Stock market for beginners

Investing in the stock market cannot be called a game, as many people mistakenly do. New capital is constantly flowing into the stock exchange, which comes from new investors, and also takes the form of dividends payable by listed companies. Investing is based on informed decisions, not randomness and luck,

The foundation of investing is knowledge and experience, primarily in the field of economics, but not only. At the very beginning, it is worth learning the basic concepts related to the stock exchange and its operation. A stock exchange is a place where individuals and institutions who want to buy or sell stocks, bonds, certificates, and other securities meet. Investors buy financial instruments assuming a profit in the form of interest, dividends or an increase in the price of the purchased asset. To buy and sell shares on the stock exchange, you need to set up a brokerage account. A brokerage house acts as a link between investors - it buys and sells shares on the stock exchange on behalf of its clients. At the same time, he records the number of purchased shares on an individual brokerage account. In addition, it will be necessary to choose the right institution that will participate in the processes of multiplying capital. Such partners include Forex brokers, which we write about on Webinar Universe. In addition, you should constantly monitor the quotations of the selected company or companies, follow its announcements, publications, balance sheets, economic trends and market situation. When investing for a long time, it is also worth observing civilization trends.

Those who want to start with less risk can open a demo trading account and practice "dry" investing. Small investors can also consider fractional shares, which are a fairly new offer from recommended brokers. It allows you to buy part of the shares, not the entire package, and thus allows you to enter more expensive shares with a smaller investment.

Open an investment account

A novice investor should contact a brokerage house to conclude an investment account agreement. This account is used to store and trade securities and other financial instruments. The contract can be signed stationary or submitted online. You will need an ID card or passport for this.

First, however, it is worth reading the terms and conditions of concluding an agreement with a given brokerage house, because if you want to terminate the agreement, you will have to comply with the notice period stipulated in it.

First deposit to the account

Once you have opened your account, you can already make your first deposit. Each investor should individually determine how much they want to trade. At the very beginning, it is better to be cautious and not allocate too much money to buy shares. It is good to think of the first deposit as money that you will not regret losing and it will not significantly affect the state of your wallet.

It should also be taken into account that it is possible to incur losses when investing in the stock market. The most important thing is that losses and costs together do not exceed profits. Generally, the amount is paid to the investment account by bank transfer to the account provided by the brokerage house.

Choosing the right broker to broker your trades is of utmost importance for your future results. Before making a decision, it is worth familiarizing yourself with the various offers and conditions offered by individual brokers. To do this, it is helpful to visit our training platform and watch a webinar on fees, commissions, available analytical tools and the quality of customer service. When making your first deposit, it is also worth paying attention to the minimum deposit amount required by the broker and the available payment methods. Choosing the right broker and conscious management of the first deposit are the foundations that can determine the success of our investments on the stock exchange.

Buy and sell orders

In order to buy shares, it is necessary to place an order. Until some time ago, the only option was to go to the customer service point of a brokerage house and place an order there. After issuing the receipt, the broker sent the order to the WSE trading system. Over the years, this issue has changed, as orders can now be placed via the Internet and brokerage house applications. The order goes to the brokerage house's system and then to the stock exchange. This is definitely a faster and more convenient option. There are two most important types of brokerage orders: buy orders and sell orders. In the first case, the investor offers cash in exchange for shares, and in sell orders, he offers shares in exchange for cash.

To buy or sell shares, you can also use two types of orders: limit or "at any price" (PKC). Limit orders declare the number of shares to be bought/sold and the unit price at which the investor agrees to buy/sell the shares. Additional conditions can be placed on such a deal to control its opening time. These m.in "all or nothing," "until the end of the day," and "do or cancel." PKC orders, on the other hand, have priority in execution, but do not guarantee how much a person will actually spend on buying shares or receive for selling them.

In addition, it is worth remembering that it is not only possible to trade shares on the stock exchange, as bonds, pre-emptive rights, rights to shares, ETFs, certificates or structured products (ETPs) are also available, which we often talk about at Webinar Universe. The exchange also offers a wide range of derivatives (futures market): futures and options.

Investing in the stock market is a process that requires solid preparation, knowledge and patience. Starting from choosing the right broker, to making your initial deposit, to executing complex investment strategies, every step is critical to your ultimate success. It is crucial not only to understand market mechanisms and terminology, but also to make informed decisions and analyze the market situation on an ongoing basis.