Posted on 18 October 2012. Tags: how to buy stock
There are different ways to understand how to buy stock. If you are investing for retirement, you will not have the same goals as someone who is investing to make a living. Retirement investments focus mostly on conservative choices that will guarantee a certain income level in the future. Some of the investments in a retirement portfolio will be aggressive and risky but most will err on the side of safety.
If you are someone who wants to make a living from stock investments, then you will not be able to work so conservatively. Instead, you will have to learn how to buy stock in an aggressive fashion and risk much more of your assets. While a rule of thumb for investment is to avoid risking more than you are comfortable losing, you may not be able to adhere to that rule in this situation.
This is how day traders operate. They do not sink their money into a few likely stocks and then wait years for them to mature. Instead, they may buy and sell stocks multiple times per day. Sometimes, day traders just hold onto their stocks for a few minutes before selling them for profit.
If you want to be a day trader, you will need to learn quite a bit about the stock market and the way that it works at a slower pace. You will also need good software in order to know how to buy stock and sell it again quickly.
The most important tool that a day trader has is leverage. Leverage is borrowed money that allows you to buy large quantities of stocks and benefit from the profits of much larger investments than you could make with your own funds. Once you know how to buy stock with leverage, your opportunities will be limitless.
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