4 Major Tips for Getting into the Stock Market for Best Long-Term Returns (2024)

The last thing you want to do is hop in without knowledge and without a plan. To increase your chances at winning, follow these major tips for getting into the stock market.

Learn the Lingo

Understanding the language of the market can be one of the big hurdles to cross when you first get into stocks. Limit orders, market price, arbitrage, moving averages, technical analysis—these terms can seem cryptic and overwhelming, but don’t let that intimidate you. There are tons of articles and videos and articles online that do a wonderful job breaking down these concepts.

Be an Information Addict

To be successful in the market, you need information. Get familiar with charts and technical analysis, as well as with annual reports that show companies’ earnings compared to goals. Also always keep your ear to the ground concerning news in the marketplace.

Reading stock market charts is great, but it is also extremely important to understand public sentiment and upcoming news about your targeted companies. If you know good or bad publicity is on its way slightly before others, you can stay ahead of any waves.

Choose Your Strategy: Investing vs. Trading

There are different ways to approach the stock market. Day trading means getting in and out of positions in a very short period of time. Day traders may make dozens of trades a day. Swing traders operate more within time frames of days to weeks to months for particular trades. Instead of riding a daily trend, they will stretch that out a bit further.

Investing is completely different than trading. Investors choose a company that they think could bring them profits for years. Investing is less taxing on a daily basis because even though investors should keep an eye on their stock value and be aware of trends, they usually aren’t constantly changing their stock holding positions.

Choosing Your Stock Broker

There are many brokers out there. Selecting the best one for you depends on what features you value the most. For example, a company like Merrill Edge is known for having no minimum account balance and strong customer support. E-Trade has a great reputation for a strong education infrastructure. People like TD Ameritrade thanks to their mutual fund and ETF trading.

other valuable readings:

Breaking Down the 50/15/5 Guide From Fidelity Investments

Investment Advising in the Age of Technology

There are even proprietary trading firms out there like Maverick Trading that recruit beginners, teach them trading strategies, and let them use the company funds to facilitate trades.

There is a lot of money to be made in the stock market, if you do it right. Don’t just take swings in the dark. Know your material. Know your companies. Understand how to read a chart and an annual report, and keep your ear to the ground about any upcoming news that could influence stock prices.

Armed with knowledge, you can thrive in the stock market.

Image Credit: Pixabay

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