If we going to discuss about investing, then we got to define it. Investing is building of wealth over a period of time, this can be done through buying and selling of stock. There is a major difference in trading and investing, though both of them have one common thing which is make profit. You can in invest in trading but you cannot do vice versa. Traders tend to be more ambitious and less patient compared to investors.
In the stock market, there are 4 types of trader who are distinguished from the duration they take to be traders. They include position who is a trader for months or even years, then swing traders who are trader for only days or weeks. There is day trader who are trader through the day. A scallop trader is a trader for like some minutes or seconds. There are many factors that categorize to one of the type of traders including account size, risk factors and many others.
If you really want to invest, you got to do research on all the investments you interested in. Know their pros and cons. Also looks at the future what does it predict. You can begin by reading books, asking questions and checking on the trade forums. Get to know definition of the stock trading terms include the stock. Work with what the market offers. Your investment is more profitable when you are timely. Hence take your time to learn or understand the trend in the market.
I know you have heard this more than once, minimize the cost. Many think going for the high cost makes you a risk taker but it makes you a fool. Minimizing cost will ensure you maximize your profit. This is a point that should always be at the tips of your fingers. The market has good and bad days. Hence be careful enough when investing. Because you may buy stock when deflated ensuring the cost is low and when it hikes up, you will have maximized the profit. There are types of investment including: bonds, mutual funds, small cap stock, large cap stock, A bond is when an investor offers money as loan to an entity and expect it to come with interest. The pay time can be fixed or over a duration.
Small caps stock, these are stocks owned by big businesses. Due to no research, an investor needs to research heavily before investing on them. Mutual fund it is an agreement between investor to contribute a certain amount of money, this money is used in investing like stock trading or bond. Penny stock, it is known for its high risk. If you are a beginner indulging in this can lead to investment loss. you can have many shares with less capital Large cap stock, it is the stock trading of large and renowned business. In this investment most of them are careful this is because they have a lot to lose.
When buying stock always look at the liquidity and price. Ensure the price is less than 5 dollars and the volume of the stock is low.