I recently posted my stock trade and got a number of messages on how to start investing in stocks. That is why I decided to make a tutorial for beginners. Usually people buy stocks for long time “investment” and some “trade” stocks for short term. I’m more of a trading guy and I picked the Philippine Stock Exchange market since I live in the Philippines.
Here are the step by step that I personally did to get started:
1. Learn about the craft
When I decided to start trading stocks, I explored another world we call “The Internet”. I Googled and You-tubed anything regarding stocks and how to start with it. But the learning doesn’t stop there! I continually hone my trading skills since real money is involved in there.
2. Identify your strategy
Your strategy depends on how much is your budget and the time you want to spend learning and analyzing the stock market.
A. Short term
A1. Intra day trading
This is a form of stock trading in which you buy and sell the stocks on the same day. I would not personally suggest this method since Philippine Stock Exchange market does not have enough volatility on a day to day basis unlike in New York Stock Exchange. The fees for buying and selling the stock will eat up your capital.
A2. Swing Trading
This is a form of stock trading in which you buy stocks and sell it after a few days or weeks. This is the method I personally use and I fell in love with it! ♥‿♥
B. Long term
B1. Long term hold
This is a form of stock investing in which you buy blue chips stock (a stock from a reputable company like Ayala Corporation, SM Investments Corporation etc.) and then you will hold the stock for over 6 months or even years.
B2. Peso cost averaging
This is a form of stock investing in which you buy stocks for a set amount of money each month or quarter over a year or more. This strategy is fit for people who wants to save some money every month instead of just putting it on their savings account. This is also ideal for people with limited budgets since you get to invest let’s say 5,000 php a month.
3. Picking a stock broker
If you want to buy and sell stocks, you will need a broker. There are a lot of online brokers here in the Philippines but my top two choices were BPI Securities Corporation and COL Financial Group, Inc. I personally chose the latter.
4. Use the right tools/website
I will enumerate the different tools I personally use every day to trade and analyze the market.
Since this is the online broker I personally use, I’m obliged to use their website :p. I use their website to buy and sell my stocks. I also use their website for monitoring the stocks via trades and via charts.
I use this website to also monitor stocks since they offer a good real time charts
I use this website to analyze stocks when the market is close. They also offer a virtual trading platform in which you can trade with pseudo money. This is very useful to test the market without actually risking your real money.
Another website I use to analyze stocks when the market is close. They also have suggestions on what stocks to buy, hold or sell.
So those are the steps I personally made in order to get started.
1. How much do I need to get started?
It depends on the broker you chose. It ranges from 0 pesos to 1m+ php. My stock broker has a minimum investment of 5,000 php.
2. Is it complicated?
Not really. If you can grasp the basic idea of buying something low and selling it high then I guess you can easily learn stocks.
3. I still don’t get it!
Leave a comment below so I can address your questions 🙂