What You Should Know Before Using Stock Market Trading Apps
Have you ever considered investing in the stock market?
There are two major factors stopping most people from finally diving in. 1, you have to be willing to risk significant amounts of money to make significant amounts of money. 2, the stock market, the lingo, the abbreviations, all seem really complicated from an outside perspective.
There’s a fairly long history of people taking advantage of how complicated the market seems. It’s illegal but very profitable. In fact, there are several movies on the subject if you’re interested.
Technology, as it often does, has made buying and selling stocks somewhat less complicated. Instead of an actual middleman, there are apps that will show you market fluctuations and allow you to invest relatively small amounts of money.
All the same, you take on risk when you use these apps. Some of them are the same risks you’d take on no matter how you interacted with the market. Some of them are unique to this format. We’d like to help you navigate these apps and increase your chances of successful trading.
When it comes to trading, time is possibly the biggest factor. A stock’s performance can shift moment to moment. When you use an app to do your trading, there is going to be a delay between you saying what you want to be done and it actually happening. That means if you tell the app to buy a stock for $99, you expect to spend $99. However, by the time your request is processed, the stock could cost $150. If you weren’t in a position to spend $150, you could just be out of luck.
To offset this issue, some apps will allow you to forego buying stocks in real time. Instead, you can set an amount you are willing to spend and when the stock of your choice gets to that amount it will be purchased for you.
Don’t Be Too Slow
On the flip side, being too cautious with your money could cause you to miss opportunities as well. If you only put money into the app when you have a stock you specifically want to buy, transferring the funds could cost your valuable time. If it takes too long, that opportunity could be gone before you’re able to act on it. That’s why it’s a good idea to have money already set aside for trading in the app. That way if something comes up out of the blue, you are in a position to act upon it.
Do Outside Research
These apps will often give recommendations and performance reports on the various companies being traded. While this can be helpful, it usually doesn’t offer a full picture. Watching the market is rarely a one-stop-shop experience. Try to diversify where you get your information so that you are as knowledgeable about your purchases as possible.
When money is involved it’s tempting to hover over the process and constantly check how things are going. This is actually not a great idea. If you check every stock every day it’s easy to get rattled if the stock takes a hit. You might think it’s a good idea to cut your losses and sell while you can. Conversely, if the stock is doing well, you might be tempted to sell before the performance turns around. Either way could be premature. It’s going to be a roller-coaster ride. It’s also going to stress you out.
If you have a certain amount of loss you are unable to deal with, some of the apps have a feature that will automatically sell a stock that dips below a certain number. This can offer peace of mind, but you never know how it might do the next day. Such is the game you play.