Trading 212 has flourished over the last few years with its zero fees investing but can cause issues for beginners, particularly those new to investing. Here are 7 Trading 212 Stock Buying Tips to help beginners to the Trading 212 App and hopefully will give some help to experienced investors as well. I will also include the video version here from my you tube channel Financial Freedom And Education.
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TRADING 212 STOCK BUYING TIPS No. 1
Always use the Practice Mode/Demo mode first. You can practice with £50,000 of pretend money as if you were trading for real but you are safe in the knowledge you can’t lose anything. The big benefit is that it allows you to get used to the Trading 212 App. You can go through the process of buying and selling stocks and get a feel for all the functions and features on the platform.
Once you have got used to the features and functions I think the biggest benefit is that once you have bought your practice stocks and have a demo portfolio, you can see how the prices move up and down with the general movement of the stock market. Sometimes your stocks will move with the general movement of the market and sometimes against but the benefit is you will see how you react to prices going against you. That feeling when you have fully researched a stock, the market is rising and you buy the stock and it immediately starts moving against you is never comfortable. Remember you are hopefully buying as a long term investment ( unless you are a day trader) and you need to be able to hold your nerve and not react to short term price movements. Don’t be tempted to rush in to real trading because you see the market rising.
TRADING 212 STOCK BUYING TIPS No.2
Probably one we have all been guilty of is rushing in to buying a stock we have started watching because it suddenly rose in value or dropped in price. It’s human nature, we don’t want to feel like we are missing out. FOMO is not a good reaction in stock investing. Just remember that stock buying opportunities are like buses, there will always be another one along shortly. If you rush a decision, there is a greater chance of it being a wrong one. We’ll talk about research shortly, but don’t skip this part. Some of my worst stock buys have been when i rushed a decision.
TRADING 212 STOCK BUYING TIPS No.3
If a stock is suffering badly, there is usually a reason for this. Now if the stock market as a whole has fallen badly then it may not be an individual stock issue but a market issue. But if a stock has fallen in price and is out of sync with the market or its sector, then there is usually a reason why and its best to find out why before you buy. Now I’m not saying don’t buy it, but just do the research, find out why and assess the risk. Make sure you are aware of the risk and the possible outcomes. It could be changes in legislation that are causing the stock price to drop or it could be a competitor like Amazon entering the sector. Markets can overreact and it could be a buying opportunity, but you need to ask the question, how will that company (your stock target) deal with that change and can they overcome it.
WANT A FREE SHARE?
*** IF YOU WOULD LIKE A FREE STOCK (I also get a free one), then use the link below when signing up for your Trading 212 account. **
** Get Your FREE STOCK here: http://www.trading212.com/invite/4KDTVgb
TRADING 212 STOCK BUYING TIPS No. 4
I cannot stress this one enough and that is to DO YOUR RESEARCH. Now by all means watch Youtube videos, read news and blogs etc. but always remember everyone can have differing opinions. So listen and watch all but evaluate what is been said. Remember sometimes there is an incentive for someone to talk up a stock and some companies pay you tubers and journalists to feature a stock which can very easily lead to a conflict of interest. One thing I always do is Google the latest news on a company, just in case you missed anything new that has just happened. Also scan back through the last year of news articles to get a feel for the sentiment towards the Company.
Try to learn the basics of Profit & Loss Statements and a Balance Sheet. If that’s not your thing then look online for someone who has done a financial analysis on the company. Understand debt and its implications. In good times with low interest rates this debt can help leverage growth, but in bad times with interest rates rising, it can be a noose round the company’s neck and has led to many a downfall.
Another must when doing your research is to google the company’s Investor Relations page. Have a read of their trading updates, their press release and lots of other information on what’s happening with the company. Remember this is their shop window, so sometimes you have to read between the lines and dig out the bits you need to know. Poor trading can often be surrounded by lots of positive statements about the future.
Lastly, I have a golden rule that if you don’t understand what the company does, how it trades, how it makes its money and what are its competitive advantages, then don’t invest. If you haven’t got these basics down then you are not in a position to properly assess the company no matter how many other voices are telling you its the best thing since sliced bread.
TRADING 212 STOCK BUYING TIPS No.5
Stock prices generally move with the market so if you have researched a stock fully and bought it, just to see it fall because the Stock Market is crashing, it doesn’t mean it’s a bad stock, so don’t beat yourself up. A falling stock market can drag down some very good companies and in this instance you just have to give it time and ride out the volatility. On the flip side of that, don’t think you are a stock market wizard when everything is going up. When stock markets are rising fast, it’s very easy to pick a winning stock, so don’t start short cutting your processes and think you are invincible and that everything you touch turns to gold.
TRADING 212 STOCK BUYING TIPS No.6
Don’t just look at the Company, make sure you look at the sector it’s in as well. Sometimes a good Company and good stock can get dragged down by an out of favour sector. So it’s always worth having a look at the sector and getting a broader picture of the trading prospects within that sector. It’s very hard to swim against the tide no matter how strong a swimmer you are. Equally it can work the other way round. Don’t think for example that if say the Technology Sector is flying that all companies in that sector are winners and worth throwing your money at. Always do your research and ideally pick a great company in a growing favourable sector.
TRADING 212 STOCK BUYING TIPS No.7
If you are new to Trading 212, the stock market and stock buying, it can be an unforgiving place so take it steady. Dip your toes in the market gradually and experience a bit of the good and the bad before plunging all in with your hard earned savings. Always try to leave yourself with some cash to invest to take advantage of opportunities that will present themselves. If you are fully invested then look for ways to generate excess cash so that you have the ability to ride out any storms and to take advantage of those opportunities. Remember opportunities are like buses, if you miss one there will always be another along shortly.
WANT A FREE SHARE?
*** IF YOU WOULD LIKE A FREE STOCK (I also get a free one), then use the link below when signing up for your Trading 212 account. **
** Get Your FREE STOCK here: http://www.trading212.com/invite/4KDTVgb
If you would like to see a video where i show live in to the Trading 212 App, I have done this video below which shows live stock buying.
Also on my you tube channel Financial Freedom And Education I have done a video series Creating My Stock Portfolio which is purely to show how i look for stocks. It is a small portfolio purely for educational purposes so you can see my decisions for buying or not buying stocks. I actually show all stock buys live in the Trading 212 App and you get to see how they pan out over time with regular update of the portfolio performance. Do take a look. Thanks for reading.
Other articles you mat be interested in are Trading 212 For Beginners and Trading 212 Promo Code:
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