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20/10/2021

Investing in the stock market: practical advice for beginners

It is often said that investing in the stock market is one of the best ways to grow your capital. However, it is unfortunately possible to lose a lot of money as a beginner. How to invest in the stock market when you're starting out? With what amount should you start? How can you make profitable investments with the least possible risk? How can you recognize the most profitable assets? When is the right time to invest?

Here are some easy-to-implement tips and tricks for getting started in the stock market.

How much should you start with ?

Today, there are many platforms for trading. For both individuals and professional traders, the options remain numerous. But the first thing you need to know is: how much do you need to invest to get good results?

Start investing in the stock market with an amount of your choice

You want to invest in the stock market, but you don't know exactly how much to invest? The basic principle, especially when you start investing in the stock market, is to invest only a part of your savings, i.e an amount you are not afraid to lose. Do not invest all your savings or your monthly salary! A part of this money is enough to begin with, because the aim is to make a profit while limiting risks.

Your first investment will really enable you to get started on the stock market. Acquiring knowledge is one thing, but the reality of the stock market is another. There is no minimum amount to start investing in the stock market. You just need to find a safe and inexpensive asset to start with. This way, you will take less risk while learning about strategies.

Trading tools to limit the risk of loss on the first investment

There is no minimum or ideal amount when you begin in stock exchange investment. The higher the amount invested, the more appealing the profitability will be. However, you need to know how to limit risks. This is where tools like Arya Trading come in: the application trades for you. It’s simple:  you just have to set a gains objective by setting up a winning strategy after analysing the market.

Nowadays, computerized tools, such as Arya Trading, make it possible to invest in the stock market with greater security. The tool offers training in stock market and trading basics and helps choose between several assets. As a beginner, it is advisable to invest in mutual funds. More diversified and made in a single transaction, they will offer you more security and success.

You will also have the option to invest with a lower amount to start with. Working with a semi-automated system, Arya Trading supports decision making when it comes to selecting assets.

Assets to invest in

To get started in the stock market, it is essential to choose an asset that offers stable profitability, the best way to lower the risk of loss. However, the question that often arises for beginners wishing to invest in the stock market is that of the right assets to invest in. 

The different types of financial investments in the stock market

Investing in the stock market means choosing between thousands of different stocks. For a beginner investor, the process can be complex. On the one hand, there are stocks from safer and more profitable sectors, and on the other, those from sectors more prone to economic shocks. Each asset is thus distinguished by its performance on the stock market.

Buying stocks directly, investing in mutual funds, ETFs or derivatives: the choice is yours. But how do you select the best asset, knowing that it is impossible to check the balance sheet for each of them?

When you're a beginner in stock market investing, it's best to start with an asset that tends to increase its dividends over the years. To be more specific, opt for a stock in a company that shows consistent improvements in its annual net margins. Opting for an asset in a sector that particularly interests you is also an interesting idea. However, choose a stock whose dividends are trending upwards.

Choose one asset to start with

If you want to reduce your risk, it is imperative that you only invest in one asset when you start out. You will also have the opportunity to learn about the world and discover the best strategies that will make you earn more.

For an individual who is new to the stock market, it is advisable to use mutual funds. These shares give access to a larger number of corporate bonds. They offer more guarantees as to the return on your initial capital.

Using tools like Arya Trading allows you to choose the best assets. The tool presents the best information and recommendations on the most profitable assets of the moment.

The right time to invest

In order to know how to make money in the stock market, you also need to do some technical analysis. These help to understand and open a position in the stock market at the best time. Indeed, it is important to choose the right time to buy and sell stocks.

A price analysis

With a trend analysis of the share price on a one-off basis, you will get more information about the future trend of your share. A price analysis is important whether you want to take short or long positions in the stock market.

Even if you have no expertise in technical trading strategies, this analysis is another way to spot the right time to buy stocks.

Stock market timing and fundamental analysis

To start trading, a solid foundation in fundamental and technical analysis is essential. This allows you to determine the best time to buy or sell your stocks.

When we talk about timing in the stock market, it is not always about determining the right time to buy a stock. Indeed, one must also be careful not to buy an asset that is overvalued on the stock market. The price of the stock should not exceed its intrinsic value or its asset value by too much.

With a trading platform like Arya, you have technical analysis tools at your disposal that make it easy to get started as a beginner.

Which online broker should you choose ?

One of the most important decisions to be taken when one starts in stock exchange investment is your choice of broker.

What is the purpose of an online broker ?

An online broker acts as an intermediary between the investor and the financial market. More concretely, it executes stock market orders, including the purchase or sale of shares. The broker acts on behalf of the investor.

It is also responsible for providing the trading platform to investors. The trader will be able to position themself on the markets and financial products via the platform.

A broker can also provide advice and information through educational material and offer the various tools necessary for the analysis and study of stock market prices.

The different types of online brokers

Nowadays, investors can choose between independent online brokers and banks. However, there is another option: online trading platforms.

These have the advantage of being far less expensive than an independent online broker. Even beginner stock market investors can use them without too much difficulty to get trading fast. These trading platforms provide access to many tools and resources, such as the Arya trading algorithm.

An online broker according to your needs as an investor

Your online broker will be closely linked to your investor profile, meaning you should also think about its fees. Fees are aligned on investment activities. If you want to invest in the stock market as a beginner, an online broker offering brokerage fees based on the number of transactions is the best choice.

The number of financial products available should also influence your choice of online broker. Indeed, there are different investment possibilities. It is therefore preferable to choose a broker who is able to provide you with the necessary information before you make a decision.

Do not forget also to check the notoriety and the reputation of the broker, as well as accessibility so that it can support you in your stock exchange investment.

How to establish a trading strategy

Even if you find the best online broker, establishing a trading strategy is essential. A good trading strategy helps to limit the risk of losses and maximize returns.

Implementing a comprehensive and effective trading strategy will lead to better results. Before investing in the stock market, and as a beginner, you must master the basics of technical analysis. Understanding money management and risk management are also essential. Data is of paramount importance in your trading strategy.

Learn the basics of trading analysis

Before establishing a trading strategy, it is important to learn the basics. Knowing how to study dynamic technical analysis with various indicators makes it easier for a trader to reach their goals.

In terms of trading objectives, any new investor on the stock market must set specific goals. Since stock market investments are based on data, profitability objectives must be achievable and measurable. A stock market investment is made over a fairly precise period of time. A beginner trading strategy needs to include time-based objectives.

What your trading plan should contain

To develop a trading strategy, you need to establish a plan. Obviously, your objectives should come first. Your method of analysis should also include all the details of the investment. Precise entry and exit points in the market are highly recommended for any beginner investor.

In order to avoid hesitations in the management of open positions, a logical and well-organized management plan remains essential to better manage risks and insure your entire portfolio and positions.

Each of these elements is essential to a good trading strategy. However, the list is far from exhaustive. To invest in the stock market as a beginner, applications such as Arya Trading will provide you with the necessary guidance to improve your results.

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