In the mid-1990s, I was a day trader. By that I mean I used an online brokerage account to buy rolling stocks, covered calls, naked puts, and a few other elementary techniques with my new-fangled internet brokerage account.
After a few months I had some fabulous successes and some dismal failures. I made some money overall, but certainly not enough to write home about.
Stock trading is tougher than it looks. It requires knowledge of markets, research into specific industries and companies, understanding stock price patterns, and general familiarity with trading practices.
While the day trading bubble burst over a decade ago, it can still be a lucrative business — if you actually know what you’re doing. If you’re considering getting into online trading, be sure you do your homework. Your pre-trading education should include:
- How markets work
- What trading techniques are available and the risk involved in each
- Company/industry research
- Which online broker firms are reputable
- Virtual trading practice
Don’t just gamble your money away. Learn how to really use the markets as an investment.