In the absence of clearly defined objectives, you will not be able to define your stock market investment strategy. This is the best way to lose a lot of money for sure. The objectives can be defined in terms of a monthly pension. Then, you precisely define the amount targeted to progress in steps. The definition of your objectives will allow you to remain focused on the financial products that correspond to them on the stock market.
Super-active investor or passive stock market investor
There are several approaches you can use to invest in the stock market. One approach is not necessarily better than another. You need to know what type of investor you want to be based on your availability. You are a super-active investor in the stock market when you do daily trading for example. You place orders every day and you have a high volume of activity. A passive stock market investor defines an investment strategy and keeps it running. He consults his portfolio at regular intervals (week, month, year). In general, the more time you spend trading in the right way, the greater your potential earnings are.
Super-active investors (traders) on the stock exchange: Strategies
I suggest the American stock exchange which offers a higher volume of trades and returns than the CAC40. However, the Equity Savings Plan may be suitable for you if you wish to invest in Europe to benefit from tax advantages.
It is useless to stay in front of your screen all day to follow stock market movements. By using the daily time unit, for example, you will consult the stock exchange 1 to 2 times. This corresponds to the opening where the bulk of the movements usually takes place and the closing.
Passive investors (traders) on the stock exchange: Strategies
As an investor, I suggest that you diversify your investment. Invest in different companies in different countries and sectors. Do the same for your asset portfolio. Your vision is long-term and you don't want your portfolio to go through roller coasters (yoyo effect on the stock market).
Stock market investment strategy
Choose a proven strategy that fits your style and objectives. In general, back-testing is the preferred method. This is a strategy that you test, for example, over the last 20 years to see how they would have performed in the markets as they have done in those years. You can also trade on paper for a few months to gain confidence before taking action with your capital.
As a last resort, use simulators to evaluate your progress. However, it should be remembered that the psychological aspect is decisive in the stock market. As long as your money is not at stake, it will be easier for you to make transactions. However, when your real investment loses 30% of its value, you may panic. These are strategies to allow the beginner to gain confidence before investing his capital.
Investing your money in the stock market
Then place the right orders on the stock market. The market order is to buy regardless of price, while the limit order is to buy at a fixed price. The objective is to move gradually. Start with small amounts and increase your capital as your confidence increases. The risks associated with stock market investments are significant. It is useless to bet against the major trends. The objective is to help you earn money on the stock market while controlling your risks as well as possible. Make sure you stay within the framework of your overall strategy and diversify your investments in several different actions. Prepare your trigger threshold to limit losses and your exit point to resell higher.
A good strategy is accompanied by the use of good tools. If you do daily trading, I suggest Tradingview and Prorealtime for chart analysis and Finviz to find stocks with high potential.
How much to start on the stock market?
Most of the time, the beginner has several false beliefs about stock market investment. These beliefs relate to the amount to be invested and the strategy to be implemented. It is important to know that to start investing in the stock market you need very little money. The need for very large capital is a false belief. The starting amount for investing in the stock market is the amount of the share you want to buy. There are some companies whose shares are worth a few cents and others worth hundreds of euros.