There are no two ways around it — the markets are complex, and trading is never an exact science. While there are plenty of resources and services that will tell you there are foolproof trading options for beginners, it is all about the way you trade, as much as it is about what you trade. That said, there are a few curious options and avenues you can choose if you are struggling to get to grips with the markets for the first time.
Doing plenty of background reading will never hurt, and yes, it will also put you at an advantage. After all, the more you know about your art before you practice, the easier you will find it to roll with surprises. It is worth looking into guides such as the 2021 best stocks for beginners. AskTraders has much more advice and guidance where that came from, too.
Let’s look at a few options that not only appeal to newbie traders but which may also end up being easier for them to handle in the long run.
Individual Value Is Important
As a new trader, penny stocks are likely going to appeal to you. After all, if you have limited capital to invest in the first instance, it surely makes sense to hold out for a bargain.
However, when looking into stocks worth less than $10 or even less than $5, you are at risk of investing in some tricky companies. We all must start somewhere, but those companies going public on penny stocks are either likely to be worth very little themselves or have yet to make strides. It’s a considerable risk.
By investing in a stock with more than “loose change” value, you at least get some assurance that a company has already grown somewhat. Of course, that isn’t to say penny stock firms won’t go far in the long run. However, for the newbie investor or trader, they can be nightmares to manage over extended periods.
Your Easiest Picks Are Ones in Niches You Care About
Yes, it may be tempting to invest or trade in stocks for the latest AI or IoT innovation, but what if you know very little about the industry or niche? It is easy enough for companies in these niches to find support from traders simply because they are growing. However, if you don’t have any kind of appreciation for the stock you are buying into, you have very little handle on whether that stock will be worth your money.
Try and search for stock that’s making waves in your favorite niche, service, or industry. Try and look for options that play to your knowledge and/or education so that you at least have the benefit of knowing when to buy and when to sell.
Growth Is Good, but Check the Speed
Many new traders will likely find that a company growing at an exponential rate will be worth investment. However, you need to consider spikes and dips.
A company with rapidly growing stock value may show promise, but you need to consider form as well as any future challenges that may come its way. If a firm has not yet had the chance to prove itself, you may be in for a bumpy ride as far as your stock value is concerned.
Therefore, new traders may do best to hold out for those companies with stock growing in value but not necessarily at breakneck speed.
Are There Any Guaranteed “Winning Options” for New Traders?
No stocks are “easy” to trade in at first. If you are a completely new trader, as mentioned, you may find cheap or fast-growing investments to be particularly interesting. However, nothing is a sure thing.
A great place to start may be to consider those companies that have thrived under massive pressure in the past few years, especially in such an uncertain climate. Alternatively, simply make sure you have a healthy stock of money to invest in those stocks that cost more than your penny options.
Every successful trader will tell you that he/she has a very different way of doing things. That is, of course, because of finding your niche and honing your trading skills. There is no such thing as an intrinsically “easy” stock to invest in ― so take the above advice in hand and keep learning.
