Stock Trading Tips for Beginners

Posted on March 19, 2018

Getting started with stock trading can be daunting. Access to top brokerage accounts is not easy and navigating your way through the minefield of online stock trading platforms will leave you dizzy. But it needn’t be so difficult. Not in 2018. UAE stock trading has been made accessible to everyone at just the tap of a finger with Mashreq Neo!

8 stock trading tips to help get you started

Start with safer stocks

If you’re new to stocks it may be wise to start with stocks that are less volatile so that you can acquaint yourself with how to buy stocks in your first couple of companies, even if Mashreq Neo does make it easy!

For safer stocks to include in your portfolio look towards consumer staples stocks such as food and medical supplies because even in troubling economic times, people will still need these products. It’s unlikely you’ll see astronomical gains but it allows you to get your feet wet whilst avoiding losing a large percentage of your holding overnight.

Have a plan

Set price targets before you jump in. Decide how much profit is acceptable (nobody ever went broke taking profits!) as well as a stop-loss to protect your capital should the trade turn against you. Exceptions can be made on moving your profit goal higher if the market is stronger than initially predicted. Many traders in this situation will then move their stop-loss up.

Never put all your eggs in one basket

1% of one’s capital is a popular budget that traders will use in each stock trade. Not only is this a good risk management practice that prevents you being wiped out the game with one trade turning sour. It also leaves you with cash for others trades should an even better opportunity present itself on the market - meaning you don’t miss out!

Set stop losses

Don’t lose all your money on a single bad trade. Set a stop-loss. It’ll stop you keeping a bad position open hoping the situation improves. Bad situations rarely improve. Cut your losses and move onto the next trade.

Trade the trend

Unless you’re an expert stock broker, it’s wise to stick to the trend of a market. Stock trading against trends, picking tops and bottoms against the momentum of the market is likely to end in disaster. Join the trends for a better nights sleep!

Selecting your brokerage account

Opening a top brokerage account was once a privilege for the few who had access to top trading companies. Next came the wave of online stock trading platforms, often difficult to use and with the requirement of a hefty minimum balance. Stock trading in Dubai has been made accessible to millions with the advent of Mashreq Neo. Your stock broker and bank, account all-in-one!

Learn with every trade

With every trade there’s a new lesson to be learned. Study every trade you make if you want to become the UAE’s next high flying stock trader!

Build up positions gradually

Dollar-cost averaging is a practice you want to familiarise yourself with. It is where you invest a set amount at regular intervals. This averages out the entry price into a stock meaning you buy more shares when the stock price is down and fewer shares when it rises.

By doing this you avoid buying on a spike, instead averaging your entry price out. Investing every time you get paid is an effective way of building up a position in a stock you like and extremely convenient when done from the same app that you receive your salary into. Just one of the many benefits of Mashreq Neo!

Disclaimer: This article has been prepared solely for information purposes. It does not constitute an investment advice, solicitation, offer or personal recommendation by Mashreq, or any of their related parties to buy or sell any securities, product, service or investment or to engage in or refrain from engaging in any transaction, particularly, in any jurisdiction where such an offer or solicitation would be illegal. Neither Mashreq nor any of their related parties warrant the accuracy of the information provided herein and views expressed in this article reflect the personal view which does not take into account of individual clients’ objectives, financial situations or needs. Investors are required to undertake their own assessment and seek appropriate financial, legal, tax and regulatory advice to determine whether such investment is appropriate for them in light of their experience, objectives, financial resources and other relevant circumstances. Neither Mashreq nor any of their related parties accept any liability whatsoever for any direct, indirect, consequential or other loss arising from this article and/or further communication in relation thereto. Mashreq do not accept any obligation to correct or update the information in this article.