Stock trading is the action of buying and selling stocks. Billions of stocks are bought and sold every day from different companies in different markets and stock exchanges. Shares you own represent a fraction of a corporation’s assets and revenues. When your shares are sold, the ownership is passed to another person in exchange for money.
How long should I hold stocks as a stock trading strategy?
There is no limit to how long you can hold stocks. Everything depends on an individual’s strategies and goals. In general, you can either day trade, swing trade, or buy and hold the stock for every long time.
- Day Trade: When you day trade, you buy and sell a stock on the same day. Individuals who day trade are more active in the market and their main focus is to buy low and sell high. Days traders use technical analysis and actively follow market catalysts such as political news, economical news, etc to help them understand the market and make better and quick profitable decisions.
- Swing trade: This is a term used when a trader buys a stock and sells it the next day, weeks, or months. The trader is mainly looking to capture short term gains in stocks as they fluctuate. Swing traders also use technical analysis and follow the market trends to guide them in their trading decisions.
- Long term trading or investing: This is a strategy that many traders use to hold a stock for many months or years. People who use these techniques analyze stocks differently than people who day trade or swing trade. Investors make decisions on which company to invest in from their fundamental analysis and ratios. By investing, you take advantage of the stock appreciation and dividends.
Where can I buy stocks?
You can buy stocks from your brokerage account. Learn in detail how to buy stocks step by step. Here it is a list of some brokerage firms in the USA you can use for trading or learning purposes.
- TD Ameritrade
- Fidelity
- Charles Schwab
- Ally Invest
- Etrade
