Stock Trading - An Overview
So many people have asked me, “What do I need to do to trade stocks in Kenya or here in the United States.” While I do not claim to be the resident expert, I have been trading long enough to narrow this answer to four main phases: READ, PLAN, FUND, TRADE.
Phase 1: READ
In my opinion, this is the first place to start. In addition, throughout your stock trading career, you will need to come back to this phase repeatedly. Read everything you can about stock trading. Start with the book Stock Investing for Dummies by Paul Mladjenovic. I still reference this book many times. This book provides a great overview of the Stock world.
Phase 2: PLAN
This is probably the most important phase. There is the old adage that says “if you fail to plan, you plan to fail”. This means that you need a trading plan. Think of this as your business plan (unless you are treating this as a hobby, then you should not even worry about following these phases). Your trading plan should include answers to the following:
What is my goal for trading stocks? Knowing this helps you set clear expectations. For example your goal could be to make a 15% return monthly on trading; or it could be greater than that – to make "2xl" amount of money through trading in just "x" amount of time. Whatever your goal is, write it down. Remember a goal needs to be SMART – Specific, Measurable, Attainable, Relevant, and Time-bound