How to Make a Living Off Trading Stocks Online

by Bill Herrfeldt

Most people work for someone else and receive periodic pay checks for their efforts. Others work for themselves, assuming the responsibility of failure but enjoying the freedom of being on their own. To be successful on one's own takes a lot of work, but the rewards are many. For example, many make a good living by buying and selling stocks on the Internet as their chosen profession. Perhaps the time is right for you to make a switch.

Decide whether it's a life style you'd enjoy. Becoming a successful stock trader is quite different from showing up at a job each day and associating with others. It's a lonely existence because you spend most days in front of a computer. Also, the best stock trader on the planet sometimes loses. If you need to be around people and to constantly win, being a stock trader at home probably isn't for you.

Practice. Before you make your first purchase, make simulated buys, then track their results. By doing so, you will learn the various elements that go into a trade online, and you will become comfortable before you make trades that count.

Set goals. Only you can decide whether to become a day trader or an investor who is in it for the long haul. A day trader sells his stock at the end of each day, where others buy stock that will either pay a hefty dividend or appreciate over a long period of time. Also, you should determine what is more important, income or appreciation. In addition, you should determine how risk-averse you are because that factor will influence every trade.

Particularly when you are new at trading, read about the market and how it's influenced by the stocks you buy and events around the world. Subscribe to publications such as Investors Business Daily and the Wall Street Journal and read them front to the back each day. As the saying goes, "Luck will take you only part of the way."

Analyze often both your portfolio and your tactics for accumulating it. Make sure that your holdings conform to the balance you considered when they were purchased. For example, you may have stocks that have done extremely well while others are selling for less than you paid for them. Undoubtedly, you portfolio is said to be "out of balance," a condition that should be rectified. Then review each purchase and sale to make sure you followed the rules you set prior to the time they were made.

About the Author

Bill Herrfeldt specializes in finance, sports and the needs of retiring people, and has been published in the national edition of "Erickson Tribune," the "Washington Post" and the "Arizona Republic." He graduated from the University of Louisville.

Photo Credits

  • stock market analysis screenshot image by .shock from Fotolia.com