Day trading—buying and sells shares online via apps—can end up being handsomely rewarding, but it can also be very risky and vexing for beginners, with many detractors calling it simply gambling. If you are considering leveraging your wind-fall stimulus check for financial gain, here are some points to consider.
Do Your Homework
As with any significant financial decision, it pays to do your homework first. There are a wide variety of online brokerage service clamoring for your business—and your money—so choose wisely and be prepared to put in the work; to make the gains that stock trading promises, you must be prepared to spend long hours researching company information and news, understanding charts, graphs, and jargon, and generally orientate yourself in a world that can be complex and challenging, even to professionals.
In your hunt for the best online trading platform, you need to consider many aspects of the service they are offering—and there could be hundreds of them. Key considerations, however, are things like ease of use, commissions and fees, range of products, technology, research and education provided, account security, and customer service.
But more importantly, first take a careful look at your financial objectives. Consider whether it might be more prudent and financially savvy to settle any debts—such as credit cards—or sink your stimulus check into your mortgage repayments before you “gamble” it in the stock market. Weigh up whether you’d like any potential gains in your equity portfolio to be a source of income, or rather geared to a slow-burning plan to grow or preserve your wealth.
Look to the Pros and Listen to Advice
That settled, you might then like to take heed of a June 2021 Forbes Advisor survey which evaluated 21 brokers, assessing the user friendliness of each platform and paying attention to the quality of educational and research materials provided. Forbes rated over a hundred features and variables for each platform, individually signing up for accounts and personally testing what was on offer. Forbes analysts tested customer support structures by phone, live chat, and email, and made sure to vet only those offering beginners zero commission fees.
While Forbes’s conclusions were not surprising in the end, what is worth noting is the professionalism and dedication to the process undertaken to reach it, much like that required by day trading itself. It is not for the flighty or feint hearted, it requires clear-eyed thinking; a careful, rational, and methodological approach; and—let it be said—a fair amount of pure luck!