Before you start stock trading, I’d like to share a simple philosophy that can make the difference between trading success and failure. What I’m going to tell you is no gigantic stock trading secret or trading holy Grail. There are already hundreds of such products out there available for sale. Unfortunately, the vast majority of them do not address what I’m about to discuss with you.
Two simple words, “risk control”, is one of the main things you should keep in mind when trading stock or trading any other markets. “The trader who controls his risk is the trader who controls his destiny”. As simple as this statement sounds is very important and well worth remembering.
Let’s discuss risk control for a moment. An important part of risk control is how much you risk on each trade. Let’s say a stock trader has $100,000 in his trading account and he buys 1000 shares of XYZ Corp. stock at $100 per share. The stock trader has essentially put all his eggs in one basket.
I can’t say one way or the other what will happen to this particular stock trader.The stock may actually go up tenfold and make him a millionaire. On the other hand, there is also the possibility that the stock will go down in price. If the stock happens to go to $0 then the trader will have lost all his money and his chances to participate in any future trading opportunities.
The above example is a display of two simple scenarios. The first scenario is the one that everyone who trade stock hopes for. The second scenario is the one that some traders block out of their minds while secretly keeping their fingers crossed.
The point of all this is that the trader above should have had some type of risk control in place. There are a few basic forms risk control he could have used. The first one we mentioned above was limiting the amount of this total account that he risked per trade. The amount to risk per trade is up to the individual trader and his trading plan. Some typical amounts are between 1% and 10% of account equity, with 10% being on the high side. Even if our hypothetical trader would have risked 10%, and his losses would have been much smaller, $10,000 rather than $100,000.
The other basic type of risk control in stock trading is using a stop loss order. Stop loss orders are designed to close out your trade when the stock price reaches a certain price level. For example, our hypothetical trader might have chosen to set a stop loss at the $90 price level. If the stock goes down and our trader gets stopped out then he has lost $10 per share. This, of course, is much more appealing than losing the full $100 per share.
When you begin stock trading and enter into it with the “home run” mentality. Your initial objective should not be to hit a home run, but to stay in the game. By staying in the game. You give yourself many, many more opportunities to profit in your stock trading.

I’m calling this article trading stock for dummies because I want to illustrate to you the stock trading does not have to be as difficult as you might think.
In fact, it can actually be quite simple but, of course, you must follow a few basic rules.
If you’ve never traded stock before or have traded unsuccessfully you have to realize that it’s time for you to learn stock trading. Whether you’re interested in online stock day trading training or you want to trade longer-term, there are tons of resources available online and offline to help you gain the knowledge you need.
Before we get into that let’s chat a little bit about what stock trading is. Trading and investing are terms that are often used interchangeably. Investing is longer-term in nature. Trading stock is typically shorter term in nature and seeks to take advantage of smaller market movements within the larger trends.
Trading stock, means that you are taking a more active role than if you are investing in stock. Let’s look at an example of a very simple stock trade.
Buy 100 Shares Of XYZ Company at Monday’s Open
Sell 100 Shares Of XYZ Company at Friday’s Close
Please keep in mind that this is just a simplified example and not a suggestion of a trade for any security. The above example is of a very simple trade that lasted for one week. Here’s an example of stock day trading using the same fictitious company is above.
Buy 100 Shares Of XYZ company at Monday’s open
Sell 100 Shares Of XYZ Company at Monday’s close
As you can see in both examples we open the trade with a buy order and close the trade with a sell order. In both cases we were “bullish” and chose to “go long” the stock. Our second example was a stock day trade because we opened and closed out our position all within the same trading day. Some stock day traders place a much greater frequency of trades during the day.
You can also see that in both examples we specified the quantity to be traded and also both examples we closed our trades using that exact same quantity. It’s always important to keep this in mind and make sure you are completely out of a trade when you want to be. What I mean by that is that when your trading method requires your position to be closed make sure that you close the trade using the same quantity of stock as you opened the trade with…That way you will not have any unwanted open positions that may potentially move against you.
Something else that’s important for you to keep in mind is that different types of stock trading will require different amounts of capital. For example, opening a standard stock brokerage account can require as little as $500-$1000 to get you started. If, however you find that you will frequently day trade than your minimum may go up if you’re classified as a pattern daytrader. A pattern daytrader places four or more day trades in a rolling five-trading-day period, stock brokerages will then require that you maintain a minimum balance of $25,000 in your account and this may vary upward depending upon the online stock broker that you are using.
So you can see trading stocks need not be mystical or difficult as long as you keep the “trading stock for dummies” attitude in mind and continue to learn while you earn while keeping things as simple and uncomplicated as possible.