How to start on the Stock Exchange?

In this article, we will show you 40 tips to start on the stock exchange in 2021 from scratch.

See also : How do banks calculate the interest rate?

Article summary:

  • Tip #1 to start well on the stock exchange: Train yourself before taking action Advice #2 to start well on the
  • stock exchange: Escape forex Advice #3 to start well on the
  • stock exchange: Escape binary options
  • Advice #4 to start well on the stock exchange: Escape the real estate
  • Advice #5 to start well on the stock market: Preference shares
  • Consulting #6 to start well on the stock exchange: Beware of mass media
  • Advice #7 to start well on the stock exchange: Beware of people who are not transparent about their investment
  • Advice #8 to start on the stock exchange: Always have a precautionary savings
  • Advice #9 to get started on the stock exchange: Choose the right Broker
  • Advice #10 to start well on the stock exchange: Pass the right stock exchange orders
  • Consulting #11 to start well on the stock exchange: Define your risk profile
  • Advice #12 to start on the stock exchange: Be aware of the free time you have available to invest
  • Advice #13 to start on the stock exchange As a trader: Escape the shares of the CAC 40
  • Tip #14 to get started on the stock market as a trader: Long live US equities!
  • Tip #15 to start on the stock market as a trader: Forget the Stock Savings Plan
  • Advice #16 to get started as a trader: Don’t waste your time with fundamental analysis
  • Advice #17 to get started as a trader: Focus on technical analysis
  • Advice #18 for good Start on the stock exchange as a trader: Use the daily time-unit
  • Tip #19 for Start well as a trader: Do not stick in front of your screen
  • Tip #20 to start on the stock exchange as a trader: The stock exchange is 5% strategy and 95% psychology
  • Advice #21 to start on the stock exchange as a trader: Always do 1 month of paper trading to test a new method
  • Tip #22 to start well as a trader: Beware of simulators
  • Advice #23 to get started as a trader: Start small
  • tip #24 to get started as a trader: Use the right tools
  • Advice #25 to get started as a trader: Do not invest everything your capital at once
  • Tip #26 to start on the stock exchange as a trader: Be ready to lose
  • Tip #27 to start well as a trader: Consider invested money as lost
  • Tip #28 to start on the stock exchange as a trader: Never invest against trend
  • Tip #29 to start on the stock market as a trader: Don’t bet everything on the same horse
  • Advice #30 to start on the stock exchange as a trader: Always prepare a stop order
  • Tip #31 to start on the stock exchange as a trader: Always have your exit point
  • Advice #32 to start on the stock exchange as a trader: Always withdraw 25/ 50% of your earnings
  • Advice #33 to get started as an investor: Learn how to diversify your investments
  • Advice #34 to get started as an investor: Beware of taxation
  • Tip #35 to start on the stock exchange as an investor: Invest in ETFs
  • Consulting #36 to start well as an investor: Create a diversified portfolio
  • Advice #37 for good Getting started as an investor: Be patient
  • Tip #38 to start on the stock exchange as an investor: Be aware that all years will be different
  • Advice #39 to get started as an investor: Use the right tools
  • Advice #40 to get started as an investor: Train yourself

In 2010, we created a decision support tool to easily invest on the stock exchange. We called this AFM tool for Future Millionaires Algorithm.

Related topic : What is a mutual broker?

Thanks to this tool, we have transformed a few hundred euros into several million euros today.

You can click here if you would like to have more information about AFM.

In this article, we will give you the 40 tips we would have liked to receive when we started investing in 2010.

Plan de l'article

Advice #1 to get started on the stock exchange: Train yourself before taking action

This advice is as important as the other 39.

If you invest without training 10,000€ and after 2 weeks, you have only €2,000 left, it is because you will pay for the fact that you do not have trained yourself. Your refusal to train yourself will cost you €8,000.

If you train and earn 20% per year (starting capital of €10,000) instead of 10%, you will have after 20 years:

  • 10%: 67,275€
  • 20%: 383,376€

You see how important it is to train yourself, just by reading this article to the end for example.

Tip #2 to get started on the stock exchange: Escape the forex

Forex, if you ignore what it is, is the currency market. 1 dollar vs. 1 euro, etc…

These exchanges are quoted. It is therefore theoretically possible to buy dollars, wait a few hours/days and resell your dollars with added value. But that’s in theory.

Forex is VERY popular among beginners for, in our opinion, 2 reasons:

  • Currency can be exchanged at any time of the day and night.
  • We can use strong leverage effects (which multiplies by 10, 20 your gains but also and above all your losses)

The problem with currencies is that it is impossible to define the intrinsic value of a currency. And so it is impossible to determine in advance the price of a currency in a few months, years…

Unlike a growing action whose intrinsic value increases every year.

It is impossible to determine a long-term trend, so it is very difficult to determine a short-term trend.

That’s why most people who start forex end up ruined in a matter of weeks/months.

Tip #3 to get started on the stock exchange: Escape binary options

Binary options consist of buying PUTS and CALLS to bet on the rise or drop. The problem is that these options only enrich your broker who charges these options at a high price.

Not to mention the scams (95% of brokers in the forex market and options) that simply prevent you from withdrawing your winnings!

And since these companies are often abroad, you lost 100% of your money as soon as you opened your account but you didn’t know…

If you only had to remember one thing of these 2 tips: Forex/binary options = scam. So run away.

Advice #4 for good Start on the stock exchange: Escape Real Estate

Many of the people who follow our blog are interested in financial independence and not the stock market. It is for this reason that at one time or another, these people think about investing in real estate. Here is our point of view:

The question is simple: can you earn 50% a year with real estate? The answer is that simple, it’s no.

In addition to a very low yield, real estate has many drawbacks:

  • Difficult diversification (the slightest apartment costs several tens of thousands of euros)
  • Sometimes complicated tenant management
  • Rental holidays
  • Work and maintenance that nibble profitability
  • The obligation to have resorted to an expensive real estate loan (which still comes to nibble profitability)
  • Difficulty in resale
  • Taxes…

Unfortunately, the list is still long and most of the time we arrive at real returns of 2 -3% per YEAR!

The conclusion is simple: if you want to take a giant step towards financial independence (and not in 25 years), forget about real estate 🙂

Tip #5 to get started on the stock market: Preferred shares

In the long term, shares are 100% winners. You can judge this with the SP500 which a stock index that already existed during the French Revolution:

You will understand, diversifying well you are almost sure to earn 7 -8% a year. Actions, contrary to what one might think, are not that risky as that.

There are, of course, accidents industrial companies and companies that put the key under the door. But there are also very many surprises, for example: Apple, stock price multiplied by 100 in 10 years.

7 -8% a year is good. 7 -8% per month is better, it’s up to you to choose your shares well.

Tip #6 to get a good start on the stock exchange: Beware of mass media

France loves experts. There are many TV shows or specialty magazines that invite perfect strangers to listen to them give advice.

Unfortunately, these experts are rarely experts. The worst thing is that often they are not investors themselves!

We come to the following advice:

Tip #7 to get started on the stock exchange: Beware of people who are not transparent about their investments

The world of purse and money as a whole are filled with scammers who try to make money on your back.

As for “experts”, there is a very simple way to spot them: do they have a performance history or transparent advice?

If the answer is no, suspicion.

One tip, if you see someone selling 10 trainings for 10 different strategies, is that there are 9 too many. 9 that probably don’t work and we’re trying to make money on your back.

If you have the slightest doubt: run away. Simply.

It is for this reason that we decided to share in real time, the balance of our securities account (several million euros invested) to our subscribers.

More information by clicking here.

Tip #8 to get started on the stock exchange: Always have a precautionary savings

You can read our article “How to become rich? “, before investing, you must have precautionary savings.

If you are a father of a family and have only €1,000 in savings, the stock exchange is, in the short term, not for you. Quite simply, because the stock exchange will always present a risk of capital loss, you absolutely need to be aware of this.

Never invest money you may need in the short term to repair your car or washing machine for example…

Tip #9 to get started on the stock exchange: Choose the right broker

Some brokers will charge you 50€ per transaction in dollars. If you invest €1,000 in an action and you pay 50€ on purchase and 50€ on sale, you will have to earn 10% to pay your broker fees. As much as to tell you that you start the race with a ball in the foot.

The choice of the broker is therefore paramount! We invite you to read the big comparison we made on our blog: how to choose the right broker to invest in the stock exchange.

Here is simply the cheapest broker for the USA stock market: DeGiro. It may be useless but we would like to clarify that we are not affiliated with this broker but simply satisfied users 🙂

We have already been asked: we can, of course, make incoming and outgoing transfers at no cost and at any time.

Tip #10 to get started on the stock exchange: Pass the right stock exchange orders

Pending a stock exchange order is like buying a stock. In order for there to be a sale, it takes a buyer and a seller. That is, the stock exchange is an exchange between buyers and sellers. In order for there to be a salesman, you need a Buyer.

There are mainly two types of orders: market orders and limit order.

The first type of order: the market order is to say “I buy whatever the price”, the limit order is to say “I buy at a price of 27,54€”.

In the first case, if the market price is 30€, you can find yourself buying at 25€ and you will already be in value of 17%! Believe us this mistake you may do it once but not two.

Always make limited-price orders especially if you invest in low-liquidity stocks.

If you want to know more about stock exchange orders, click here to discover our full article.

Tip #11 to get started on the stock exchange: Accurately define your risk profile

Who says purse says risks losing everything. If you’re ready to lose everything then you can double your capital every hour. If you are not ready to take a lot of risk, then do not hope to earn more than 3% per year.

What would you do if your wallet lost 10%? That you spend from €10 000 to €9 000?

  • I sell and stop the purse
  • I keep investing because I’m sure of myself

What would you do if your wallet lost 30%? That you spend from €10 000 to 7,000€?

  • I sell and stop the purse
  • I keep investing because I’m sure of myself

What would you do if your wallet lost 50%? That you spend from €10 000 to €5,000?

  • I sell and stop the purse
  • I keep investing because I’m sure of myself

By reflecting and answering these questions, you can start defining your risk profile. Your risk profile will depend on your investment strategy.

Tip #12 to get started on the stock exchange: Be aware of the free time you have available to invest

In our view, there are two main investment methods:

  • Trading
  • Investment

Trading will take you from a few minutes every day to several hours. The investment will take you from a few minutes every month to a few hours.

Depending on your time (and your goals), you will choose one or the other method. Know, that in general, the more time you spend and the greater your potential earnings.

From now on, advice 13 to 32 will be directed to traders and advice 33 to 40 to investors.

Tip #13 to start on the stock market as a trader: Escape the shares of the CAC 40

If you want to achieve financial independence quickly, simply flee the CAC 40. Good deeds earn 15% a year, bad 3%.

At this rate, you will achieve financial independence in 40 years, no more, no less.

CAC 40 is simply popular in France by chauvinism. The French like to invest in French companies.

If I had millions of euros to invest, I would probably do the same.

But between earning 5% a year with the shares of the CAC 40 and 50% per year with US equities the choice is quickly made.

Tip #14 to start on the stock market as a trader: Long live US equities!

In the USA market, all conditions are met:

  • Volume: Stocks sell and buy much easier
  • Yields: It’s almost impossible to earn 50% a year in Europe

If you invest only in Europe, we sincerely believe that you are making a mistake.

Do not be afraid not to follow the mass.

Tip #15 to get started as a trader: Forget the Stock Savings Plan

The PEA is a tax envelope that allows you to pay less taxes provided you only invest in Europe.

We let you choose:

  • Earn 5% per year and pay less tax
  • Earn 50% per year

If your goal is to achieve financial independence quickly, you don’t have to hesitate for a single second.

Again:

Do not be afraid not to follow the mass.

Tip #16 to get started as a trader: Don’t waste your time with fundamental analysis

We had a period when we study the fundamental analysis a lot, we saw the shares as shares in a company and therefore we studied the fundamentals of the company before investing: balance sheet, cash, profits, etc…

This strategy, which we realized too late, is not working in the short term.

If you want to achieve financial independence quickly, you’ll have to learn how to identify trends, which is called Technical Analysis .

You buy when you detect an uptrend start and sell when you reach the end of that same trend.

On paper, we go from 10% per year to 50% per year.

Tip #17 to start on the stock market as a trader: Focus on technical analysis

Technical analysis is a full-fledged science of trying to determine trends, to benefit from it.

One of the most popular technical indicators is Ichimoku Kinko Hyo, you can find our article on the topic here: http://objectif10pourcent.com/ichimoku-kinko-hyo-lindicateur-ultime/

There are, of course, other indicators that are more or less effective, for you to find the ones that best suit you.

Tip #18 to start on the stock exchange as a trader: Use the daily time unit

On a chart, each price can represent a minute, an hour, a day, etc…

With technical analysis, you will identify trends of 10 minutes, 10 hours or 10 days depending on the chosen unit of time.

Your results will be in this order:

  • 0.1% in 10 minutes
  • 1% in 10 hours
  • 10% in 10 days

The most active traders try to earn 0.1% in minutes. The least active try to earn 10% in a few months.

Tip #19 to start on the stock market as a trader: Don’t stick in front of your screen

Using the daily time unit, you will identify trends of several days. So it’s pointless to look at the purse every 10 minutes.

It is even counterproductive because you will want to sell at the slightest bearish micro-movement…

We invest in the US market (Opening: 15:30 French time, closing: 22h), we noticed that the big of the movement often took place at the opening.

We advise you to limit yourself to looking at the purse three times a day:

  • At the opening (15:30)
  • Mid-session (6pm-7pm)
  • At the end of the session (9pm-10pm)

Our strategy is particularly interesting if you are still an employee and dream of financial independence.

If you can only watch the purse once a day, look there around 6pm-7pm.

Note that it is possible to look at the actions on your mobile phone for example. A little look at the 5-6 actions you monitor, it will never take you more than 5 minutes.

Tip #20 to start on the stock exchange as a trader: The stock exchange is 5% strategy and 95% psychology

You may have a strategy in hand if it is not rigorously applied, you will not have the desired effects.

This is difficult to explain but it is impossible to “predict” how the stock price will evolve.

It’s like you’re in the dark and told you to always go straight. Many would be too scared and turn around.

It’s the same with the purse, though you have all your indicators green, if you’re afraid, you won’t take action. Psychology is therefore a very important point.

Tip #21 to start on the stock exchange as a trader: Always do 1 month of paper trading to test a new method

The best way to beat this “fear” is not to invest your own money.

For a month, take a sheet of paper and note the actions you would have bought. If you lose virtual money, try to figure out why.

If a month is not enough for you, continue until you are ready.

Do not get into the wolf’s mouth until you’re ready to 200%.

Tip #22 to get started as a trader : Beware of simulators

When you start on the stock exchange, the first reflex is often to invest via simulators or create a virtual portfolio. Even if we think this is a very good way to learn how to invest and especially to make your first mistakes, investing virtually is very different from investing your money “for real”.

With the best preparation in the world, a very thorough analysis of the company in question, you will never be 100% sure of making a good investment. There will always be a share of doubts and uncertainties.

As we like to recall, the scholarship is 1% method and 99% discipline.

How will you react when your first investment loses 10 -20% of its value? This is what happens to all novice investors and most, in panic, sell at a loss… Just before the stock market price goes back!

The larger the amount invested and the more psychological aspect, doubt will take over your mind. It is this psychological dimension that is not present through virtual portfolio so beware in!

Tip #23 to get started as a trader : Start small

This board overlapping the #2 board. At your beginnings: Test, experiment and above all mistake. It doesn’t matter if you’ve invested only a tiny part of your wealth in a bad placement. Once your method is completed, this is where you will be able to invest larger amounts and enrich yourself sustainably with the purse.

There is no minimum for investing in the stock exchange. We started with a few hundred euros and became millionaires in just a decade.

Tip #24 to get started as a trader : Use the right tools

Analyze charts:

  • TradingView
  • Stockcharts
  • Prorealtime

Find actions with high potential:

  • Finviz

Tip #25 to get started as a trader: Don’t invest all your capital at once

Once your paper trading month is over. Invest a small sum to start: 1000€ is ideal. Don’t invest all of your capital in a sudden.

Again the reason is simple: psychology. Investing virtual money and investing real money is not the same thing.

So go gradually for 1 month or 2.

We repeat: Do not throw yourself into the wolf’s mouth until you’re ready to 200%.

Tip #26 to get started as a trader: Be ready to lose

Our strategy allows us to earn in 80% of cases. If you are good at mathematics, you understand that we lose in 20% of cases.

If you invest in the stock exchange like us, you must be ready to lose. The objective is to:

  • To win more often than losing!
  • Let the gains be very much higher than losses!

Tip #27 to get started on the stock market as a trader : Consider the invested money as lost

This solution is radical but consider the money invested, in your early days, as permanently lost. Even if you follow the best trainings, read the best books, you will make mistakes. The important thing is not to avoid mistakes but rather to learn from your mistakes.

Consider your first, second, third investment as tests. Take risks, go off the beaten track, test innovative methods and see if it works. It is in your early days that you need to define a method that will work precisely for you.

In our early days on the stock market, we made countless mistakes. We tested, studied, learned for several years before we found a method that really worked for us. Every year was better than the previous one.

Tip #28 to get started Stock Exchange as a Trader: Never Invest at Against Trend

We invest in the US market and we like to look at European stock exchanges (which opens before). When the CAC40 gains 3%, we know that the US stock exchanges will open up sharply.

When the CAC40 loses -3%, we remain very suspicious.

The important thing is to never invest against the trend. If the trend is bearish, do not risk and refrain.

Tip #29 to start on the stock market as a trader: Don’t bet everything on the same horse

Do not invest 100% of your portfolio on one and one share.

Because if this share loses 20%, your wallet will lose 20%. Once you have lost 20%, you will need to earn 25% to return to balance, i.e. your initial wallet.

Our recommendation is to have no more than 10% of its capital in a single position.

Tip #30 to start on the stock exchange as a trader: Always prepare a stop order

This is what we teach our students in our training: you must always have a stop order. Some brokers call these orders “trigger threshold”.

We advise you to place this stop order at 50% of your profit target. Explanation: you buy a 10€ share, your profit target is 12€ (you want to win 20%). 50% of 2€ = 1€. Your stop order will be 10€ — 1€ or 9€.

To sum up, you take a position at 10€:

  • If the stock price exceeds €12, you sell with an added value of 20%.
  • If the stock price goes below 9€, you sell with a loss of 1€

Tip #31 to start on the stock exchange as a trader: Always have your exit point in mind

This advice goes hand in hand with the previous board. At each position, you must have a profit objective and a maximum loss threshold to meet. It’s very important!

Let’s imagine that you take a position at €10, here are two typical scenarios:

  • Everything goes as you want, the action rises: 11€, 12€ (you do not sell because you want to earn even more), 13€, 14€, 15€, 14€ (you do not sell because you think the action will go higher), €12, €9, 5€ (you do not sell because you think the action will go up), 3€, 1€, etc…
  • Nothing happens as you want the action plonge: 9€ (you do not sell because you think the action will go up), 8€, 7€, 6€, 5€, etc…

These two scenarios are real: we both experienced them in our early days. By respecting your profit target and stop order, in 5% of cases, you will miss the action of the century (which continues to climb) and 95% of cases, you will avoid losing all your money!

Because nothing beats practice, you will see what happens if you do not respect your profit goal or stop order…

Tip #32 to get started as a trader: Always withdraw 25/ 50% of your winnings

With the purse, you can earn a lot of money quickly and lose it just as quickly.

As long as the money is in your securities account, the money is not definitely in your pocket, it is for this reason that we advise you to regularly withdraw part of your winnings.

The scholarship can sometimes be frustrating so feel free to use this money to make you happy.

Tip #33 to get started as an investor: Learn how to diversify your investments

It must be admitted: Shares remain a risky but remunerating investment in the long term. One share can lose 10% of its value in one day as it can earn 10% on another.

To avoid seeing the value of your portfolio do yo-yo, invest in multiple companies in different countries, in different sectors to reduce your risk exposure.

Also invest according to your goals and age. We don’t buy the same shares at the age of 20 as at age 60.

You must also diversify your investments in terms of assets: equities, bonds, commodities, etc…

We’re going to go into the details a little further in this article.

Tip #34 to start on the stock exchange as an investor: Beware of taxation

Taxation can have a strong influence on your stock market performance.

If you like to buy and sell regularly, you have to pay 30% tax on capital gains, even if your money stays on your securities account.

Fortunately, there are solutions to invest on the stock exchange, without paying taxes.

Tip #35 to get started as an investor: Invest in ETFs

90% of investors do not beat the market, so why try to beat it in the long term? The best advice we can give you is to copy it.

To do this, we use what is called ETFs or trackers (click here to access a more complete article):

These ETFs copy clues fellows such as the CAC 40:

  • If CAC 40 wins 1%, CAC 40 ETF will win 1%
  • If the CAC 40 loses -1%, the CAC 40 ETF will lose -1%

It’s a real children’s game!

Tip #36 to get started as an investor: Creating a Diversified Portfolio

As explained earlier, ETFs copy the clues. But not only equity indices, there are also bonds, commodities, precious metals, etc.

The more you diversify, the more risk and volatility you decrease, the more you will decrease performance over the long term.

Here is an article in which we present 10 diversification strategies.

Tip #37 to start a good stock exchange as an investor: Be patient

Investing in the stock exchange is of interest only if you are aiming for the long term. Do not hope to become a millionaire for less than 10 years. If your goal is to get rich by slamming fingers from your couch, then pass your way.

The scholarship is an exciting enrichment vehicle provided you are disciplined and invested regularly.

Performance of W. Buffet in 50 years: 2 850 000% Do not forget that it takes 5 minutes to learn the rules (buy/sell shares), and a lifetime to master the subtleties of them.

Tip #38 to start on the stock exchange as an investor: Be aware that all years will be different

When you are told that this investment will earn 10% a year, we think:

  • 2021: 10%
  • 2022: 10%
  • 2023: 10%

While reality will rather look like this:

  • 2021: 23.44%
  • 2022: -5.99%
  • 2023: 3.12%
  • Etc…

If you invest in the long term, do it for real, do not change your mind after 6 months otherwise it will have no interest.

Tip #39 to get started as an investor: Use the right tools

Here are the best tools to invest in the long term:

Find ETFs:

  • Morningstar
  • ETFDB file

Choosing your own actions:

  • Stockopedia

Tip #40 to get started on the stock exchange as an investor: Train yourself

We repeat the advice #1 because it is the most important:

If you think you will be able to enrich yourself in your corner with the purse… You are seriously mistaken! Like us in our beginnings.

In fact, we explain our scholarship success by two things:

  • First of all, we made a lot of mistakes… Only once. We never made the same mistake twice in a row and we never gave up.
  • Second key: We read a lot of books, followed trainings and, as good students, we systematically applied what we learned.

Learning, training, reading books is useless if you do not apply. Remember: The scholarship is 1% technical and 99% discipline.

To go further, we invite you to follow our free click-through training.

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