How to Buy Stocks With Two Precise Strategies

In the investment world, how to buy stocks is a topic that has become popular recently. Not without reason, certificates of shares or ownership of this company are expected to provide the highest returns or returns compared to instruments. For a beginner, buying stocks is confusing.

It is only natural, because buying shares is not as easy as buying food in a shop. Because, in the secondary market (exchange) or in stock trading activities, prices will vary. Whether in the form of an increase or decrease, the formation of share prices occurs due to the demand and supply of these shares.

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Initial knowledge of the world of stock investing can start from basic knowledge of when to buy and when to sell shares. In this article, we will discuss 7 strategies of how to buy stocks, including of course important strategies for mitigating the risk of loss in stock investment. Come on, let’s have a look.

Type of Stocks

Buying shares through the application is very profitable and efficient. Moreover, if we invest in global stocks. However, before reviewing how to buy stocks on the stock exchange, it is a good idea to first know the types of stocks. as follows:

1. Types of shares based on ownership

Ownership-based shares include two, ordinary and preferred shares. Here are the stock types and examples.

- Common stock is a type of stock that can claim ownership according to the profits and losses incurred by the company. However, shareholders have limited liability. An example of common stock is stock warrants.

- Preferred stock is a combination of common stock and bonds. Generally similar to ordinary shares, the difference is only in the interest rate of the profit earned.

2. Types of shares based on how they are transferred

Types of shares based on how to buy stocks based on their transfer are divided into two, among others:

- Bearer Stocks are shares whose ownership names are not written on a sheet of paper so that these types of shares can be easily transferred.

- Shares in the name (Registered Stocks) are proven ownership of shares in the name written on the securities.

3. Types of stocks based on trading performance

Meanwhile, based on trading performance, stocks are divided into 5 types, including:

- Blue Chip Stocks are shares issued by highly reputable companies

- Income Stocks are superior stocks that always pay dividends or profits that are greater than the average dividend paid in the previous period

- Growth Stocks are stocks with high revenue growth, which include two types, Well-Known and Lesser-Known

- Speculative stocks are stocks with high returns but cannot provide consistent returns. This type of stock is suitable for investors with a high risk risk profile

- Counter Cyclical Stocks are stocks that have the most stability when the economic situation is volatile

Strategy When Buying Stocks

The first strategy is to decide when is the right time to buy shares. Well, when it comes to the right time, it can really be seen from two things, which is based on fundamental and technical analysis, this is a short explanation.

1. Fundamental Analysis

This analysis refers to the approach to economic conditions, politics, or even looking at current business development trends. This analysis is one way how to buy stocks by looking at the company’s financial statements.

2. Technical Analysis

Meanwhile, technical analysis is the analysis of stocks by the method of the stock’s own movement, over a period of time. This includes prices and their fluctuations, as well as information on stock highs and lows. This analysis is useful for determining shares of companies worth buying.

The next strategy of how to buy stocks is to understand the company’s profile. There are things we need to consider before buying shares, including:

  • A company’s liquidity level
  • Market trend
  • Return on Equity (ROE) or profit from shareholders’ investment in the company
  • Sale or sale
  • Earnings per Share (EPS) Growth.

Friends of Narabasa.com, of course, apart from paying attention to the important points above. How to buy stocks to be safe, you must pay attention to the following important things:

1. Buying On Weakness

Which is buying when the price of the stock has fallen to a certain level that is safe to buy.

2. Buy If / On Breakout

Which is buying when the stock price manages to penetrate a certain level or rises through resistance (its highest level).

3. Buying on Retracement

Which is buying shares after a breakout or bottom price occurs. Stocks that break out successfully will generally experience strong gains immediately,

How to Buy Stocks For Beginer

If you are new to the global stock exchange. Of course you have to be selective when choosing a reliable broker to start investing in stocks. Thanks to technological advances, buying shares is quite easy and affordable, you know. Ok, here is Narabasa.com giving a tutorial on how to invest in stocks, as follows:

1. Choose a Stockbroker

When starting stock investing, you have to choose and appoint a broker or stock broker. Brokers are parties who have a role as a link and intermediary between the capital market and you as an investor. A stockbroker can be a company, but can also be an individual.

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As well as connecting you to the capital market, the broker must also be responsible for all the buying and selling of shares that you do as an investor. They are also responsible for helping you analyze the capital market. Make sure they are incorporated as members on the Stock Exchange.

Because now everything is online, it is very easy how to buy stocks. All securities companies have provided applications to make it easier for you to monitor, or conduct stock buying and selling transactions.

2. RDN Registration

How to buy stocks online, first you must register and open a stock account with a securities company. This account is not an account like a savings account, but is a Customer Fund Account (RDN) specifically for storing capital in share buying and selling transactions.

The process of registering for an RDN is easy, just contact the securities company or stockbroker of your choice. Later, you fill in a form and attach a number of complementary documents. After that, you can download and use applications from securities companies.

3. Make an Initial Capital Deposit

It’s called investment, of course it requires capital. Stocks also require capital. Well, the amount of capital can vary, depending on the securities broker you choose.

How to buy stocks is enough with a capital of only $ 10, but there are also those who need an initial capital of hundreds of dollars. Choose according to your abilities and needs when investing in stocks.

4. Start Trading

Once you have deposited capital, you can start buying and selling shares. Later, you have to pay certain fees with different rates between securities brokers. Later you will see terms like lots, acquisitions, buybacks, capital gains etc.

Conclusion

Keep in mind, all types of investment must have risks. You need to understand the type of investment and how to buy stocks through how it works. From this you will understand what you have to do and you can reduce or even avoid losses. For those of you who are active traders.

If the stock you are holding continues to fall, then it is better to take a stop loss immediately. There are two ways that can be used as a benchmark in determining the stop loss point of a stock, namely based on the purchase price and based on the support point. You can set a cut loss limit from the start of 5% or 7%.

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