Stock trading involves buying and selling stocks for a profit. Many people are able to make a living through stock trading. Or at least they did until the Coronavirus pandemic hit the world. The stock market has changed dramatically since and may never return to the stock market we knew before.
The pandemic has led to many people asking, ‘just how reasonable is stock trading in 2020?’ Well, the volume of trading in the stock market has certainly declined but that does not mean it is obsolete.
The following reasons show that stock trading is still reasonable in 2020:
The prices of stocks in the stock markets all over the world have fallen ever since the Coronavirus affected the planet. Many stock markets have seen record lows as people simply do not want to risk their money in case the pandemic gets worse. That means that stock traders can acquire stocks at very low prices this year. In some cases, the prices may be lower than they have ever been.
Such low prices offer great profit opportunities. It may be harder to sell such stock at a high price, but if you can wait for the right offer, fortune will befall a brave trader.
Low stock prices such as the ones seen in 2020 also offer the opportunity to discover a hidden gem. Though most traders aim to make a quick profit, there are certain companies that traders would like to hold on to but never get the chance.
The Covid-19 crisis might just be the opportunity you were waiting for to find a great company for pennies on the dollar.
Time to Learn
Trading stocks is an art form and a science. You can always learn something about your craft, especially now that the market is slightly inactive with such little trading volume.
For the more opportunistic traders, this is a time to learn and to practice. Use educational sites like Investopedia to learn as much about the stock market as possible. Investopedia is an incredibly useful site for stock traders.
When the stock market trading returns to normal, you will be better placed to take advantage of opportunities. Moreover, many traders’ skills will have diminished from inactivity during the pandemic.
Use Trading Tools
As we have stated, 2020 is a time where you can take advantage to learn as much about the stock market as possible. One way in which you can do so is to learn how to use trading tools.
Trading tools offer insight into the world of successful stock traders and stock market insiders. One such tool is GuruFocus which can help you uncover stock trading ideas, receive pertinent financial news, and perform research. By using trading tools, your profitability and success rate in stock trading will certainly increase. You just need to better understand how to use the tools to your advantage.
Learn About Human Misjudgment
Success and failure in the world of stock trading is often a matter of judgment. There has never been a better time to learn about how emotions like fear affect our judgment, especially as it pertains to stock trading.
According to an article from the New York Times, most people are trading stocks on their phones while listening to pandemic news on the TV. That is surely going to affect your judgment.
Therefore, stock trading is reasonable in 2020 as it can help you learn about yourself in the harshest of times. That way, you will learn how to handle yourself through tough trading times in the future and other aspects of your life.
Create Another Income Stream
If you have only dabbled with stock trading in the past, then now may be the time to commit a little more to the discipline. It may help you create another income stream once 2020 ends or even during the year.
There are still people making profits during this time. If you can learn how to be successful at stock trading, you may leave this crisis with a secondary stream of income that is certainly beneficial. Such an income stream is particularly useful during such harsh times. However, it is one of the best ways to earn money while working from home and isolated.
As you can see, there are plenty of reasons to continue stock trading in 2020. It is definitely reasonable to continue trading this year, despite unforeseen circumstances. The real question is whether you are going to become a better or a worse trader after the pandemic. The answer is up to you.