Trading Stocks in Australia gives you one of the highest returns compared to the other Stock markets in the world as of 2020. The Australian Stock Exchange (ASX) comes in the top 15 Stock exchanges worldwide and trades a total volume of $67.5 million as of 2020.
In the past decade, the average return for each Australian trader is 6.5%, trading with moderate to high-risk assets. The Australian Stock Market also topped equities on indices, leaving behind the USA and Europe. This makes ASX a lucrative arena to start Stock trading.
How can I buy Stocks in Australia?
1. Sign up for a trading platform
Blueberry Markets is one of the leading trading platforms in Australia. We can help you learn how to trade Stocks in the ASX as smoothly as possible. Apart from Stocks, you can also trade Forex, Share CFDs, Commodities, and Cryptocurrency CFDs with us.
There is no subscription fee, and you can open a trading account for as low as $100. To get started, you’ll need the following requirements:
- 2x Photo IDs such as Passport and Driver’s License
- 1x Photo ID (Passport)
- 1x Proof of Address (Bank Statement or Phone bill no older than three months)
2. Study the market’s previous performance
Before you place your order, it is essential for you to study the market first. You can do this by studying past price movements and charts of the companies listed on the ASX. Some of the fastest-growing Stocks in the ASX are Ramsay Health Care, Pilbara Minerals, Megaport, and Bank of Queensland.
- Determine your trading goals: To understand how to trade in the Stock market and learn about the Stocks you want to trade, you must define your trading goals and objectives. It can also be helpful to identify your portfolio’s purpose and focus on Stocks that align with your investment goals.
- Be aware of the news and announcements: One of the most important things to do as a trader is to be up to date with financial experts’ market news and analyses. Read financial news every day to keep up with the industry trends and use this knowledge to make informed decisions.
Look for corporate presentations: Corporate presentations are less critical and comprehensive than financial statements, but they provide an overall view of how the firm is making money. Corporate presentations are easier to absorb as it talks about the company’s future and how they plan to outperform their competitors.
3. Choose the Shares you want to trade
It is recommended that beginners trade low to moderate risk Stocks as they provide you with enough security to make decent profits. You also need to determine the number of Shares you want to buy, as that will define your initial capital. The minimum investment you can do in the ASX is $500, implying that if ABC ltd. is valued at $10, you need to buy at least 50 Shares.
4. Place your first order
The two options you have for placing your first order are:
- Limit orders: You can set a maximum price to buy the Stocks when you trade by placing a limit order. When the Stock reaches that price within a specific period, the trade automatically gets executed.
- Market orders: Market orders can be placed when you wish to buy or sell a Share in real-time, according to the best available price.
Once you place an order, you’ll need to pay the brokerage fee and total trade value.
5. Monitor Stock performance
Once you have successfully placed an order on the ASX, you need to monitor the performance of your Stocks. If you plan to invest long-term, you can monitor the performance once a month. However, if you have a short or medium-term trading strategy, it is wise to check price movements every day.
Top tips for Stock trading in Australia
Always trade according to your risk appetite
If you have a low-risk appetite, you may want to diversify your portfolio and consider investing only in mid-cap or large-cap companies. However, if your risk tolerance is high, you can consider investing largely in a company.
Stay updated with the Australian economy
Stock trading in Australia means any change in the Australian economy will affect the ASX. Hence, you must be updated with the economy’s health, bank interest rates, government policy decisions, exchange rates, and more. It is recommended to check economic calendars for this purpose regularly.
Start with blue-chip companies
We recommend beginner traders start investing in blue-chip companies that hold a strong reputation and operate profitably. The top 50 established companies in Australia in which you can invest are listed on the S&P/ASX 50.
Diversify your portfolio with the ASX
Long-term profitability in Stock market trading depends on consistent efforts to learn about the companies, devising the right trading strategy, and keeping a close eye on the financial news and market trends. One of the best ways to get into Stock trading is through Share CFDs which allow you to trade with leverage with a small deposit.