Online trading is a hot topic not just in India but also worldwide. Many people are taking it up as a full-time profession, as it holds much potential. Everyone, from college students to retired individuals, are trading online.
It is important to inform them of the basics in a stock market, such as, who are involved, what is traded, how money is earned, and the risks associated, etc. Unless you give them a good background and proper introduction to the markets, they won't know what they are doing. With awareness and practice, they will be able to trade more confidently in time.
Anyone who trades in the financial markets needs to be very well-informed about the stocks they wish to invest in, it’s history, and how they have performed over time. Inform your kids on the importance of research before investing. Researching and doing the homework will help them earn higher profits in the financial markets.
Youngsters are often impulsive and lack patience. However, it will help if you teach your kids that patience can bring the desired yields. Being impulsive when investing is dangerous. Encourage your kids to read up, understand the risks, the scope of the stocks and then invest, sell or buy.
Tell your kids that it is essential to set targets and understand their own investment objectives rather than following a herd or random advice. For example, if their goal is to save for college tuition, allow the child to set age-appropriate financial goals through trading and then coach them to earn the money needed. Furthermore, it is important to emphasise that one’s goals are reflective of their trading style, so it is crucial to not fall prey to deviating.
Finally, allow your kids to make mistakes. Do not be harsh with them if they make mistakes. Everyone learns through mistakes, and a couple of mistakes in the teething phase won't harm them. Just ensure no significant financial loss occurs due to their mistakes, but some harmless mistakes would act as great stepping stones.
Ease your kids into the world of online trading and open up a sea of opportunities for them. However, until they are old enough to understand the responsibility of being financially independent, monitor their activities and guide them as and when needed.
Doing so will make it easier for both of you, and your kids will have a good foundation. If they learn systematically, they can make a great career out of online trading when they grow older.
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