Trading stocks in 2025: Making a profit is not easy, but it's not something to be afraid of

It’s natural for many people to be interested in stock trading, but they approach it with suspicion. Why? Because they usually hear about risks and complexities. However, if we understand the basic methods and follow the appropriate path, stock trading can shift from being something scary to something manageable.

What exactly is stock trading?

Ultimately, stock trading is buying and selling stocks over a short period to profit from price changes. This differs from long-term investing, which aims to hold stocks for future returns. Trading involves dynamic movements that require quick actions and important decisions.

What makes it appealing is that profit opportunities exist in both bullish and bearish markets, as long as we can reasonably predict the market direction. But the problem is that the risks are higher than regular investing because decisions must be made quickly, and short-term price fluctuations are hard to predict.

Experienced traders often use technical analysis—looking at charts, trading volume, and various signal tools—to catch good timing. Some also incorporate fundamental factors, but for beginners, it’s recommended to start by understanding the basics first.

6 main steps traders must take

Step 1: Find the right brokerage firm

Before diving into trading, you need to open an account with a brokerage firm. The current market offers many options both domestically and internationally. Key factors to consider are fees, trustworthiness, and ease of use.

Applying for an account is usually straightforward, with minimal documents, and can often be done online. Many brokers require only a small minimum deposit, often just a few hundred baht.

Step 2: Set a clear investment plan

This is a very important step. You must have a plan on how much money to invest and ensure that it’s money you can afford to lose—not emergency funds or daily living expenses.

Professional traders generally follow the rule of not risking more than 10% of their total assets in a single stock. They often start with small amounts and increase their capital as confidence grows.

This plan should also include setting profit targets and stop-loss levels per trade. Many say that you should not risk losing more than 2-3% of your total capital on a single trade.

Step 3: Learn about order types

Trading stocks requires understanding various order types. The most common ones are:

Market Order: Buy or sell immediately at the current market price. It’s fast but the actual price may differ slightly.

Limit Order: Set a specific price at which to buy or sell. The order executes only if the market reaches that price, ensuring a certain price but not guaranteeing execution.

Stop Loss and Take Profit: These two orders help manage risk effectively. Stop Loss limits potential losses, while Take Profit locks in gains when the target price is reached.

Step 4: Practice with a demo account first

However, before trading with real money, it’s recommended to practice with a demo account. Most brokerages offer this service. Simulated trading helps you get used to real trading conditions without risking actual funds.

While practicing, choose a stock, analyze it, and track whether your predictions are correct. Doing this for 3-6 months will help you understand the market better and build confidence in your decisions.

Additionally, practicing allows you to test different strategies to find what suits you best, and importantly, learn trading psychology—something many overlook.

Step 5: Compare your performance with an index

The goal of trading is to outperform the index, such as the SET Index or S&P 500. If you earn 5% annually but the index rises 10%, you haven’t achieved success.

This comparison helps clarify whether your approach is effective. If not, you may need to adjust your strategy or consider other investment methods.

Step 6: Keep a long-term perspective

Although trading is short-term, thinking long-term remains important. Don’t expect to get rich overnight. Successful trading requires patience, continuous learning, and emotional control.

Top traders often share the same approach: trading is just one part of a diversified portfolio, not the entire investment. Long-term investments in other assets should also be maintained.

Managing risk: the key to sustainable trading

The ability to manage risk is crucial for successful trading. Even with only a 60% success rate in predictions, profits can be made if risk is well-managed.

Tip 1: Diversify your positions

Never put all your money into a single stock. Spread your capital across multiple stocks. Each trade should risk no more than 2-3% of your total funds. This helps prevent large losses that could wipe out your account.

Tip 2: Use Stop Loss naturally

Stop Loss is setting a point where if the price drops to that level, you sell to prevent further losses. It’s a safeguard against significant losses. The key is to set this point before entering the trade, not after the price has fallen.

Tip 3: Be cautious of unreliable advice

Social media has both good and bad information. Many sources may have hidden agendas or lack real knowledge. Relying blindly on advice without analysis is risky. The best approach is to learn how to analyze yourself, use trustworthy sources, and understand deeply before trading.

Tip 4: Keep records and manage taxes

Recording every trade is essential for self-analysis and tax purposes. In Thailand, profits from trading are taxable, and the calculation methods can be complex.

Tip 5: Balance trading with long-term investing

Trading can be exciting, but it shouldn’t be your only investment strategy. A diversified portfolio, including both short-term and long-term assets, helps reduce overall risk.

How beginners should approach stock trading

For newcomers, choosing the right platform and tools is crucial.

Many brokerages now offer free demo accounts that simulate real trading conditions. The virtual funds can range from hundreds to millions of baht. Practice with an amount close to what you plan to use in real trading.

Service fees and support vary. Some have comprehensive educational centers covering from basics to advanced topics, with real-time charts, economic calendars, and news.

Most importantly, choose a regulated broker with good risk management systems, easy-to-use Stop Loss and Take Profit features.

Summary and key takeaways

In the end, stock trading is a skill that can be developed over time. It requires continuous learning, disciplined risk management, and solid fundamentals. Start with the basics, practice diligently, and gradually move to real trading when confident.

Successful trading doesn’t come from good intentions but from knowledge, experience, and discipline in risk control. This makes stock trading an effective tool for generating additional income.