Trading Academy
Everything you need to know before your first trade
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Risk warning
Trading stocks involves significant risk. You can lose some or all of your invested money. Past performance does not guarantee future results. The signals and analysis provided by Stock Alert Hub are for informational purposes only and do not constitute financial advice. Always do your own research before making investment decisions. Only invest money you can afford to lose. Stock markets are subject to volatility, economic events, and unpredictable fluctuations. Consider consulting a licensed financial advisor before trading.
Contents
1. What is stock trading?
When you buy a stock, you buy a tiny piece of a company. If the company grows and makes more money, your stock becomes more valuable. If the company struggles, your stock loses value.
There are two ways to make money from stocks:
Capital gains
Buy low, sell high. If you buy BMW at €70 and sell at €82, you make €12 profit per share. This is what most traders focus on.
Dividends
Some companies pay shareholders a portion of their profits. BMW pays ~€4.40 per share per year. You get paid just for holding the stock.
Stock markets are open during specific hours. The Frankfurt Stock Exchange (DAX) is open 9:00-17:30 CET. NYSE is open 15:30-22:00 CET. You can only buy and sell during these hours.
2. How to start investing
1
Open a broker account
You need a broker to buy stocks. Popular options in Germany: Trade Republic, Scalable Capital, N26 (for stocks), Interactive Brokers, or your bank (Comdirect, ING).
2
Verify your identity
German law (BaFin regulation) requires identity verification. You will need your passport/ID and proof of address. This usually takes 1-3 days.
3
Deposit money
Transfer money from your bank account to your broker. Start small — even €100 is enough to begin learning. Never invest money you cannot afford to lose.
4
Research before buying
Use Stock Alert Hub to analyze stocks. Check the swing score, RSI, and AI analysis before making any trade. Never buy based on emotions or tips from social media.
5
Place your first trade
Search for the stock ticker (e.g., BMW.DE), enter the number of shares, and click Buy. Start with well-known companies you understand.
3. Understanding buy signals
A buy signal means conditions suggest the stock price may go up. Stock Alert Hub uses multiple indicators to generate buy signals:
DEEP DISCOUNT
Stock is 15%+ below its 52-week high with RSI under 42. Like finding a €100 item on sale for €85. The bigger the discount, the more room to recover.
BUY WINDOW
Dividend ex-date is within 5 days and the stock has not run up yet. Buy now to receive the upcoming dividend payment.
HIGH YIELD
Dividend yield is 5%+ with RSI under 50. The stock pays excellent income and is not overbought.
MACD BULLISH CROSS
Short-term momentum is crossing above long-term momentum. Like a car shifting from reverse to forward gear — momentum is changing direction.
RSI OVERSOLD (below 30)
The stock has been sold too aggressively. Like a rubber band stretched too far — it tends to snap back. Historically, stocks with RSI below 30 recover within 1-3 weeks.
LOWER BOLLINGER BAND
Price touched the bottom of its normal range. 95% of the time, price stays within the Bollinger Bands. Touching the lower band often means a bounce is coming.
Important: No single signal is 100% reliable. The more signals that fire together, the stronger the buy case. Our Swing Score combines all signals into one number — score 7+ means multiple signals agree.
4. Understanding sell signals
Knowing when to sell is just as important as knowing when to buy:
RSI OVERBOUGHT (above 70)
The stock has been bought too aggressively. Like a balloon inflated too much — pressure builds for a pullback. Consider taking profits.
MACD BEARISH CROSS
Short-term momentum crossed below long-term. The uptrend is losing steam. Time to lock in profits or tighten stop losses.
UPPER BOLLINGER BAND
Price hit the top of its normal range. It is statistically likely to pull back toward the middle. Good time to sell if you have profits.
DEATH CROSS (SMA)
The 20-day average crossed below the 50-day average. This signals a potential long-term downtrend. Professional traders use this as a sell signal.
STOP LOSS HIT
If a stock drops to your pre-set stop loss price, sell immediately. No exceptions. Protecting your capital is more important than any single trade.
5. Technical indicators explained
RSI (Relative Strength Index)0-100
Measures if a stock is overbought or oversold. Below 30 = oversold (potential buy). Above 70 = overbought (potential sell). Between 40-60 = neutral.
SMA (Simple Moving Average)20/50/200 day
Smooths out price data to show the trend. Price above 200 SMA = uptrend. Price below = downtrend. When 20 SMA crosses above 50 SMA = golden cross (bullish). Below = death cross (bearish).
MACDLine + Signal
Shows momentum direction. When MACD line crosses above signal line = bullish momentum. Below = bearish. The histogram shows the strength of the momentum.
Bollinger BandsUpper/Lower
Shows the normal price range. When bands narrow (squeeze) = big move coming. Price at lower band = potential buy. Price at upper band = potential sell.
Volumevs 20-day avg
How many shares are being traded. High volume on a drop = institutional selling. High volume on a rise = institutional buying. Volume spike (2x+ average) on a dip = smart money buying.
Support & ResistancePrice levels
Support = price floor where the stock bounced before. Resistance = ceiling where it got rejected. Buying near support gives you a safety net.
Swing Score1-10
Our proprietary score combining RSI (25%), discount from high (25%), yield (20%), SMA (15%), and momentum (15%). Score 7+ = strong buy. Below 5 = avoid.
6. Reading candlestick charts
Green candle (bullish)
Stock closed higher than it opened. The body shows the open-to-close range. The thin lines (wicks) show the high and low of the day. A long green body = strong buying pressure.
Red candle (bearish)
Stock closed lower than it opened. A long red body = strong selling pressure. Long lower wick = buyers stepped in and pushed the price back up (potential reversal).
Our charts show Bollinger Bands as dashed lines (red = upper, green = lower) and volume bars at the bottom. Use the timeframe buttons (1m, 5m, 1h, 1d, 1w, 1M) to zoom in or out.
7. Types of trading
Day trading
Minutes to hoursVery high
Buy and sell within the same day. Requires constant monitoring. Most day traders lose money. Not recommended for beginners.
Swing trading
Days to weeksMedium-high
Hold positions for a few days to weeks, riding price swings. This is what Stock Alert Hub is optimized for. Uses technical indicators to time entries and exits.
Position trading
Weeks to monthsMedium
Hold for longer periods based on trends. Less stressful than swing trading. Focus on SMA 200 and MACD for long-term trend direction.
Dividend investing
Months to yearsLower
Buy stocks that pay regular dividends and hold long-term. Focus on yield, P/E ratio, and company fundamentals. Stock Alert Hub tracks dividend dates and yields for you.
Futures trading
VariesVery high
Contracts to buy/sell at a future date. Uses leverage (borrowed money) which amplifies both gains AND losses. You can lose more than your initial investment. Only for experienced traders.
CFD trading
VariesExtremely high
Contracts for Difference let you speculate on price movements without owning the stock. Up to 30x leverage in EU. 76% of retail CFD accounts lose money. Regulated by BaFin in Germany.
8. Risk management
Golden rules of risk management
Never invest more than you can afford to lose
Trading money should be separate from rent, bills, and emergency savings.
Always set a stop loss
Before every trade, decide the maximum you are willing to lose. If BMW drops from €70 to €65, sell. No exceptions.
Never risk more than 2% per trade
If you have €10,000, never risk more than €200 on a single trade. This way, even 10 losing trades only cost you 20%.
Diversify across sectors
Do not put all your money in one stock or sector. If auto stocks crash, your banking and energy stocks may hold up.
Take profits when you have them
A 10% gain is real money. Do not get greedy waiting for 50%. The market can reverse at any time.
Do not trade on emotions
Fear and greed are the two biggest enemies. If a stock is dropping and you feel panic, step away. If a stock is rising and you feel FOMO, do not chase it.
9. Trading with N26 and brokers
N26€0.90 per trade
Markets: US, EU stocks + ETFs
Great for beginners. Simple interface, no minimum deposit. Limited selection but covers major stocks. Good for buy-and-hold and dividend investing.
Trade Republic€1 per trade
Markets: Stocks, ETFs, crypto, derivatives
Most popular broker in Germany. Huge selection, fractional shares, savings plans. Excellent app. Good for swing trading and dividends.
Scalable Capital€0.99 or flat rate
Markets: Stocks, ETFs, crypto, funds
Free broker plan available. PRIME plan at €4.99/month for unlimited free trades. Good for active traders.
Interactive BrokersVery low
Markets: Global — all exchanges
Professional-grade broker. Access to every market worldwide including HKEX, Indian stocks. Best for advanced traders. Complex interface.
Comdirect / ING€3.90-12.50
Markets: Stocks, ETFs, bonds, funds
Traditional German bank brokers. Higher fees but full banking integration. Good customer support in German. Suitable for conservative investors.
Tax note: In Germany, capital gains are taxed at 26.375% (Abgeltungsteuer + Solidaritätszuschlag). Your broker automatically withholds this tax. You have a €1,000 annual exemption (Sparerpauschbetrag) — set up a Freistellungsauftrag with your broker to use it.
10. Common mistakes to avoid
Buying the hype
When everyone on social media talks about a stock, it is usually too late. By the time you hear about it, the smart money already bought and is waiting to sell to you.
Not having a plan
Before every trade, write down: entry price, target price, stop loss, and reason for the trade. If you cannot articulate why you are buying, do not buy.
Averaging down blindly
Buying more of a losing stock to lower your average cost is dangerous. It works sometimes, but it can also multiply your losses. Only average down if your original thesis is still valid.
Ignoring fees and taxes
A €9.90 fee on a €100 trade is 10% of your investment. Use low-fee brokers and account for the 26.375% German capital gains tax when calculating profits.
Overtrading
More trades does not mean more profits. Transaction fees and taxes add up. Professional traders often make only 2-5 trades per week.
Checking your portfolio too often
Watching prices every 5 minutes leads to emotional decisions. Set your alerts (Stock Alert Hub does this for you) and check once or twice a day.
Ready to start trading?
Open the dashboard, add your first stocks, and let the AI guide you.
Stock Alert Hub is not a licensed financial advisor. All content is for educational and informational purposes only. Trading involves risk. Consult a qualified financial advisor before making investment decisions. Stock Alert Hub and Hamburger Studios are not responsible for any trading losses.