Stock Market Tips For Beginners

If you’re reading “Stock Market for Beginners” you probably have never traded a stock. The stock market is a real place if you’re talking about The New York Stock Exchange, often abbreviated NYSE. This exchange has floor traders that take the orders submitted by customers either online through a company or through their broker. Bidding on the stock occurs, like a crazy auction and the trade then moves to a specialist that facilitates the trade by matching the highest bidder to the lowest seller.

There are other markets besides NYSE. These are primarily electronic markets that are not a specific location. Market makers specialize in a specific stock, like the specialist at the NYSE, but instead of facilitating bid orders, he buys and sells. This is a dealers market where the dealer sells for the ask price, the higher price, and buys for the bid price, the lower price. The difference between the two prices is the spread, or how the dealer makes his money. He may buy a stock from you , put it his inventory and seconds later he sells the stock to someone else. The NASDAQ is the most famous but there are other exchanges. NASDAQ stands for National Association of Security Dealers Automated Quotation. There is no place the market makers all meet but they link electronically.

No stock market for beginners article would be worth anything if it didn’t explain the language of the trade. If you place an order with a broker, most of the time they ask questions in terms that you understand, or make the order decisions themselves. If you go online to place an order then you suddenly have a completely new language in front of you.

First you enter the type of order, a buy or a sell. The order uses the symbol of the stock. Those are the short letters used to identify it. Microsoft symbol is MSFT. The next step is the number of shares that you want to buy. The type of order section is very important if you are a stock market beginner. You have two possibilities, market order or limit order. The market order buys the stock at what ever the price is that minute. In a fast moving market this is very dangerous. If you buy penny stocks, never buy them with a market order. Always use a limit. The limit order sets the highest price you want to pay for the stock. If the price is lower, you get the lower price. The timing section indicates how long you want the trade viable. You have GTC (good until cancelled) and Day. The day order lasts until the close of the market or if you cancel it during the day. The last part of the order, before you hit the trade button is the conditions section. Most traders use ” none” in that section.

There Is No Place For Emotions In The Stock Market

More than eight out of ten people regularly lose money in the stock market. However, there are some who regularly make money consistently at trading. The key to their success is making decisions to buy and sell without being influenced by the stock market fears and greed displayed by the masses.

Fear of losing money in the falling stock market and, therefore, selling their valuable portfolio short, or greedily rushing to buy when a stock is going up is the normal psychology of the masses. Both these methods can display spectacular gains or dramatic losses. Though this is a normal practice and logical too, the stock market experts trade differently! Practice and careful analysis have made them experts in the field of investing. Moreover, this practice and analysis has also helped them overcome fear and greed – the two evils of trading.

To emulate the experts, one can find plenty of trading tools on the internet. There are many online trading systems that allow you to practice stock market trading without risking real money. This way, you can also practice to keep your emotions under check! These tools help you in choosing stocks according to the market trend in real time, and also help in analysis of the technicalities of the stock market by studying the various patterns and charts of the stock. Various books are available to study the trends and learn the best entry and exit points. This system of practicing the stock market trading is also called real-time virtual trading. This system helps in learning the market in real time and can take weeks or months to evaluate your “trade” was fruitful or not.

The faster way to learn trading is by using the historical data and available historical charts. Comparing the historical charts of the stocks and the overall market trends at key points will teach you the behavior of the stock against the overall trend at any given time.

Using good analytical and charting software, you can use the charts and learn the various theories. You can also hide the forward bars and try and predict how the particular stock behaved. You can also compare many other stocks’ behavior during that time and do deeper analysis. You can even check your emotions by pretending that you own a sizable position in the stock and then monitor your feelings at the highs and the lows of “your” stock, and whether you were able to control your emotions!

This way, you can educate yourself without risking real money. All these helps in overcoming fear and greed, and practice emotionless trading — the way the experts trade!

The experts also focus on the present indications of the stock and concentrate on understanding what the stock is “doing” at the present moment, rather than worrying about its future course. They evaluate and reevaluate the current situation and get to a point in deciding whether to sell, hold, or buy that particular stock at that particular moment. The analysis also helps them learn what other important stocks are doing at that time. They continually ask themselves on how to minimize the losses, if any, or how to lock in gains, or whether to place a limit order, or exit with a profit, or even a small loss. Experts are dynamically thinking about other stocks too.

These stock market trading tools help you calm your nerves with virtual trading without risking real money, helps your decision making while simultaneously building your technical skills for the future stock exchange trading.

Stock Market Investing – Planning Your Financial Success

Making money by trading in the stock market requires learning just how the market functions and using prudent strategies to gain a great return on your investment.

You need to become comfortable with the basics of stock market terminology and strategy to help determine how to approach your investment strategies. Upon understanding the basics, you can learn how to maximize trading opportunities for maximum gains. The stock market is definitely NOT a get-rich-quick scheme.

How to Succeed

It is nearly impossible to be successful with trading in the stock market until you know what you are doing (though some claim a monkey throwing darts at a “buy” or “sell” target could be as successful as any investor – but that’s another discussion…). Success requires proper planning and preparation as well as a great deal of knowledge about the market.

You need to make calculated, well-informed decisions to succeed with your investments while learning what to trade, when to trade it, and what techniques and strategies to use for maximizing the return on your investment.

Following are a few skills and techniques to help improve your stock trading proficiency.

Learn the Right Timing

You want to gains a sense of how long to hold on to your investments before selling. Knowing whether to hold onto your stocks for only the short-term or to hang in for the long-term is one decision you have to get right – at least when you have a lot of money invested.

A successful trader must be able to discern when the timing is right to buy, sell or hold. Timing is everything in the stock market, because selling too soon or late can make the difference between earning and losing money.

Make Decisions Based on Logic, not Emotions

All your decisions should be made based on a prudently calculated decision that takes into account all pertinent factors of the stock market. No matter how tempting it is to act off a hunch or your emotions (“This one’s a winner – I feel it in my bones!”), you should do your utmost to avoid it.

Sometimes your intuition may be right, but you want to be extremely cautious when making rash, expensive decisions.

This principle goes both ways: you also cannot allow your emotions of fear to paralyze you from making good, solid moves. Some decisions may be difficult due to the risk involved, but may be the best choice in the long run – such as “cutting bait” and selling when your stock price is spiraling downward. Weigh both the likely short-term and long-term scenarios.

Permitting your emotions to guide your decisions may work in a card game, but it’s a recipe for disaster in stock market trading. The best decisions are made drawing conclusions from the enormous amount of available data you have about the performance of the stock market and the specific stock you own.