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Stock Market Tips to Live By

The stock market is a volatile animal but one you can tame if you want to. Millions of people have found their fortune on the market and even more have lost one or two, but in most cases this is because of poor strategy.

Setting some guidelines to stick to is a great place to start when you are trying to build a stock portfolio. The trick is to plan smart. Read as much as you can about latest trends and stock market basics. Then you can see what others did that make them money, from there you can set up your own rules to follow, rules that include the amount of money you want to put into the stock market. Stick to these rules and you are much more likely to see success in stocks.

For a good and versatile portfolio try to keep things spread out nice and evenly. This means no putting all of your eggs in one basket. Keep no more than 3 percent of your portfolio in any one stock. This is a simple rule that you can use to keep from losing your shirt in the stock market.

The better you spread the money over the stock market the better you spread the risk as well. When stocks dip you will be risking so little of your overall stock wealth that you will not need to panic.

Every smart trader has a line that they do not cross. This means not watching stocks go down and down just hoping and waiting for them to rise again. You must set a point at which you will sell. Pick a percentage and make a rule that says no matter what the stock is, if it gets to that point it is time to sell. You may take a hit now and then, but you will prevent losing everything you put into that particular investment. Too many stocks never recover and you do not want to find yourself having to deal with that time and time again. A loss of 15 percent is a good place to cut and run.

Never be afraid of success. Do you know how many people sell when things are looking good just out of fear that the bottom will fall out? It is a far better idea to take a bit of a risk and stay with the stock a little longer. Put your ear to the ground and do not get led astray by restless rumblings. This is how you will make the real money.

And when it comes to the stock market you must realize that the learning never stops. Because the stock market is always changing so must you. You need to be able to ride with the waves of the stock market if you want to be really successful with it. This means accepting losses and being willing to win big. Stocks are not for everyone but for those who have a passion for the game it can be well worth it in the long run. Just set your rules and guidelines early and stick to them come rain or shine.

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.