Stock Market for Beginners: Top 5 Investing Tips

The Stock Market for Beginners can seem like a place to make money fast. To be successful, you must have a definite trading plan. It must be practical, easy to use and dependable more times than not. That is why these Stock Market for Beginners investing tips need to be considered before you make a decision to buy or sell stocks.

1. The Fundamentals. Will they be bullish or bearish, in the future? If they will be mostly bullish, you can consider going “long”, going long means you purchase the stock and will profit if the price of the stock goes up. Or, if they are likely to be bearish, you can consider going “short”, going short is the practice of selling stock, that have been borrowed from a broker, provided the following four tips indicate a move in that direction.

2. The Trend. Does the trend point up towards a price that, in the future, will justify the bullish fundamentals? If so, you have two tips that indicate buy. If the trend points down towards a price that will justify bearish fundamentals, in the future, sell.

3. Volume of Sales. Markets tend to move in the direction of the largest volume of sales. If prices rise and the volume of sales increase, that is a bullish indication. It gives you a third good reason to buy, provided the first two tips are bullish. If prices decline on large volume and rise on small volume, that’s bearish. You should then consider going “short” if the other tips are also bearish.

4. Seasonal Factors. Most stocks tend to follow a seasonal pattern. Low prices are generally made during certain months and high prices generally occur at certain other months. (The Stock Trader’s Almanac can help you know the seasonal influence.) A note of caution, however. During periods of great shortage or large supply, the seasonal factors are not as dependable because, at those times, prices will stay at high levels for a longer period during shortages, or stay around low levels for a longer period due the large supply which must be reduced.

5. Supply and Demand. If research reports show there will be a shortage of a stock, in the near future, you have another reason to buy, if the other four tips indicate a bullish trend. If those reports indicate a larger supply will soon be coming to the market, you have another reason to “sell short”.

Finally, make sure all of the Stock Market for Beginners five tips agree on the possible move, up or down. If your financial advisor or stock broker say, “yes”, and the Stock Market for Beginners five tips say, “yes”, then you can buy or sell according to what they indicate, bullish or bearish.