Tips to Make Money on the Stock Market

When it comes to making money in the stock market, most people don’t understand what they are getting into or what they are doing.  With little knowledge, the stock market is like a casino, many ways to gamble.  Like a casino there are winners and losers.  The person who always wins is the brokers. 

Brokers Make Money Whether You Win or Lose

The brokers are the casino owners. It is not what game is being played but how many players there are. The brokers can make money on every trade whether the investor makes money, loses money or just charges them a fee when they do nothing at all.  If you take the time to learn how the stock markets works, the terminology of the market, understand probability and statistics, you will have a good chance of making money.

This article is not intended to give investment advice, but is only to give a person some basic knowledge of the stock market. 

When it comes to the stock market, there are generally three ways to increase your wealth. 

Safest Route: Investing

Investing is generally the safest way to handle your money.  Investing is picking companies with a good record of achievement and a good profit to earnings ratio. 

You can then attempt to predict a growth pattern.  This pattern will give you some idea of what you expect to make over a period. By investing in growth stocks and diversifying (buying growth stock of different markets), you will have lower risks and will generally be safe in your investments. 

Remember there are no guarantees in the stock market. You can make money or lose money, so think before you buy.  Investing is generally long term thus patience and time will be the deciding factors.

Online Trading

Trading is another way to make money in the market.  Trading is buying stocks not to keep them for a long time, but to buy low and sell them when they peak.  Determining when they peak is difficult and risky. 

When it comes to making money in any endeavor the general rule is the higher the risk the higher the reward.  The other side of the coin is the higher the risk the better chance you will fail (lose your money). 

If you understand probability and statistical analysis, you will have a better chance of increasing your portfolio. Once again to remind you, there are no guarantees in the stock market.

Day Trading is the Highest Risk

Lastly, there is day trading.  However, it is very risky although it attracts many people.  It makes many poor people wealthy and will make some rich people poor.

Day trading is buying stocks on trends of the flow of the stock market.  There are many devices that are supposed to reduce the risks of day trading. Some work and some do not.  The only sure thing is the stock market has too many wild cards so playing it makes it very risky. 

Every poker game has its winners and it losers and managing your pot will make the difference between winning and losing.  Day trading is the fastest way to gain or lose in the stock market.  When you day trade, you are playing in the world’s largest poker game. 

Using the stock market to increase your wealth over time has proven to be the best return on your investments.  Choosing what to invest, how to invest and the risks involved is your choice.  If you choose wisely, the probability of building a sustainable nest egg is good. So do your homework first then decide what you want to do.  The best thing to remember it is your money. So it is up to you what to do with it.