Top 10 Stock Market Tips For Beginners

You’ve worked hard and saved money. Now you want those savings to work for you and earn you even more money. The stock market is the easiest and best way to do it, provided of course you know what you are doing.

Here are ten stock market tips for beginners that if followed will lead you to success.

1) Determine your goal. Are you trying to generate an extra income or do you just want your money to grow so you can retire at an early age? Once you have defined your goal, then you can create a trading strategy for achieving that goal.

2) Mutual funds are for the ignorant. Mutual funds have historically underperformed the markets. It is extremely rare that you will ever get a 100% return with mutual funds. Therefore, take the time to learn how to pick stocks so you can easily make double even triple-digit gains rather easily.

3) No one trading strategy will work in all markets. You must have an arsenal of at least three trading strategies, one for when the markets are moving higher, one for when the markets are moving sideways, and one for when the markets are falling.

4) Avoid short selling. Short selling is a strategy used to create wealth when stocks are falling. It is extremely risky and your broker is in control. He can force you out of a losing position right before it reverses and takes off. A better alternative is to invest in Contra ETF’s or Puts.

5) Choose a low cost broker and do your own investing. Full service brokers charge hundreds of dollars to place one single trade while an online discount broker can do the same thing for $5 or less.

6) Before investing real money, practice paper trading your stocks and strategies. “Paper Trading” means simply that you find the stocks to invest in and pretend you are buying them. Once your paper trades make consistent profits on paper, then start trading them for real money.

7) Before buying any stock, always have an exit strategy. The stock market can be rough for beginners. Always have a price you will exit at on the downside or the upside and stick to your plan. After you buy a stock, emotions such as fear and greed can kill your portfolio. Make a plan before buying and stick with it.

8) At the end of each year, go over your trades. Figure out why the losers lost and learn from it so you don’t make the same mistakes next year.

9) Master technical analysis and you’ll be able to predict the direction of any stock or index with fairly accurate results.

10) As a stock market beginner, you may not have had the time yet to learn (or want to learn) how to pick winning stocks. Use a stock picking service instead. You can find these all over the Internet. Make sure they have a proven track record you can check, and make sure they give you a free trial.

By following these ten tips as I have laid them out, your chance for success in the stock market as a beginner will increase dramatically.