The Stock Market For the Beginner
By [http://ezinearticles.com/?expert=Billy_Akerman]Billy Akerman
Many people think that being in the stock market is for professionals. In most part it is, but for the amateur they can do just as well if they follow a few simple guidelines. Here are 5 things to remember when trading stocks.
1. When you trade in the stock market you can't let your emotions make your decisions. I've seen people get emotional when their stock has made a major move downward. They panic and dump the shares as soon as possible, thinking that there' more to come. When a stock drops in value, you must see if the company is reporting negative information or if other traders are taking profits from a recent upswing in value. If there are no problems with the company then what you have is a buying opportunity for you to add to your position.
2. Before you invest in any stock you must do your research on that company and the sector that they are in. I like to refer to research as "doing your due diligence". Reading financial reports and balance sheets are a key to knowing if a companies fundamentals are solid. Once you can do that you need to learn how to read their chart. Following the chart will give you an idea if a dip or a spike in price will coming soon.
3. Avoiding "great stock tips" will always save you from getting caught up in the hype of stock. You need to ask yourself why this person is giving this information to you. Is it because they're investing in this and need other people to boost share price? If a person has "inside information" on a company, they wouldn't be allowed to tell you since it's illegal to do so.
4. When you have decided on a stock to invest in, you don't buy all of the shares at once. If you do and the price drops(which they do at times), you won't have any capitol to buy any more. What you need to do is buy incrementally. You need to figure how much total money you will invest into this stock. Divide that in half and that would be your first buy in. When a stock drops below your cost basis by more than 8%, you buy half of the remaining amount you have on the side. If the stock goes up from there you wait and see where it goes to in value. If it drops another 5% from your second buy in, you purchase the remaining shares.
5. Before you buy into a company you must have a exit strategy. Unfortunately there will be times when the stock that you see as a sound investment drops in price too much(or rises beyond 20%) you need to know how and when to get out. Yes, there are other forces at work that will cause a great stock to just drop. To name one, is when investors invest in what they call "shorting a stock". They buy stock for the purpose of going down in value(when you research a stock you can find out how much trading is going on this way. An exit strategy is needed to be in place before you buy into a stock.
I hope that these few tips are helpful to you. I know that they have helped me thought the rough spots.
My name is Billy, I've been trading in the stock market for many years and have now made it my career. I manage a few accounts which have been quite successful. I now run a blog and investment forum where useful articles are published daily. [http://beatingthestockmarket.com]Investment Property Blog [http://forums.beatingthestockmarket.com]Investment Forums
Article Source: http://EzineArticles.com/?expert=Billy_Akerman http://EzineArticles.com/?The-Stock-Market-For-the-Beginner&id=1360029
Thursday, August 7, 2008
Factors Responsible For Bear Market
Factors Responsible For Bear Market
By [http://ezinearticles.com/?expert=John_Efetobor]John Efetobor
The bear market is the interval in the capital market characterized by falling prices for securities. It is a period that separates the men from the boys in the art of stock trading; it is the season when investors who are unsure of the reason why they hold a stock sell out of panic. It is a period when most of the prognosis of stockbrokers and experts are thrown into winds and are torn into shreds. I am amazed at the way most investors appear to be taken unawares by the bears; it ought not to be, because there are always loud signs that always herald a bearish season, unfortunately, only the seasoned stock traders that are able to see them afar off.
I want to show you warning signs you should look out for, that should prepare you before the bear market sets in, remember there will always be a bull and bear market as long as the forces of demand and supply continue in the capital market.
Massive profit taking
Profit taking is the name of the game; stock traders generally look forward to selling off their stocks once their objective for buying into a stock is achieved, but when this action is carried out en masse it can trigger off a bearish session. During the bull market stock traders take advantage to sell of their stocks, the massive shedding will eventually have its toll, so watch out when you observe there is massive effort by stock traders to sell their stocks, know the bear market will come knocking.
Active and prolong primary market activities
The primary market is the other half of the secondary market, both markets function in diverse ways. The primary market is where the vast majority of investors do business, the reason is not farfetched; it is an all comers market. For this reason whenever there is prolong activities in the primary market, in other word, if there are so many initial public offerings and private offerings, investors will channel their funds to the primary, sometimes they may even withdraw their funds, the effect there will be more sellers in the secondary in the secondary market than buyers, supply will outperform demand thereby driving down the prices of shares.
Massive panic selling by emotion driven investors
One of the feature of a bearish a bearish market, is the reaction of emotion and sentiment driven investors. The bearish season over the years from my experience analyzing and trading stocks have always beaten uninformed investors who have not imbibe the entry and exit strategy that I know has most of the time protected wise and seasoned stock traders. When the vast majority observes that the prices of stocks are rallying down they react by selling off their which affects the stability of the secondary market.
The bear market when fully understood can be a great opportunity for wise and seasoned investors to create wealth, because you find stocks which have been hitherto scarce and expensive available and affordable. During the bearish market, you will find securities with very sound fundamentals selling below their real value, which means if had prepare yourself in anticipation of a bear market by your understanding of the activities discussed above, you could be your way to making awesome profits.
John Efetobor is an Investment Communicator, Analyst, Motivational Speaker, Coach, Trainer, Human Developer, Investor and Businessman. He has a [http://stocktradingrevolution.blogspot.com/]Stock Trading Revolution Blog where he writes informative articles on Stocks, stock trading and other Vital aspect of stock investment Visit: [http://stocktradingrevolution.blogspot.com/]http://stocktradingrevolution.blogspot.com for more information.
Notice - You are allowed to publish this article in its entirety provided that author's name, bio and website links must remain intact, active and included with every reproduction.
Article Source: http://EzineArticles.com/?expert=John_Efetobor http://EzineArticles.com/?Factors-Responsible-For-Bear-Market&id=1382366
By [http://ezinearticles.com/?expert=John_Efetobor]John Efetobor
The bear market is the interval in the capital market characterized by falling prices for securities. It is a period that separates the men from the boys in the art of stock trading; it is the season when investors who are unsure of the reason why they hold a stock sell out of panic. It is a period when most of the prognosis of stockbrokers and experts are thrown into winds and are torn into shreds. I am amazed at the way most investors appear to be taken unawares by the bears; it ought not to be, because there are always loud signs that always herald a bearish season, unfortunately, only the seasoned stock traders that are able to see them afar off.
I want to show you warning signs you should look out for, that should prepare you before the bear market sets in, remember there will always be a bull and bear market as long as the forces of demand and supply continue in the capital market.
Massive profit taking
Profit taking is the name of the game; stock traders generally look forward to selling off their stocks once their objective for buying into a stock is achieved, but when this action is carried out en masse it can trigger off a bearish session. During the bull market stock traders take advantage to sell of their stocks, the massive shedding will eventually have its toll, so watch out when you observe there is massive effort by stock traders to sell their stocks, know the bear market will come knocking.
Active and prolong primary market activities
The primary market is the other half of the secondary market, both markets function in diverse ways. The primary market is where the vast majority of investors do business, the reason is not farfetched; it is an all comers market. For this reason whenever there is prolong activities in the primary market, in other word, if there are so many initial public offerings and private offerings, investors will channel their funds to the primary, sometimes they may even withdraw their funds, the effect there will be more sellers in the secondary in the secondary market than buyers, supply will outperform demand thereby driving down the prices of shares.
Massive panic selling by emotion driven investors
One of the feature of a bearish a bearish market, is the reaction of emotion and sentiment driven investors. The bearish season over the years from my experience analyzing and trading stocks have always beaten uninformed investors who have not imbibe the entry and exit strategy that I know has most of the time protected wise and seasoned stock traders. When the vast majority observes that the prices of stocks are rallying down they react by selling off their which affects the stability of the secondary market.
The bear market when fully understood can be a great opportunity for wise and seasoned investors to create wealth, because you find stocks which have been hitherto scarce and expensive available and affordable. During the bearish market, you will find securities with very sound fundamentals selling below their real value, which means if had prepare yourself in anticipation of a bear market by your understanding of the activities discussed above, you could be your way to making awesome profits.
John Efetobor is an Investment Communicator, Analyst, Motivational Speaker, Coach, Trainer, Human Developer, Investor and Businessman. He has a [http://stocktradingrevolution.blogspot.com/]Stock Trading Revolution Blog where he writes informative articles on Stocks, stock trading and other Vital aspect of stock investment Visit: [http://stocktradingrevolution.blogspot.com/]http://stocktradingrevolution.blogspot.com for more information.
Notice - You are allowed to publish this article in its entirety provided that author's name, bio and website links must remain intact, active and included with every reproduction.
Article Source: http://EzineArticles.com/?expert=John_Efetobor http://EzineArticles.com/?Factors-Responsible-For-Bear-Market&id=1382366
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