Understanding Stock Market QuotesEver bought a car without test-driving it or at least seeing it? How about your refrigerator? Did you at least measure the opening in your kitchen cabinets to make sure it fit? There is a minimum amount of information we need before we make important purchases. This theory is true in the stock market as well. You are interested in purchasing a particular stock, but what is it doing today? When you are trading and investing you need to understand not only the overall strength of your stock but its current activity. This is the value of stock market quotes. Stock market quotes are the Wall Streetís method for letting you know at a glance the current state of a particular stock or the market as a whole. The current stock market quote is kind of like your chance to try it before you buy.
Getting A Quick Glimpse
Before you look at the TV or the Internet, tell me what is going on with Google stock....what has it done today? Without knowing you would probably be a little nervous about making a trade. Perhaps you want to sell but it has fallen 10% today. Maybe you want to buy but it has gone up 10%. Either way, the up to date market news can help you make your final determination before you act.
Is it really important to check? The answer to that question lies in whether you want to make or lose money. If you have done your fundamental analysis and you are ready to buy Microsoft but you check the stock market quote and it has risen 5% for the day, you might wait until you can do some research to see if the trend will continue. If you are thinking about selling General Motors but it has dropped 5%, you might need to hit the Internet to see what is going on before you decide to sell. Stock market quotes will not change your investment philosophy but they can be that ďsanity checkĒ that you need to move ahead confidently.
How To Read A Stock Market Quote
The most basic stock market quotes are very easy to read. These are the ones that you see everyday on TV or on the business page covering Wall Street news. For these stock market quotes, you will have the name of the company or market, its last reported price, how much it has changed for the day, whether that change is up or down, and what percentage of change has occurred. Stock market quotes give you a snapshot, usually within minutes of real time, of the status of the market or a specific stock. Knowing how active and profitable stock trading is for a particular day can help you decide if you should get in, get out, or wait for another day.
Not A Substitute
A stock market quote is not a substitute for technical analysis or a trading plan. Letís think about the test-drive analogy that I started with. Do you need to test drive a Ford Pinto from the early 1970s to decide whether to buy it? Probably not if you did any research....that fear of fire and explosion after a rear-impact would convince you itís not a good purchase. Do you need to drive a Bentley if you know you canít afford it? These are the kind of decisions that your analysis and plan make for you. The stock market quote is merely your way of knowing what is happening today and whether you should make a move right now.