Candlestick Trading Blog
June 6, 2008
Stock Market Investment
Stock Market Investment - How to Invest In Stocks First and foremost each every wise investor invests in himself first before making a stock market investment. The successful trader does this through obtaining a thorough education, through a ton of practice and through developing a network of peers. Many obtain this education through a stock market home study course, through attending trading seminars, and through taking technical analysis stock tutorials. The first piece of information necessary to understand before investing in the stock market is what is stock? Stock, also known as a share, is a portion of ownership or equity in a company with rights and obligations. To buy stock and sell stock involves contacting a stock broker who can make the trade on your behalf. You can do this by working directly with a discount broker or regular broker, or you can do it online. Either way you must go through a brokerage firm. Once a company decides to “go public” and is listed on the stock exchange, it means that they can now sell their shares to the public. They use this money to grow their business through raising capital. When you make a stock market investment, you are assisting these companies in raising capital. Once a company goes on the NYSE, the American Stock Exchange, or any other exchange, their shares are permanently traded by traders and investors. Once you decide you would like to make a stock market investment or two, you will learn about fundamental and technical analysis. Both methods are used by traders and investors and both will swear by their methods. Most likely, however, you will go with one or the other. Those who practice fundamental analysis learn more towards long term investing. They opt to invest in a company that they believe will increase in value over time, predicting that the stock is worth more in the future. They then choose to cash out and take the profit or keep the stock in the hopes that it will continue to increase in value. Those who practice technical analysis when they want to make a stock market investment are referred to as traders more than they are called investors. Its not that they aren’t investing, but they invest in the short-term by predicting where they think the price of a stock will go next. They study the price trends, and trend analysis, and they buy or hold a stock based on that analysis. This type of trading if often referred to as day trading and swing trading because they literally trade within hours, minutes, and/or days. They don’t really care what the market’s perception of a stock is, they only care about what that perception does to the price. They then follow the price and look for trends to base their trades on. Very exciting! Whichever method you choose when you are ready to make a stock market investment, the key is to have a through understanding of what you are doing. Get educated and seek the help of a mentor. Join online forums and network with other peers who can point you in the right direction. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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