10 Tips for Successful Stock Market Trading by markcrisp07

Don't fall into the trap of selling off your stock the minute it starts to lose money. Let cooler heads prevail and wait out the market. Over time, the stocks will make money, but you have to be in it for the long haul.

2. If everyone else is already talking about a stock, you should avoid it. If a stock is hot enough to be fodder at a cocktail party then chances are the stock has already reached its saturation, and you should not get involved.

3. Cut your losses - sometimes stocks do not perform as expected. Rather than hang on in hopes of it re-bounding, get out now. You'll be able to cut your losses at a reasonable point. If you hold on and the stock plummets even more you will lose a whole lot more.

4. If your stock keeps setting record highs, don't sell. There is something good happening at that company so it would make sense to hold onto the stock because it will likely rise again.

5. Diversify your portfolio - This is very important. If you have a portfolio with nothing except tech stocks, and then that industry takes a downturn, you will be in financial ruins. On the other hand, you don't want an entire portfolio of bonds either. The key is to spread your investment risk over several industries and types of stock.

6. Know what you are buying - If you don't understand the stock or commodity, don't get involved. It doesn't matter who tell you that it is the hottest IPO in months, if you do not have a grasp of the industry then it is best to avoid the investment.

7. Choose stocks with your head, not with your heart - Unfortunately many people let their emotions dictate which stocks they buy and sell. You will not be successful trading stocks if you let your emotions get into the way. It is simply a recipe for disaster.

8. Dollar cost averaging - this investment strategy minimizes risk when purchasing large single stock purchase. You invest a set amount every week or once a month and buy the same stock regardless of the price. Spreading the investment over a longer period of time will help prevent the market losing value after purchase.

9. Only invest what you can afford to lose - Essentially, stock investing is a gamble. Some stocks go up and some go down. Many will go down after you bought them high. Just understand that going into investing in the stock market that you might lose some money.

10. Invest in businesses, not stocks - Okay, so you really are buying stock in a business, but the idea is the same. Don't look at how well the stock is doing. Investigate how well the business is doing. Who is the competitor of this business? What is the potential for new product development? These indicators are very important to how well a company's stock will do.

About the Author

Mark Crisp is the momentum stock trader. Finding the hot stocks that are going up right now and will continue to go up in the future. Sign up for my free e-course at:

<http://www.stressfreetrading.com>;

Stock Market For Beginners - Your Guide to Stock Market Basics by Reginald T. Hobbss

Understanding the stock market for beginners starts with understanding some stock market basics.

Buying a stock means that you own a part of a company. A stock is the smallest share that is possible. A stock is issued by companies who raise capital to sell a portion of their company. Those who hold stock also hold the right to voice opinions about how a company runs and share the profits (if any). Even though stock owners have some rights, they do not face responsibility if the company faces a lawsuit or defaults. The worst that can happen to an investor is that their stock will have no value and they will lose their investment.

When a company sells stock, they want to raise capital. They might need extra cash or need to purchase new property. A stock issue has a limit to the number of shares. When they are issued, the stocks are assigned a par value. However, the market will soon adjust par value due to the success of the company and its projected value to grow.

An investor decides to purchase stocks when they think that a company will find success and the stocks will rise in value. Those who buy stock from a new company are taking on a greater risk because there is no guarantee that the company will be successful. Those who invest in a well-established company will have a lower potential risk, but their potential for gain is less. For example, those who purchased and held onto Microsoft shares in the beginning saw a great return on their investment.

Stock trading takes place within stock exchanges such as the NASDAQ (National Association of Securities Dealers Automated Quotation System) and the New York Stock Exchange (NYSE). This means that companies who are on this system of public exchange can have shares that are sold on the open market. An investor could also choose to purchase a small company that isn't on the stock exchange. That type of purchase is completely different than just buying stocks.

An investor should have a broker help make transactions for him because stocks must be sold and bought on a stock exchange. A broker's job is to take orders from a client and buy or sell certain stocks. The investor may give the broker orders to trade when a stock hits a particular price or what the market can take. When a broker gets a specific instruction, they try to fulfill it by finding an appropriate buyer or seller. The broker works with another broker who represents another buyer or seller. Each broker will get a commission for the sale.

Stocks can be more beneficial than other savings investments. They represent owning a portion of a company and the right to help make company decisions. A share equals one vote. In most cases, shareholders are asked to voice their opinions on important decisions. A stockholder also will get money from profits that the company acquires. Profits are give as dividends that could be doled out once or twice a year as the company sees fit.

When a company is successful, stocks will rise accordingly and profits will increase. However, if a company is not doing well, the value of the stock could plummet.

Stocks have the potential to gain more money than the average investment, like bank certificates of deposit and bonds. However, they also carry a greater risk. Investors should be educating themselves about the stock market and find the right type of strategy to use to make the greatest profit. Many will find that they will make more profit in stocks than other type of investment.

About the Author

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