I need help on investing stocks ^^;?
Question:
not a tons of money to put in but just a little bit to get an idea of how the "investing stock" works...
so heres my questions
1. in which way I can buy and sell stocks? (by credit card? banking account?)
2. where can I buy and sell stocks? (internet? how?)
3. If you have one, can you please recommand me a good book to get an idea of investing?
Thank you so much!
Answer:
I see you are interested in investing in the stock markets. Start trading stocks is as simple as opening a trading account and then picking a stock and then buy. However, that simplicity is truly the wolf beneath the sheep's skin. Doing so is an expressway to losing a lot of money.
There are quite a number of things you need to learn before you can even start thinking of the stock markets ...
1. You need to understand how the stock market works and what it is exactly about.
2. You need to know what are the different styles of trading in stocks and shares.
3. You need to read about why so many people lose their shirts in the stock markets so that you can avoid their mistakes and also decide if this is a risk you want to take.
For all these issues and more, you can read about them from some of the articles that I wrote at http://www.mastersoequity.com/articles.h...
After you are adequately armed with the basic concepts and ideas, you need to know how to find profitable stocks to trade or invest in. You can do that the easy way by subscribing to stock pick services (example http://www.stockpickmaster.com ) or you can learn to use charting tools and softwares to find stocks with parameters that you can pre-define. (example http://worden.mastersoequity.com/)...
Remember, the slogan "Just Do It", Just won't do for the stock markets. If profiting in the stock markets is as simple as buying a single stock , then why are so many people still poor?
After you have all the above mentioned knowledge, you need to ask the following golden questions before you can decide whether a stock is worth buying or not :
1. Why are you of the opinion that this stock will rise?
2. Is your opinion valid in the first place?
3. When are you expecting it to rise? Can you hold on for that period of time or longer?
4. What is your expected entry price? After what price would your expected profit margin be too thin to enter upon?
5. Where is your expected stop loss point? What is your stop loss point based on? Where will you tell yourself that it is time to take a loss and get out?
6. Where is your expected profit taking point? What is your profit taking point based on?
7. Does the way you are buying the stock allow you to hold on until your expected profit taking point?
8. How much of your money should you dedicate to this one trade?
9. What is the level of primary, secondary and idiosyncratic risk you are undertaking when deciding how much of your fund to use?
10. What is your cashflow need? Does your cashflow needs allow you to hold the full lifetime of the stock?
After you are able to answer all these questions confidently, THEN you are ready to... PAPER TRADE your stock strategy. Yes, even at this point, you are NOT READY to trade for real. You should trade on PAPER for at least 6 months and become consistently successful BEFORE you take your stock strategy into real life.
Then.. you are ready to start... but there is still no guarantee of success as paper trading is very different from real trading. You will need another maybe 1 year or 2 trading very little money and be consistently successful BEFORE you are ready to increase your stakes.
So, as you can see, success in the stock markets is not easy at all the the less knowledge you have, the more risk you undertake. I lost hundreds of thousands in the stock markets before I become successful.
Take heed and good luck.
All in all, investment and trading is a lifelong education and non stop learning. No one is ever done learning and catching up with changes in the markets.
If you care to read about how I went from completely broke to retired millionaire trading stocks and options by 28 years old, you can go to http://www.mastersoequity.com/
In conclusion, what I am saying here is that trading stocks and investing for profit is a professional game that takes years and a lot of money to learn, so it is not something that someone in need of college fees should do ... now. but you should certainly start to learn about it right now.
Hope these information helps.
http://www.optiontradingpedia.com/...
http://www.mastersoequity.com/
.
Alot of people here will throw out names with a hidden agenda..All I will say is Scottrade is usually ranked the best as far as overall customer satisfaction.. scottrade.com
You shouldnt be paying over $10 for buying and selling a stock IMHO..
1. A brokerage account they set up for you. (i.e. Scottrade, TD Ameritrade)
2. Online through one of the brokers listed above or many other mainstream brokers.
3. Vanguard.com / MotleyFool.com / Lucky-Dog-Investing.com / Investopedia.com are popular websites for beginners.
1,2 answered in response 3.
3) Investing for Dummies or Stock Market for Dummies both by Eric Tyson. Also Mutual Funds for Dummies by I don't know.
If you have never invested before, don't do it yourself. Talk to a few advisors who charge by fee rather than commission. See who you like. You want someone who preaches diversification and long term investing. If someone tells you they will trade stocks and beat the markets by a bunch, run as fast as you can. Sooner or later things will go the wrong way and you will be chased away from the markets forever. The 1% you have to pay an advisor like myself will come back to in spades over time.
More Questions & Answers...