What are the first steps I need to take before buying stock?

Question

I am currently 17 years old, and I am quite interested in the stock market. Yet, I have absolutely no knowledge as to how this system works. Please help

Answer 1

I think that's great, to be 17 and interested in the stock market. If only I had started at that age.

At 17 and with limited funds, the best thing you can do is read and research the market strategies over the next several years.

While you are getting experience, you can learn about what makes stocks go up and down. There are many books and websites that explain how to buy stocks.

There are different strategies, and some of them tell you to do the opposite things. For example, one book might tell you to sell your stock if it goes down a little bit, and another book might say if your stock goes down, you can buy more. Don't be confused by things like that. All investment and trading strategies can be divided into two groups: Technical Analysis or Fundamental Analysis.

Technical Analysis means people look at charts trying to figure out what the stock will do in the future by studying its past. They look at price patterns and draw trendlines. If they find a good chart, they decide to buy the stock and may keep it for a few months or a year until they sell it.

Fundamental Analysis means people are researching facts about a company and looking into financial records to find out what the company is really worth. If they find a valuable company at a low price, they buy it and may end up holding it for 5-10 years until it goes up.

Technical analysis and fundamental analysis are deep subjects and they both work if you learn them well. To give you an example, Warren Buffet made money by studying fundamentals. A famous trader Ed Seykota makes money by studying charts.

William O'Neil, the founder of Investors Business Daily newspaper, wrote a good book called "How to Make Money in Stocks." This book combines fundamental analysis and technical analysis and teaches that the best thing to do is to use both strategies together. I am sure, you can find this book in libraries, and you may read it if you are interested.

The Investors Business Daily newspaper (IBD) contains a very long list of stocks, and beside every stock, you can see three ratings and a number. (In his book, How to Make Money in Stocks, William O'Neil explains what these ratings mean and what the numbers mean, and how to pick the best stock.)

You may want to join investment and stock trading yahoogroups where people can recommend more books for you to read.

If you are looking for a book which contains stories, adventures, and market lessons at the same time, then read The Reminiscence of a Stock Operator by Edvin Lefevre. This book tells the story of the famous trader, Jesse Livermore. Another good book I've found is the Money Game by 'Adam Smith.' Both of these books are very entertaining.

In order to trade stocks, you do need a significant amount of money. Some people say you need at least $10000. I would say that you need at least $3000. If you don't have that much money, it is going to be very hard to get started. However, if you just want to buy and keep your stocks for a long time, then it doesn't really matter how much you start with. You can invest as little as $100. At first, it may go down some, but later your investment could double. If you're making money, you can always keep adding more money to your investment account, so you can keep buying more and more shares.

Congratulations on your interest in the market and good luck.
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Answer 2

1. Do your homework. Every public stock has the fundementals for you to see. Growth and earnings are what you want to see here.
2. Pick a stock and watch it for a while-don't buy on impulse.
3. You are young-good for you! I would buy a good mutual fund, one that has preformed well over the past 7 years. Right now we have had a conservative stock market. Many of the DOW stocks have had some ride. The economy is slowing down...I would wait at least a year before buying anything. In the meantime-pretend you buy 5 stocks and see how you do.
4. Read Warren Buffet, and other books.
5. Since Bush has been in office, Halibuton, Exxon and many oil stocks have done well. If a Democrat gets in office-tech stocks and green stocks will do well. Policy effects stocks.
5. Companies must make money for the stock to go up. If you can get on board a good stock keep it for at least a year.

Answer 3

Buying stock is easy. Making money in stock takes some work. If you must buy stock you can open an account with Etrade, Scottrade, or any of a number of online stock trading companies. If you are not experienced, you should find a financial advisor who can advise you what you really need to do. If your goal is to make some investments, then there are other things to do before you dive into the stock market.

Answer 4

In order to buy or sell stocks you need to open a brokerage account. There are a lot of different brokers out there-- you're looking for one that has low comissions (the fees to buy and sell stocks) and that won't charge you an account maintenace fee (ie a fee for just having the account open). www.tradeking.com and www.scottrade.com should both fit these criteria. You may need a parent/gaurdian to open the account if you're under 18.

As far as educating yourself you can find plenty of books on investing at a library/bookstore. The easiest investment you can make to get started is to buy exchange traded funds (etfs--essentially mutual funds that trade on the stock market like stocks). Just buy shares in the ishares etf or the spdr etf (spy and ivv are the ticker symbols) and you'll have stock in 500 companies.

Answer 5

This penny stock service has years of proven experience. Ultimately it is the best service for beginners to use https://tr.im/oxypW
You will have to wait between 3 and 10 days to get into the system in most cases. When I signed up it took 8 days. I wished it was faster, but if you can wait a week or two to start earn life changing money than you will have what it takes to make it in this business.

Answer 6

First learn how the stock markets work.

Its a policy voilation of yahoo if i post any link here.
Just mail me at [e-mail] with subjet- stock markets . I will send a link of best website where you can find good offers, tips and resources.

Best wishes

Answer 7

A. Have an "asset allocation"
B. Always understand what you're buying & why.
C. Know what your "exit" stradegy is (stop loss & profit level).
D. Don't jump in. Read... Read... Read...
E. Never act on stock "tips".
F. Don't buy "Penny Stocks" until you have at least 5 years of experiance.

Answer 8

the first step is to ensure you have the fund to open an account.