How do I invest on the stock market?

Question

I've been thinking about investing in the stock market but I need some clues on how it actually works and how do I get the most out of it.
I want to start slowly with a small amount of money.

What do you recommend and suggest?

Answer 1

stock market is a place where equities of certain companies are sold. if an investor is no longer interested investing in that stock, he/she can sell his/her equity in the stock market through the stock exchange (NYSE). frequent selling and buying equities is called stock trading.

stock price is not static. depending on the market forces, it can either moves up or down. demand and supply is what drive the market forces. and most of the time, perception influence investors' or traders' decision to either buy or sell the stock.

Answer 2

First, with your small amount of money, buy a "S&P 500 Index Fund". Vanguard and Fidelity have good ones with low annual fees and no sales load. You now "own" the 500 largest companies in America, and all of their employees and managers get up every day, put on their shoes and socks, and go to work for you, their newest owner.

Second: Follow the above advice. Learn stuff. Study in university or read books. Don't hook up with one of those cheesy "make a million in the stock market" courses. They are there to make money for the authors (who would spend all of their time trading if they were really good at it!). Finace courses at a university.

I like William O'Neal, Graham and Dodd, and "Confessions of a Stock Operator" by Jesse Livermore--an almost hundred year old classic. He got rich and poor several times and then shot himself in the head.

The lesson: Don't trade. Buy a good variety of good stocks (if you follow my advice, you already have 500 of those and you can buy more every month if you set it up that way!) and hold them for the long term. Trading makes brokers rich (see the book: Where are the customers yachts?--another classic)

Index funds. Buy and Hold. See me in 20 years and if you followed my advice, you'll be rich and buying me lunch.

Answer 3

I recommend reading how I made 2 million dollars in the stock market by Nicolas Darvas and read Market Wizards 1 2 and 3 before you put any money it.. from there I use tradeking for my broker and they're awesome..good luck it's a lot of fun!

Answer 4

I agree with the above. Buy a book on how the stock market works first. I read Jim Cramer's "Real Money" and I thought it was pretty informative. He is also good to watch on CNBC. He is very experienced and shares a lot of knowledge on his show. I've learned much by watching his show. When your ready you can open an on-line brokerage account which is very easy to do, fund it and start trading. Just take it slow at first...don't rush it...you can make stupid mistakes and lose money.

Answer 5

I see you are interested in investing in the stock markets. Start trading stocks is as simple as opening a trading account with no minimum investment amount and then picking a stock for as low as $100 and then buy. You need to buy through a broker, there are no way around this. However, that simplicity is truly the wolf beneath the sheep's skin.

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.htm

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/

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Answer 6

not the right market.
get your self a good book and read all the fundementals.
read the wall street jorunal when you can
real the business section of your newspaper daily watch the financial stations on TV
then when you are comfortable begin to invent.

Answer 7

Learn to trade.
BUT YOU HAVE TO FIND THE RIGHT SOFTWARE PROGRAM FOR YOU. Investigate BEFORE you invest!
Hints: Red lines and green lines; red lights and green lights; Late-at-night infomercials.
Total initial investment: Anywhere from:
Five Thousand [$5,000.00] Dollars [USD] to about Thirty-five Thousand [$35,000.00] Dollars [USD].
I gave you hints about the lower-priced, easier-to-understand and work with software program. That program has free technical support and upgrades; its own subscriber supported, on-line TV program. &&& User Groups throughout the world. .

IN ADDITION YOUR on-line broker account could be as little as $500. However, to day trade, you MUST have AT LEAST Twenty-five Thousand [$25,000.00] Dollars [USD] to open and fund your trading account.

AND THIS - above all else: BEFORE you go “live in the market” with any of your hard-earned money, I strongly suggest:
For each and evey trading strategy, make and have your own trading rules. THEN FOLLOW YOUR TRADING RULES. . Plan your trades and trade your plans. There are many, many different trading strategies. HOW? With EACH trading strategy I MOST STRONGLY SUGGEST: Paper trade, paper trade, paper trade AND paper trade some more.

THEN trade stocks, options, currency or commodities. I do it - using stock options. I LOVE THEM!

I saw a late-night infomercial about trading stocks. It had these charts with red lights and green lights and red lines and green lines.
1] After the infomercial - that day and a few days later - I asked a few questions and discovered how much it REALLY took to trade stocks. I found-out it took an account of $25K or more to be a day trader or scalper. I KNEW I didn’t have that size account.
I made a few more inquiries about other ways to earn money trading on-line. I found out about options. Options are a sort-of side investment from the stock.
2] We invested $5K in an options trading software program.
3] I studied the DVDs and read about trading options. To me, it took a while “to wrap my brain” around the concept, but, through “paper trading” [pretending I was trading with real money]. eventually I did.
4] THEN I opened a margin trading account with an on-line broker as a "speculator".
5] I discovered “paper trading” ISN’T ANYTHING like trading for real. Real trading is VERY emotional.
6] I lost about $2K - AND I kicked my own butt!.
7] I decided I was going to actually “buckle-down” AND concentrate on earning money, trading options. I did. I’m just about back to the original $5K.
8] This software program has a live, on-line, subscriber-supported TV program/network. It has programming for currency, stocks, options and commodities. Subscribers can e-mail or call in questions about their various interests. Because of this, everyone watching, learns. The TV folks do not give any buy, sell or hold recommendations. When folks pay attention as to what is going on, they DO make/earn money.

At times, when the stock goes up, the option goes up. At other times, when the stock goes down, the option goes up. Yes, that’s right! Needles to say, I LOVE trading options!
AND, YES, YOU CAN LOSE MONEY! I just told you I lost money.

“Newbies” - the new folks who are thinking about making the investment, can e-mail their questions. MOST Wednesdays are options “Training Days”. About one hour is devoted to exploring different aspects about options and trading. Training days are broken down to plain, every-day, understandable English. Some technical terms are used. I'm sure in your line of work, there are technical terms the layperson may not understand.

The technical support is terrific! If a program is missed, this software program offers an on-demand feature so folks can review a program.

This particular software also has “User Groups” throughout the world! Our particular group is a legal, non-profit entity. We pay dues of $60 per year. We - the users [subscribers] - meet once a month at a different library in the region where the members of our group live. Guests are welcome. Guests pay $10 per meeting.

We discuss whatever topics our members and guests are interested in. We have very interesting members and guests.

The members and our officers are wonderful! They are knowledgeable and very willing to share information and their knowledge.

We have every type of trader:
Scalpers/day traders: in and out of one or more stocks in the same day.
Swing - owning a stock or option for a few days to a few weeks.
Intermediate - owning a stock or an option for a few weeks to a couple months.
Position or long-term: owning a stock or option for a couple months or longer.

I don’t own any stock or options in the parent company. I am a paying subscriber and a member of our user group.

So, if you want to have some fun and at the same time learn a lot and do your best to earn some additional money, look into investing in this excellent software.

A person should learn some things about the market and how it works. Through these sayings, I can tell you these facts:
A] There are no gifts on Wall Street.
B] You are trading people. You are not trading stocks, options, currency, commodities, bonds or any thing else.
C] Trees don't grow to Heaven. Neither do stocks, options, currency, commodities, bonds or any thing else.
D] V.I.C.P.I.E.
Volume Is the Cause; Price Is the Effect.
E] "Bulls make money. Bears make money. Pigs get fat. Hogs [greedy traders] get slaughtered."

1] People make or earn money when the market or their stocks, options, currency, commodities, bonds, etc. [“position”] go up.

2] People make or earn money when the market or their stocks, options, currency, commodities, bonds, etc. [“position”] go down.

3] People make or earn money when the market or their stocks, options, currency, commodities, bonds, etc. [“position”] go sideways.

4] Its one thing to learn. Its another thing to learn AND DO!

5] So you thought [and think] education is expensive? Just wait until you try ignorance!

6] Ask questions of knowledgeable people.

There are two old sayings:
A] "The only stupid question is the question you don't ask."
B] "So, you thought --- and think --- education is expensive? Just wait until you try ignorance."

Remember this: When you are in a group and you or someone else asks a question; that question being asked could be a question one or more folks have on their mind, BUT are afraid to ask.

DON'T be afraid to ask questions - and keep asking questions until you get understandable answers to your questions. This requires persistence and tenacity.

Will some folks think you're a pain in the neck [and another place]? Absolutely. Don't settle for
"fluff" answers or "smoke and mirrors" answers.

Thank you for asking your question. I enjoyed taking the time to answer your question. You did a great job - not only for your information, but for every other person interested in reading my answer.

I wish you well!

VTY,
Ron Berue