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Absolute beginner. Economies crap, not like I’m going to find a job anyways. Fortunately just had a bit of a windfall. Have some money to play with. Might as well try my hand at trading and investing.

7 Thoughts on What do I need to know to get into trading on the stock market?
  1. Reply
    mildred f
    March 2, 2013 at 9:45 pm

    You need to know that Forex is a scam for the casual investor. You will go through all your savings. The big time investors will just chuckle to have someone giving them money hand over fist.

  2. Reply
    Go with the flow
    March 2, 2013 at 9:54 pm

    Call a company like Schwab or Fidelity.
    They have advisors – no cost, that can help you invest your money in no-load ETF’s or mutual funds.
    Also get a book called:
    Investing for Dummies.
    Not and insult – a great book.

    Protect that money at first. Think conservative. Until you learn.

  3. Reply
    crunch
    March 2, 2013 at 10:38 pm

    Have a look at……… http://www.howtodaytradeforex.info/course/system17.html
    Free on me !!

  4. Reply
    A nobody
    March 2, 2013 at 11:20 pm

    To be a trader you must first learn how to invest. You must know the products and the markets in which they trade and more importantly you must know the rules that govern those products and markets. So you must know what you’re doing, why you’re doing it, and how to do it. You should start by reading “Investing for Dummies” by Eric Tyson.

    Here’s a list of books you should consider, at least read half of them
    Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea
    How to Trade in Stocks, Jesse Livermore
    Millionaire Traders, Lein & Schlosberg
    One Up on Wall Street by Peter Lynch
    Reminiscences of a Stock Operator, Edwin Lefevre
    The Disciplined Trader, Mark Douglas
    Trader Vic-Methods of a Wall Street Master, Victor Sperandeo
    Trader Vic II-Principles of Professional Speculation, Victor Sperandeo
    Trading for a Living, by Alexander Elder
    Trading in the Zone, Mark Douglas

    And when you think you want to trade, try some paper trading to test your skills without spending you money http://simulatorinvestopedia.com/ http://www.moneyworks4me.com/
    and/or http://www.tradingsimulation.com/

    Before you enter your first order you need to address four major policies and have very strong discipline to follow them
    1 – You need a written sound trading/investment plan with rules that will not only help you but more importantly protect you, mostly from yourself. Always use stops either to protect you on the down side or to lock in profits on the up side. Never trade on emotions, when emotions get involved walk away. Don’t try to out-smart the market, you’ll loose but if you always take what the market is willing to give you, you’ll be successful. Other words, you don’t trade against the trend since the market is always right. And NEVER trade on emotions, once you let emotions in your trades you will loose
    2 – A written money management program is essential. Remember never invest 100% of your capital into any one security and never have 100% of your capital invested. Never go into a trade without knowing when and where you are going to get out of it. Never let a loss on a trade get greater than 8%-10%, always take you loss and walk away – don’t loose more than you need to and don’t be afraid to take the loss. Remember you never can get hurt taking a profit. Never average down, but you can average up.
    3 – You must have sufficient trading/investment capital. Use your own money, there’s no need to go into debt so that you can trade and/or invest. Margin can be used but only with restraints, never let the account wall below 45% equity. Unless you fully understand margins you should not use it.
    4 – A full and complete understanding of the rules & regulations of the industry. If your going to play in the game be sure you know the rules of the game and always follow them.

    Unless you are willing to study and follow the above you will never make it as a trader. To be successful as a trader it takes work and constant study of the markets and the products traded in those markets, there is no easy way.

    B U T– There are many people just like you that are, or were looking to invest and those that did bought Mutual Funds and/or Exchange Traded Funds (ETFs). One purpose of mutual funds is to help investors like you, who are either just entering the investment world or who have no investing experience. Once you feel you at least have an understanding of investments you should look into ETFs which are similar to mutual funds but are traded on the exchanges.

    Mutual Fund companies as well as ETFs and Master Limited Partnerships have an entire array of products many will fit your needs. Read about the various products and in doing so you will be getting investment ideas and at the same time educating yourself about investing.

    You could also contact the funds companies for more information. I have found that Vanguard (http://www.vanguard.com/) & Fidelity Investments (https://www.fidelity.com/)
    can meet your needs for mutual funds. The service and information they provide is all free and you will find it helpful. You can also read about Master Limited Partnerships at “the Dividend Detective” http://www.dividenddetective.com/

    Regardless of what you decide, do not ever let anyone tell you not to invest, especially those that do not invest themselves.
    Good luck on your journey

  5. Reply
    Joe
    March 3, 2013 at 12:19 am

    Newbies tend to think that the best way to play the stock market is to buy stocks then sell them a day or few months later, then repeat the process. This method of investing usually loses money. The people who buy and hold for long periods are the people who make the most money.

    Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. If you are like most people you will invest part of your money aggressively in stocks, and part conservatively in money market funds and bond funds. However, some young people will go all stocks, and some very conservative people will go all money markets. The links below have on-line questionnaires which will give you an idea of how to do “Asset Allocation,” determining how much to put in each type of investment.

    You want to buy a diversified portfolio of stocks as individual stocks are too risky. Highly knowledgeable people can buy a properly balanced portfolio, but most folks have a difficult time balancing things on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Back in 2000, Some people bought all Internet stocks; they got burnt when they all crashed together. You have to diversify across industries. Unless you know what you are doing, it is best to buy mutual funds that will diversify for you. Buy no-load, low cost funds. Mutual funds should have expense ratios of less than 0.4%.

    I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest management fees. For stock funds, I like putting ~70% of one’s money in the Vanguard Total Stock Market Index Fund. and ~30% in the Vanguard Total International Stock Index Fund. The Vanguard Total Bond Market Index Fund is good for a bond fund. The Vanguard Target Retirement funds can be a good all-in-one stock and bond funds for an IRA. (If you have less than 3,000 dollars, you’ll have to use the Target Retirement Funds) There are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

    Once you have stared investing, you need to keep adding money on a regular basis. Many funds allow you to set up automatic investment programs that take a set amount of money out of your bank account each month.

    If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.

    If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

    I will warn you that there is a tremendous amount of stock investing books and websites that teach stock investing strategies that don’t work. Particularly bad are people that teach “technical analysis” systems that sound impressive, but don’t work.

    Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however. I prefer not to use one, but some people just can’t understand it, and need their hand held.

  6. Reply
    Emma F
    March 3, 2013 at 1:12 am

    You make your money by buying low and selling high. Look at the trends, do research on the company.

    Join Scottrade! It’s free and easy. I just joined today.

    I’m 18 and started investing. If you use my referall code XZFY2202 you will get 3 free trades.

  7. Reply
    Eddie W
    March 3, 2013 at 1:13 am

    If you’d want to speculate stock to make money, here are some hints.

    (1) If your investment dictionary only has 2 words, low and high, you should not be investing. A successful speculator never buy low, sell high. Of course not buy high, sell low. It`s buy high, sell higher. When it comes to long a stock, buy the rising stock.

    (2) If you are shorting a stock, short the falling one. Sell low, buy lower.

    (3) Be discipline, control your loss. Buy a stock, it falls, selling it to take a little loss is only the beginning of the game. What next is when it falls further, buy it back. This is why, great successors always trade the same stocks.

    (4) When you see the stock is falling, be the first one to get out. There is no such thing as panic sale. When it comes to lose, be the first to get the money back. The stock couldn’t save you, only money could.

    (5) Don’t be greedy. After purchasing a stock, when it encounters anykind of pressure, take the money first and trade again. The pressure applies to everybody, not to you alone. Remember, when it comes to money, doesn’t matter how little, even a few dollars, if you don’t take it, a lot of people would. Might as well let the one be you.

    (6) If you can make the money, don’t aim for making an even. If you can make an even, don’t aim for losing. If you have to take a loss, make sure it’s as little as possible. Let’s say after purchasing the stock, you need to sell it but lose $ 20. All you need is to buy it back a little lower, say $ 20. When the stock goes back to your original price, you are already $ 20 ahead.

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