Posts Tagged ‘Investing’

Developing a Stocks Trading Investment Plan – Steps to Take

Wednesday, July 14th, 2010
The floor of the New York Stock Exchange.
Image via Wikipedia

Are you thinking about investing in stocks trading business? If yes, then your objectives need to be crystal clear to you when you make an entry in this business. You should have enough funds that can cover your every day expenses and then there should be enough money left that can be invested in this line of business. Beginners in the stock market should not depend over stocks income to cover their everyday money requirements since this can get risky. If this is what you need, then become one of the daily traders. Day trading can be said as a full time job too and you need to have total control over the insights of day trading in order to be successful.
As the morning comes, you need to open your monitor and poke your eyes into it right from the time stock exchange opens and work all through the evening until it closes. There are numerous fluctuations in the stock prices that make it very important that you must keep an alert eye over stocks; decision making time is not enough and you need to buy and sell stocks in seconds. Even thinking for a few minutes can make high changes and your decision might prove to be wrong since 10 seconds ago the price was low and when you purchased it; it was higher.
Not only your focus is needed on the price fluctuations but at the same time you need to focus over financial changes and situations of various companies that you are interested in or already own their stocks. Having a stock trading investment plan is vital if you want to see success in this line of work and these are the factors that can surely help you in preparing a full proof stocks trading investment plan.
A stock market trader needs to stay alert and updated with every second that goes by. People who are new can take help from brokers or talk to other reputable professional stock market traders for tips or advice but make sure that you are making use of those tips to be successful and not fooling yourself by trying something extra ordinary or completely out of the box since the very beginning. Remember that having a stock trading investment plan would not give you a lot of profits all the time but it would make sure that your losses remain limited; losses in stock trading cannot be avoided at any cost but they can surely be reduced by working over a well defined stock trading investment plan.

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Defining the Role of Brokers in Stocks Trading Business

Monday, July 12th, 2010
Monkey Business
Image by jurvetson via Flickr

Many people face problems and confusions when it comes to searching and picking a stock market broker who can make the job of trading a lot easier for them. So, it is advisable here that you must Keep on reading in order to know the role of brokers in this stock maze and how to avail services from the right one as well. You need to sit and think carefully while considering a few things before choosing just any broker, since this is about your money and investment. Basically, you can find brokers in two categories that are discount and full service.
Compared to the discount brokers, full service brokers offer a lot more services to you regarding trading in the stock market. Most of your work in the stock market would be completed by the broker plus he would also give you an advice on every step and make suggestions over what to do. One thing that you should be well aware of that full service stock market brokers are expensive because of the services they offer.
Investors who are still in the learning phase should go with discount brokers; this is the best choice when you just took a start in the stock market. This is also attractive because these brokers are not expensive to avail and mostly a new investor does not carry that much amount to hire a full service broker as well. The good news is that the current discount stock market brokers are far better compared to a few years back offering you more tools and assisting you nicely as a beginner.
Every trade brokers make; they would charge a fee for it. Not only this, if they are providing you with any other services or taking care of anything else in the market for you; they will charge you for that as well. When you need to choose a stock market broker, consider what type of an investor you are first. If you are more of a day trader making loads of trades on daily basis then search a broker who would not charge a lot for trade execution. Similarly, it goes on for various types of investors such as an investor who buys and holds on to stocks for longer period of time would not really hire a broker on monthly basis. Considering your investment type, just check with various stock market brokers and choose the one suiting your requirements.

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Exploring Winning Stocks – Things You Must Consider

Saturday, July 10th, 2010
Warren Buffett speaking to a group of students...
Image via Wikipedia

When it comes to picking up winning stocks in the market then it is something which is not easy to perform by any means. There are a few investors that can make this job look relatively easier such as Warren Buffet but those are just a few and you reading this article tell me that you are not one of them. Bad stocks are something that is chosen by all of the investors including the stock market pros as well. However, the point is that the amateurs tend to pick up far a lot of bad stocks compared to the professionals. The stock picking strategies that come in to use every day are nothing less then a puzzle. This puzzle or strategies are just a set of rules every investor has made for himself that he uses when it is time to execute a trade. When it comes to investing in a commodity, currency, or a stock, an investor has to tick mark all the things in the strategy’s check list so the trade can be a sure success.
Professional traders have much more experience and knowledge compared to other individuals and this is why they implement successful trading strategies as compared to ordinary traders. Now when such strategies come in to play and your check list is in an organized manner, you would surely explore winning stocks that is just another name for a good or a successful stock.
Let me give you an example of how a lone trader would be exploring winning stocks. There are pieces of certain information that he would put together in order to find and explore a winning stock such as; he might have read a tip about buying stocks that is fitting in nicely, the company has been making consistent profits over the last 3 to 4 years, the particular stock went down a little in the past 3 days; looking like a cheap stock and etc. Now these readings can also assure whether you are going for a winning stock or not but professionals would add a couple of things more to make things hundred percent sure like the ratio of price earning that should be over 20, yield dividend moving on to 7 percent, and the current ratio is more then 5.
If you simply consider these things carefully then it can get relatively easier for you to explore winning stocks and once you explore such stocks, you would be certain to make profits in the days to come.

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Minimizing Stock Losses – What to Do?

Thursday, July 8th, 2010
Robin Hood statue in Nottingham
Image via Wikipedia

People often enter the stock market with a dream of making millions overnight; this is just a myth so snap out of it. Being a part of the stock market means dealing with risks of losing an investment on every step you take. You need to know when to enter and exit a trade if you want to minimize your stock losses. Opportunities keep on coming and going but you cannot put your money in every one of them; hunt for the big fish and once you catch it, sit back and relax for a while.
Minimizing stock losses means playing the trade game in the right manner. People often take it as gambling and trade just by assuming things feeling lucky; such people end up losing everything and finally get out of the market. You need to do careful calculations and have a plan behind every trade you make; if you find after calculations that a lot of risk is involved in a particular trade then don’t go for it. Don’t be stupid and act like Robin Hood that you can put everything on the line; remember, investing more then you can actually afford is not trading, it is gambling. When you look for stocks, find a company that has been successful for a long time and still is quiet stable and growing.
You can also hire a reputable stock market broker if you can easily afford one; it can be of great help in taking advice, suggestions, and knowing everything that is going on at all times in the market. You should be able to understand the level of risk that comes with every trade you think of making. Sometimes these are the fortune opportunities but again; do not trade blindly trusting your instincts. You need to analyze, check on the stock’s history, company’s history, and such things; if the calculations fit straight then do the trade.
Being frustrated and undisciplined makes people confront a lot of stock losses because they simply lose the ability to think and keep on making wrong trades. Always remember that even pros go through stock losses in the market, this is something that is a part of the game. You go through a stock loss, forget about it and focus on the next fish. You can even do stock trading from the comfort of your home being online since many people get confused in the environment of stock market. Stock losses cannot be avoided but can be minimized so be alert and remain in senses at all times while trading.

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Suicidal Stock Trading Mistakes – Some Highlighted Ones

Thursday, July 8th, 2010
NYSE's stock exchange traders floor before the...
Image via Wikipedia

There are a bunch of stock trading mistakes that can be said suicidal as they can make you lose a lot of investment in a short period of time. It might be a fact that may be you already know them or may be not but knowing about them prior to falling behind can save you a lot of money, grief, and time.
First thing which must keep within you mind as a stock trader is never to trade with the money that you cannot lose at any cost. This might sound stupid or rare to you but this mistake is being made by numerous stock market traders; it can be said as desperate trading too. You cannot put the money on trading that can get you out of the market if the trade goes down. Traders also make another common mistake of making trades without having any strong stock trading plan in mind. Just like no one can start off a business without a business plan if he or she wants success; same is the case with stock trading as well. You need to be creative, organized, maintained, and stay side by side with your trading plan no matter what. People in the stock market can spend an hour thinking what to eat in supper but do not spend even a few minutes planning on their next trade. You cannot just shoot from the hip, this is the stock market; not having plan means game over.
You should not at any cost keep unrealistic expectations. People who are new in the trading business can seriously end up facing a lot of frustration only because they were expecting something unrealistic. You might have seen people making stock trading look like a child’s play but they are professionals, they have years of experience and expertise, you are new and amateur; learn things. You cannot just day dream that tonight you will walk off with a million dollars.
Another suicidal mistake traders make is, not carefully understanding the risk involved in a particular trade. As a new trader, it is alright to go for small hits and not worry too much about risk but it cannot be ignored all the time. Even the most successful stock market players go through a chain of losses and so would you at some point; a wise move would be to understand the risk involved ahead of time.

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Differentiating Between Common Stocks and Preferred Stocks

Saturday, June 12th, 2010
NASDAQ in Times Square, New York City, USA.
Image via Wikipedia

When we talk about stock market, there are basically 2 types of stocks that are traded within the stock market, preferred stocks and common stocks. In short and in simple words, the better you understand the difference between both of these, the better you will trade and make profits. Preferred stocks can be explained in a way that such stocks can be said as being quiet alike bonds and why they are alike is because of the returns; just like bonds, the returns are fixed. When we consider this aspect of preferred stocks, one thing becomes really clear that the risk factor is limited making these stocks attractive for a trader. When you deal with preferred stocks, you are known as a preferred shareholder that means having preferential treatment attached with you with the dividends available; the first right of refusal is what you actually have, majority of the traders enjoy trading preferred stocks.
While on the other hand, common stocks are something like investing in the operations of the company or organization. Mostly when it is about investment, almost 80 percent of the investors would go towards common stocks. Although high risk factor is involved while trading in common stocks, but at the same time, they can prove bountiful, if an organization or company starts doing well from business perspective.
Talking about common stocks, they are available in different types and each type carries its own risk and potential; some might be too hard to trade while others can be real easy. This is decided by a stock’s composition that how hard or easy would it turn out to be that means considering the risk involved along with that stock’s overall performance. Common stocks are more risky compared to preferred stocks and if you are not much of a risk taker then it is advisable here that you must trade preferred stocks rather going with common stocks.
It is one’s mental capability and self satisfaction through which he or she chooses to go with either common or preferred stocks but both can give you loads of profits if fortune turns our in your favor plus, you make right moves at the right time as well. So, I guess that now you have a bit of information about preferred stocks and common stocks plus what are the major differences between the two as well. So, consider your options plus your characteristic before picking the type of stocks for trading purposes.

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Investing in Growth Stocks – A Wise Move

Friday, June 11th, 2010
This is a pie chart of employment types in the...
Image via Wikipedia

Investing in growth stocks is surely a wise move if carried out in an appropriate manner. You have to do a few calculations in order to know that you are investing at the right spot and for this you need to have a check over three basic things which are directly associated within growth stocks. These three things are fundamentals, industry, and technical stock charts.
Statistics play a vital role when sighting potential growth stocks; statistical calculations are essential in tracking a stock’s performance. A company’s statistics are known as the fundamentals in the stock market. You can simply know how positively or negatively a company is moving on by simply going over its fundamentals. Statistics is a group of categories labeled such as return on equity, profit margins, sales growth, annual earnings, and quarterly earnings. Each of these areas should be searched out thoroughly and the best number should be looked for; you should consider numbers that are consistently getting better. This is the exact company you would want at your side when investing in growth stocks.
Industry is the second vital consideration for growth stock investment and you should see it from a player’s perspective. If there are 10 players competing to play on the same point, the best performer needs to be picked out. There are many industries within the stock market in which similar companies are in a group. Firstly, you have to choose your industry and then you need to pick the best company out of the bundle. So, keep in mind that in order to select an appropriate company for the purpose of investment (Growth stocks), you need to select an appropriate industry first.
Moving onto the final factor, technical stock charts also assists you in deciding the growth stocks in which you should invest. It is always important that you must see the history of a particular company’s stock price movements before investing in it and this is why technical charts are of great importance. Basically, you will only need to focus on 2 factors over these charts; firstly it will be the continuous improvement of price and secondly as the price movement goes up look for strong volume association.
Above mentioned 3 simple things would make sure that you find the right growth stocks to invest in and get good returns in a very short period of time.

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Making the Most Appropriate Stock Pick

Thursday, June 10th, 2010
The floor of the New York Stock Exchange.
Image via Wikipedia

When we talk about the most profitable and the choicest stock deals possibly available for a certain trade or time frame then we are talking about stock picks. People who have a good experience over stock analysis and also have the required skills can only make the right suggestion over stock picks and what can be the best trading scenario at the time. There is certain criterion set on the basis of which the art of stock picking is done; having huge returns is the major objective behind stock picks. When an investment is made in the stock market, stock picking is one of the main strategies that come in to play along with analyzing the sector timing, the market timing, and holding and buying strategies.
Big profits can be made in a matter of months, weeks, and even days or hours if the right stock pick method is applied. When we say the best stock pick method then financial evaluation of a certain stock comes at the top.  Many things come into consideration such as the company’s future, present, and past financial condition, all these needs to be analyzed with a thorough research; this is what financial evaluation of a stock is. Not only this, you also have to see at the ratio of price to earnings, return to equity, and ratio of price to book as well.
Stock pick plays a vital role for traders who are involved in day trading. Traders need to stay updated and keep on educating themselves about stock picking since there is latest information available and changes taking place every now and then. Making the most appropriate stock pick should be done by taking advice from trustworthy and experienced stock analysts. This helps in making the right choice even when the market is fluctuating too much. Usually, these are big companies that are a part of established and strong industry businesses that are referred to as stock picks. So analyzing the right stock pick also involves considering the market’s size, the management quality, and how is the regulation within a certain industry as well.
Trading in the stock market is not a game and you cannot make investment on every other thing as well. Making the right stock pick would assure big profits in a short period of time and without much risk involved but remember that once you hit a fortune, calm down for a while and do not go for big shots again very quickly.

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Stock Market Secrets – On Your Way towards Success

Wednesday, June 9th, 2010
Broad Street with the New York Stock Exchange ...
Image via Wikipedia

In the rapidly advancing world, almost everyone knows what stock market is and how it functions as well. However, there are a few things which you must keep within your mind when you want to be a part of this maze and thinking about making an investment in the stock market. So, just for your concern, in this piece of writing, I have decided to share some stock market secrets, which will surely help you in making the right investment and at the right time as well.
You need to play your own game staying in the market that means having your set of rules and following them strictly. It does not matter if you take my tips or gather strategies from here and there, once you have them, play with them ONLY. A trader who is undisciplined and is not consistent can never be able to make something out of the stock market. Running after different tips and strategies would not make you anything; your rules would be your strength. You should learn to control your risk that means not to be an adventurous trader. Your financial safety needs to be ensured at all times so keep your capital base at a safe side. You need to try and grow that capital base and not use the previous profits as an investment. This would keep you strong even if you lose all your investment at some point. You should not put more then 3 percent of the portfolio on the line at a single trade.
People always lose money in the stock market; many end up losing everything. You would too lose money but make sure it is not a lot. If you see one of your investments going down, do not sit and wait because it can not magically go up; instead, move on and exit the trade losing a little instead of a lot. When you see a stock reaching at its peak, do not be afraid that it will come down dramatically within no time at all, stick with it and see how much you can possibly make over a particular stock. If you take a bit of calculated risk, it would surely pay you off in the end.
Remember that stock market is reality and not like a fairytale that would give you fortunes over every trade you make. Learn to enjoy the small profits since big fortunes do not come all the times.

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All You Need to Know about Stock Quotes

Tuesday, June 8th, 2010
NEW YORK - NOVEMBER 05:  A trader works on the...
Image by Getty Images via @daylife

Stock quotes can be simply summarized as a piece of information regarding the price of a stock at a certain or specific time. Stock quotes are basically denoted or displayed by decimals or fractions and show the most valuable piece of info regarding the stocks and also the significant changes that occur within the stock market as well. When the traders are about to execute trades, stock quotes come handy as they can be primary tool that can assist in their decision making. There are other derivatives as well for which these quotes are available such as forex currencies, options, futures and etc. There are various categories or groups in stock quotes as well such as real time stock quotes, delayed stock quotes, and historical stock quotes.

When a trader wants to know about certain stock market changes and price changes before a particular time period, he can make use of historical stock quotes. These are very helpful when it is about understanding stock trends periodically. There are stock quotes that portals, journals, various institutions, etc provide the traders with; these are usually free and are known as the delayed stock quotes. They are called delayed since they are 15 to 20 minutes late. The small scale traders along with several investors in the stock market make good use of these stock quotes. Then there are streaming stock quotes or live stock quotes generally known as real time stock quotes, these quotes have a delay but of less then a minute and are produced by trading systems in the market or other specialized quotes sites. There are traders who trade online and on daily basis; they use these stock quotes to make the decision considering the smallest stock price changes.

The ways in which these stock quotes are presented is very diverse. They may come in the form of graphs having values, a simple phrase line having alphabets or decimals, or even tables with values. Looking at the theory’s perspective, there is a set of stock quotes with every stock as ask price and bid price. There are a few resources from where a stock trader can get these stock quotes. Yahoo Finance or MSN Money can be the choice of online stock traders or the stock broker websites can be considered for the purpose well. Stock quotes are of high importance for stock traders in order to make adjustments or decide whether to enter or exit a trade at the last moment. They can help traders avoid losses at the last minute or make use of a last moment opportunity as well.

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