Stocks the simple way!!

[coollikeme]

Doing stocks, its not brain surgery. It’s a fun way to try and get rich. Millions of people get rich by doing stocks. So, why can’t you? You just need to develop a system that suits your needs. Here is a basic system that I use. This is knowledge that I have acquired from reading books and asking questions of the right people.



Tip #1: Read a lot of books on stocks and money. My favorite book is “Beginners Guide to Day Trading” by Toni Turner. Also I would recommend reading Rich Dad’s “Cash Flow Quadrant” book by Robert T. Kiyosaki. Although, he does not teach you about stocks, he teaches you how to handle money. It changed the way I think about money. Also I watch Mad Money and Fast Money on CNBC. These shows actually try to teach you about stocks and how they work.


Tip #2: Find an online broker. I use Scottrade, but find the broker that makes you feel comfortable. Here are the reasons why: You can control your own account. It’s a lot cheaper, and your online broker will help you with what you need to know. They won’t help you pick stocks, but they will teach you how to use their system. Which gives you the same advantage as the big boys.



Tip #3: The most important rule is, don’t lose your money. That is why you need to learn how to use a stop loss. A stop loss prevents you from losing all your money. All online services give you the ability to have a stop loss. When you go to stockbrokers they don’t offer you stop losses. They tell you to hold for the long term. Which is one reason why the people that had Enron stock went broke. If they had a stop loss, they would have saved a lot of money. A stop loss gives you the power, just like the Pros.



Tip #4: Don’t be afraid to make mistake, because you will, its part of doing stocks. The key is to write everything down and learn from your mistakes. This is where the stop losses really help. They keep you from losing all your capital, while you let your winner run. The more you study about a stock the better off you are. Try to pick a stock you are familiar with. For example, say you go to Starbucks a lot, and enjoy their coffee. That might be a company for you to pick, because you are familiar with the product. Find out if they have good management, and do the research.



The best person in the world to control your money is you, and only you. Take steps to be the best investor you can be. Good Luck!!

[Sam988]

I second what you said.

Wise advices for anyone interested in investing. The best way to invest is not based solely on technical analysis neither solely on fundamental analysis (if you don't know what these are go google it, because they are the step stones of investing), but rather to make a combination of both in a way that you're comfortable with and i a way that you know everything you're doing, instead of investing based on advices by other people that you can't understand yet you follow anyways.

[Ninja]

I think the number one rule when giving stocks a go is: don't panic! Just look at the stats for a while: a company can be doing great for years and make a large profit every time, but when one less important product is recalled for toxins (or something like that) and it hits the news, the stockprice immediately drops because investors think the world is coming to an end. A few days later everyone forgets about the incident and the price returns to normal. It works the other way around too: internet bubble anyone? Emotions play a huge role in the stockmarket and the trick is to buy from pessimists and sell to optimists, without falling in the trap of blindly following the herd yourself.

P.S. Does anyone have experience with trailing stop-losses?

[FXTraderWill]

I spend 40-50 hours/week on stocks, so my advice is: if you want to learn the game, commit to it and study it and take it seriously, like a business. To take money from professionals on the other side of your trades requires judgement and intelligence and well as intuition - which you can only gain from experience.

[cdn2wheeler]

Originally Posted by FXTraderWill

if you want to learn the game, commit to it and study it and take it seriously, like a business.

Good point.

Thing is, where does one go to get clear, unbiased information about how and what to trade?

[Sam988]

Originally Posted by cdn2wheeler

Good point.

Thing is, where does one go to get clear, unbiased information about how and what to trade?

There are many great books about this. Just read a few books that explain fundamental analysis and other books that explain technical analysis (if the guy who wrote the book throws his marketing stuff in the end of the book, like "a fund that practices everything i've explained on the book", and he throws you beautiful numbers about the past year's profits, that's not a good sign). Once one knows technical and fundamental analysis, it's up to each person to decide where to invest.


As Ninja said, a great tip in investing is not panicking. And the person will only be able to not panic, even if his stock goes considerably down, when he knew why he invested in it, when he did some researches on the stock and the stock's company by himself. If it's a good company (good history, good management, good numbers; informations that anyone can get) and the stock goes down, he won't panic because he knows (if he did his homework well) that the stock will go up again.

[DarkSociologist]

Coollikeme,

Not losing money is one important point. Another very important point that you forgot to mention is to make money. ;D

Also, you mentioned that stocks are a fun way of making money. I am actually of the school of thought that believes that stocks shouldn't be fun. It should be mechanical and even boring. If you believe that stocks are fun, then it is really like gambling for entertainment. Emotions cloud logic and lead to mistakes.

[laciemn1]

How much money would you say that it takes to get started on one of these sites?
I might well have enough if I get lucky at Christmas and sell some stuff .