I have had my share of experience as a stock trader for four years and I love every bit of the stock market. The biggest advantage of being a stock trader is that you can do it in the comforts of your home, in your pj's sipping a big cup of coffee. You are the boss.
To be a professional trader, you don't have to listen to Kramer's crap or read Buffet's books. Let's be practical. You can never copy somebody else' style and think you will make tons of money. You have to make your own original formula of money making. Sometimes its thorough research and sometimes its pure instinct...I'll let you decide how you want to play.
I do believe the stock market is purely for the uneducated lot, the class of people who don’t need to use too much of their brains. Dumb people can end up making more money than the brilliant financial analysts and stock market professionals. The reason is simple if you are still wondering. The stock market is all about feelings and emotions. That’s right!! This is the most important piece of information I am sharing with you, so keep it a secret
A sudden rise in the sell or buy volume of a particular share is governed by three factors: emotional upheaval, emotional insecurities and follow the herd attitude.
There are basically two kinds of traders…one the long term investors who let their investment sit for a while, until they feel its time to pull out their principal amount along with the profits. They swear by fundamental analysis. So what is fundamental analysis?? Its about studying the quarterly financial reports of the Company and keeping track of profit and loss account and the over all management.
The other type is the speculators who invest for a day or two, a week or maybe two weeks and sell their shares as quickly as possible depending upon the trend. These people sometimes make a lot of money. They go by the technical analysis which is about reading charts and making inferences. Charts are very easy to read once you learn them. There are three kinds of charts – candle chart, line chart and OHLC chart.
If you want to know my take on playing in the stock market…its about thinking ahead. It’s just like gambling but more sophisticated because there are intelligent players…call them the sharks. Always remember, to be on top of the game, you have to know two things:
1. you are a small fish in the big ocean.
2. the big ocean consists of big fishes who want to gobble you up.
So how do you find cover and save yourself from these sharks? What I actually mean is…how do you protect yourself from not making losses?
1. Keep your eyes open – which means don’t sleep over your investments.
2. Know when to walk out which means you have got to be disciplined.
Beginners, please stay away from options and derivatives. It’s not for you! You will burn your fingers even before you know it.
The best thing for newbies is to get some experience first. Use small investment for buying and selling of equity shares to get the hang of it. It’s easier to handle. All you do is buy stocks at the right price and as soon as the price increases, sell it. Your profit is the difference(sale price - buy price) multiplied by the number of shares you sold. See, how simple that is.
If you like what you read and think you are game for it, all you need is an online trading A/c that most banks provide, they link it to your savings account. Next, get some cash to begin with, voila you are ready to take the dip…cold water…don’t freeze
Respected ShiningStar, it is a wonderful article and reflects the original and practical approach for succeeding in the stock market and also life in general. Thanks for writing and sharing a valuable treasure.
Thank you
Thanks Deepa...You really explain everything in a very easy manner and take the worry out of playing the market. And.......ya know what I'm going to say next. Gold is really on the upswing lately, and most are saying that it will continue to do so. Some say that in three years it will at least double in value. It's good to have some of your money invested in physical possession of gold. It's not always a good idea to purchase gold from companies who will provide safe storage for you for a small storage fee. Some of them don't actually possess all the physical gold that they sell and store for you. If all their customers decided to acquire physical possession at the same time,they probably couldn't meet their needs.
Ummmm....When I wrote this comment early this morning, the spot price for gold dropped. It was not a good day for gold. We'll see what happens tomorrow.
The price flucuates so much. All in all... I'm buying for long term...about 5 years,before I decide to start selling.That's about the time when I will be retiring at age 62.Then I'm going to buy a gold metal detector and find a home in the gold country part of Nevada,and get my daily exercise walking around looking for nuggets.And an interesting sidenote....the gold that is used in making jewelry,coins,and ingots is almost microscopic gold dust.Nuggets,like the pictures that I have posted are not used these days because they have a gem value all of their own.In the days of old,they used to use nuggets,but not anymore.They're too rare and valuable,even though they are not 100% pure.They still fetch a price comparable to pure gold,and many times even more.It depends upon their appearance.Some nuggets are beautiful crystals,which are worth a lot.