For those who wish to enter the stock market, it is not that difficult. If you are intimidated by unfamiliar symbols, prices and trading procedures, here are 10 rules you can follow to trade:
1.Investigation
Know what actions are. Know what company you are investing in. Follow the Market: You can download a stock ticker directly to your computer, check quotes online, or check historical stock prices. It’s good to do some research on the industry or company you want to invest your money in.
2.Knowledge
Once you do the research, apply it. Choose companies whose industries are doing well. After researching your company and the stock market, be prepared to choose several companies in which you want to invest your money.
3. Follow the market
This means following the New York Stock Exchange (NYSE), following the NASDAQ, and even the stock markets of other countries. Stock prices can change in a day, so it’s important that you stay up to date on your industry or company that you want to invest in.
4. Stocks go down – Sell
Most people hold stocks that are going down because they think they will eventually go back up. Good idea? Mistaken! If a stock goes down and your guy tells you the money is gone, sell it before you lose more! I’ll say it again, sell bad stocks before you lose more!
5. Stocks go up – Don’t sell
Most people will sell with the idea that they want to make a profit before the stock price goes down again. No no no! Stock prices go up for a reason, and if it goes up, ride the wave for maximum profit.
6. Unless you trade, hold stock for the long term
As I mentioned before, buying long-term stocks that are well diversified will keep you in the positive. Stock traders make a living trading stocks because they are trained. Unless you want to make a living on price ranges that run thousands of dollars, stick to buying good value long-term stocks that pay good dividends.
7. Common sense
Always use common sense. If you think you can become a millionaire overnight with the stock market, think again. It takes time, commitment, a lot of ups and downs, but it will pay off in the long run if you use your common sense. Choose good deeds and don’t risk it.
8. Analyst recommendations
Follow the analyst and his recommendations. If you want to invest in penny stocks, that’s another story. But buy stocks that have long-term value, and following a recommendation is a good starting point. The stock market pays those who wait, meaning if you bought Coca-Cola 50 years ago and held the stock, you’d be a millionaire.
9. Be smart – Diversify
Portfolio management rule number one: diversify. Make sure you don’t put all your eggs in one nest. Buy stocks in the financial industry, in the commodity industry, in utilities, gold, etc. Buy shares in Japan, in Germany, the United States, etc. Just make sure your stock selection is diversified and risk isn’t stuck in one area.
10. Do not get depressed if your actions fail
You are bound to lose some money on the stock. Everybody does. But don’t let it scare you because there is a lot of potential. Average Americans don’t invest in the stock market because they fear losing money or don’t know how to use it. Take advantage of opportunities, and if you encounter several bumps in the road, take them in stride and learn from your mistakes.
