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If you want to make money in the stock market, you will basically be using the metrics of probability to guide you in your trades. You are aiming to be successful on enough percentages of your trades to compensate for trades that you do not well on. Chances are you will pay for the schooling of stock trading by losing money on trades early in your career. Things can improve dramatically when you start handicapping the likelihood of a price on a stock to go up or down. You will need to understand moving averages of stock prices and stock indexes. Here are some sites I use, and that might take you some time to utilize and/or refer to regularly for stock market info and ideas on economics and sentiment about money and the US economy:
If you have not signed up for a brokerage that provides streaming intra-day stock market prices, you should look into one. I use TDAmeritrade. I get somewhat decent real-time stock price quotes from them.
You will need to understand there is much psychology behind stock market price fluctuations. Also, there is much noise to why prices vary like they do. That is why I mentioned the moving averages above. You will need to understand that price movements tend to be influenced by moving averages of prices. Typically, the 50 day and 200 day moving price averages are used for reference. Stock prices can be described as having support or resistance at those price averages -ie- prices are likely to not go lower or higher than those levels until some happens to disrupt the trading behavior.
Once you investigate trading, you will find there are many people who do it. That in itself is not a testimonial to its utility for you. You will need to read some and learn how trades get determined to be made by others.There are spectrum of reasons why people choose to pick a particular stock for a trade. I will tell you I am short on part of the market though right now. As much as the market can go up and look like it is good times for the rest of the year, things are not that simple. You will find that prices go up and down and your edge in that movement to is to understand the probability of how much prices can go up or down and to what extent. It is all probability. Even long term investors count on probability to reward them. They do have some tax incentives to aid them too. But, in the end, it is probability that most investors and traders are latching onto.
THE book to read if you want to understand the stock market is "A Random Walk Down Wall Street." After coming to understand all the various theories behind "technical analysis" (the concept that drives day trading), you'll be in a much stronger position to risk money.
Peter Lynch also wrote a couple good books.
These guys (I can't remember the author of the first) approach it with a no-nonsense approach. They don't try selling you on the theories of "following the ax" and all the other theories. They just put it out there "this is what this is and this is what I do."
Both books give you a solid introduction into the basics of stock research.
If you don't mind some fatherly advice from a guy who's blown plenty of money in my youth on stupid ideas, don't pick up any book that makes big promises about getting rich quick. You can get rich quick. However, it's not easy and it's not risk free... that's why it's usually a "get broke quick" scheme for all except those selling you a book or service.
Read those books first. Then, if you pay attention, you'll be ready to move on to the advanced stuff.
Great book by Burton Malkiel. I search out the newest editions when he gets them out. He makes a good case for just sticking with index funds as a long term buy and hold investment strategy.
Location: Los Angeles, which as I understand was once upon a time ago part of the United States of America
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Quote:
Originally Posted by John23
Nearly everything online about stocks is just hype and insanity. The same people that said housing would go up forever say stocks go up forever.
It's a big club of hype, dollar signs, seemingly infinite ability to predict the future (watch Cramer on CNBC, he tries to "predict" everything). It's all a big rah rah club. There's always another Microsoft waiting in the wings (read MSN Finance, Yahoo Finance, CBS Marketwatch, they're all the same).
I would skip all the hype and craziness and get the 5 star books on investing on Amazon, if I was first starting.
Money Game was a brilliant book that's saved me money. $10 or $12 on Amazon. Market Wizards by Jack Schwagger is a pretty good overview of successful traders/investors. There are too many books to mention. But they are far better than anything online.
The thing about all those market talk shows is that, if people such as Jim Cramer, Maria Bartiromo, and all the rest know so much, why don't they use their knowledge to make billions instead of going to a studio every day and sweating under lights?
First, disabuse yourself of the notion that you'll get rich. I dont know how many traders working alone with their own money have made themselves "rich." Some, I'm sure, but it takes a long time and a lot of confidence and discipline, which you'll only get through experience. Also the expression "it takes money to make money" absolutely applies to trading.
That is to say, you have to love it and feel comfortable with it, learn to make smart decisions - then profits will come.
The newbie fantasy is of dropping $50,000 Monday at 9:30 a.m. on a $10 stock that pops up 50% by noon. Pick a different stock Tuesday and do it again, etc.
Dont ask advice or even listen to other traders, traders tend to be big exaggerating braggers
Take your time learning. Very important, take finance and economics courses at your local community college in order to get the big picture. Learn to read a financial statement.
Read everything in your local library. An earlier poster recommended nice old WASPy ten-bagger Peter Lynch Jim Cramer's first two books, not the autobio, are hugely instructive - I think he's a genius, admire him enormously. The Investors Business Daily CANSLIM guy.
You are lucky to be living now with the innernets. Dozens and dozens of websites provide detailed tutorials for beginners, glossaries, examples etc for free. Lots of traders blog, you can learn like crazy from them.
Learn to short. Learn about options. Learn the sectors and their cycles.
Before you risk actual cash, download a trading simulator and set up some practice portfolios to make mistakes with. This will help you build confidence in timing when to jump in and when to sell, how to short, practice making calls and puts, and the hard, cold meanings of "best of breed" and "utter dog."
I dont know if there are free simulators that let you see the bid/ask and size in real time, but look around for one that does.
As you get better informed you'll begin to see what's noise and what's for real. I dont watch financial infotainment on TV and I do fine. Online for news each day I suggest Bloomberg, the WSJ and Forbes, earnings.com, 247wallst ...some others...not for news but for great overview reading someone mentioned Barry Ritholz, he's fantastic but he sure likes those stats and charts.
You can make a living right from your computer, it feels GREAT when you score big, and it beats the pants off of working for somebody else. Good luck.
Last edited by delusianne; 04-22-2008 at 05:41 AM..
Reason: was going to post Joey Ramone/"Maria Bartoromo" but he's too sick in that video :(
I am a newbie in this and would like to know about trading stocks where you can earn huge profits (as I have read online).I have been looking for an online resource to teach me the tips and tricks of the stock market but there have been not any good as far as I have known. Please help me to find any good online resource which can educate me in this arena.
Thanks in advance!!!
I really mean this for your benefit: the sentiment you express, as you express it, shows the over-eagerness and over-optimism of the sort of person who ends up getting burned, burned, burned.
If you want to invest, start with an index ETF such as VTI, which will bring you the return of the stock market overall while you learn about the various types of securities, how they work, and how to choose what to buy and when to sell. That approach could make you money. Some of the best investing info available online is at Motley Fool, to which another poster referred you.
Also, ignore bagger-braggers. These are the hot dogs who love to boast about 'my latest ten-bagger!'. If you do not even know what that means, fine. You don't really need to know it. You would be far better off understanding P/Es, moving averages, 52WH, 52WL, how dividends are calculated and paid, and how the various types of equity and fixed income securities actually work.
I am a newbie in this and would like to know about trading stocks where you can earn huge profits (as I have read online).I have been looking for an online resource to teach me the tips and tricks of the stock market but there have been not any good as far as I have known. Please help me to find any good online resource which can educate me in this arena.
Thanks in advance!!!
It takes years and years of practice and losing money before you start to make money to speak of --- especially in this market which is manipulated like crazy and does the opposite of what it should based on the fundamentals. We should not be having rallies with unemployment getting worse and the market shrinking. Real Estate market should not be getting any better with foreclosures increasing.
You also need to learn about technical analysis. In fact today, fundamentals mean little. The charts and using good technical studies
are your best guides in this market.
To introduce yourself to basic techncial analysis, you can go to www.finance.yahoo.com
You can find charts of stocks by enterring in their symbols such as SPY for the exchange traded funded for the S & P 500 or QQQQ for the NASDAQ or AAPL for Apple Computer. Then just click on the different chart options and look at what the indicator was doing when the stock was going up as compared to what it did when it went down to learn how the indicators work. Stochastics; MACD and 2 line moving average are popular indicators. There are dozens of others.
You can also do searches on You Tube for "day trader" or "Investing" or other keywords to find videos of people who will show you how they do it.
Do searches for techncial indicators to learn what each of those are.
Read the financial news. Buy a financial magazine. Start watching CNBC.
Jimnasik, you've received a lot of advice here in this thread, and a lot of it is just going to serve to confuse you even more than you already are. Several posters have suggested you read Peter Lynch's books, and I second that. Peter Lynch's best line is basically this: "Look for the most depressed market sectors, and buy stock in the best companies in those sectors." Hold them until their sector comes back into favor, and you will make money. As an example, I bought into several major banks back in March and April, and have more that tripled my money, and they are still rising. The next sectors to invest in are energy stocks such as oil, nat gas and coal, because energy prices are low right now, and then homebuilders and building material stocks, because the housing market is in the toilet. Buying into these sectors now is the part we like to call "Buying low", and later, we "sell high". it really is that simple - you just need the knowledge to know what sectors are beaten down and what the best companies in those sectors are, and then you need the discipline to wait it out. If you can do that, than you will make money, and lots of it, and who cares what the stock price is from 9AM to noon? Best of luck to you.
Quote: "Bargains are the holy grail of the true stockpicker. The fact the 10 to 30 percent of our net worth is lost in a market sell-off is of little consequence. We see the latest correction not as a disaster but as an opportunity to acquire more shares at low prices. This is how great fortunes are made over time."
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Random Walk Down Wall Street
Jim Cramer's first two books, not the autobio, are hugely instructive - I think he's a genius, admire him enormously. The Investors Business Daily CANSLIM guy.
