Planning Stock Market Trading
Before you think about investing in the stock market, you should really have a long hard examination of your existing situation.
The first thing to focus on is your current financial position.
You should do this at least yearly.
It is very important to understand your position, and to sort out any problems before you consider any investments.
If you've put aside $20,000 to invest, but you have $20,000 of debts you would be better off repaying the debts first.
This will obviously set the time of your starting stock market trading back but you will not have the problems of debts on your mind, and remember you would have to make additional profits to pay the interest on these loans.
It doesn't seem sensible to start out investing funds if your bank balance is not at least in credit.
That is, your monthly credits don't at least exceed your monthly debits.
As well as these debts, look at everything you are paying every thirty days, and get rid of expenses which are not essential.
For example, high interest credit cards are not necessary.
Pay these off and get rid of them and replace them with a credit card with reduced interest and refinance high interest loans with loans which have a lower interest rate.
All this may take time but after you have done all these things you will have a reduced amount of financial pressure, and you will be able to have a clearer view of stock market trading.
These things, you may not consider to be stock market basics, but once you have got yourself into excellent financial condition, which you will have, your stock market trading will be easier and a lot less stressful if you don't have to struggle to pay monthly bills, and you will make sounder investments with less financial pressure.
Many new investors believe they really should invest much more than they really should.
That isn't necessarily true.
To determine the amount of money you really should invest, you must first see how much you truly can afford to invest, and exactly what your financial goals are.
So how much cash should you invest? Unless you plan on investing in 'blue chip' stocks that can be easily liquidated you should keep a minimum of three months living expenses in the bank with no plans to touch this money.
If you can honestly say that you have stocks that are 'blue chip' never deviate from this plan, if they are, you can buy shares with the money.
'Blue chip' stocks don't really vary in price week-to-week or even month-to-month so they will be almost as good as money in the bank.
This is not always true, but almost always is.
Because 'blue chip' stocks only vary in price over a fairly long period they are ideal for investment not really for trading.
Plan to make money with them from the dividends they pay, not from price fluctuations.
You will need a large investment of capital to make enough money to retire on.
If you plan to trade you can make (or lose) a lot of money with shares that fluctuate in price over a month, a week or even a day.
So these are shares you should focus on if trading is what you want to do.
You should concentrate on only one sector of the market at a time.
After you have selected one of the sectors you should check on the website of each company you have selected and do due diligence on the stock, and use as many of the technical indicators as you can.
Each positive indicator will give you a better than even chance of making money on that stock.
If you do not receive trading signals, then you should move to another sector.
The most important of all stock market basics is 'you should never buy shares with money you can not afford to lose.
'
The first thing to focus on is your current financial position.
You should do this at least yearly.
It is very important to understand your position, and to sort out any problems before you consider any investments.
If you've put aside $20,000 to invest, but you have $20,000 of debts you would be better off repaying the debts first.
This will obviously set the time of your starting stock market trading back but you will not have the problems of debts on your mind, and remember you would have to make additional profits to pay the interest on these loans.
It doesn't seem sensible to start out investing funds if your bank balance is not at least in credit.
That is, your monthly credits don't at least exceed your monthly debits.
As well as these debts, look at everything you are paying every thirty days, and get rid of expenses which are not essential.
For example, high interest credit cards are not necessary.
Pay these off and get rid of them and replace them with a credit card with reduced interest and refinance high interest loans with loans which have a lower interest rate.
All this may take time but after you have done all these things you will have a reduced amount of financial pressure, and you will be able to have a clearer view of stock market trading.
These things, you may not consider to be stock market basics, but once you have got yourself into excellent financial condition, which you will have, your stock market trading will be easier and a lot less stressful if you don't have to struggle to pay monthly bills, and you will make sounder investments with less financial pressure.
Many new investors believe they really should invest much more than they really should.
That isn't necessarily true.
To determine the amount of money you really should invest, you must first see how much you truly can afford to invest, and exactly what your financial goals are.
So how much cash should you invest? Unless you plan on investing in 'blue chip' stocks that can be easily liquidated you should keep a minimum of three months living expenses in the bank with no plans to touch this money.
If you can honestly say that you have stocks that are 'blue chip' never deviate from this plan, if they are, you can buy shares with the money.
'Blue chip' stocks don't really vary in price week-to-week or even month-to-month so they will be almost as good as money in the bank.
This is not always true, but almost always is.
Because 'blue chip' stocks only vary in price over a fairly long period they are ideal for investment not really for trading.
Plan to make money with them from the dividends they pay, not from price fluctuations.
You will need a large investment of capital to make enough money to retire on.
If you plan to trade you can make (or lose) a lot of money with shares that fluctuate in price over a month, a week or even a day.
So these are shares you should focus on if trading is what you want to do.
You should concentrate on only one sector of the market at a time.
After you have selected one of the sectors you should check on the website of each company you have selected and do due diligence on the stock, and use as many of the technical indicators as you can.
Each positive indicator will give you a better than even chance of making money on that stock.
If you do not receive trading signals, then you should move to another sector.
The most important of all stock market basics is 'you should never buy shares with money you can not afford to lose.
'
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