On the previous topics Stock Broker went through the basics about the stock market reports and how to find a report using a stock symbol. Now we should take a look at the investment ways and how those types are doing they stock trading. But before starting to describe the investment ways we will take a look at how to start stock trading.
To start doing investments you would need a notebook. You should write down short notes about stocks you are following or will start to follow and when you will buy shares. Those notes should describe you current thoughts or ideas why the share is good or bad to follow or to buy. The notes are important to recall reasons or thought about why did you like the company and why did you think it was worth to buy or to sell. In case if something went wrong or some of your decision was extremely successful, it is good to follow the same pattern or avoid it for good. While you are making your notes about the stocks keep in mind do not overload them. The overloaded notes are difficult to follow and you may miss out the most important point.
When you are choosing a stock to follow or you are starting a day trading do not make it too complicated. Stock Broker says: you cannot follow or buy all possible stocks; you can start to follow for example 2 or 3 share and when they don’t give expected results just find something new or different and start to follow the new ones. Do not forget to make notes why did you stop follow the “unsuccessful” stocks. The stock market can change and maybe your first ideas weren’t so incorrect at all.
For the next we will describe three main types of investing “methods”. The first type is gambling and the common thing about them is that they do buy stock without doing any research or reading. They usually following somebody’s tips from news or a prediction about some stock that should make a huge profit. The gamblers are taking the change and investing in stocks that are tipped. Even if this somebody is a professional broker or just a good family member it doesn’t matter while you haven’t done your own research and became to your own conclusions it is gambling. The gamblers are extremely lucky if they are making any money at all, because most of those hints are wrong or hoaxes. Stock Broker recommends to avoid the stock market hints and tips. It’s even better to stop follow the stock for a while after you got the hint about your chosen stock. There is a change that something will happen with that stock soon and there is no reason to give your money away for a bad hint. You shouldn’t worry about giving up with a good company there are loads of shares to follow and to buy on the stock market.
The second investor type is a day trader. The day traders are buying and selling the stocks many times during the same day or during a short period of time. To gain any profit in a short time you need to use a big amount of money, because doing trading has a fee on every movement. Since you are using loads of money to buy stock the risk is higher to loose it all too. Stock Broker thinks that a day trading is an option to do quick investments and you can make a quick profit, but we don’t recommend it for beginners and you should stop doing it when you start to loose money. When it happens accept the lost and try the third trading method.
The third type is an investor. The investors are investing in one stock for a long time, because they did deep research about the company and they do believe this share will make some profit in a long run. This is the type that Stock Broker recommends to do. You should start buying stock for a long term and it will pay off more than the first two types.
It is important to remind that being an investor does NOT mean you should NOT sell your stock in a short time if something went wrong. For example you just bought a stock and some very bad news about the same company are starting to come in or the stock price is starting to fall to quickly and constantly. In this cases it is better to sell your stock straight away even with some lost. It is better to loose some money than all of it. You can always recover from the lost with some another stock. We do prefer to have some lost than waiting and hoping your “bad” stock will start to raise one day. That day when you “bad” stock will start to raise again may come and may not come and even then you may have recovered the lost for long time ago with riding another share.
It is very important to take out your emotions about loosing some money and do not fall in panic when the stock market has some bad days or you just made a mistake with buying something you shouldn’t have done. You have a change to learn your lessons and make it right on next time.