Amateur Trading Tips for Getting into the Stock Market Game
Wednesday, April 6, 2016, 6:00 AM | Leave Comment
Investing your excess funds into the stock market can be quite lucrative if you know what you are doing.
If trading and advancing a little extra cash is on your list of things to learn, here are some amateur trading tips for getting into the stock market game.
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What is Your Expertise?
Believe it or not, most successful stock traders have very limited expertise. They might have a very finite expertise in one sector, industry, or commodity. By learning everything about that one particular asset, they can earn nice profits.
Others are great mathematicians. Do you remember “Rain Man” when the waitress dropped the box of toothpicks and Dustin Hoffman counted them all in seconds? Some of the top stock traders have incredible mathematical minds allowing them to crunch stock prices faster than anyone else. Find where your skills can fit a niche in the market and decide what you might be best at.
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Got Computers?
Of course, nowadays, you don’t really need to calculate the stock price gyrations in microseconds. You can purchase a stock trading software program and hardware computer to crunch the numbers for you. The best systems will give you colorful, real-time stock price charts and graphs, which will notify you with signals on your cell phone when certain parameters are reached.
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Using “If … Then” Statements
Early computer code was based on simple commands such as “Go To,” “For Next” and “If Then”. The way to make money in the stock market is to anticipate price moves. You might consider a cell phone manufacturer. If they make a product that everyone loves, then the stock price will go up. Amateur traders should purchase a stock low before it appreciates.
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What is Risk Management?
You have heard of the principle of “Don’t put all your eggs in one basket?” Risk management is the professional methodology that mirrors this concept. When you start trading, it is easy to get really excited about one particular stock. Don’t invest everything you own in one stock.
If the stock does well, you profit. If it fails, you lose all your money. It pays to diversify – spread your money around in order to better manage your risk. If this is something you’re new to, look at blogs like Winner’s Edge Trading to get tips and customized advice.
Stock trading can be fun. You have an incentive to check on your company’s price each morning to see if you made money. Be careful though, and use technical charts. Don’t invest everything you own in one stock and be aware of the market. The sky is the limit, so don’t hold back.
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