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Joining A Stock Market Forum

Editors note: Guest post written by Richard Lauder, who also guest posts at Beating The Stock Market

A few years ago, I joined a free online stock market forum whose recommendations and “tips” never really yielded any significant profits. Most of them use the “Pump and Dump” attack, where several sites send out mass alerts on a particular small cap stock and cause a bit of buying spree on that stock. You will sometimes see a large percentage increase in value, but usually a very short term rise in these stocks which amounts to just a few cents per share. Be aware that it usually falls again just as fast as it went up, so you need to be ready to get out fast. That’s the “dump” part of the equation. If you have the time and patience to closely watch and trade these stocks often, and at large volumes, you can make some profits.

I usually stick with one of the “big house” sites for research, news and stock market 101 type of information. These guys spend a lot of time, money, and resources to come up with their data, and I can access all of it just by paying to trade on that site. Most of these sites will offer options in membership to where the more you pay, the more of these tools you will be able to access. The old saying still holds true, “you get what you pay for.” While there may be some sleeper sites out there that occasionally hit on some fast risers, you will pay for them, if you can find them in the crowd with all of the others.

As you have always heard, do the research, follow the leaders, and stay in it for the long run. Most of the recognized large trading firms now offer online trading for from four dollars up to twelve dollars for each basic market trade. Some of them will require a minimum starting balance of several hundred dollars. There are a couple of really good sites that have no minimum balance requirements, and actually offer some pretty impressive research and tracking tools. My recommendation is to study the difference in the types of charts, graphs, history, and tracking tools that are most commonly used, and learn how to use them before you buy stocks. Once you find which method works best for you, and become comfortable spotting trends and patterns, then find the site that offers these along with your basic trading platform. Check for a stock market course in your local area. You can pick up some good stock market tips and information there.

You also need to decide what kind of trader that you want to be. A day trader has to have a lot of knowledge and resources, and must be in the position to study and trade pretty much 24/7. A commodities trader, and especially short sell traders need to be even more in tune with what they are doing and pay even closer attention. At this stage, you are most likely just diving into stock trading and will be an occasional trader. My advice is to start small and take your time learning the ropes until you have a good understanding and good “gut feel” for what you are doing. If you are interested in only being an “investment trader,” where you want to put some money into something and not have to deal with the details day in and day out, then you will most likely not be the stock market forum type.”

These forums are more for traders who pay attention to the market every day, and trade at least several time per week. As with everything online, there is some junk out there, there are a lot of scams out there, but then there are some real jewels to be found. You just have to take the time to dig them out.

© 2010 Buy Stocks Online
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Take A Stock Market Course

Stock trading has transformed in the past few years from being primarily an activity done by professionals or corporations to an activity which individuals can also perform profitably. As a result, individuals have increasing options when it comes to finding a stock market course in order to better understand market patterns and trading strategies.

There are various types of courses. Some are only available online; others, only available offline. Finally, some offer a hybrid of both online and offline courses. Offline courses will be the emphasis of this article. One place to begin looking for a stock market training seminar is at a local community college or library. If your library is too small, or your local community college doesn’t offer these courses, consider searching online or in the phone book for professional investment training companies.

The price range for courses from these companies could be anywhere from a few hundred dollars to tens of thousands of dollars. The choice between a community course and a professional company is yours. In order to decide, you should consider your background. Are you familiar with financial terms and concepts? If not, perhaps a good starting point is a basic class in finance or accounting before you begin to buy stocks. The skills you would learn in a basic finance course will be essential in determining your profit and loss in the stock market, in deciding how much money you should invest, and in keeping accurate records for tax purposes. Your investment goals are also a crucial factor in deciding which course to take. Are you planning to begin investing for your retirement? Are you planning to transition eventually into stock market trading as a full-time job? Are you investing in the stock market as a hobby?

Depending on your answers to these questions, you will want to change the type of training you are seeking. If you plan to invest as a hobby, or even for your own retirement, a course from your community college, library, or an introductory course from a training company should be adequate. You will get a basic idea of terminology and how the stock market works. On the other hand, if you plan to invest as a business, you will need the competitive edge that one of the more expensive training companies can offer. You will need to budget a minimum of several hundred dollars, and possibly closer to a thousand dollars, in order to complete these professional courses. Regardless, you will need to view your initial expense the same way you would view your college education or other job training, as an investment for future reward, and take the course or courses seriously.

When signing up for any of these types of courses, you should find out some key information first. Will the course discuss stock options as well as basic stock investing? Will advanced strategies be covered, and will the teacher assume you already are familiar with basic terminology and concepts? Will there be question and answer or one on one instruction with the teacher in case you have specific questions? What resources are provided for identifying top stocks, in terms of books, DVDs, or other training materials? How many students will be in the class? Do you need to attend the class in person or is it via correspondence? Does the school, library, or company offer night classes to accommodate your work schedule?

This is not an exhaustive list, but should give you a good starting point for deciding if the class is a good fit for your goals and personality. If you have considered your background and goals, asked sufficient questions to find a course that is a good fit, and then dedicated yourself to completing that course, you will be well on your way to choosing the best stocks and making wise investments in the stock market.

© 2010 Buy Stocks Online
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Stock Market 101

Learning and investing in the stock market can be both very rewarding and risky. The more one studies and learns about the stock market before investing the better prepared and more successful they are likely to be. So where should one begin their personal stock market 101 learning experience? It is best to start with either reputable sites or the business section of the newspaper for stock market tips and advice. The stock market like any market goes up and down, prices of individual stocks rise and fall.

To best follow the market, choose top stocks of companies that are familiar such as Disney or Coca Cola. Every stock has a “ticker symbol” this is the symbol you will need to enter to see the stock price. Disney is DIS and Coca Cola is KO. Follow the stock on a daily basis and you will notice that the price will rise and fall. Try and understand why the prices are rising or falling. Is there a piece of company specific news that is positive or negative? Is the stock trading higher or lower because of some general economic news. Understanding the underlying companies business is critical to learning about how to invest in the market. Learn the mechanics of the market.

Companies on the stock market have their “shares” traded. Follow the number of shares traded on a daily basis, this is called the “volume.” Try and figure out why volume may be heavy or light? Notice the trading range of a stock, or how high or low the price has been over the last 52 weeks. Study companies in similar businesses to the companies you are following. So if you like and follow Coca Cola also look at Pepsi Cola and try to understand why one company may be doing better than another. Read the market summary before you buy stocks because it’s important to understand why and individual company rises or falls, but equally important to understand why the whole market moves in one direction or another.

Very often macroeconomic trends move the market. Data such as unemployment numbers or consumer confidence numbers. To truly become a wise investor get a calendar of when all the relevant economic numbers are announced and follow those number to see if they were as expected, better than expected or worse than expected. See how the market reacts to each of these scenarios.

Follow the Stock Markets around the globe. The US stock markets are the largest in the world but almost all countries have stock markets. Of particular importance are the markets in London, Tokyo and Hong Kong. Markets influence one another if it is a good day on the New York exchanges, international markets will tend to respond positively. News in one part of the globe affects the rest of the globe and the same holds true for foreign and US markets there are all interconnected.

The primary rule of thumb is, don’t invest a penny unless you really understand how the market works and why a particular investment is attractive. Also always be aware of the relationship between risk and reward. The riskier the investment the greater the potential reward and the greater the potential loss. The less risky an investment the lesser the gain or loss. Finally, have fun, the stock market is never static it is always changing and moving. Good luck.

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