Learn the Stock Market

Posted in Articles on Jan 21, 2009

In order to know what stock is and the basic meaning of stock market first we have to dive into the history of stock market specifically , the history of what has come to be known as the corporation. Corporations in one form or another have been around ever since one guy convinced a few others to pool their resources for mutual benefit. In order for a corporation to do business, it needs to get some money from somewhere. A stock is a piece of ownership of a company. When a Company needs some money, which is helpful in growing business, they acquire extra money by selling ownership in small percentages in form of stocks. The word stock trading is commonly used to describe both the physical location for buying and selling (trading) stocks as well as the overall activity of the market.

The strategies you need to know to maximize your wealth and the pitfalls you need to avoid are not beyond comprehension. Even if you feel that you don’t have the time, and prefer to entrust your money to a portfolio manager or mutual fund, the least you need to know is which funds are better, how to choose your fund manager, and keep a tab on its performance. There are two analytical ways in investing in stock market, technical and fundamental analysis

Technical analysis is based on prices and volume. Technical investors believe price and volume interpret every thing in the market. They study charts for forecasting of future stock price or financial price movements. For learning technical analysis academic knowledge isn’t required, with every level you can learn it.

Fundamental analysis is a stock valuation method that uses financial and economic analysis to predict the movement of stock prices.

The newbie investor is advised to investigate some of these basic strategies and see for himself how they perform. Stock trading closely follows the economy of a country. When the economy is doing well, the market is bullish. Before investing in the stock market you must choose a stock broker. A stock broker is who performs the various transactions in financial instruments on a stock market as an agent of their clients. There are basically two ways to trade the stock market- using effective stock trading strategies or shooting in the barrel. There are numerous stock trading strategies. Of all of these, there are a couple of tried and trued methods that have worked well for investors over many years.

So many people invest in these stock markets but only few percent of them can only make money. They make common mistakes and you should avoid them by high level of understanding by the information given.

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