Stock Market Investing Basics

Long before you put any real money into the market, you should invest your time learning stock market investing basics. You need to learn how markets operate, what all of the possible kinds of investments are, what services the various types of brokers offer, how to set up an investment account, how to get orders executed, etc. You also need to decide how you will make stock investing decisions. This means learning the differences between technical analysis and fundamental analysis. Then you will need to decide whether you will use fundamentals or technical indicators, or maybe a combination of each to manage your investment strategy.

There are many sources of information about stock market investing basics. Free courses offered online are a good place to start, but you need to take a course that offers real substance instead of being little more than a high pressure sales pitch for a software dealer or personal investment advisor. There is a wealth of basic trading information at your public library, your local bookseller or online bookstore.

A menu of stock market investing basics you need to master before you start investing with real money should include:

The nitty gritty details of the market — how securities are bought and sold and forces that influence stock valuation fluctuations.

The difference between trading stocks and other securities such as bonds, foreign currencies, and futures.

The distinction between penny stocks and blue chip stocks, and the difference between buying and selling stocks in open outcry markets compared to online electronic markets.

A description of fundamental analysis and how it fits into a day trading or short term or a longer term investing strategy.

Technical analysis and its proper role in short term trading and longer term investing.

Tools you will need for stock trading — historical price data, charting software, news feeds, computer systems, and so forth.

Gaining a solid knowledge of markets, investing and trading prior to risking real money in the markets will make it much easier for you to achieve consistent profitability in your investing program.

Invest time before you risk money. You should also invest a little money in books and investment training course before you start trading with your hard earned capital. Visit TradingProfitsMadeSimple for information about trader resources and training, and sign up for our Simple Trading Profits e-letter while you are there!

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