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Any advice on Stock Market and Trading/investing methods?

Hi, thanks for any help in advance.

Looking for both short and long term investing.

What are the signals you look for to get in and out of trades. Includes day, swing trades and long term investments.

How successful have you been? Do you think you can make a living out of short/day trading?

Also can you tell me what the term "Put" and "Call" means?

Any good sites online for stock market terms? I need to start out very simply as I have no experience with trading.

Thanks a lot...

11 Answers

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  • Joe
    Lv 6
    1 decade ago
    Favorite Answer

    Newbies tend to think that the best way to play the stock market is to buy stocks than sell them a day or few months later, then repeat the process. This method of investing usually loses money. The people who buy and hold for long periods are the people who make the most money.

    Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. If you are like most people you will invest part of your money aggressively in stocks, and part conservatively in money market funds and bond funds. However, some young people will go all stocks, and some very conservative people will go all money markets. The links below have on-line questionnaires which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of investment.

    You want to buy a diversified portfolio of stocks as individual stocks are too risky. Highly knowledgeable people can buy a properly balanced portfolio, but most folks have a difficult time balancing things on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Back in 2000, Some people bought all Internet stocks; they got burnt when they all crashed together. You have to diversify across industries. Unless you know what you are doing, it is best to buy mutual funds that will diversify for you. Buy no-load, low cost funds. Mutual funds should have expense ratios of less than 0.5%.

    Once you have stared investing, you need to keep adding money on a regular basis. Many funds allow you to set up automatic investment programs that take a set amount of money out of your bank account each month.

    If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.

    I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. The Vanguard Total Bond Market Index Fund is good for a bond fund. The Vanguard Target Retirement funds can be good all-in-one stock and bond funds for an IRA. (If you have less than 3,000 dollars, you can't invest in most Vanguard funds. For such people I would suggest Schwab funds. There is a Schwab Total Stock Market Index Fund and a Schwab Total Bond Market Index Fund.) However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

    If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

    I will warn you that there is a tremendous amount of stock investing books and websites that teach stock investing strategies that don't work. Particularly bad are people that teach "technical analysis" systems that sound impressive, but don't work.

    Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

  • Anonymous
    1 decade ago

    Here's a neat little trick you can use.

    1. Find a well known stock which has been heading in an upward trend and usually beats market expectations at earnings announcement time.

    2. Buy a position about 4 weeks before the next earnings announcement.

    3. As the earnings announcement approaches more and more people will be taking positions which itself will cause the stock price to rise.

    4. On earnings announcement day sell into the hungry buyers about 30 minutes after market opens.

    You'll have made a tidy profit and all those who bought on earnings announcement day will be left holding a loss wondering why the stock price dropped when the company actually beat expectations.

    Try it a couple of time using fake (no money) trades and when you have the hang of it do it for real. It works time and time again.

  • Anonymous
    5 years ago

    Educate yourself in this field very well. Learn market psychology, learn how the market makers on the floor move prices to instill FEAR and GREED in investors. Learn charting technicals and remember that the indicators on the chart are "A look back in time". Preservation of capitol is the most important thing so cut your losses short. Go with the flow and do not try enter a position before it is moving the direction you want to go. I use 10 20 and 50 MA's and Stochtastic Full, look at both 5 minute charts and back up to 3-6 month charts to try and determine trending, support and resistance levels etc... I have done much better with swing trading than I have with day trading though both have been profitable since my starting earlier this year.

  • 1 decade ago

    Understand that picking the "right" stock is not the most important part of making money in the market.

    Money Management / Risk Control / Trader & Market Psychology are the most important things to know.

    Making a living in Swing or Day Trading is achievable. It takes 3-5 years to be consitantly profitable.

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  • 1 decade ago

    Decide to start within expence limits you know are accurate. When using funds as an activity you should avoid rookies, or plan pals. The trust part of funds is involved in your class. A solid insured family level such as 40,000 block has good directions and is long term substantiated. Money does not move out of the bank until it is wisely spent. Bad spending, risks, gambles are not on the books. Stock teams are allowed to help people, and money is in this direction. The more money being spent the stronger the nation. With this single point you must behave yourself in appropriate manners. Talk to your benefactors. Larger amounts are more responsiblities and Forex is experienced, though not immune to daylite. The fun of funds is with defense, definitions, directions.

  • 1 decade ago

    By the natue of your questions it appears that you are in need of some basic education. You might wish to give some consideration to your reasons for wanting to trade and what your objectives are. Short-term trading can be difficult and frustrating, especially for beginners. Some few people appear to "make a living" from this, but most do not. Perhaps you can practice short-term trading by employing a method known as "paper trading" and see if you are profitable with pretend money.

    For puts and calls, I can recommend the educational site http://www.safe-options-trading-income.com/putsand... Numerous terms and concepts are discussed on the site as well. The same site has a brief article on paper trading.

  • eve
    Lv 6
    1 decade ago

    I follow the stock for awhile before I invest.

    I get in when theres news in that sector. Like Im waiting for the companies to report this week and for the stock to then pull back to give me a good entre price. I research the comp. and do comparisons with its competitors.

    I get out when I realize a nice gain or it reachs its target price. I could sell some retail stocks right now but christmas will boost sales so ill hold longer.

    I don't use puts and calls ,I do use stop losses. Stop losses are a price you put in to sell if the stock drops like 10%

  • Anonymous
    5 years ago

    You can make money in binary options only if you treat it as a real form of investing. Learn here https://tr.im/NiDBE

    This means learning how it works, learning how to read charts and learning how you can make accurate predictions. All these are not that difficult but it takes some time. If you treat it as gambling and just make random predictions then you will obviously not win.

  • 4 years ago

    2

    Source(s): Invest in Forex Tips http://teres.info/TheTradingCode/?47Ym
  • Anonymous
    4 years ago

    1

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