Help me to learn to trade stocks!!!

[jacward]

I am a newbie in this and would like to know about trading stocks where you can earn huge profits (as I have read online).I have been looking for an online resource to teach me the tips and tricks of the stock market but there have been not any good as far as I have known. Please help me to find any good online resource which can educate me in this arena.

Thanks in advance!!!

[disneysteve]

Originally Posted by jacward

I am a newbie in this and would like to know about trading stocks where you can earn huge profits (as I have read online).

Don't believe everything you read online. If it sounds too good to be true, it is. Don't you think that if we could all be trading stocks for "huge profits" we'd be doing that instead of hanging out here talking about how to save a few cents at the grocery store.

[Broken Arrow]

I do NOT recommend trading stocks. At least not starting out.

The best thing you can do for yourself is to learn and implement the basics of safe, passive investing. Even myself, who is interesting in stock trading, is starting out with the vast majority of my holdings in well-diversified mutual funds.

Then, and only then, do I recommend looking into stock trading, and see if that's an investment style that fits you. It's perfectly fine if it does not.

If it fits your investment style, then I recommend to set aside time to learn how to invest actively and do your own research. Stock trading will require time and effort, and you have to be comfortable doing your own homework.

Trading individual stocks can be dangerous, especially if you do it haphazardly and without much thought to safety. The key to investing in general, not just stock trading, is in learning how to minimize risk, not maximizing gains. The gain is obvious. We all want as high a return as we can get our hands on. The question is how do we do so without running into the good chance of losing the shirts on our backs.

This is especially true in stock trading, where all the safety devices that are inherently built into other investment vehicles are not initially there.

Where there is big money to be made, there is also big money to be lost.

[r2b2lynn]

It's difficult to find free tutorials and information to help a beginner learn how to invest in the stock market.
I've read articles, etc., and still didn't know where to begin.
Anyways, I tried a few market simulators.
My favorite is a game called Ticker Tycoon.
You can download a trial version for free, I think.

It help me get a basic understanding of "how" to trade in the stock market.
After playing the game over and over again, I begin to go back to those articles, information and afterwards have a better understand "about" the stock market, etc.
Next thing you know I was putting 2 and 2 together.
But that's just me.
I had begin learning from a game...LOL.
But since you're a beginner, don't expect to know everything about the stock market anytime soon.
It will take time.
Me still learning...LOL
Good luck.

[jc3900]

Here is some good advice to know before you take aim at those "huge" profits.

Go search on this forum or google INDEXING and you will see that a good majority of the "hot" wall street managers can't even beat the market. If 75% of wall streets mutual funds can't beat the market, how do you expect to. Furthermore, you won't have all the time, money, and resources that wall street does. Doesn't it seem silly that you could somehow make all this money when paid professionals have trouble even beating an index?

[Broken Arrow]

Originally Posted by r2b2lynn

It's difficult to find free tutorials and information to help a beginner learn how to invest in the stock market.
I've read articles, etc., and still didn't know where to begin.
Anyways, I tried a few market simulators.
My favorite is a game called Ticker Tycoon.
You can download a trial version for free, I think.

It help me get a basic understanding of "how" to trade in the stock market.
After playing the game over and over again, I begin to go back to those articles, information and afterwards have a better understand "about" the stock market, etc.
Next thing you know I was putting 2 and 2 together.
But that's just me.
I had begin learning from a game...LOL.
But since you're a beginner, don't expect to know everything about the stock market anytime soon.
It will take time.
Me still learning...LOL
Good luck.

That's good advice there. I started out with a stock simulator as well. Sometimes, even with quality materials that you read, you don't always really understand the lessons until you try it out on the simulator. Then, it starts to make more sense.

Of course, the reverse is also true where learning on the simulator can be very confusing until you read more about how to trade actively first.

So, in the end, you have to do both at the same time.

But I'm still learning too so....

I wonder why there is a rash of "stock trading" questions? In a saving advice site?

[disneysteve]

Originally Posted by Broken Arrow

I wonder why there is a rash of "stock trading" questions? In a saving advice site?

I'm always suspicious of those posts. They always seem to come from first time posters and hint at some proprietary system, so I immediately think they are trolling for customers.

[Broken Arrow]

Originally Posted by disneysteve

I'm always suspicious of those posts. They always seem to come from first time posters and hint at some proprietary system, so I immediately think they are trolling for customers.

Yeah, probably. They'll be sorely disappointed though.

[Tim, Ohio]

I jumped right in and started with an e-trade savings account since the
starting rate was 3.5%. I then opened a trading account and found
that with the trading account I also had a debit card and checks for
quickly accessing the money. After my money was electronically transferred
into e-trade account (about 7days) I was able to move it between the two
accounts instantly. When I do not have it in the stock account invested in
stocks, I keep it in the savings for the interest. The interest has gone down
to 3.1% since the feds lowered the rate, but that is still as good as most
CD rates without having it locked up. As for access, you get a few uses with your ATM card a month where e-trade reimburses you for the fees.
Otherwise, you can write a check or use the debit card to spend your money
out of the stock account that is not invested (your cash account part of the
stock trading account). So far, I have had fun buying stock and watching it
perform. Each transaction costs 13.00 which is higher than many other
companies, like Scottrade, but I like the debit/checking features that allow
easy access to the money. By the way, look up the performance of Visa (V).
I invested in it at 66.00 a share four weeks ago and it has gone to about 90.00 per share. You do the math and figure out what you can make.

Best regards,

Tim

[tripods68]

Agreed...I got into Visa at 59. It has done tremendous thus far.

[Broken Arrow]

Oh Tim, I have a funny feeling you and I are going to have some interesting times.

I'm glad you don't mind jumping right in, but that is NOT what I would recommend for anyone. To do so is to take on a whole lot of unnecessary risk, and frankly, I'm in the business of minimizing risk, not inflaming it.

Plus, and with due respect, but you're cherry-picking stocks and looking at only its past gains. That's in the past. There's no guarantee that Visa will continue this upward trend. Not unless you know some deep fundamentals you'd like to share with us.

Otherwise, the domestic market is still bearish, the financial sector is still battered, and the lending industry is still iffy. The fact that Visa's IPO has gone gang-buster to me doesn't say much about how it will perform from here on out. Before that, it was Apple, and Apple has slipped slightly since its hey day. Before that was Google and Google fell off the turnip truck to about $450 after peaking from $700. We can keep going on and on.

Seriously folks. The fact that a stock is HOT right now is NOT the signal you want to see to buy into something. Rather, it's a great way to lose money in the end.

[tripods68]

C'mon Broken Arrow, lighten up!

Why you bustin' chaps? We all know about the market condition. With so many negativity around the market, I think people are just sick and tired of hearing same old stuff... And if some people like to share some good news why not without being criticize for it. I think most people that come to this board are smart, educated, and understand their risk tolerance. You're understimating people's intelligence on this board. Beside its not your money to lose

[disneysteve]

BA - I think trading stocks is fine as long as it is done as a small part of an overall investment plan. Taking 5-10% of your money for dabbling in stocks isn't such a bad idea. I own some individual stocks that I've had for years and I periodically go through a trading phase. Even though well-respected magazines like Money and Kiplinger's give the traditional advice of investing in low-cost mutual funds, index funds, etc., each issue still has several articles about individual companies and their prospects.

And if you have enough money to be well diversified, you could do just fine with a portfolio of nothing but individual stocks. It isn't a way to start out because you wouldn't have the funds to do it right, but you could certainly get there eventually.

That said, I think many people's first entry into the investment world comes through the purchase of a single stock. My very first investment was a few shares of Disney stock. Did I have a well-balanced, diversified portfolio. Nope. But I think the best way to gain an understanding of how the market works and how various factors influence prices is to follow one or two companies. Buying a mutual fund that holds dozens or hundreds of stocks doesn't provide the same lesson.

[cptacek]

The best book I have read about picking stocks is Benjamin Graham's "The Intelligent Investor". He is the guy that taught Warren Buffet how to pick stocks. He'll teach you how to be a value investor, and stresses to know what the company does, their fundamentals, the actual value of their property, etc., instead of just looking at green or red arrows saying to buy or sell.

[tripods68]

Disney stock is one of the favorite stock I'ved owned since 2000, along with Altria, and this year Visa. All made some money so far. And yes, I'd bought some crappy stocks as well (e.g., buy on high and sell out of fear) but that's part of learning curve.

I agree with Disneysteve, as long you are not trading "scared money" and it's within small percentage of your overall diversified portfolio why not. I guess that's why I enjoy the most about trading. You can make good money and you can lose a lot. But one thing I'ved learned, I learned to be patient and take what the markets gives you.

[aevans1206]

All I know about investing in the stock market comes from my grandmother, whose father was a stock broker and survived the 1929 stock market crash: put your money in and don't look at it. Let it ride...a long time. Over that long time, your money will grow. My grandparents are enjoying a long, pleasant, fulfilling and wealthy retirement (I'm sure they've given in to speculation from time to time, but diversify, diversify, diversify). Gee, you'd think with all that sound advice and good role modeling I'd have picked up a good habit or two? Apparently not.

[Tim, Ohio]

Yes, I realize there are great risks trading stock. I set aside 5K to
get started. This was money I saved towards getting started with
trading. Like all hobbies, you have to spend money and that is what
this is to me. I don't suggest people "jump right in" without at least
understanding the basics. I used that phrase without explaining that
I did do some research to get started. But opening an account finally
was like "jumping right in" for me. All of the mechanisms that have
to be understood about that part of it are not easily understood until
you actually do it. I had a good experience and so I recommend others
not be too shy about it.

As for my experience, yes I did invest in Visa and yes it did well and
continues to do well. Keep in mind, there are mechanisms that help
you protect your principal if that is a concern. For instance (and I am
sure most of you already know this, but for the benefits of others), you
can place a trailing stop on your investment where a sell is triggered
at a preset value that continues to follow along with a stocks growth
in value, but when it starts to decline, triggers a sell. This is something
very useful to protect against devastating loss. You are in full control
and can make quick decisions which does make a difference for peace
of mind. I do agree that research is necessary, but how long do you
study and try to satisfy yourself of a companies worthiness before you
give it a try? You can, of course, pick stocks and keep track of performance
without buying to see how well your research paid off. Doing this
will give you some idea of whether you might be well suited for the
stress of the market.

Tim, Ohio

[Broken Arrow]

C'mon Broken Arrow, lighten up!

Why you bustin' chaps?

Tripod, I promise I'm not trying to bust anyone's... chaps. What I am saying isn't meant to be personal. I've always been against chasing after hot stocks, regardless of who brings it up.

In fact, I always try my best to be as objective and factual as possible.... Now, whether I succeed or not is a different matter.

But right now, Visa is the Latest Hot Stock, and whenever you have this much hype surrounding the stock, and with such a meteoric climb, chances are very good that the hype and speculation is cooked into the price.

Now here's the thing. I don't doubt that Visa is a bad company. Just like Google and Apple, I'm sure the fundamentals are solid. However, the fundamentals also has a hype-inflated bubble cooked on top, and the trouble with bubbles is that they're not built from sustainable business fundamentals. They can pop at any time, when you least expect it. That's the risk. That's what happened to Google (even though they're still a good company), that's what happened to Apple (even though they're still a good company), and believe me, that's what will happen to Visa eventually as well (even though they're still a good company).

Now, frankly, I'm not above speculating on short-term bubbles. But I'd definitely do so with a trailing stop in place. Or just sell outright. Sometimes, it's better to just go ahead and lock in the gains. Buying is great, but selling-- especially when you know it's About That Time-- is even better. That's all I am trying to say.

BA - I think trading stocks is fine as long as it is done as a small part of an overall investment plan. Taking 5-10% of your money for dabbling in stocks isn't such a bad idea.

Steve, I agree with you, because that's the same advice I give as well. But as I have mentioned in the above paragraphs, if the exercise is to actively trade stocks (as opposed to passive investing), then we need to know not just when to buy, but also when to sell.

If something is considered speculatively hot, it's made an abnormal return by bucking the trend against the rest of the industry, much less the sector, much less the market... AND, if we can't articulate the forward fundamentals as to why it can sustain that level, then the only logical conclusion to me is to SELL.

Again, I don't disagree with the advice to set proper allocation for speculating. But even in speculating, there is a good way and a bad way of going about it... and I just don't think chasing after hot stocks is a good way to go.

Yes, I realize there are great risks trading stock.

Hey man. Sorry if it seemed like I gave you a hard time. I assure you that wasn't my intention. I'm really glad Visa's done well for you guys. I had considered buying it, but couldn't articulate the fundamentals myself so... I didn't. Anyways, let's virtually shake hands on it? We're all Cool & the Gang here.

[disneysteve]

Originally Posted by Broken Arrow

But even in speculating, there is a good way and a bad way of going about it

Personally, I'll be doing some speculating at the blackjack table at Caesar's tomorrow.

[tripods68]

No problem BA--I'll invite you for some beers if I could

I for one believe VISA has great fundamentals and I have some very compelling reasoning if you look at this stock beyond the "hype". VISA has No debt, except litigation settlement cost, and collect fees on transaction costs. So long everyone uses VISA to swipe their cards in making purchases, they are making money no matter what the condition of the economy. When you all SWIPE your VISA card (debit, or credit card) you all contributing to the success of company. Why the big run? Many feels it's undervalued and lots of speculation what ought to be the price target. Some analysts views VISA is worth at least $100 per share. It's simply trying to get there and perhaps it might capitulate back down. That's what trailing stops is there for. Most of VISAs revenues on 1st quarter came outside the US. They had 1 trillion transactions in the first quarter and about 400 million originated in the US and has a market share around 65%. I could be wrong on this analysis, but you asked earlier what we know about this stock that you don't. I just told you.

CHEERS!!!