subject: How To Play The Stock Market Simplified [print this page] The stock market is one the most profitable investment venues, if and when you know how to play it to your advantage. There are many ways to do so, of which the following tips are just a few.
Buy Low, Sell High
This is the first edict of making a killing at the stock market, which cannot be overemphasized for both novice and expert traders alike. Basically, this means that you have to buy stocks at the lowest price, usually when the industry sector or market as a whole is down, and then sell the same stocks, when the company recovers from its slump.
Of course, choosing the stocks with the best chances for recovery is an art in itself. For most investors, however, stocks in the consumer staples, alcohol, pharmaceutical and electric industries are stable sources of investments, no matter the state of the national economy.
Entry and Exit Plan
The second edict of successful stock investors is to always formulate and follow your entry and exit plan. Basically, you set limits on how much you can profit from a trade and seize the opportunity when it comes up as well as how much you can afford to lose and cut your losses. For example, if your profit limit is a thousand dollars on a few shares of a company, then sell it. If your loss limit is half the amount of your profit ceiling, then sell the stocks before it slides down any lower.
Ask The Professionals
There is no shame in asking for professional advice especially when your hard-earned investment capital is at stake. Professional help can come in many forms and it is up to you to choose the best one to suit your needs. Or better yet, use all of them for optimal results. First, you can read books written by successful investors, which will give you insights on the intricacies of the stock market. Second, you have the services of professional stockbrokers on your side especially if you enroll in an online trading platform. Third, you can look for a mentor to teach you the ways of the stock market on a more personal basis.
Use Your Head
The stock market will move up or down. Wall Street executives and company management will make their moves. The forces affecting stocks in general will move in many directions. All throughout these movements, you must not fall into the trap of thinking that it has something to do with you on a personal basis.
As such, it pays to always make your decisions based on informed judgment that are, in turn, shaped by the savvy use of technical investment tools. No matter what happens, never use your emotions to make your decisions for you, least of all greed.
by: Mike Singh
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