In this post I will tell you about their opinion on how to work and earn money in the stock market. In the course of my investment activities I had some idea about earnings in the stock market, which I will share with you.
What is the stock market?
The stock market - a financial institution, on which the securities of various companies. What is this paper? . It shares, bonds, options and futures contracts. All this can be called in one word - investment instruments.
In the stock market, as the Forex market trading lots. Only in Forex, the currency auctions, and then on the securities. For normal operation, you will need 2-3 monitor, one system unit and access to the Internet. One monitor will work, there you will be able to conclude the deal, the other two - they will come news. The main thing that all of your monitors were the same manufacturer and have the same color resolution. It is safer for your eyes. Yes, you read that right, today you can earn on the internet and in the stock market too.
Operating principles of the stock market
1. The market is unpredictable. You can never predict in which direction will the share price.
The market is ruled by greed and fear of all its participants. The horror lies in the fact that in this ocean there are a few dozen major players whose actions dictate the direction of price movement. The remaining investors and traders simply react to it.
Suppose there is a major investor like Warren Buffett, he decides to buy shares of any company he liked. He buys them, but does not buy 1-2 lot, and buys a large consignment of several thousand papers. Naturally, this immediately causes a jump in prices for these securities. Ordinary investors see it the same start buying these securities. It enhances growth. It turns a snowball effect. The same thing happens when the same Warren Buffett (or someone else) decides to sell the shares. But now the movement has been going down very quickly.
For the big players, we can carry and the state. Through its banks, the state apparatus may also affect the price movement.
How to work and earn money in the stock market?
For myself, I brought two trends in the stock market.
1. Investing in terms of business.
2. Short-term and medium-term investment.
Work on the stock market. Investing in business terms
This approach is the same Warren Buffett. He does not buy the paper, he bought the business. It looks at whether the company will be profitable in the future, and if there is any. As a rule, it selects those papers that are undervalued by the market. When the profits of the enterprise begins to grow will begin to grow and the price of its securities.
You can also apply it in their practice. So you can try to move with major investors and even anticipate their purchases. Of course it takes time and money experience.
Short- and medium-term investment.
Invest, of course, need to long time frames, but that's what tools?
The secret of the short- and medium-term method of investing is that the investor simply looks at the price of shares or other securities and makes decisions about buying or selling.
If the price falls below 15% - he sells paper and move to another tool.
He invests continues, but in a different place.
Agree, it's silly to keep money in the securities of companies that do not perform well. To understand the movement of the paper can help technical indicators and to what extent candle shape, but I'm more inclined to trust indicators. Candlestick figures use as a confirmation or refutation of future trends.
You can also combine these two methods. That is one part of the portfolio can give a short-term strategy, and the second - under the investment from a business perspective.
Axioms of earnings in the stock market
I have identified three, in my opinion, the most effective rules for the stock market.
1. Predict the direction of the market is not possible.
Nobody and nothing will not tell you how the price will change.
The market always does just what it does. It is not repeated, and owes nothing.
2. Market - a chaos. It can not be streamlined.
As soon as you try to find some kind of system, the template for which can be traded, and always win, you get trapped. You start to get attached to the chosen strategy and can simply not notice a change in direction. Therefore, I recommend that you do not trust when someone is trying to sell you some kind of super system that always makes money on autopilot. Can this system and worked with him, but the market is moving and changing, and the next time the system simply does not work.
3. If the ship sinks - do not pray! Run.
If you see that the selected paper you are beginning to lose in price more than 15% - sell them. Do not comfort themselves with the hope that vot-here's the situation changed. Edit - will enter again.
Technical details of earnings in the stock market
As with earnings in the Forex market, the stock market the same principles.
Always trade according to plan. That is, here you have decided that the share buy when the price falls to a certain number - buy! Or you decide that you sell when the price breaks through some price level - sell. Even if the price after your sales go up - do not worry. The market is not going anywhere. And you will be able to earn, not only today, but tomorrow. Much worse would be if the price began to plummet, and you have continued to sit and wait.
Always expose the stop orders. This will protect your account against losses. Always keep a diary and record trading to what you got and why. Just do not get attached to any particular securities, nor to the methods and strategies. The goal is to be one - to make money on the stock market.
And yet. There is no point to keep in the portfolio 'favorite asset "if its shares fall in the past year. Of course, if only in this case you are not playing on a short position. And certainly never trade on borrowed money. This business model of bankruptcy. You can only risking your money, you can use leverage, but for their money.
These are the basic principles of work and earnings in the stock market. In the process, you as good fighters to find their own style and their manner of conducting the auction. The main axiom observe and practice. At first on a demo account. And when it will be possible to obtain a sustainable profit, go for real money.
Good luck to you!
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