EconSOS

Mar 03, 2010

Stock Simplified Writes
by: Shaun

Trading in the stock market can be a very rewarding opportunity. Basically when you trade in the short term you rely on something called technical analysis which is a fancy way of saying looking at patterns that have been reoccurring in the market in the past to predict what will happen in the future.

The idea is to trade these patterns while limiting your losses when you are wrong and letting your winners ride when you are right.

I give an example of how I used Chart Patterns to make a triple didget return on stock options in this Trading Stock Options Page.

But everyone is different; there are literally hundreds of ways to pick stocks. Before you trade there are some Stock Market Books that you will want to read, most notable Trading for a Living and How to Trade In Stocks. They will give you a good idea of what to look for and the psychology of trading.

As far as getting started you have to open up a brokerage account before you began. Here is a list of Cheap Stock Brokers that will help you buy stocks without spending a lot of money.

You just need to deposit whatever the minimum is for a certain broker in order to open an account and start trading. But you should have at least a couple thousand dollars in order to manage your risk more effectively.

Also see if the broker has a paper money account that let you trade "fake money" to see how you would have done had you traded real money. When I was starting out I was told that you should have 3 profitable months in a row on your "paper trading account" and be up overall before starting to trade with real money and I think that is pretty good advice.

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