When you start out, it is always nice to get some help. No matter what you are doing, it takes some time to learn your way and people that have been there before always have a better vantage. The same is true when getting stock tips from someone who has already been investing in the stock market. Talking with someone who has already established their investment philosophy can help you to avoid some common problems. Here are 10 stock tips for you to follow:
Stock Tip #1 – Know How Much You Can Afford To Invest
The term for this is called risk premium and it’s called that for a reason. Investing is a risk and you should only put in an amount that you can comfortably afford to lose and not affect your quality of life. Hopefully you won’t lose any but you can’t look at it that way.
Stock Tip #2 – Know Your Limitations
This is different from how much you can invest. Can you stick with an investment strategy? Do you make rash decisions when you are nervous? Do you pay attention to details? The honest answers to these kinds of questions will help you prepare for the next tip.
Stock Tip #3 – Create A Trading Plan
A stock trading plan is the first tangible thing you will do. This is where you will outline your strategy, your long-term goals, and your techniques for managing profits and losses. You cannot put too much in your trading plan; this is your contract with yourself for how you will trade.
Stock Tip #4 – Choose A Stock Broker
For this one you need to do some research and refer back to #2. What are your tendencies? If you manage yourself very well, you can choose a broker who charges and offers less. If you are willing and able to do your own research, get stock quotes and the like you will need less support than someone less disciplined.
Stock Tip #5 – Test Your Plan
Who says you can’t get something for nothing? It’s called paper trading and it is a way of playing the stock market for free. Your broker will probably have a demo trading account where you can do all of the normal things but your money is virtual. This will allow you to test your trading plan before you spend your hard-earned money.
Stock Tip #6 – Develop A Trading System
This goes hand-in-hand with the next one. A stock trading system is a method of charting and analyzing stock movements in order to determine when to buy and sell. The best trading system available is Japanese Candlesticks and the Candlestick Forum is the best place to learn it.
Stock Tip #7 – Do Your Homework
Trading relies heavily on understanding the financial condition of a company and its standing in the market. Fundamental and technical analysis are the tools to help you….make sure you take advantage of them!
Stock Tip #8 – Win Gracefully And Be A Poor Loser
What does that mean? A poker player once told me that it is better to win small than to lose big….that might actually be the best investment advice. Winning gracefully means to take what the market gives but get out just a little too early. Likewise, no investor should be satisfied with losing money. It is important to always have and follow a stop loss strategy.
Stock tip #9 – Remember the ultimate goal.
Stock trading is about making money. This isn’t an ego trip or some way to out-do your buddies at work for bragging rights at the water cooler. If you stick to the plan you will do just fine in the long run.
Stock tip #10 – Never stop learning.
Who has been teaching you? Have your read anything by Warren Buffett? Did you find out what Benjamin Graham thinks about defensive investing? How about letting me teach you what I know about Japanese Candlesticks? If you learn from the people that went there first you don’t have to make the same mistakes.
Conclusion
There is a tried-and-true set of steps to learning about the stock market. Follow the stock tips that others give you can be the first step in becoming a successful trader.
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