Stock Market Trading as
Another Way to Increase Your Wealth
Stories of stock market trading success and failures have been echoed throughout decades.
From the legendary Jesse Livermore and Bernard Baruch in the 1900s to Gerald Loeb in the 1930s to Nicholas Darvas in the 1950s to George Soros, Jim Rogers and William O'Neil at the present...
We have heard about them and are inspired by their stories. And we certainly want to emulate their successes. We know that a successful trader can make millions in minutes. However, do you know what stock market trading is all about?
What trading is...
Trading simply means buying and selling stocks frequently with the objective of short term profit.
Traders never hold a stock for a long period of time. An investor on the other hand will study the company, its financials and do fundamental analysis on the stock. Once the investor is satisfied with his research, then he will invest in the company. He or she will hold it for a very long time, sometimes up to several years.
A person doing stock trading sometimes is not even concerned about the financials of the company. Personally, when I trade stocks I don't even look at the company reports. Traders rarely look at the income statement, the balance sheet or even the cash flow statements. That's stock market trading.
So how do traders know when to enter or exit a stock? Well, we time our trade entry and exits through technical analysis. Don't worry when you finish the Basic, Intermediate and Advanced topics, you will also know when to enter or exit a stock. Again, patience...
For now, let's take a look at our next question...
Is Investing or Trading better?
There is no right or wrong answer. That is because some people might find investing more suitable for them while some might find stock market trading more suitable for them.
This website will teach you how to invest as well as how to trade. At the end of your exploration of this site, you will be able to decide better. You will know whether investing or trading is suitable for you. But generally...
Investing requires less time
If you invest, you will not require as much time and concentration to monitor your stocks. That is because you are in for a longer period of time and you don't care about the daily fluctuations. If you trade, you will have to monitor your trades every week, every day and even every minute. You might not be able to trade if you have a job.
However, investing does not mean it is safer
Some people think that just because investing involves less time and a longer period, it is much safer. Let me be honest with you. Whether you invest or trade you are always at risk of losing your money.
You don't need to decide right now to commit to investing or trading. As mentioned earlier, you will be able to make a decision later. This site will teach you investing as well as trading strategies.
Here's a special alternative...
Investing and Trading combination. The unique and beneficial approach.
This website offers you investing as well as trading knowledge and strategies. Why did I include both? Most sites only focus on one or the other. If you look around this site, I also put in Options and Forex strategies and knowledge as well.
Well, you see...
I believe that to be a complete investor, you also need to know about trading and other investment categories such as options and forex. The knowledge in one area will greatly enhance your decisions in another area.
That is because the different markets are interrelated. This might all seem confusing to you at first. Don't worry you will understand later. Remember, this is just the foundation.
What you need to know right now is this...
If you choose investing that's fine. If you choose to trade that's also fine. But here is a great alternative for you. You can invest and trade at the same time. That way, you will not be a one dimensional market player.
Investing is good to build wealth. At the same time you can also learn to trade to have short term income. If you can do that, it will be a great combination with beneficial results.
I will talk about this a bit later in the more advanced sections. So don't confuse yourself too much for now. However, I'm sure you are getting excited at the amazing possibilities waiting for you.
That's all for stock market trading introduction. Let's get to know what fundamental analysis and technical analysis is. Click on the link to move to the next article in the Foundation series, Fundamental Analysis and Technical Analysis.
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