Decide what trading will mean for you
Hello Fellow Bullhunters
When you first decide that you want to trade the stockmarket, think about how you will be trading. Ask yourself the following questions:
1. Will you make it a full time or part time job?
2. Are you doing it for a possible source of extra income or to replace your income?
3. Are you prepared to commit to practice to increase your confidence?
Trading the stock market is a personal journey. Just like it is for an artist to be good at his craft, it takes many hours of practice to be good, or confident, at trading the stock market.
Different uses for shares
When investing in shares, we can use them for passive income, growth “Capital Gain” or to build an asset base. Whatever you choose, it is wise to diversify as I mentioned last week. Do not put all of your trading bank into the one stock. A little here and there should perform and grow nicely for you, with the intention to keep it active Have some stock to rent, some to grow, and some to build on.
Disciplines of trading
Some useful hints for proceeding to trade the stockmarket:
It is a good idea to develop a plan and set some ground rules. These rules must then be adhered to. Do not stray. If you stray, things can go wrong and usually do.
1. Writing down your intentions is usually best as you can then refer to your notes on a need to basis.
2. This plan must then be tested to see if it is working for your strategies.
Some homework for you...
Could you have a look at 2 stocks in the US DOW JONES that you may be interested in paper trading and research them. I would like to refer to them down the track so depending on how many comments I get and how many stock suggestions there are, we can follow these and learn how to trade them.
Get in quick….so you don’t miss your stocks getting looked at!
Angela Recchia
Graduate Support
Universal Wealth Creation © 2004 – 2007
{ 9 comments… read them below or add one }
Once again, a great article, Angela. Well done!
Sean Rasmussen
Universal Wealth Creation
Thanks Sean… I would like to get to know some of our readers and what stocks are of interest to them so we can all learn from them.
Cheers
Angela Recchia
Universal Wealth Creation
Hi Angela,
Good idea!
My suggestion would be to include the Dow Jones Industral Index as one of the ’stocks’ to review. It’s good to refer back to the main index in the same way that people would look at the XJO when looking at Aussie stocks.
Cheers,
Brian
Hi Brian… thanks for stopping by. Of course that is a great suggestion as it will encompass all the stocks. Everyone, if you are reading this, Brian is one of the authors of Learn How to Trade Profitably. He has a lot of to offer and you can find him on the forum at http://www.universalwealthcreation.com/forum
Cheers
Angela Recchia
Universal Wealth Creation
Hi Angela,
This is how new I am to this – there are lots of different things to tap into on the US Dow Jones sites!! Which one do I log onto to see the shares. PLEASE be patient.. I am keen to learn.
Margaret
Hi Margaret,
We all had to start somewhere. If you look up finance.yahoo.com/ here you will be able to access the US stock market index. Take your time with it, there is no rush.
Cheers,
Angela Recchia
Universal Wealth Creation
Hi Sean,
I read the book and the book was awesome….it gave me fair understanding of how the share market works…..but not completely….i still didnt understand the game part which you had asked to play between 5 friends…i read it more than twice but didnt get it…
But i understood the part where u can rent the shares and gain money….i dont know the exact terms but i got that right….if i want to know the rates of shares of different companies in australia….where do i need to go….i mean which website…
Nikhil
Hi Nikhil,
What Sean is suggesting is a way to learn about the 30 stocks in the DJIA without doing all the work on your own, hence the 5 friends as an investment club. This way, you don’t have to do all the study yourself. The way to pick the “winner” is which ever stock performs the best after that 15 weeks.
Cheers
Angela Recchia
Universal Wealth Creation
Hi Sean and Ange,
I’m not sure what trading is for me yet. I know that I want to learn more and I’d love to be able to make a living from trading shares. But, that seems so far away.
Right now, I’d be happy to learn to be able to pick stocks that I could hold onto and they’d increase in value over time. I’m not even sure if people do that. I want to learn to buy and sell shares to make money.