learn to trade stocks
learn to trade stocks
I would like to know how to basically learn how to trade stocks.?
I would like to know if it’s possible to learn how to trade stocks on the internet and if it’s posible to learn and even invest for a small amount?
The vast percent of people that trade stocks end up making people that do not trade stocks rich. (instead we buy and hold index funds)
If you really want to trade stocks do what Warren Buffett says…write a book on the company before you buy the stock.
Do yourself a favor: forget actively trading stocks. Learn how to invest properly:
http://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0471730335
Most people think that investing is complicated. In fact, the more complicated people make it, the worse they seem to do. People that follow a few simple principles are getting the best returns. Those principles are:
1. Do not chase past returns. People that buy funds because they have done well in the past are doing exactly that.
2. Do not market time. Market timing is buying based on your (or your newsletter, or your TV, or neighbor’s) guess about what is going to happen in the future. Even if someone knows something, you’ve already missed the boat. The price already reflects what you just found out.
3. Use index funds. Over time, index funds outperform actively managed funds, mostly because they do not have those high expense ratios. Some actively managed funds do beat their index, but the ones that do usually do not do so consistently. So why gamble? Use index funds. If you want to use a few actively managed funds, make sure that the costs are very low. Vanguard has some good ones.
5. Diversify. Don’t put all your eggs in one basket. Own a mix of bonds, domestic equities (large, small and mid cap funds), an international fund and perhaps a REIT (Real Estate Investment Trust) and emerging market fund. Four to six funds is all you need. Know your risk tolerance and set up an appropriate asset allocation. Rebalance as needed.
6. Consider taxes. Use the least tax efficient funds in your tax-deferred accounts and the most tax efficient funds in your taxable accounts.
