Investment Tips for the Beginner

Investing can be confusing, especially for the beginner. Getting some basic tips can help
a beginning investor to make informed choices that fit their needs. Each person has a
different goal when investing and that plays a big impact on how you invest. The
following list explains some things beginners should know before investing.

1. Understand that there are no set rules for investing. There are no guarantees and
no perfect way to invest.
2. Make informed choices. Before investing in any way you should completely
understand how your investment will work and all of the details of the transaction.
3. Make a simple plan to determine your goals and needs. This will help you to
determine what investments to make and how much money to invest

These three tips are great for general investing, but many people are looking to invest in
the fast paced world of the stock market. The above tips are a good beginning, but the
following tips will further help those interested in investing in stocks.

1. Look at the value of the stock instead of the price. Low cost stocks may be low
for a reason. Look at the whole picture. See why the price is low and if there is a
possibility it may rise.
2. Check the companies return on net worth. This is the profit after taxes divided by
the net worth. It is important to see a trend of growing return on net worth.
3. Spread out your risk. You should not put all your money in high risk stocks. Try
some lower risks and some higher risks. This is the best way to protect your
money.
4. Understand the basics of stock prices. Prices move up or down depending on
future projections.

These four tips can help a beginning investor start investing in the stock market.

No matter what type of investment you are looking into, knowledge will be the key to
success. These short tip lists are just the beginning to understanding investing and how to
maximize your return. Keep learning and trying.

Trading Stocks - The TOP 10 Golden

Rules for Stock Trading Success
Your stock trading rules are your money. When you follow your rules you make money.
However if you break your own stock trading rules the most likely outcome is that you
will lose money.

Once you have a reliable set of stock trading rules it is important to keep them in mind.
Here is one discipline that can reap rewards. Read these rules before your day starts and
also read the rules when your day ends.
Rule 1: I must follow my rules.

Naturally if you develop a set of rules they are to be followed. It is human nature to want
to vary or break rules and it takes discipline to continue to act in accordance with the
established rules.

Rule 2: I will never risk more than 3% of my total portfolio on any one stock trade.

There are many old traders. There are many bold traders. But there are never any old bold
traders. Protecting your capital base is fundamental to successful stock market trading
over time.

Rule 3: I will cut my losses at 5% to 15% when I am wrong without question.

Some traders have an even lower tolerance for loss. The key point here is to have set
points (stop loss) within the limits of your tolerance for loss. Stay informed about the
performance of you stock and stick to your stop loss point.

Rule 4: Never set price targets.

This is a style that will allow me to get the most out of rising stocks. Simply let the
profits run. Realistically, I can never pick tops. Never feel a stock has risen too high too
quickly. Be willing to give back a good percentage of profits in the hope of much bigger
profits.

The big money is made from trading the really BIG moves that I can occasionally catch.

Rule 5: Master one style.

Keep learning and getting better at this one method of trading. Never jump from one
trading style to another. Master one style rather than become average at implementing
several styles.

Rule 6: Let price and volume be my guides.

Never listen to any opinion about the stock market or individual stocks you are
considering trading or are already trading. Everything is reflected in the price and
volume.

Rule 7: Take all valid signals that show up.

Don't make excuses. If an entry signal shows up you have no excuse not to take it.

Rule 8: Never trade from intra-day data. There is always stock price variation within the
course of any trading day. Relying on this data for momentum trading can lead to some
wrong decisions.

Rule 9: Take time out.

Successful stock trading isn't solely about trading. It's also about emotional strength and
physical fitness. Reduce the stress every day by taking time off the computer and
working on other areas. A stressful trader will not make it in the long term.
Rule 10: Be an above average trader.

In order to succeed in the stock market you don't need to do anything exceptional. You
simply need to not do what the average trader does. The average trader is inconsistent and
undisciplined. Ask yourself every day, "Did I follow my method today?" If your answer
is no then you are in trouble and it's time to recommit yourself to your stock trading rules.

Day Trading Tips and Technique

Day trading the stock market involves the rapid buying and selling of stocks on a day-to-
day basis. This technique is used to secure quick profits from the constant changes in
stock values, minute to minute, second to second. It is rare that a day trader will remain in
a trade over the course of a night into the next day. These trades are entered and exited in
a matter of minutes.

The main question that most people ask when it comes to day trading is simple: ‘is it
necessary to sit at a computer watching the markets ALL day long in order to be a
successful day trader?’

The answer is no. It’s not necessary to sit at a computer all day long. There are a number
of factors to consider, but generally the rule of day trading is to trade when everyone else
is trading. In other words, trade in the morning.

As with all financial investments, day trading is risky - in fact, it’s one of the riskiest forms
of trading out there. The stock prices rise or fall according to the behaviour of the market,
which is entirely unpredictable. Day traders buy and sell shares rapidly in the hopes of
gaining profits within the minutes and seconds they own those particular stocks. Simple
to do in theory, harder to do in practice.

If you are constrained by a small amount of capital, you may not be able to buy large
amounts of a stock, but buying only a small amount can add to the risk of a loss. And,
obviously, it is impossible to predict with certainty which stocks will result in profits and
which in losses. Even the best of traders must learn to accept both outcomes.

It’s also important to know that in day trading, it is the number of shares rather than the
value of shares that should be the focus. If you day trade, you WILL face losses, but even
for the more expensive stocks, the loss should be marginal, because prices do not usually
fluctuate to an extreme degree over the course of just one day.

The day trading industry deals in a large variety of stocks and shares. Here are just a few:

Growth-Buying Shares - shares made from profit, which continue to grow in value.
Eventually, these shares will begin to decline in price, and an experienced trader can
usually predict the future of this type of share.

Small Caps - shares of companies which are on the rise and show no signs of stopping.
Although these shares are generally cheap, they are a very risky investment for day
traders. You’d be safer to go with large caps and/or mid-caps, which are much more
secure and stable thanks to a premium.
Unloved Stocks - company stock that has not performed well in the past. Traders buy
these shares in the hopes of generating profits if and when the stock rises in value. As
with small caps, unloved stocks can be a risky choice for day traders.

These examples are NOT your only options when it comes to day trading stocks. The best
way to determine which type of stock is right for you is to invest some time for careful
research, a knowledge of market patterns, a solid strategy, and a disciplined trading plan.

The key to successful day trading is to be prepared. Know as much as possible about the
industry before you begin actually trading. You need to learn to trade ONLY when the
market gives the right signals, and ONLY when the volume of activity in the market
supports a successful trading opportunity.

Online Investment Tips

When it comes to online investment tips, everyone could benefit from tips. Most people
are new to online investing, and are not very familiar with the way things work. The online
world of investing can be cruel, but also very rewarding. When it comes to investing
online, the tips you will find below are designed to help you make the most out of your
experience.

The first thing to do with online investing is to start small. If you are new to this method
of investing, do not put your entire life savings into an online account. Instead, start with
a smaller sum, which should be easier to handle and keep track of. Once you feel
confident enough, you can decide to add more money to your online account.

Once they are online, many investors tend to concentrate on stocks, specifically larger,
more domestic ones. Most online investment tips note that while these stocks should
make up part of your portfolio, they should not be all of it. Also make sure you take into
account your time horizon and risk tolerance to develop a well balanced portfolio of
stocks, bonds, and cash.

When it comes to mutual funds, most investors are into them for a reason. Most investors
do not have the expertise to make their own investment calls on individual stocks. They
are also too preoccupied by work and other demands to spend every minute watching the
market. You should keep your mutual funds and it will probably be an unwise move for
you to cash out your long term fund holdings.

Other online investment tips note that costs may not always be obvious. Even if online
broker costs are somewhat lower than those of full service brokers, they can still add up,
even if you do a lot of buying and selling. Online broker firms also like to impose a
number of other fees and charges that should be studied closely.

When it comes to orders, you should make them work for you. If you plan on doing your
own investing, you will need to learn how to use the tools that are available in order to
avoid potentially steep losses and to buy or sell a stock at effective prices. This way, you
get a good decent return on your investment. Many information on creating own
investing you can find on theHYIPs.net
As beneficial as online investment tips may be, problems that you will encounter are
inevitable. Investing online is not foolproof. Sure, there will be times when you ca not
access your account; you could even be away from the computer when the market makes
a major move.

When it comes to online investing, your internet connection could be down as well, or the
online firm server could crash due to heavy trading, unexpected software glitches, or
another sort of natural calamity. Make sure you are familiar with the firm alternative
trading options. This may include automated telephone trading or calling a broker.

The most helpful of all the online investment tips, is to always remember that information
is power. If you plan on buying and selling individual stocks online, it is in your best
interest to keep yourself as well informed as possible. Do not settle for just the hype
about hot stocks.

Commodity Futures Tradings

Compared to cash contracts, which require payment against the physical delivery of
goods immediately or after a specified period, a futures contract is a special type of
agreement made strictly under the rules of a commodity exchange, which may or may not
call for the actual delivery of goods and payment in cash on a future date.

According to Emery, a futures contract can be defined as a contract for the future delivery
of some commodity without reference to specific lots, made under the rules of some
commercial body, in a set form, by which the conditions as to unit of amount, the quality
and time of delivery are stereotyped, and only the determination of the total amounts and
the price is left open to the contracting parties.

Such contracts are meant exclusively for future settlement, though the exact date of the
settlement is decided by reference to the wishes of the seller and the established rules of
the commodity exchange. Such contracts do not specify the particular grade of a
commodity, but impliedly refer to a basic grade called the contract grade, accepted as the
common grade for all futures dealings. The details in respect to the amount, the time of
settlement, the quality and so forth are mentioned in the rules and regulations, and are
common to all such contracts. The contracting parties have to decide upon the price at
which the contract is to be settled, sometime in one of the trading months specified by the
exchange.

Futures contracts are made only in the ‘ring’ of the commodity exchanges, and not
outside the exchanges. Only members of a commodity exchange can enter into such a
deal. No outsider can become a party to a futures agreement. Such contracts can be made
only in multiples of a fixed unit of trading. No such contracts can be made in fractions of
these units.
How to Build a Successful Portfolio
Walking through the financial maze of stocks, bonds and mutual funds can be quite a
challenge. American Century Investments offers the following tips to give you the know-
how on building a profitable portfolio.

* Know your goals. Consider how much money you'll need for your children's education
or your retirement. Whatever your vision for the future might be, set your goals and
develop a concrete plan for meeting them.

* Define your investment time horizon. If you're not planning on retiring anytime soon,
you might want to have a portfolio that includes more long-term investments. If
retirement is just around the corner, consider a more conservative approach.

* Determine your risk tolerance. Figure out your risk comfort level and compare that with
what you can afford. In general, the longer you have to invest, the bigger risk you can
take.

* Consult a professional. In order to avoid financial pitfalls later on, it is often wise to
seek professional guidance when putting together a portfolio.

"Recent research shows that investors continue to grapple with some of the most basic
investment concepts, suggesting a greater need for financial advice and guidance," said
Doug Lockwood, a certified financial planner.

To help investors meet their financial goals, American Century Investments has
developed On Plan Investing, a program designed to help investors build and maintain
diversified investment portfolios - at no additional cost.

Combining educational tools, advice, market insight and investment products, On Plan
Investing helps investors develop a personal investment strategy, whether they are new to
investing, seeking guidance but still want control over their investment mix, need help
positioning their portfolios with a long-term perspective or need help understanding how
the markets work.

Online Investment Secrets: Generating

Wealth
When it comes to online investment tips, everyone could benefit from tips. Most people
are new to online investing, and are not very familiar with the way things work. The
online world of investing can be cruel, but also very rewarding. When it comes to
investing online, the tips you will find below are designed to help you make the most out
of your experience.

The first thing to do with online investing

is to start small. If you are new to this method of investing, do not put your entire life
savings into an online account. Instead, start with a smaller sum, which should be easier
to handle and keep track of. Once you feel confident enough, you can decide to add more
money to your online account.

Once they are online, many investors tend to concentrate on stocks, specifically larger,
more domestic ones. Most online investment tips note that while these stocks should make
up part of your portfolio, they should not be all of it. Also make sure you take into
account your time horizon and risk tolerance to develop a well balanced portfolio of
stocks, bonds, and cash.

When it comes to mutual funds, most investors are into them for a reason. Most investors
do not have the expertise to make their own investment calls on individual stocks. They
are also too preoccupied by work and other demands to spend every minute watching the
market. You should keep your mutual funds and it will probably be an unwise move for
you to cash out your long term fund holdings.

Other online investment tips note that costs may not always be obvious. Even if online
broker costs are somewhat lower than those of full service brokers, they can still add up,
even if you do a lot of buying and selling. Online broker firms also like to impose a
number of other fees and charges that should be studied closely.

When it comes to orders, you should make them work for you. If you plan on doing your
own investing, you will need to learn how to use the tools that are available in order to
avoid potentially steep losses and to buy or sell a stock at effective prices. This way, you
get a good decent return on your investment.

As beneficial as online investment tips may be, problems that you will encounter are
inevitable. Investing online is not foolproof. Sure, there will be times when you ca not
access your account; you could even be away from the computer when the market makes
a major move.

When it comes to online investing, your internet connection could be down as well, or the
online firm server could crash due to heavy trading, unexpected software glitches, or
another sort of natural calamity. Make sure you are familiar with the firm alternative
trading options. This may include automated telephone trading or calling a broker.

The most helpful of all the online investment tips, is to always remember that information
is power. If you plan on buying and selling individual stocks online, it is in your best
interest to keep yourself as well informed as possible. Do not settle for just the hype
about hot stocks.

Selecting Profitable Stocks

Stock picking is a very complicated process and investors have different approaches.
However, it is wise to follow general steps to minimize the risk of the investments. This
article will outline these basic steps for picking high performance stocks.

Step 1. Decide on the time frame and the general strategy of the investment. This step is
very important because it will dictate the type of stocks you buy.

Suppose you decide to be a long term investor, you would want to find stocks that have
sustainable competitive advantages along with stable growth. The key for finding these
stocks is by looking at the historical performance of each stock over the past decades and
do a simple business S.W.O.T. (Strength-weakness-opportunity-threat) analysis on the
company.

If you decide to be a short term investor, you would like to adhere to one of the following
strategies:

a. Momentum Trading. This strategy is to look for stocks that increase in both price and
volume over the recent past. Most technical analyses support this trading strategy

. My advice on this strategy is to look for stocks that have demonstrated stable and
smooth rises in their prices. The idea is that when the stocks are not volatile, you can
simply ride the up-trend until the trend breaks.

b. Contrarian Strategy. This strategy is to look for over-reactions in the stock market.
Researches show that stock market is not always efficient, which means prices do not
always accurately represent the values of the stocks. When a company announces a bad
news, people panic and price often drops below the stock's fair value. To decide whether
a stock over-reacted to a news, you should look at the possibility of recovery from the
impact of the bad news. For example, if the stock drops 20% after the company loses a
legal case that has no permanent damage to the business's brand and product, you can be
confident that the market over-reacted. My advice on this strategy is to find a list of
stocks that have recent drops in prices, analyze the potential for a reversal (through
candlestick analysis). If the stocks demonstrate candlestick reversal patterns, I will go
through the recent news to analyze the causes of the recent price drops to determine the
existence of over-sold opportunities.

Step 2. Conduct researches that give you a selection of stocks that is consistent to your
investment time frame and strategy. There are numerous stock screeners on the web that
can help you find stocks according to your needs.

Step 3. Once you have a list of stocks to buy

, you would need to diversify them in a way that gives the greatest reward/risk ratio. One
way to do this is conduct a Markowitz analysis for your portfolio. The analysis will give
you the proportions of money you should allocate to each stock. This step is crucial
because diversification is one of the free-lunches in the investment world.

These three steps should get you started in your quest to consistently make money in the
stock market. They will deepen your knowledge about the financial markets, and would
provide a sense of confidence that helps you to make better trading decisions.
Key to Researching Stocks for Investment
Once you determine which business cycle the economy is currently in you can start
researching for a trade. It is best to have some sort of a system in place that will be used
before EACH trade. Here is a simple 5 Step formula to help get you started.

5 Steps to Investing Online:

1. Find a stock

This is the most obvious and most difficult step in stock trading. With well over 10,000
stocks to trade a good rule of thumb to consider is time of the year. For example, as I
write this, it is the beginning of spring. It would make sense to consider stocks that
traditionally make runs, or slide if you are bearish, during this time of year.

2. Fundamental Analysis

Many short term traders may disagree with the need to do ANY Fundamental Analysis,
however knowing the chart patterns from the past and the news regarding the stock is
relevant. An example would be earnings season. If you are planning

on playing a stock to the upside that has missed its earnings target the last 3 quarters,
caution could be in order.

3. Technical Analysis

This is the part where indicators come in. Stochastics, the MACD, volume, moving
averages, RSI, CCI, support levels, resistance levels and all the rest. The batch of
indicators you choose, whether lagging or leading, may depend on where you get your
education.

Keep it simple when first starting out, using too many indicators in the beginning is a
ticket to the land of big losses. Get very comfortable using one or two indicators first.
Learn their intricacies and you'll be sure to make better trades.

4. Follow your picks

Once you have placed a few stock trades you should be managing them properly. If the
trade is meant to be a short term trade watch it closely for your exit signal. If it's a swing
trade, watch for the indicators that tell you the trend is shifting. If it's a long term trade
remember to set weekly or monthly checkups on the stock.

Use this time to keep abreast of the news, determine your price targets, set stop losses,
and keep an eye on other stocks that you may want to own as well.
5. The big picture

As the saying goes, all ships rise and fall with the tide. Knowing which sectors are
heating up stacks the chips in your favor.

For example, if you are long (expecting price to go up) on an oil stock and most of the oil
sector is rising then more likely than not you are on the right side of the trade. Several
trading platforms will give you access to sector-wide information so that you can get the
education you need.

Successful Stock Traders

We often hear that 95% of people who try trading for a living fail within the first year.
These are not very good odds and it is natural for new traders to wonder if they have what
it takes. In this issue, I give you a list of 20 characteristics I believe could be found in
most winners. I also included some Truths about trading.

The methods employed by winning traders are extraordinarily diverse. Despite the broad
spectrum of traders, certain characteristics are found in most winning traders (in no
specific order):

• Winners have a trading plan with a strategy that incorporates effective money
management. They have the discipline to execute their plan relatively flawlessly
and the self esteem to accept the money the market gives them.
• They use their head and stay calm - they don’t get excited or depressed because of
their trades. They don’t act on emotions. They can handle success and failure
without self-destructing.
• They don’t trade to feel good or to get high.
• They handle trading as a serious intellectual pursuit.
• They always protect their capital because they know they cannot trade without it.
This means that they don’t get caught up in the thrill of the moment, the
excitement of a running stock - they don’t jump into careless trades.
• They love trading, trading is a passion and they spend a large portion of their time
trading and learning about trading.
• They know that sometimes the best thing to do is to do nothing (sit on their
hands). They do nothing unless there is something to do.
• They don’t pay attention to other people’s opinions, they make their own.
• They don’t try to guess the future - they know it is a game of probabilities. They
understand that they will always have a percentage of losing trades but they keep
the losses for those trades small. They don’t hesitate to get rid of a position when
the loss is still small.
• They have a great respect for the markets and they never think taking money from
it is easy.
• They behave like professionals. They take full responsibility for their actions and
don’t look for something or someone to blame. Instead they use their losses as an
opportunity to improve their plan.
• They trade to trade well, not for the money.
• While they are in a play, they don’t count how much money they have made or
lost because they know this would influence their judgment. They focus on
trading well.
 • Amateurs keep thinking what trades to get into, while professionals spend just as
much time figuring out their exits.
• When they have a winning position, they don’t let their emotions dictate when to
close the position, which would result in small gains. They know emotions cannot
be part of the decisions.
• When they enter a play, they don’t have any expectation. They understand it can
go either way and that nobody can know the future.
• They have confidence in their plan, patience, and discipline.
• They are not afraid because they have developed attitudes that prevent them from
getting reckless.
• They have self-monitoring skills and can continuously monitor their performance
in order to improve it.

Some Truths about Trading

• The market is a huge crowd of people. Each member of the crowd tries to take
money away from other members by outsmarting them. Everyone, including some
of the brightest minds in the world, is against me and I am against everyone. It’s
every man for himself. The money I want to make belongs to other people who
have no intention of giving it to me.
• The market is like an ocean, it moves up and down regardless of what I want. The
market does not know I exist and I cannot influence it. I cannot control the market
any more than a sailor can control the ocean, but I can control my own behavior.
• Trading is all about management - managing myself, my money, my attitude, and
my positions. It is not about predictions, forecasts or opinions.
• There is the plain fool, who does the wrong thing at all times everywhere, but
there is the Wall Street fool, who thinks he must trade all the time. No man can
always have adequate reasons for buying or selling stocks daily or sufficient
knowledge to make his play an intelligent play (Jesse Livermore).
• Trading without imagination is like painting by numbers - and is about as
rewarding(William R. Gallacher).
• The market is not going to reward anyone for observing the obvious.
• A mistake made by many traders is that they become so involved in trying to
catch the minor market swings (generating lots of commissions in the process)
that they miss the major price moves.
• Advisors are only wrong when you get too many of them start thinking the same
thing.
• A strategy to enter and exit trades will not help you unless you are both
disciplined and organized.