Introduction to the Stock Market.
Tags: Trading, Stocks, Investment, Investing, Stock Market

Hello readers, this is my first post on the medium are you curious about the stock market. Nowadays it is so easy to be involved in short term trading, long term investing.

I am by no means a stock expert I have only been trading in the market for a couple of years which have been a bit rough so maybe I shall tell a couple of the mistakes that I made at first.

Mistake #1 was investing stocks with low value often under $5 without enough DD which means “Due Diligence” that is the research you need to do first before purchasing any stock you should know the company’s history backward and forwards their earning history, which means earnings per share if it’s negative each quarter that is not a great sign but not necessarily the end-all because they could be a new company and putting the money back into the company, research development etc.

Companies that don’t cost a lot usually are not the best picks I would stay away from unestablished companies and focus more on the ones that are listed in the S&P 500 and the NASDAQ.

Mistake #2 listening to other people’s advice, now if it was someone close like a friend I trusted that is one thing. But on the internet it truly is a dog eat dog world. You will see the term Bull and Bear means for buying which means you are “Bullish” and for the selling side it is “Bearish”. You will see a stock sometimes jump up 300 % even 1000 % until you are an experienced trader please stay away from stocks like that or if you are invested in one that jumps don’t be afraid of taking profits don’t fall into “greed “ because what goes up usually comes back down even faster listen to your gut.

Now those were pretty big mistakes I’m betting a lot of new traders make them but I think if you avoid them then that will make you more successful. Although it is a learning process you can, however start a paper trading account that allows you to trade without actually making purchases it’s the same as the real stock market but with “fake” money. This will help you learn more about your instinct whether or not you have good stock picks.

When should you make your stock purchases?

You can see the stock market constantly going up everything going up let’s make some purchases? Well, perhaps you shouldn’t if a stock is high already unless something serious is about to happen. It will usually pullback periods where the stock just stays in a range is where investors and institutions make their purchases. This can stay relatively the same for even months. If you see the stock market tanking for the day NASDAQ is red S&P 500 is red Dow is also red there is a good chance that if you purchase on one of those days then your stock will end up profitable.

Most of us all saw what happened in March due to Covid the stock market plummeted Oil industry, Airlines, Cruises this was “the discount day” for people the market sounds great, doesn’t it. Well a lot of oil companies are small cap and if they have troubled history they might not make it. Cruises sound good well they are burning through tons of cash letting all those ships sit. The Airline industry still with it they get bailouts from the government.

What stocks were fairly safe even through a pandemic big tech, grocery stores, Peloton, food delivery. It was a very interesting year to watch because it gave traders more insight on what actually will happen to their stocks during a global event.

Hopefully my introduction will help give you some insight on investing in the stock market, in the next chapter I shall write more about researching DD on the stocks, websites, as well as research apps that you can download.

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