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Investing Tips That Make A Lot Of Money

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By college-economist


The Trends

Knowing the Trends.

This is easier said than done. Many people try and take in too many trends at once and end up confusing themselves. Take it slow. This is some advice that is not utilized enough. Do not try and learn every trend there is immediately. Look at the market sectors you are familiar with or that you have an interest with. Say that you are interested in cars. Look at the automotive manufacturers like Ford and Dodge. You should then look at their charts. The farther back you go, the more trends you will see. Start to track those stocks and notice how they react to certain news. Each stock reacts differently. Some stocks actually go down on good news. It all depends on the buyer's mind set. After you have been following some stocks for a while see how their competitors fair. Track the competitors also.

Tracking the sector.

After you have started following a few stocks, you will probably get a grasp on how a sector starts to behave. You may be inclined to try predicting how that sector will preform. Write down your predictions then compare it to the professionals who have been doing it for a long time. Depending how close you are will give you a good measurement on how accurately you were tracking your stocks. The more closely you monitor your picks, the better you will be. This takes time, patience, and hard work. The professionals did not get to where they are over night. They put in the study time.

Sector Trends

After a while you will notice that some stocks go in patterns. These are described as up-trends and down-trends. Some stocks actually have an almost yearly pattern. Look at video game developers. Their stocks usually go up after the release of a new game if it becomes a hit. People will do speculative buying, thinking that the new game will be a hit before it comes out. These people will buy in before the release hoping that the stock price goes up. Gaming stocks have a speculative pattern, their stock price reflects people's hunches on their new products.

Profit speculation.

Some companies have seasonal profits. These companies include energy companies. People will speculatively trade these companies depending on the season. Energy companies are highly speculative during the winter months since they provide energy for heating houses. The same thing applies here as it does to the gaming companies. People will buy in hoping the company gets more profits as the winter season sets in. During the spring time these stocks will typically go down because no one is heating their homes and it is not hot enough for air conditioning. Energy companies will sometimes follow predictable patterns based on the seasons.


Investing Your Money

Knowing the Charts

Charting

Just because you think you know a sector's trend, doesn't mean you should just jump in. You should also track certain stocks. Each stock behaves differently and will reflect this in their charts. By actively charting your choices, much like how you began tracking the sector, you will get a better grasp in how the stock reacts in relation to the over all sector. Some stocks will actually go up before the rest of the sector. These are some good signals that a sector is turning around. It can be very financially lucrative if you track down some of these stocks and use them as flags to give you a heads up. 

Inverse Charts

Some sectors have an inverse relationship with each other. As one goes up, the other goes down. It is a good point to know which ones have inverse relationships with each other. Some competitors have inverse relationships. Take a look at Apple and Dell. These two competing companies are not always inversely related but around the holiday season, it helps. People come down to a choice, buy a PC or a Mac--they usually don't buy both. By tracking consumer reports, and polls as well as the charts you could pick the winner in the holiday season and make some nice profits. 


Getting In The Game

The setup for success.

After you have all the information you are ready to buy a stock. The best way to do this is through a brokerage firm. For help in choosing such a firm, check out this article. Having the right broker will affect a lot on your trading experience. By having the right one from the start, you will save yourself a lot of stress and heart ache. As for what equipment to have, there are no specifics.

All you really need is a computer with internet access. Some traders prefer multiple screens so that they can track many stocks at once. This is really helpful if you are a great trader and do it a lot. For most people who are long-term traders or swing-traders, a one monitor setup is good. Charting software usually comes with your brokerage firm. If not, then try out google finance or yahoo finance. They both have some really good charts. 

Hands On Vs Hands Off

Trading by yourself.

Some people like to trade their own money by themselves. This allows you complete control over your investments. This also means that you are in charge of whether you make money or lose money. This could add a lot of unwanted stress into your life as well as more work. The benefits of freedom come with more stress. You get to choose how your money is invested but that takes research. For some people, they don't want the extra worry. 

Someone trading for you.

Some people are trained to trade for you, called brokers. They invest your money for you and you don't have to manage it. All you have to decide is which broker to give your money to. There are pros and cons with this strategy as well. To learn more, check out this informative article.

Money

How to make money.

There is an old saying, it takes money to make money. This is true. You will have to put money into the stock market so that you can make some profits. Where you place your money is entirely up to you. Be sure to consult a professional if you have any questions. I am not a professional so do not take anything I say in this article to be the words of a professional. Invest at your own risk. The people who make a lot of money on the market are the same people who make good choices. These choices are supported by a lot of research and work. be sure to do your own research and work before investing and you should do well. 

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