Do you want to earn money by stock trading? There are several things to think about before jumping into the stock market. If you do it right , the stock trading is rewarding investment, but if you buy stocks without preparation, you will lose the money. Take my three simple advises to buy stocks.

Start investment with small amount of money or the amount you feel comfortable with. When the market is doing well, people think that they would make lots of money right away. So they tend to put large amount of money, even borrowing money by using the margin account. And they end up paying off the dept. Believe me , the feeling would be devastating when your stock drops 50% or more. Always start with small amount of money that you are comfortable with.

Go with large value company stocks. Once I bought penny stocks thinking that the penny stocks would skyrocket. But the result was terrible. The price fluctuation is too severe for regular people to handle. One of the penny stocks was going out of business completely. I mean they are penny stocks company, so they are very dangerous for the long term investment. So my suggestion is to buy a good valued company such as Google, Apple, and IBM when they are cheap during the BEAR period. And it is for sure that they would not likely to go bankruptcy.

Monitor the major stock indexes. The market is always about the fight between the bear and bulls. Year 2012 is time for the bulls. So it’s a great time to start. But when do you jump in? You will need to find the best point when the market price is low. You can easily find the long term chart graphs for the indexes with additional technical indicators such as RSI7 or MACD. When you have low RSI or MACD for longer period time, I say that would be a good time to buy some value stocks. When the technical indicators remain on the upper side over 70, you should just wait until the market excitement settles down.

Thank you. That was the major three ideas for staring stock trading. To buy stock , you would need to do some study to make money, but it is surely worth the time. Please check out my site for more articles on stock trading tips.

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