Document of stocks that are being shared is not just an ordinary piece of paper, simply because it represents the partner ownership of the two companies. Moreover, if you also purchase a stock it also means that you are also giving the opportunity to have a portion on the business. Likewise, the advancement of technology is also a great help for the development of online brokerages. With it, the act or the way of purchasing stocks becomes easier and quicker as compared in the past. The needed process for researching, learning and looking for an investment somehow may be more complex, but successful.
Furthermore, if you are planning to buy stocks from a certain company, then you should first need to read and understand the following information below. Those are the things and steps you need to keep in mind on how to buy stocks.
Study the stock market
The very first thing that you need to do on how to buy stocks is to know first the important things in the stock market. The stock market also works in a similar way to other kinds of marketplace except that the products included, which is being bought and then sold, are the pieces of belongings in the company and is called as the shares of stocks. You can also trade your stocks in exchange of the things you want depending on the transaction between you and the company.
The prices of stocks can also be up or down depending to the demand and supply. For instance, if the stocks have great demand, then the tendency of the price will go up. However, if there is high number of sellers in the market, its price will be lower. Furthermore, the very basic motivation on how to buy stocks is to look for the available shares in a certain company that can really increase your money over the time. Especially that the value of shares can rise the moment that the demand for it rises or normally as the company whom you purchased stocks has a good performance. Additionally, the difference also between the current selling price and your purchase price of stock will represent the possible profit you can make in your investment.
Aside from that, memorizing also the possible important terminologies on how to buy stocks is also important. Once you understand it, there would be definitely bigger chance for you to easily do the needed process when it comes to buying stocks. Considering mutual funds is also important. It is because the money that you invested in a certain mutual fund will have the chance to get profit in every investment it involves. With it, you will have a lower chance of losing the money you will be investing compared to purchasing stocks by yourself.
Look for a stock
When you are planning to purchase a stock on your own, then the second thing you need to do on how to buy stocks is to look for a stock. In looking for a stock, it is really important that you will spend enough time and effort in it for you to prevent any possible mishaps because of wrong stock information that you got. You can also get the information of different companies through internet that is usually provided in the internet quarterly and annually including the financial report of the company. With it, you can easily assess whether the company is in good condition and if the firm really has the capability to give you profit instead of losing your investment.
Choosing also the kind of business that has high-quality rating is also included on how to buy stocks. It is important because when you purchase a stock in a certain business that has a high-quality standing, then it only means that they can really have the chance to return the money you invested in a much higher amount. For you to also know whether the company you will be investing is a good choice or not, you should look for their gross profit boundary. The higher it is, the more it means that the company can really give you bigger profit. Aside from that, you should also look for their return on equity. With it, you can assess how good the company in using the invested money in making returns for their investors.
Decide and make your investment
Deciding and making your own investments are the last two things that you need to do on how to buy stocks. After you already have the idea about stock market and after looking for the possible stocks you might purchase, the next thing that you need to do is to decide. Decide which company you will be purchasing a stock. As much as possible, really choose a company that has high standing and also think of your investment as one of their precious and important belongings.
Once you have decided which company you want, then it is the time for you to make or purchase your stocks. Know what kind of process involves for the purchasing, whether it is through online, in their company or by the help of broker. However, having a broker is also helpful on how to buy stocks. It’s because they are the people having enough knowledge in terms of purchasing and selling stocks. With them, every needed work or process would be definitely lot easier and less stress for you. The broker whom you have chosen will also make sure to give you helpful advices for you to really be successful in every decision that you make.
Earning a lot of money through investments of buying stocks is really not an easy thing. However, if you read, consider and do the following important things on how to buy stocks cited above, you will really have a greater chance to earn bigger amount of money. Remember, every cautious and right decision will lead you to a more successful life. So make sure to be careful in every decision that you make for you not to regret in the end.
The reason behind the affordability and availability of stock trading is the online brokerages. Lots of people who rely on the services that are provided by stock brokers are responsible for making good selling and buying of orders on behalf of their customers. Trading stocks online is increasing very fast due to the fact that online marketing is also increasing. Today, it is now easier for people to execute buying and selling of orders by themselves without spending too much time through the use of trading services that are computerized which gives them convenience all the time.
It is not easy to become a successful trader due to the fact that competition in the industry is increasing that is why there is a need to become strategic to attract great number of customers who would try what you offer. Since trading stocks online is increasing, it is very much important for traders to become familiar with different trading tools, theory, as well as daily reports that are responsible for driving market shift.
Basics of Stock Market
Just like any form of business, stock markets also operate on a kind of system for demand and supply. Once you purchase a stock, make sure that traders would become even more eager in owning a share of a certain company over the time. When the popularity of the stock increases, there is a tendency that the traders will compete in order for them to own the stock then bid up the price of the sale. The theory states that, a share price that is rising is the effect of improvements that are happening in potential and value of the firm and also called as fundamentals. There are lots of reasons for the stock prices to change but only few are predicted and known by the investors.
Research and choose stock
Trading stocks online are growing which would give every trader an assurance to become successful. Choosing stock should be given much attention and it is important to know that there are major schools of thought. The first one is technical analysis wherein the analysts believe that stock prices swing follow the patterns which the traders can utilize and learn in order to detect as well as profit from those. This is not accepted or practiced widely but many of the traders use the combination of techniques in choosing stocks. The second school of thought is fundamental analysis which merely depends on financial report of the company as well as its public statements in analyzing the status of the business. There are lots of tools that are use for the fundamental analysis such as news releases coming from the company, quarterly and yearly earnings, income statements, and balance sheets.
Before you decide in buying and selling any kind of stock, there is always a need to have a thorough research about the company, leadership, and most of all its competition. This would give you an assurance that you are in good hands and would become a successful trader. On top of that, there is a greater chance to experience good trading stocks online that would benefit you the most.
Personal services for stock-trading
Before starting selling and buying any product, there is a need to know the basics for deciding which of the trading services online that you are going to utilize to ensure good trading stocks online. Fidelity Investments director of the public relations, Rob Beauregard said that choosing a partner for brokerage carefully would affect directly what your bottom line is. He said that that best advice that he can give for the online trader is to look for brokerage partner having open eyes. There is a need to know security practices, research resources, education, investment choices, service, and pricing. Do not rely on what your instinct is and even on tips coming from your neighbor or friends. Choose resources that can be accessed easily in order to validate as well as generate investing decisions that are valuable enough bot to use. Consider the cost of the services that they provide as well as the support level that you would be needing from the qualified brokers.
Practice what your skills are
Trading stocks online is very much important that is why there is a need to become aware on how to increase the stock. Education is the first step in learning how to trade. There are many ways when it comes to information gathering such as watching different investing courses, podcasts listening, and reading financial websites and news. The best way to have a great opportunity when it comes to discussing your education to people who are experienced traders is by means of joining investments in the locality.
Tips for first time investors
Trading stocks online can be very difficult especially for beginners, but through the help of fund’s gradual investment and right foundation, there is an assurance to experience significant and satisfying results.
- Do not ever invest your money that you do not want to lose.
- Investments should be diversify.
- Do not trade especially when you do not have enough time for researching.
- Make a good plan.
- Do not buy a very high stock
- Do not be afraid.
Have more information
Reading online articles is not enough for you to be qualified in a trade market. There is a need for you to practice trading before planning to invest and you can read investment literature to be guided on becoming a good trader as well as know the basics when it comes to trading stocks online.
Trading stocks online for other people is still a mystery but for some this is just a cakewalk. This is simpler knowing that software tools are available as well as emergence of the online accounts of brokerage. However, this may also lead to liabilities and complexities for some of investors. There are many ways to help those beginner traders to trading stocks online and it is up to them to choose the one which would give convenience to them and the chance to become a good trader that the industry would look up to.
You might not have noticed it that much at your favorite gas station (there isn’t always a perfect correlation between crude oil and the price at the pump) but in July alone, crude oil futures fell more than 20%, to bottom just above $45 a barrel yesterday (Aug. 3).
Oil is now nearing the six-year low of $42.03 we saw this spring. Says The Wall Street Journal:
“Concerns about an economic slowdown in China, coupled with persistently high production from some of the world’s biggest petroleum suppliers, have soured investor sentiment in recent weeks.
“Oil prices plunged into a bear market last month and have continued to fall in August.”
“Still, analysts said oil prices could have further to fall in the near term. The market remains oversupplied, and demand typically declines at the end of the busy summer-driving season.”
You may have already watched the recent interview with our Chief Energy Analyst, Steve Craig, where he mentioned that oil had been in the process of finishing a fifth wave down. A fifth wave is the final wave in a basic 12345 Elliott wave pattern. When it’s complete, prices reverse. The question is, how close are we to that reversal?
To answer that, you have to keep in mind that Elliott waves are fractal: Smaller-degree patterns make up larger-degree wave structures. In other words, wave patterns self-repeat on all degrees of trend. That’s one of the strengths of Elliott wave analysis. It allows you to a) pinpoint the end of a trend with astounding accuracy, and b) capitalize on opportunities at all degrees of trend.
But you can also see that this is a fifth wave within a larger-degree third wave. A wave four is due next – and because fourth waves are corrective, they move against the trend. Which means that, at least in the short term, oil is due for a nice bounce.
Some investors or traders may take it for a sign of a bottom — but with Elliott waves, you already know that oil is not quite out of the woods yet.
Crude has been in the headlines almost daily for the past six months, but for all the wrong reasons.
A bit of history: After hitting a high of 107.73 in late June, oil has dropped an alarming 40%. (Well, alarming to some. If you own a car and live in the U.S., you’ve seen an almost corresponding drop at the pump.)
On Tuesday, Dec. 9, after a hitting a 5-year low, crude was able to close higher for the first time in five consecutive days.
Does that mean that oil has finally found a near-term bottom?
For some answers, let’s turn to EWI’s Chief Energy Analyst, Steve Craig. He has been preparing his Energy Pro Service subscribers for oil’s near-term ups and downs. In his final intraday update for Tuesday, Steve wrote (partial Elliott wave labels shown; bold added):
I still can’t rule out further near-term strength, but the relatively deep retreat makes it seem a little less likely. In any event, the rebound should prove corrective and lead to another leg down (minimally below the 62.25 overnight low) to finish the … decline.
Repeating: Looking ahead, a potential downside objective … is 60.82.
Crude fell to $60.44 on Wednesday — and continued to drop Thursday, Dec. 11.
Today, crude prices are at a 5-year low, and at least one economist thinks “$60 oil will be the norm for the next 5 years.” (CNBC)
Our Energy Specialty Service doesn’t look quite as far down the road. Steve’s latest update says:
“…Crude is oversold by most any measure and primed for a relief rally, but there’s nothing yet to suggest that the decline has ended. Ideally, the market will move [to]…”
So at least in the short term, a bounce is due.
On Tuesday (Dec. 16), reported Bloomberg,
“The ruble plummeted into a freefall, losing as much as 19 percent as panic swept across Russian financial markets after a surprise interest-rate increase failed to stem the run on the currency.
“The ruble sank beyond 80 per dollar, a record low, before rebounding…”
If you’d like to hear a good Elliott wave story, the ruble has one to tell.
Even if you don’t follow the currency, you know about the recent tensions between Russia and the West. It all began in February-March, when Russian troops (in unmarked uniforms) annexed the Crimea peninsula, a big piece of Ukrainian territory. The audacity of that move prompted the West to… well, scratch its head, at first. The question was, “What do we do?” On the one hand, a blatant land-grab in a potential future member of the European Union seemed intolerable. On the other hand… Russia has nukes.
So, the West settled on trying to pressure the Russians with economic sanctions. That, said the analysts, was the catalyst for the ruble’s downfall. In early October, when the dollar/ruble exchange rate first zoomed north of 40, The Wall Street Journal wrote:
“The dollar popped above 40 against the ruble for the first time, a move that follows months of pressure that has been building on the Russian currency since tensions flared between Russia and Ukraine in March.”
Note the date: March. That’s when the Russia-Ukraine-West conflict began in earnest.
And now, please read this forecast for USDRUB that the editor of our Currency Pro Service, Jim Martens, published for subscribers in January:
The specific Elliott wave pattern that helped us turn bullish on the dollar/bearish on the ruble two months before the Russia-Ukraine tensions began was an Elliott wave triangle. You can see it in the USDRUB chart above. It’s a wave pattern that most often appears in the 4th wave position of a 5-wave move. When a triangle ends, the price usually “thrusts” in the direction of the previous trend — higher, in this case.
That’s it. Our January forecast included no geopolitical “if, then” scenarios. No scrutinizing every news report. (There was no news to scrutinize yet!)
Each move you see on a price chart, up or down, is part of a pattern that reflects the collective psychology of market participants. That’s really what wave patterns help you track and forecast.
USDRUB was ready to rally in January. The market psychology was ready for a turn against the ruble, news or not.
Some people like to get outside on the weekends, maybe playing tennis or working in the yard. Some people like to visit their friends or cook a big meal or go out to see a movie. And some people who are passionate about their work — such as Elliott Wave International’s futures analyst Jeffrey Kennedy — like to stare at hundreds of price charts on their computer screen to find patterns that point to trade setups. We used to worry for his health but not anymore, because he’s been doing it for years and he comes up with some neat stuff. A case in point is his discovery of a two-bar pattern that he named the Popgun. Find out more in this excerpt from the Club EWI eBook, called How to Use Bar Patterns to Spot Trade Setups.
* * * * *
Excerpted from How to Use Bar Patterns to Spot Trade Setups by Jeffrey Kennedy
I’m no doubt dating myself, but when I was a kid, I had a popgun – the old-fashioned kind with a cork and string (no fake Star Wars light saber for me). You pulled the trigger, and the cork popped out of the barrel attached to a string. If you were like me, you immediately attached a longer string to improve the popgun’s reach. Why the reminiscing? Because “Popgun” is the name of a bar pattern I would like to share with you this month. And it’s the path of the cork (out and back) that made me think of the name for this pattern.
The Popgun is a two-bar pattern composed of an outside bar preceded by an inside bar. (Quick refresher course: An outside bar occurs when the range of a bar encompasses the previous bar and an inside bar is a price bar whose range is encompassed by the previous bar.) In Chart 1 (Coffee), I have circled two Popguns.
So what’s so special about the Popgun? It introduces swift, tradable moves in price. More importantly, once the moves end, they are significantly retraced, just like the popgun cork going out and back. As you can see in Chart 2 [not shown], prices advance sharply following the Popgun, and then the move is significantly retraced. In Chart 3 [not shown], we see the same thing again but to the downside: prices fall dramatically after the Popgun, and then a sizable correction develops.
How can we incorporate this bar pattern into our Elliott wave analysis? The best way is to understand where Popguns show up in the wave patterns. I have noticed that Popguns tend to occur prior to impulse waves – waves one, three and five. But, remember, waves A and C of corrective wave patterns are also technically impulse waves. So Popguns can occur prior to those moves as well.
As with all my work, I rely on a pattern only if it applies across all time frames and markets. To illustrate, I have included two charts of Sirius Satellite Radio (SIRI) that show this pattern works equally well on 60-minute and weekly charts. Notice that the Popgun on the 60-minute chart [not shown] preceded a small third wave advance. Now look at the weekly chart [not shown] to see what three Popguns introduced (from left to right), wave C of a flat correction, wave 5 of (3) and wave C of (4).
There’s only one more thing to know about using this Popgun trade setup: Just be careful and don’t shoot your eye out, as my mom would say.
Posted on May 06, 2010
As you certainly know, the US stock market was in crash mode today, losing more than 8% at some point. I have not seen such panic selling since the top of 2000. The recovery that followed was spectacular as well. Only time will tell if the bear market is back or the uptrend will resume.
I hope that todayhotstocks.com subscribers were not surprised by this (temporary?) downturn as this was absolutely predictable (the downturn, not the panic selling). We alerted our subscribers about it in an email alert sent and posted on our website ( http://www.todayhotstocks.com/latest-trading-alerts/) on March 23. Here is what I said at the time:
“This is just a short update to let you know that we have not added new stocks to our portfolio recently as the market is extremely overbought right now and the odds for a downturn are very high.
The Nasdaq 100 index had 17 up closes during the last 19 trading days and the ‘NYSE New High New Low Indicator’ ($NYHL) made a new high at about 550 points two days’ ago. During this market rally (March 2009 – today), EVERY time this indicator made a new high, it was shortly followed by a maker downturn. Several other indicators we follow show that the odds for a market correction are very high.“
From the time we sent that alert, the market continued to stay on the extremely overbought territory for 3 more weeks, but the inevitable happened. What is important is that at the start of the downturn (April 26), our portfolio was 80% in cash and we were 90% in cash before today’s panic selling.
Why am I writing this? It’s because every time our portfolio holds a significant amount of cash, I get a lot of emails from subscribers complaining that they are paying a monthly fee and do not receive enough buy alerts. During those times, I am under the impression that most of our subscribers will be extremely happy if we issue a record number of buy signals everyday regardless of the returns generated. It is obvious that most people are after the excitement of buying and selling stocks, not after generating positive returns.
If you are one of those investors, you should remember that investing is about making money, not about excitement – making money implies risk management and taking a bet ONLY when the odds are definitely on your side. Sometimes, doing nothing is the best investment decision you can make. The reason we were 90% in cash before today’s panic selling was because the odds were completely against us and the best thing in such cases is to stay in cash.
This is basically how we managed to post great returns both in 2008 and 2009. We will not change our system because of the record number of people that unsubscribe during those times.
In 2002, Elliott Wave International’s president Robert Prechter published his New York Times and Wall Street Journal business best-seller Conquer the Crash, a prescient book that explained why a financial crisis was inevitable and predicted almost exactly how it would unfold.
Now in the 2nd edition, Conquer the Crash remains a very useful read. To give you an idea of just how useful, we are releasing 8 chapters of the book to all 150,000+ free Club EWI members. Here’s an excerpt. (Details on how to read full report are below.)
Make sure you fully understand all aspects of your government’s individual retirement plans. In the U.S., this includes such structures as IRAs, 401Ks and Keoghs. If you anticipate severe system-wide financial and political stresses, you may decide to liquidate any such plans and pay whatever penalty is required. Why? Because there are strings attached to the perk of having your money sheltered from taxes. You may do only what the government allows you to do with the money. It restricts certain investments and can change the list at any time. It charges a penalty for early withdrawal and can change the amount of the penalty at any time.
What is the worst that could happen? In Argentina, the government continued to spend more than it took in until it went broke trying to pay the interest on its debt. In December 2001, it seized $2.3 billion dollars worth of deposits in private pension funds to pay its bills. …
With the retirement setup in the U.S., the government need not be as direct as Argentina’s. It need merely assert, after a stock market fall decimates many people’s savings, that stocks are too risky to hold for retirement purposes. Under the guise of protecting you, it could ban stocks and perhaps other investments in tax-exempt pension plans and restrict assets to one category: “safe” long-term U.S. Treasury bonds. Then it could raise the penalty of early withdrawal to 100 percent. Bingo. The government will have seized the entire $2 trillion — or what’s left of it given a crash — that today is held in government-sponsored, tax-deferred 401K private pension plans. I’m not saying it will happen, but it could, and wouldn’t you rather have your money safely under your own discretion? …
Perhaps you have no such opportunity for a tax saving and do not want to pay the penalty attached to premature withdrawal. If your balance is high enough, you may wish to consider converting your retirement plan investments into an annuity at a safe insurance company (see Chapter 24). It is highly likely (though not assured) that such investments would be left alone even in a national financial emergency. …
If you or your family owns its own small company and is the sole beneficiary of its pension or profit sharing plan, you should lodge its assets in a safe bank or money market fund. As an alternative, depending upon your age and requirements, you may consider converting it into an annuity, issued by a safe insurance company. Such insurance companies are few and far between, but the next chapter shows you where to find them.
Read the rest of the 8 free chapters from Robert Prechter’s Conquer the Crash now, free! All you need is to create a free Club EWI profile. Here’s what you’ll learn:
- Chapter 10: Money, Credit and the Federal Reserve Banking System
- Chapter 13: Can the Fed Stop Deflation?
- Chapter 23: What To Do With Your Pension Plan
- Chapter 28: How to Identify a Safe Haven
- Chapter 29: Calling in Loans and Paying off Debt
- Chapter 30: What You Should Do If You Run a Business
- Chapter 32: Should You Rely on Government to Protect You?
- Chapter 33: A Short List of Imperative “Do’s” and Crucial “Don’ts”
Keep reading this free report now — all you need to do is create a free Club EWI profile.
By Nico Isaac
In case you were hiding out Tiger Woods’ style far away from the mainstream media during the past month, let me be the first to say: January saw an abrupt end to the U.S. stock market’s record-setting winning streak. Last count, the Dow Jones Industrial Average plummeted 4% in its worst monthly loss in a year.
And, according to one Feb. 1, 2010, MarketWatch story, “The time to consider an exit strategy” has officially arrived. Here, the article captures the public’s astonishment turned acceptance of the Dow’s boom-to-gloom shift:
“The Dow has shocked the bulls out of their complacency. After all, analysts were looking for the bull market to last until at least the second half of the year. Investors were not prepared for such a sharp decline and now at least some of the chatter has gone from ‘how high will the market go?’ to ‘how low will it fall?’ [emphasis added]“
Let me get this straight. The powers that be say it’s time to “consider an exit strategy” — AFTER the Dow has already plunged 700-plus points to land at its lowest level in two months. That’s about as helpful as building a life raft AFTER your ship has begun to sink.
Let me get this straight. The powers that be say it’s time to “consider an exit strategy” — AFTER the Dow has already plunged 700-plus points to land at its lowest level in two months. That’s about as helpful as building a life raft AFTER your ship has begun to sink.
Then, those same sources go on to say investors were “not prepared” for the degree and depth of the stock market’s decline. This is only partly true. On Main Street, the early January flood of bull-is-back-type headlines gushed in and washed all the bears away.
Yet, on our “Elliott wave” Street, preparation for a “sharp” decline in the Dow was fast in place. One week before the market turned down from its Jan. 19 high, Elliott Wave International’s Short TermUpdate went on high bearish alert with this commanding insight:
“The Dow’s diagonal remains in tact and its form is clear. We will afford the pattern a bit of leeway over the next one-two days… but the structure is very late in development. That means a trend reversal is fast approaching. A potential stopping range is 10,725-10,740. A close beneath [critical support] will confirm that the diagonal is over and the market has started a down phase that should draw prices significantly lower. Once a diagonal is complete, prices swiftly retrace to near its origin, which in this case is 10,263.90, the very first downside target.” (Jan. 13 Short Term Update)
Soon after, the Dow peaked within four ticks of our cited upside target; next, it went on to fulfill the second part of its Elliott wave script with a staggering triple-digit slide to “near the origin” of the diagonal triangle pattern, and then some.
That leaves one question: Are the bears now ready to relinquish control of stocks? Don’t wait for the market action to “shock” you.
Robert Prechter, CMT
The following article is an excerpt from Robert Prechter’s Elliott Wave Theorist.
First they bought into the “stocks for the long run” case and got killed. Then they jumped on the commodity bandwagon and got killed. Many investors are buying back into these very same markets, but others are running to what they perceive as safe “yields” in the municipal bond market. So far this year, individual investors have “poured a record $55 billion” (Bloomberg, 11/12) into muni bond funds, with the pace running $2b. per week in August and September; many other investors are buying munis outright. These must be the people who tell us that they can’t live without “yield” and also cannot imagine their city, county or state government going bust. But as Conquer the Crash warned and as The Elliott Wave Theorist has reiterated, the muni bond market is heading for disaster.
Municipalities have borrowed more than they can repay, they have pension liabilities that they cannot meet (up to a trillion dollars’ worth, according to Moody’s), and tax receipts are falling. The only reason that states haven’t failed yet is the so-called “stimulus package,” which took money from savers, investors and taxpayers—thereby impoverishing the people who live in the various states—and gave it to state governments to spend so they would not have to cease their profligate spending. But political pressures will eventually cut off this gravy train. In the 2010-2017 period, the muni bond market will become awash in defaults. The leap in optimism since March, which has shown up in every financial market, has fueled a retreat in muni bond yields to their lowest level since 1967 and narrowed the spread between muni bond yields and Treasuries.
This rush to buy municipal bonds is occurring right on the cusp of a dramatic decline in their values. While many individuals are loading up right at the peak so they can participate in the next major market disaster, smarter investors, such as insurance companies Allstate and Guardian Life, are getting out. Subscribers to our services, we trust, own not a single municipal IOU. Our recommendation for investors is 100 percent safety, and such a program does not include muni bonds. If you are a recent subscriber, please read the second half of Conquer the Crash as a manual on how to get your finances safe.
Get Your FREE 8-Lesson “Conquer the Crash Collection” Now! You’ll get valuable lessons on what to do with your pension plan, what to do if you run a business, how to handle calling in loans and paying off debt and so much more. Learn more and get your free 8 lessons here.