| This article is directed to anyone who is wishing to | | | | Among the trading resources mentioned above that |
| learn about the stock market and how to trade | | | | are offered by many stock brokers and are also |
| stocks. There are many reasons to become involved | | | | available independently on the internet, some free of |
| in the stock market and the first point to make is to | | | | charge, is "Paper Trading", also called virtual trading, |
| differentiate between traders and investors. And the | | | | that allows the participant to operate an account in |
| difference is mainly in their respective time horizons. | | | | an identical manner as a real account but does not |
| Investors tend to take a longer-term view in their | | | | require real money. Those are for every newcomer |
| stock market holdings and in their reasons for | | | | to check out. |
| acquiring new stock positions that do traders. | | | | There are hundreds, probably thousands, of books |
| The investor is likely to be mostly concerned with | | | | available on stock market topics, many available from |
| possibilities for a company's future growth, its | | | | local public libraries but I am going to recommend just |
| payment of dividends, and perhaps it valuation | | | | a couple and if you can understand and master what |
| compared to its current market price. That method is | | | | they have to offer you will become very well |
| often referred to as a buy and hold approach. The | | | | informed and know a lot more than most beginners. |
| "buy and hold" signifies that stocks are held through | | | | In fact I would go as far as to say that those alone, |
| the inevitable up and down fluctuations in the stock | | | | if faithfully followed, may be enough to prepare for a |
| market as long as their underlying attributes remain | | | | first cautious entry into trading, the buying and selling |
| intact. Warren Buffet, the great and well-known | | | | shares to make a profit. |
| investor, and others, have described their favorite | | | | But be careful, the stock market is unforgiving of |
| hold period as "forever". I think that explains their | | | | poorly executed trades and trading mistakes and |
| position, and there are few that can claim to equal | | | | that is why learning from experience is the final |
| Warren Buffet's success as an investor. | | | | factor in becoming a successful trader. So spend |
| Generally, the investor is more conservative | | | | some time with virtual trading to find out whether |
| compared with the trader who can perhaps be | | | | you really are ready to trade (or not). |
| better described as a speculator. The trader's | | | | The primary book source is called "How to Make |
| methods are targeted to taking advantage of the | | | | Money in Stocks" by William J. O'Neil, most of what |
| relatively short-term fluctuations of stocks that can | | | | you need to know for about $15, check it out first |
| take place over days, weeks, or months. As one of | | | | at your nearby bookstore and see what it has to |
| the great speculators of recent times I would cite | | | | offer. I won't go into details here, there is just so |
| George Soros who reportedly made $1 billion in one | | | | much of value in the book and it should be read and |
| day during the British currency crisis in 1992. | | | | re-read. Other similar books by O'Neil are excellent |
| An individual trader or investor, who is not at or near | | | | too, coming from a successful investor and trader |
| the level of the greats such as Buffet and Soros, and | | | | and giving the details of a proven winning system. |
| few are, has no affect on the movements of stocks | | | | Other O'Neil inspired reading is the newspaper |
| because the total monetary value of their combined | | | | Investor's Business Daily, founded by O'Neil, it has |
| transactions is so small in comparison with that of the | | | | much of what you need to know, check that out |
| really big traders. The big money that drives the | | | | too. There is also The Wall Street Journal and several |
| market comes from institutions, the hedge funds, | | | | financial magazines that can help add to the |
| mutual funds, insurance companies, pension funds, | | | | knowledge base. |
| and so on. | | | | A second book I suggest is Mad Money by the |
| The title of this article establishes that here we are | | | | flamboyant successful trader and former fund |
| addressing the trader, although much about how to | | | | manager, Jim Cramer, now a nightly television |
| trade stocks also applies to the investor. The main | | | | personality. The book is a little above the beginner |
| common element being that to become a proficient | | | | level but a good read anyway and something you |
| participant in the stock market demands a lot of | | | | can learn from. He has other titles published under his |
| reading and study in order to become familiar and | | | | name. |
| understand how the market works. | | | | Two other internet resources I always recommend |
| Resources for learning how to trade stocks | | | | to anyone wishing to find out how to trade stocks |
| Much of what must be learned is self directed and | | | | are and Marketwatch.com, they too have abundant |
| sourced from various printed publications and other | | | | information, far too much to describe here. There are |
| resources available through the internet, although | | | | many other similar internet sites, those are the |
| there may be some courses of study available from | | | | sources I use to stay updated. |
| local educational institutions, public libraries or other | | | | Finally your ultimate objective is to learn how to find |
| community sources. | | | | the right stocks to trade, when to buy them and |
| Perhaps the most valuable source of information is | | | | when to sell them, and to always practice |
| the stock market itself, where the individual stock | | | | appropriate risk management that allows you to cut |
| exchanges and many individual stockbrokers provide | | | | your losses early and let your profits run when they |
| a wide range of educational and training facilities for | | | | occur. |
| self study that is accessible through the internet. | | | | |