There is no room for emotions: Never ever get emotionally attached to any stock. Stocks are an asset class and you must look at them as such. If you don’t, and you keep holding a stock no matter what, then you will lose out on many opportunities to make money.

Book profits, stop losses: Profit is like a burglar – if you don’t catch it, it will run away. Loss is like an insurance salesman – if you don’t shake it off, it will stick to you. Therefore, you must always book profits and cut losses in the stock market – all the big guns have done it and they’re human beings, just like you. So, why shouldn’t you? Get the point?

No one can time the market: You have to be God to predict the market movements, which you aren’t. So, be happy when you get in, be happy when you get out, don’t regret, don’t fret and SMILE no matter what you do, provided you do it right.

It pays to know: It will pay you well if you understand the stock you are buying into. What are its finances? Is it making profits or losses? Is the market price right? Is the management clean or are they sons of Enron? Does the industry have a bright future? Look, you will make a load of money if you know what you are doing in the stock market. So, get savvy with figures and with the economic and global trends. Analyze all the factors affecting a stock and then act.

Well, these are some basics you have to understand before you enter the stock market. Obviously, you will make mistakes, but that’s normal – every stock market player does. Just take care to play the market by the book and that will ensure that you will ride on the booms and weather the busts.

Before you go scampering for a broker or memorizing stock market jargon, you might want to first get properly acquainted with the stock market in general and get to know the world stock markets and explore your options.

To begin with, what is a stock market in the first place and why do you want to take part in stock market trading? A stock market is also referred to as equity market. In its simplest sense, it is where buyers and sellers meet to trade stock of companies, as well as derivatives of company stock, at negotiated prices. A stock market can be a private or a public one.

There are numerous world stock markets that you may join. In the United States, the stock market allows trading of all securities listed on the NASDAQ, the American Stock Exchange, the New York Stock Exchange, and even those on various regional exchanges. In Europe, stock exchanges include the Euronext, the London Stock Exchange, and the Deutsche Borse. You can find lists of world stock markets on the Internet. Websites provide information on trading currencies and international economic news. You can basically find out all the information you need, just by browsing around for 10 minutes or so. Make sure you bookmark websites that will aid you in the future and visit them often. Keep up with all the changes that happen and it should keep your investments safe at the same time.

An investor should have a broker help make transactions for him because stocks must be sold and bought on a stock exchange. A broker’s job is to take orders from a client and buy or sell certain stocks. The investor may give the broker orders to trade when a stock hits a particular price or what the market can take. When a broker gets a specific instruction, they try to fulfill it by finding an appropriate buyer or seller. The broker works with another broker who represents another buyer or seller. Each broker will get a commission for the sale. Stocks can be more beneficial than other savings investments. They represent owning a portion of a company and the right to help make company decisions. A share equals one vote. In most cases, shareholders are asked to voice their opinions on important decisions. A stockholder also will get money from profits that the company acquires. Profits are give as dividends that could be doled out once or twice a year as the company sees fit. Stocks have the potential to gain more money than the average investment, like bank certificates of deposit and bonds. However, they also carry a greater risk. Investors should be educating themselves about the stock market and find the right type of strategy to use to make the greatest profit. Many will find that they will make more profit in stocks than other type of investment.

Anyone can invest in the stock market. Before, individuals such as businessmen and people with money to invest dominated the stock market investors, now, large corporations and companies have become buyers and sellers. These “institutional” investors have increased the stock market making it a very good investment. Takeovers and merges have been a deciding factor in the rise and fall of the stock prices for these companies. Generally, investors can buy shares of the companies that have been opened to the public for trading. These shares represent a portion of the company and investors are called stockholders. These means that they own part of the company. The prices are determined by the growth of the company and their profits and success or by its losses as well. The movements of the prices of the stocks of company can be seen on stock market indices. Stock markets have stock market indices to provide that all important information of the price movement to the brokers and the investors. Many people consider the stock market to be a very risky venture. As the prices drop and rise, your investment is on a roller coaster ride. There is no guarantee that the value of your stocks will go up. This is especially on cases stocks of companies that are just starting, but with the higher risk comes the bigger payoff. If the company makes it big you make a big profit. Stocks for starting companies are low and when it becomes a success, the prices will rise up. Large and well established companies and corporations have better chances with having their stocks growing.

Similar to NYSE is American stock exchange which is again in the financial district of the country called New York. The American exchange has stocks for trading but also has options for trading. The AMEX can trade smaller companies than traded in NYSE and hence it is attractive to a lot of companies. NASDAQ is the baby of them all though not in terms of the sheer size of companies listed on it and the full form of NASDAQ is National Association of Securities Dealers Automated Quotations. It began in 1971 and has almost any company you could think of listed there. Historically though it was known for technology companies like Microsoft and Intel and a lot of new technology start ups like to list here. This exchange does not have a physical building and it works a computer network where buyers and sellers meet through computer software and sell or buy stocks.

“If you don’t know where are you going… you will probably end up nowhere.”

So the question you should ask yourself is:

Why should I start trading in the stock market?

Is it the fun and excitement? Do you want to be rich? Perhaps you enjoy status of being a trader? Do you want to do a part-time trading or a full time trading? Or maybe you just want to secure your future.

For some traders, it’s an escape. They hate the world around them-their job, their boss, their spouse. No matter what is your reason behind trading, but trading has to be about only one thing… …Making A Profit

But making profit doesn’t mean that you’ll double your money every few weeks and start dating Hollywood movie stars with your newfound wealth. If anyone tells you that, please laugh at him loudly.

Trading is NOT A Get-Rich-Quick Scheme. It takes time to earn money and become successful. The most basic problem that we have found most traders struggling with is lack of direction.

Traders come into the market hoping to make money, but without any strategy. Many traders fail because their plan is too shallow or they don’t even have a plan.

Planning is a critical ingredient in a successful trading decision. It is rightly said-

Failing To Plan Is Planning To Fail”.

We know quite a few traders who have made a tremendous amount of money in the market, but within a year or two, they lost all of it.

What Is The Reason…!!

These traders viewed trading as a “Get rich quick scheme” and not as a real business. Their only true objective was to make as much money as possible, without any plan or consistency.

These traders believe that the “End justifies the means”, which means that making money, despite bad habits and reckless trading is good enough for them.

They end up losing everything.

Trading is a perfect business. And the best part is you can do it full time as well as part time. The choice is completely yours. But both type of trading requires a different set of rules, strategies, mindset and lot many things.

We will talk about that in the later section of this book. But for now, you must decide- Why do you want to trade?

Close your eyes and visualize what being a successful trader means to you. See yourself doing trading and making money consistently days after days and week after weeks.

Imagine the feeling of happiness it creates when you see money keeps on going to your bank account. How does it feel getting richer every passing day?

This is really a great exercise and works in almost any situation. It helps you formulate a solid, worthy, personal goal and keep you motivated and focused throughout this EBook.

ASSIGNMENT FOR YOU

Write down one primary goal you want to accomplish by trading in the stock market.

Take that goal and write it (-It is important) on a 3 X 5 card and put it where you see it when you wake up in the morning and before you go to sleep each night.

If you really want to burn this goal into your subconscious mind you should read it aloud each morning and before you go to sleep each night.

Believe me, this technique really works. This is not some “corny” technique I am writing here- this is one of the key technique Napoleon Hills teaches in “Think and Grow Rich”, the classic book on how to turn your thoughts into riches. You can see this technique live in action in some of the books written by marketing guru- Yanik Silver.

So do you have your goal clearly stated and written down?

Good.