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How do you learn to trade the stock market succesfully?

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dxkj

Lifer
Are there basic guidlines that can get you started? I look at how big it is, and how many different factors are involved, and can't begin to wrap my brain around it. In the late 90's it was basically invest and make money, now it actually requires some thought 😛

I thought mutual funds were safer, and even if they are Im still down 35% on them (6 different funds). Is this something someone can learn to do in their spare time, or should it be left to people who do this for a fulltime job to decide where to stick money.


Just curious.
 
do you want to actually trade stocks like a trader or just do some successful personal investing through a broker.

if the former, you'll need a company to sponsor you to take the series seven and then have you train with their more experienced traders until you can do so on your own with some success.

if the latter, you'll need to do a lot of research into the different prospective companies in which you wish to invest.
 
Originally posted by: dquan97
Learn how to accurate value the shares of each company.
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Bingo. Of course it takes a LOT of work to do this and that's why there are so few that are successful long term. No quickie fixes here.

 
Originally posted by: dxkjI thought mutual funds were safer, and even if they are Im still down 35% on them (6 different funds).
Click to expand...

Disclaimer: I may not know what I'm talking about, so nothing in my post should be used as a basis for any personal investment decisions.

I hope you bought those funds right before the crash, but even so, I can't see how you are down 35%.
I have 7 funds in my 401k and the past 12 months performance is:
+19%
+22%
+22%
+41%
+26%
+51% (T.Rowe Price Science and Tech fund)
+36%


Mutual funds are safer only because they spread your risk out among multiple stocks. You can certainly still lose money, but you don't have the risk of losing everything because one company fails.
If you just want to invest for your future, you may want to get the help of a financial planner who can help you make the right choices. If you really want to play the market and realize it is a gamble, my only suggestion would be to do a lot of reading and see what analysts think about various companies. Then make your own decisions. Just remember that you can't predict the future. All you can do is make an educated guess and hope you are right.

As an example, when I started my 401K two years ago, I had to decide which funds to use. This was really the first time I've ever had to make a decision about an investment. I decided to put a large chunk of it into science and tech. For the two previous years, this tech fund had taken the biggest loss (over 50%). I decided to put a large portion in this fund for several reasons:
1. It was my opinion that science and tech wasn't going away anytime soon. It was still very important to our society.
2. The stock prices had stabilized and weren't really dropping anymore, so I "guessed" that the only way for them to go was up.
3. I thought the tech industry crash had helped weed out the bad companies. I figured the one's that were left must be the strongest companies with the best chance of surviving and growing in the future.

So I made an educated guess and luckily it has paid off with 50% gains in the last year for this fund.
 
I've taken a few investments classes, so I know how to take some information, do a regression, and interpret the data, but I am certainly not a pro. Even the Harvard MBA grads often don't beat the "dart throwers." I personally rely a lot on intuition and the opinions of friends. Between both sources, it's sometimes possible to "feel out" certain industry trends and predict who will benefit.

For example, early last year, while Delta Air Lines was still struggling, AirTran announced it was breaking ground on a new facility in Atlanta. I decided to invest in the company and made like a 50% return at least last year.

When it comes to mutual funds, I consult these guys.
 
Originally posted by: dxkj
Are there basic guidlines that can get you started? I look at how big it is, and how many different factors are involved, and can't begin to wrap my brain around it. In the late 90's it was basically invest and make money, now it actually requires some thought 😛

I thought mutual funds were safer, and even if they are Im still down 35% on them (6 different funds). Is this something someone can learn to do in their spare time, or should it be left to people who do this for a fulltime job to decide where to stick money.


Just curious.
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Bear markets are a buyers dream. During the bear market over the last couple years I purchased a considerable amount of equities, which have recently made me very strong gains.
 
I trade stocks when I'm bored at work. In fact I'm doing it right now. IT takes a lot of practice and a lot of mental control. It's almost a self discovery, where you will learn exactly how willing you are to take a risk. When I started, I made massive losses in the thousands, of my own money, but I was determined to learn it and figure out the trends... sure enough I did and am now sitting on a nice gain. Pick a few volatile stocks and notice how they trend. Some stocks are sure money makers at certain times of the day.

Dont bother with fake money, coz ultimately once you put real money on the line, all rationality flies out the window. Spend a month just looking at how the stock moves intraday. See if you can get a feel for the stock, when it is likely to spike etc. After a few monhs you'll know how it behaves with 80% certainty. Then you trade with those chances.

I would start with about $3000 and go from there.

Ultimately fear and greed will become your 2 best friends and you'll have to learn how to control both emotions in order to be successful. Can you take a $3000 loss on $25,000 in a matter of a minute and not bat an eyelid? If you can then you are in control and the stock is not controlling you. Have a backup plan in adance. When are you going to pull out both on the upside and downside.

I trade with Ameritrade and havent run into any problems.
 
Originally posted by: dxkj
Are there basic guidlines that can get you started? I look at how big it is, and how many different factors are involved, and can't begin to wrap my brain around it. In the late 90's it was basically invest and make money, now it actually requires some thought 😛

I thought mutual funds were safer, and even if they are Im still down 35% on them (6 different funds). Is this something someone can learn to do in their spare time, or should it be left to people who do this for a fulltime job to decide where to stick money.


Just curious.
Click to expand...

your best bet is to leave it to the "pros" and just pick some mutual funds (or preferably, index funds).
 
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