Stock Market Investing – Planning Your Financial Success

Making money by trading in the stock market requires learning just how the market functions and using prudent strategies to gain a great return on your investment.

You need to become comfortable with the basics of stock market terminology and strategy to help determine how to approach your investment strategies. Upon understanding the basics, you can learn how to maximize trading opportunities for maximum gains. The stock market is definitely NOT a get-rich-quick scheme.

How to Succeed

It is nearly impossible to be successful with trading in the stock market until you know what you are doing (though some claim a monkey throwing darts at a “buy” or “sell” target could be as successful as any investor – but that’s another discussion…). Success requires proper planning and preparation as well as a great deal of knowledge about the market.

You need to make calculated, well-informed decisions to succeed with your investments while learning what to trade, when to trade it, and what techniques and strategies to use for maximizing the return on your investment.

Following are a few skills and techniques to help improve your stock trading proficiency.

Learn the Right Timing

You want to gains a sense of how long to hold on to your investments before selling. Knowing whether to hold onto your stocks for only the short-term or to hang in for the long-term is one decision you have to get right – at least when you have a lot of money invested.

A successful trader must be able to discern when the timing is right to buy, sell or hold. Timing is everything in the stock market, because selling too soon or late can make the difference between earning and losing money.

Make Decisions Based on Logic, not Emotions

All your decisions should be made based on a prudently calculated decision that takes into account all pertinent factors of the stock market. No matter how tempting it is to act off a hunch or your emotions (“This one’s a winner – I feel it in my bones!”), you should do your utmost to avoid it.

Sometimes your intuition may be right, but you want to be extremely cautious when making rash, expensive decisions.

This principle goes both ways: you also cannot allow your emotions of fear to paralyze you from making good, solid moves. Some decisions may be difficult due to the risk involved, but may be the best choice in the long run – such as “cutting bait” and selling when your stock price is spiraling downward. Weigh both the likely short-term and long-term scenarios.

Permitting your emotions to guide your decisions may work in a card game, but it’s a recipe for disaster in stock market trading. The best decisions are made drawing conclusions from the enormous amount of available data you have about the performance of the stock market and the specific stock you own.