Stock Trading
how to do it
TM
Money & Business published by Barnes & Noble
Stock Trading master the fundamentals by teaching yourself to:
Get ready for the opening bell.
Stock trading isn’t for the weak of stomach: it’s a fast-paced, risky, and exciting approach to making money in the markets. Before you place your first order,
• Understand the difference between stock investing and stock trading • Evaluate various trading styles and decide which (if any) is right for you • Utilize popular trading strategies, including basic technical analysis
Stock Trading vs. Stock Investing
Before you can decide whether stock trading is right for you, it’s important to understand the differences between stock trading and stock investing.
Fundamental Analysis vs. Technical Analysis
Stock investors use a technique called fundamental analysis to assess a company’s financial health, including its profitability and debt, to try to predict and profit from the long-term trend in the company’s share price. Investors buy stocks that they believe will increase in value gradually over time: most investors own stocks for at least a year, and some hold on to the same stocks for several decades. Stock trading is the process of trading—buying and then selling—a stock within a brief time period, which ranges from a few seconds to a few months at the most. The main aim of stock trading is to profit from short-term trends in share prices, regardless of a stock’s long-term prospects. To predict short-term trends in stock prices, traders use a technique called technical analysis in which they assess the recent price movement through close examination of stock price charts.
Critics of stock trading often dismiss technical analysis as a misguided and useless approach to investing. Their main argument against technical analysis is based on the efficient market hypothesis, which states that stock prices constantly change to reflect all the available information that might affect a
TM
Money & Business published by Barnes & Noble
Stock Trading master the fundamentals by teaching yourself to:
Get ready for the opening bell.
Stock trading isn’t for the weak of stomach: it’s a fast-paced, risky, and exciting approach to making money in the markets. Before you place your first order,
• Understand the difference between stock investing and stock trading • Evaluate various trading styles and decide which (if any) is right for you • Utilize popular trading strategies, including basic technical analysis
Stock Trading vs. Stock Investing
Before you can decide whether stock trading is right for you, it’s important to understand the differences between stock trading and stock investing.
Fundamental Analysis vs. Technical Analysis
Stock investors use a technique called fundamental analysis to assess a company’s financial health, including its profitability and debt, to try to predict and profit from the long-term trend in the company’s share price. Investors buy stocks that they believe will increase in value gradually over time: most investors own stocks for at least a year, and some hold on to the same stocks for several decades. Stock trading is the process of trading—buying and then selling—a stock within a brief time period, which ranges from a few seconds to a few months at the most. The main aim of stock trading is to profit from short-term trends in share prices, regardless of a stock’s long-term prospects. To predict short-term trends in stock prices, traders use a technique called technical analysis in which they assess the recent price movement through close examination of stock price charts.
Critics of stock trading often dismiss technical analysis as a misguided and useless approach to investing. Their main argument against technical analysis is based on the efficient market hypothesis, which states that stock prices constantly change to reflect all the available information that might affect a