Stock trading can be extremely complex or very basic depending
upon the depth of investing research an investor is willing to take
on. One strategy for stock trading is the buy and hold
strategy. For example, buying $1000.00 of Dell computer stock in 1990 and
holding for 10 years could have produced a return of over $1 million.
If there are any amazing challenges in the world of finance it's stock trading at the right time and in the right stocks. Stock trading is a mystery to so many people that this author has put together a series of websites attempted at unraveling some of the stock trading mystery.
There are two schools of thought in the investing community with a million variations in between the two schools. The first school of thought is fundamental analysis and the second is technical analysis.
Fundamental Analysis: Fundamental Analysis looks at the company from the viewpoint of the underlying fundamental value in the company. A fundamental analysis gives more importance to companies that have an expectation of performing better in the future through business operations, and as a result of the company performing better in the future, the stock holder, will benefit. An example of fundamental analysis is making investment decisions or stock trading decisions based on the growth of the company earnings relative to the price earnings ratio. Fundamental analysis may include very "technical" review of financial data and relating financial ratios. Learn more about stock trading using fundamental analysis by clicking this link.
Technical Analysis: Technical Analysis typically looks at the historical stock price performance and or other variables associated with previous trading of the stock to make projections about the future direction of the stock price. An example of technical analysis is using the two hundred day moving average as a trigger to sell a position in a stock. Technical analysis uses past historical price trends to forecast the future direction of a stock price. The stock trading technique of selling a stock if it falls below the 200 day moving average or "200 dma" is well known technique used by many stock traders. Another example of a stock trading strategy is to buy or sell stock when the 10 day moving average gets close to crossing the 50 day moving average. A second example displays a stock trading system involving technical analysis to analyzes the price movements of IBM.
Stock-trading
Important Disclaimer: Stocks are risky
and every dollar you invest is is at risk of total loss. Their are no
guarantees in the stock trading and this site is not intended to give advice on
particular investment decisions or buying and selling of stocks.
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