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Stock Trading Internet Basics We have all received them. Those stock tips from a co-worker, friend or family member about a stock that is certain to go through the roof in a matter of days. You wonder whether you should plunk down that $1,000 you had been saving for a new washer and dryer. You convince yourself to do so, saying to yourself that if the tip turns out to be true, not only will you have enough for the washer and dryer, but for that new camcorder and the trip to Hawaii you had promised to your wife. Making money investing can’t be that difficult can it? Stock Trading Internet Basics will lead you on your way to prosperity. You open up an Etrade trading account and purchase that can’t miss stock. Within a week, not only do you NOT have enough for the camcorder and the trip to Hawaii, but you squandered the money saved for your new appliances. Your $1,000 account is now worth $183.45. What happened, you ask yourself? Your stock guru contact seemed so solidly confident about his recommendation. You have just learned one of the most valuable lessons when playing the stock market: There are no shortcuts to investing. You get out what you put in. Below are 5 of the most common mistakes new investors make when playing the stock market. Paying attention to these Stock Trading Internet Basics will help you in the long run. 1.) THERE IS NO SUCH THING AS “STOCK TIPS.” – Any person that comes at you with a “stock tip,” is either an inside trader (which is illegal), or simply passing on a hunch. Truth is that most of the information needed to research a company is on the web. I particularly like to use the Finance section of Yahoo.com. There, all the information you need is at your fingertips. Company summary, historical prices, company headlines, key statistics, competitors, analyst estimates and opinions, insider transactions, major holders, balance sheets, income statements, and company cash flow are all readily available for consumption. When it comes to making money investing, there is nothing wrong with a “hunch,” so as long as the hunch is based on solid research. Familiarize yourself with the terms listed above and find out how healthy or unhealthy a company is for you. 2.) STAY AWAY FROM LOSER STOCKS ON THE WAY DOWN – Many people are enamored by stocks who hit 52 week lows. After all, who wouldn’t want to own a $5 stock valued at $25 a few months ago. What a deal! They buy the stock at $5, then at $4.50 a few weeks later, and at $3 a few weeks after that. They have committed the investor sin of trying to catch a falling knife. An investor needs to remember that when a company’s stock tumbles 50, 60 70, or more percent, there are reasons for the drop in price. The reason could be a bad balance sheet, a chaotic board of directors, or the possibility of bankruptcy. In any case, when a stock starts tumbling in a downward spiral, stay away from that knife! The trend is your friend. 3.) A PENNY FOR YOUR THOUGHTS? NO THANK YOU! – Every investor wants the biggest bang for their buck; the biggest return for the smallest possible investment. For this reason, some choose to invest their hard earned cash into penny stocks, considered stocks which sell for less than $5 a share. The problem is many of these stocks are not listed on the same exchanges as the larger publicly traded companies. As a result, Penny stocks do not have to disclose much of the same information that is mandated of companies listed on NASDAQ and the New York Stock Exchange. With limited available information, there is no way to be sure of the financial stability of a penny stock company. 4.) DON’T BE AFRAID TO PULL THE BUY TRIGGER. – It takes money to make money. We have heard that said time and time again. It is so true. Don’t be afraid to hit the buy button after your research is completed. So many times, investors will study a company, check-out the company’s financial health, and even visit a store location. After doing so they feel confident about the stock and its price, but find excuses not to invest. They may not find the time, or may choose not to trust their own research. Remember this: all the research in the world will not make you any money; only buying a stock can potentially make you money. After the research is done, an investor needs to learn to trust themselves. Pull the trigger and then put your knowledge to the test. Otherwise, you will always be talking about the stock that got away. 5.) NEVER BE AFRAID TO TAKE A PROFIT. – Very simply, don’t be greedy. Most people would be happy with a 20% return on their investment, yet if their $5 investment in a stock turned to $6, they not might consider selling the stock for what they believed to be such a small profit. A gain is a gain. Never be afraid to take a profit once your investment crosses the 20% threshold. By the same token, don’t think twice before selling a stock once it’s lost 7% of its original value. It’s a hop, skip and a jump from 7% to a 20 or 30 percent loss. Selling a stock that has dropped in price doesn’t have to mean giving up on a stock. You can always buy more shares once it reaches a stable price point and starts to move up again in price. If you avoid the common stock trading Internet related mistakes listed above, you will be that much closer to reaching your investment goals. If you have already committed some of the mistakes outlined in this article, learn from your mistakes and move on. Remember, those who don’t learn from history are bound to repeat it. Making money on line is possible, provided you put in some time and effort. Do you want to learn how to make money? Just Follow The Link. Want to save money with Claim Jumper Coupons? Click here. Tags: Basics, Internet, Stock, Trading View this post on my blog: http://stocktips.valuegov.com/stock-trading-internet-basics/