Investing for beginners guide
There are 3 major Market players present at any given time in the market.
Hogs or pigs are new comers or amateurs with false market assumption and unrealistic expectations. They read 1-2 stock market books or take 1-2 crash courses in trading and pretend like they know all about market. Usually they end up in slaughterhouses during big market movements.
Second participants are Sheep’s, those moves in herd. These watch market channels, follow market gurus and take their advice for investment. But never learn a thing about markets. Most of these also end up in slaughter houses in difficult market conditions.
Third and most of the time winning participants are professionals. They watch market closely, do own research, have lot of market experience and always make money in longer terms.
How they find the stocks?
Hogs usually look up to market channels, financial newspapers and ask buddies to suggest them a good stock. Usually enter in market at top and most of the time never take profits off the tables or never controls the risk.
Sheep’s follow herd trend or remain dependent on market gurus but at end poor risk management and impatience approach push them into losers.
Professional on the basis of experience, do own technical as well as fundamental research find good companies with value and better long term prospectus and invest in them. They always take controlled risk and watch their money closely.
200 days moving average is the only simple secret.
200 days moving average is simple and most important indicators for stocks. Stock trading above 200 days moving averages considered as bullish ones while stock trading below them usually remain bearish ones.
Beginners always start with investing in blue chip companies whose stocks are trading above its 200 DMA. This is most simple but working technique for small investors.