Money Making Online

What about Stock Market Trading? Is it a good option for making money?

Well, as with many things in the life, it depends of you. Many people hear about a guy that spend some money in the Stock Market for buying stocks in a low price, and then sell those stocks in a high price. Later, these people go to stock market, spending their savings and some months later, those stocks have a lower price. People are desperate now, and fearing lose all the money, they sell the stocks in a lower price.

Now, these people say: “The Stock Market sucks. I lost my money”.

For these people there is a question: Do you know how the stock market works? Yes? Well, then why you were desperate in a simple drop in stocks prices? Not? Well, how do you think you will win in the stock market if you are an ignorant in this field?

Usually, people don’t buy the stocks themselves. They give the money to a broker, and this broker “invest” the money for them. But in most cases this broker is not a real investor. In most cases this broker is just an employee, who is paid even if your money is lost. So, this employee only take care about to maintain your account, and yes, they are trying you win something, but it is not likely you have a lot of earnings unless you take the control of your investment, but having the necessary knowledge about stocks, options, trends and the market strategies.

If you are really interested in Stock Market Trading but you only have a basic knowledge, I recommend you to use simulators in order to practice while you learn something else. There is a lot of simulators by Internet, even real time simulators (but real time simulators are not free) operating in market hours taking the real values of stocks.

But, if you are an amateur like me, maybe it is a good idea if you try a simple free simulator, and Google have some useful tools in order to start:

* Try Finance Google for find interesting stocks or public companies in NYSE or Nasdaq

Here you can register yourself for a portfolio (or use your Google account if you have one). You can select the stocks, buy them (with unreal money) and track the performance everyday for checking your earnings or losses. With your basic knowledge you can have a method in order to select the best stocks.

I have a simple method. Maybe you can use the same:

- Choose the field. Maybe you think Gold market is good now, or technological market, or Ethanol market, or Oil market, or commodities. You must be informed about the current events and have a logical sense about the market trends for future in a short, medium and large period of time.

- Look for stocks which the current price is close to 52Wk Low price (You can see that in Finance Google). This means the stock have a good price for buy, because the price is low.

- Calculate the increment (%) between the 52Wk Low price and the current price. Current price is always bigger than 52wk Low price. If this increment is less than 5%, maybe the stock will continue losing its value in the next days. Not good for me.

- If this increment is more than 10%, maybe you arrived very late, and the stock is expensive now. Not good for me.

- If this increment is more than 5% but less than 10%, is good for me: Price is sufficiently higher than minimal price in a year, but even is a cheap stock and it could have a big potential to grow. This is my Stock.

- Buy stocks in your virtual portfolio (by Finance Google). Usually I start with (unreal money) $ 1,000 and tracking every day. In this moment, I set in an Excel file a “peak price” that is equal to the value that you paid for each stock.

- Every day when check the new price for each stock, you can change the “peak price” if a new peak was reached since you bought the stocks (obviously).

- If any day the price is lower than decrease the “peak price” by 10%, it is time to sell. I sell, and usually I have an good profit, but sometimes I lose my unreal money.

Please, take this only for didactic purposes. Not for real investments! I am saying this, because It is working for me in my virtual portfolio. But, believe me, I must learn a lot of things about the stock market yet.

This is funny for me.

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