Successful Stock Investing: Keep it Simple

March 30, 2010

Successful Stock Investing

Successful stock investing can be very complicated and it can be very simple depending upon your approach. Successful stock investing starts with deciding on a strategy for stock picking, buying stock, and holding for long term investing. It includes knowing how and when to sell stock. Investing in the stock market involves homework, attention to detail, diversifying a stock portfolio and other strategies for managing investment risk management. The most successful stock investing comes from adhering to a few simple rules and not letting the psychology of investing or stock market tips distract you. Use of technical analysis tools such as Candlestick chart formations will help find stocks that are at the bottom of their cycle allowing for cheaper purchase of a promising stock. There is no perfect system for  picking stocks. That having been said there is such a thing as smart stock investing which will reduce your stock market risk and increase your chances for good stock market results. Smart investing is choosing a simple strategy that fits your available time and your current knowledge of the equity market. Stock investing basics are to make more than you lose month by month and year by year.Value stock investing is a means of choosing stocks that are currently underpriced, have good product potential, sound financials, and commanding positions in their market sectors. The market under prices stocks for various reasons. Why is not especially important. What is important is to pick up promising growth stocks, ones that pay good dividends year after year after year, or stocks that have a low price to earnings ratio when they are at a low price. A good rule of thumb for beginning investing in the stock market is to limit the number of stocks owned to five, in different market sectors. A good rule of thumb for successful stock investing is to never, never buy stock at current  stock market prices. Place limit orders. A buy limit order will be executed at or below the limit price you specify. A sell limit order will be executed at the price you specify or higher. If you buy or sell at market price you cannot control what you pay or what you receive. There are times in successful stock investing where you have purchased a stock and it has had a good run. The stock begins to cycle up and down and fundamental analysis or Candlestick analysis tells you that the stock is reaching the top of its potential. However, you do not want to sell on the low side of the current trading range. You choose a stock price at which you are willing to sell, near the top of the range, and place a limit order. You exit the stock position with a nice profit. Successful stock investing is deciding if you are going to  invest short term, take profits, and look for another stock each time or if you are going to buy and hold, profiting from stock splits and reinvest your quarterly stock dividends. However you choose to invest in stocks start by keeping it simple, manage your time wisely, and protect your investment capital by diversifying your stock portfolio with stocks from different market sectors. http://www.candlestickforum.com/blogs/2010/03/successful-stock-investing.html