Stock Market Trading

This article explains the first rule of stock market trading ...

 first got interested in stock market trading when I was twelve years old.  The first two stocks I bought were Union Oil of California and Sears Roebuck department stores.  These were the only companies that I knew well since that is where my family bought our gasoline and shopped for almost everything else.  My stock market trading you must understand was only on paper.  However, fifteen years later, I became a licensed stockbroker for real and now my stock market trading was using my ideas and other people's (my clients) money.

The first and number one rule I learned as a professional was the same rule I happened on when I was twelve; in your stock market trading, only invest your money in companies that you know and understand.  I understood Union Oil.  The gas station was right down the street from my house.  Everyone knew my mother and father there.  When they gave away free calendars every year, they saved one for us.  I knew and liked the company.  That is the best rule to follow if you are beginning in stock market trading.

How many billions of dollars did ordinary people lose in their stock market trading during the late 1990's when they bought shares of companies that they had no idea about?  They heard the word Internet and they bought regardless if the company's business plan made any sense.  That is not wise stock market trading.  That is not even sensible gambling.

Stock market trading can be both profitable and enjoyable if you know what you are doing and how to do it.  Stock market trading is not brain surgery.  It is 80% common sense and 20% educating yourself.  The most successful and profitable traders I have known over the years were individuals that followed no one else's opinion but listened to everyone else's information and facts.  Stock market trading rumor is not what I am talking about.  I mean facts.

The big winners used their heads.  Made the buys and sells that they thought made sense and most importantly, in their stock market trading, they only invested in companies that they understood.  If they felt that the company's idea might make sense but they did not fully understand it, they educated themselves by finding out the facts.

Stock market trading is no more difficult that any other money-making proposition.  However, will all business ventures you always must know what you are doing.  If you do not understand the game, do not play.  The same applies to your stock market trading.

For more information about investing in shares, share trading and the stock market, see the "resources" section of this website, or go to articles about investing in shares.

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