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The stock market operates on exactly the same principle. Your portfolio is nothing more than inventory to be bought and sold, the same as if the stocks were used cars or toys. Your job is to buy cheaply, mark up the merchandise, and resell it. The quality of the merchandise is the important factor. Not only does what you buy have to be cheap, but also, there has to be some prospect of people wanting it later at a higher price. Basically, you want to buy Mercedes caliber merchandise because people always want it later. You can get a great deal on a truckload of hula hoops, but it doesn't much matter how cheaply you buy them if they sit in your warehouse because no one wants them.
Certainly there is a place in some portfolios for the speculative flyer, the occasional trade, and the IPO, but in managing accounts, pay close attention to the quality and reputation of the stocks that are purchased.
Likewise, the market is a formidable opponent and one not to take lightly. Understanding sound risk or reward principles will help you size up the market as an opponent. The Stock market trading tips and strategies will help you score often, while attempting to reduce your losses.
Momentum is a very short-term Stock trading tool. Following weekly stock momentum is very helpful when timing trades as well, but it gives a longer horizon. It is an intermediate tool, since changes to negative or positive weekly stock momentum last seven weeks on average. The monthly momentum is used more to highlight or signify a longer-term turnaround.
Category: InvestingStock Market Principle was written by:Author:Anthony GreenAdded: Mon, 04 Feb 2008 07:21:29 -0500 This Article Has Been Read 61 times View all Anthony Green's articlesAbout the Author: Collect your free stuff like stock recommendation and investment strategy articles onstock market on http://www.5minutetrader.com/benefits.php. |
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