How does stock work, and where do i begin?

im very young, and still in high school. So im living off my parents, i work 2 jobs, i have money to play with. And im looking to kind of.. set up a good source of $$ for the next few years. What would be a good investment? Where do i buy stock at? I have an idea how it works.. what is a reasonable starting amount? Thanks for your time! You could make my next few years very easy! : p Thank you very much!

Your first step is to head on over the the library or book store and get a copy of "investing for dummies". It is a very good introductory text. There are others also but that one will give you the back ground you need. Now if you are under 18, you will have to have one of your parents open an account for you. The on line brokers are very reasonable in the commissions they charge. Some require a large deposit than others. I especially like Fidelity becuase of the large amount of research material they provide. They are more expensive than other on line brokes such as Scottrade at $7.00 and TDAmeritrade at $10.00. Neither has the debth of research as Fidelity.

Another option open to you is mutual funds. For a beginning investor, they are in some ways a better choice becuase they provide diversity for a small investment. I expect though that becuase you are young you will want to attempt to hit the jackpot by buying a stock or two that might double in price in a year or so. I know because that was my strategy when I was young. Sometimes it worked and sometimes it did not. Now I am older and quite happy with an overall 10% annually or even less in a bear market. 0% return during a bear market is great.

There is a lot of risk in buying just one or two or even three stocks. There is the risk of loosing half or more of your investment. But there is also the opportunity of making 2x or even more on your investment in just a year or two. You will learn as you go. A couple of mine this year did 2x. I had some that actually lost quite a bit also though. Overall, I am more than satisfied thoough.

You are very young indeed... young enough to think that the next few years could be "very easy" by trading stocks. Nothing is further from the truth. More than 90% of all beginners in the stock market.. LOSE ALL THEIR MONEY...

The stock market is a highly complex investment arena, not a charity box where everyone can just come in and take some money away from time to time. Investing or trading the stock markets starts from adequate investment and trading knowledge. There are quite a number of things you need to learn before you can even start thinking of the stock markets ...

1. You need to understand how the stock market works and what it is exactly about.

2. You need to know what are the different styles of trading in stocks and shares.

3. You need to read about why so many people lose their shirts in the stock markets so that you can avoid their mistakes and also decide if this is a risk you want to take.

For all these issues and more, you can read about them from some of the articles that I wrote at http://www.mastersoequity.com/articles.htm

After you are adequately armed with the basic concepts and ideas, you need to know how to find profitable stocks to trade or invest in. You can do that the easy way by subscribing to stock pick services (example http://www.stockpickmaster.com ) or you can learn to use charting tools and softwares to find stocks with parameters that you can pre-define. (example http://www.worden.com )

All in all, investment and trading is a lifelong education and non stop learning. No one is ever done learning and catching up with changes in the markets.

If you care to read about how I went from completely broke to retired millionaire trading stocks and options by 28 years old, you can go to http://www.mastersoequity.com/

Remember, the slogan "Just Do It", Just won't do for the stock markets. If profiting in the stock markets is as simple as buying a single stock , then why are so many people still poor?

After you have all the above mentioned knowledge, you need to ask the following golden questions before you can decide whether a stock is worth buying or not :

1. Why are you of the opinion that this stock will rise?

2. Is your opinion valid in the first place?

3. When are you expecting it to rise? Can you hold on for that period of time or longer?

4. What is your expected entry price? After what price would your expected profit margin be too thin to enter upon?

5. Where is your expected stop loss point? What is your stop loss point based on? Where will you tell yourself that it is time to take a loss and get out?

6. Where is your expected profit taking point? What is your profit taking point based on?

7. Does the way you are buying the stock allow you to hold on until your expected profit taking point?

8. How much of your money should you dedicate to this one trade?

9. What is the level of primary, secondary and idiosyncratic risk you are undertaking when deciding how much of your fund to use?

10. What is your cashflow need? Does your cashflow needs allow you to hold the full lifetime of the stock?

After you are able to answer all these questions confidently, THEN you are ready to... PAPER TRADE your stock strategy. Yes, even at this point, you are NOT READY to trade for real. You should trade on PAPER for at least 6 months and become consistently successful BEFORE you take your stock strategy into real life.

Then.. you are ready to start... but there is still no guarantee of success as paper trading is very different from real trading. You will need another maybe 1 year or 2 trading very little money and be consistently successful BEFORE you are ready to increase your stakes.

So, as you can see, success in the stock markets is not easy at all the the less knowledge you have, the more risk you undertake. I lost hundreds of thousands in the stock markets before I become successful.

Take heed and good luck.

http://www.mastersoequity.com

http://www.optiontradingpedia.com

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I think the best way to learn about the stock market is to first see what the best investors are buying and selling and why. Check out http://www.top10traders.com - this is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors. You can also read posts on investing from the best traders, as well as share your own investing ideas.

Here are this month's best traders:

http://www.top10traders.com/Top10Standings.aspx

Good luck.

Hi, i suggest a great site with plenty of Issues related to your Investing and everything around it. it also provide clear and accurate answer to many common questions.

http://investing.sitesled.com/

I am sure that you can get your answers in this website.

Good Luck and Best Wishes!

Getting started: step by step

While this subject may seem trivial to most experienced investors, I often hear people asking what they need to do in order to start trading stocks. If you are new to the stock market or are just wondering how to get started, here is what you will need to do:

First, stocks are not a good short term (less than 10 years) investement. Think stocks for the long term, like building up a retirement nest egg.

Second, the best way to buy stocks is to buy a diverse portfolio and hold it, no trading. If you don't have the money for that buy a market index stock fund, like the DOW or the S&P.

Scottrade (If you have at least $500.00 USD)

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