Share trading presents a very unique opportunity to make money within a short timeframe. Making money from shares requires that a trader keeps in mind the following essential points.

1.    Research on the target company.
You’re advised to thoroughly research the company you intend to purchase shares from. Research should be done some time before you purchase the shares. Your background research should be founded on factors such as the target company reputation, market capitalization, Market share, and financial results. This information can be easily obtained from the company audited financial results either straight from their website or from financial magazines and newspapers.

2.    External factors that may directly affect the share price.
Making money from shares involves keenness in identifying those factors that have a direct effect on the share price of your target company(s). Share prices are usually depended on a number of external factors and which cause prices to fluctuate on a daily basis. These factors play a huge role is determining the demand for particular shares. External factors like political instability, financial results, scams, and more, can have a big influence in share prices thus warrant attention when investing in shares. Company mergers, management change and acquisitions are also factors to be closely observed.

3.    Timely decisions.
Making the right decisions at the right time is the secret to success in the stock market. Avoid impulse trading and instead focus on objective trading based on empirical data obtained from your research of the market. Impulsive trading could adversely affect your success as a share trader. Impulsive trading always results to losses. Be patient until the time is right to purchase the share at a price you deem appropriate.

4.    Learn the risks.
Shares like any other form of investment presents some risks that any serious trader has to be aware of. Risks associated with share trading are especially high in appreciated markets. Most shares maybe overvalued, hence a decision to purchase shares of a particular company should involve comprehensive study of the said company’s background.  Some of the things worth study are the company’s future plans, products potential etc.

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Dreams of fancy cars, luxurious holidays, loaded bank accounts, worry free life and the list is endless, perhaps you’ve rolled some or all of these dreams in your head at some point in your life. Peruse through the newspapers and you’ll encounter stories of many folks making millions everywhere, and maybe that’s true if you believe all that you read in the newspapers, on the internet and on TV.

Welcome to reality! Because things are seldom that easy. Its true there’s money to be made particularly in the bull market, (climbing share prices). Money can be easily made and in plenty. The downside is that most newbie’s are unprepared to for the unavoidable slump in the stock market. A couple of bad trades and these share market newbie’s end up burning their account equity severely, as a result become disillusioned and run from the market never to return.

The stock market is littered with tales of broken dreams and forlorn hopes. If such people ever decide to dare the market, then the cycle of bad luck begins again and soon they’re doomed to failure. Their problem is not bad luck but rather their attitude towards the market.

The market always rewards a trader amounts proportionate to efforts exerted towards learning the ropes of the share market, and realizing that you’re the biggest problem to your stock market success. Education for the trader is highly emphasized for the newbie.

Before you start trading, ask yourself the following questions and be honest with yourself when answering them.

a)    How much money do I want to invest?
b)    Why do I want to trade shares?
c)    What is my risk appetite?
d)    What are my profit expectations?
e)    How much time I’m I ready to spare for share trading?
f)    What do I want to trade in the stock market?

Education for the trader is essential in equipping the trader with the right set of skills necessary to successful share trading. As a share trader, capital preservation is just as important as profit making.  Done prudently, share trading can be very profitable and self sustaining.

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By purchasing a company shares, a shareholder automatically becomes a part-owner of the share issuing company. The share market is filled with tales of fortunes made and lost; this partly explains the reason why the stock market is so exciting and popular.  You profit from your shares by selling them at a price higher than the price you acquired them at; similarly, you suffer a loss by selling shares at a price lower than what you purchased them when the price falls, also called a bear market.

Whenever the company you invested in makes a profit, they share part of it with you as dividend. A shareholder is often an anonymous player in the share market and many make handsome profits. There is no holy grail to consistent profits in the share market, but prior to your odyssey into this exciting world, you should learn share trading basics.

Learning share trading basics will ensure that you’re conversant with the market lingo and other technical terminologies necessary to successful trading.  In order to trade shares, you have to approach a broker; this can be done electronically in an exchange floor. This means that you must familiarize yourself with the exchange floor environment; because it is here that your stockbroker organizes for your shares to be ordered. The exchange floor clerk locates your the trader from whom the shares can be purchased. Once they agree on price, a deal is settled.

Electronic transaction is the norm these days because of the efficiency and fast execution it affords. But even with electronic transactions you require a broker; the advantage is that order confirmations are instantaneous. In online trading, your broker will link you to the exchange network and search for buyers or sellers depending on your submitted order. Stock prices can not be foretold, they’re depended on various factors which cannot be easily predicted like geopolitical events and more.

Share prices fluctuate depending on demand at any given time. Any event that could negatively affect a company will also have a direct effect on the share prices of the said company. If you’re a novice in the stock market, learning share trading basics will undoubtedly equip you with sufficient knowledge to start trading.

Love life, not just the weekends. You only have one life, Live It! @ www.NicciAndLee.com