Finance and Money » Stock Market http://ebloging.com Finance, Trading and Forex, Insurance, Loan and Mortgage Sat, 24 Jul 2010 21:54:00 +0000 en hourly 1 http://wordpress.org/?v=3.0 Greed And Fear http://ebloging.com/stock-market/greed-and-fear/ http://ebloging.com/stock-market/greed-and-fear/#comments Tue, 16 Feb 2010 20:29:19 +0000 arief http://ebloging.com/?p=197 Greed and fear are the major players in the stock market. These two emotions are the  driving force behind almost all market participants – Institutional mangers, stockbrokers,  Investors, traders and yourself.

You might be saying to yourself that greed and fear will never get in the way of my trading,  but believe it or not they will be. It is not something to be ashamed of. It is something you  have to admit to, come face to face with, If you are to become a successful stock trader or  investor.

What do greed and fear look like in the stock market trading arena? You have been watching a particular stock for some time now. It has set up perfectly, so you pull the trigger. You bought it at the perfect price and now it is moving higher just as you thought it would.

Now greed steps up to the plate and says to you, this is going to be a rocket ship. So you buy some more shares. Or your stock moves a few points and goes passed the price that you decided to get out. Greed tells you this baby is going higher tomorrow so you hang on.

When stocks make strong moves to the upside greed from all the cumulative market participants joins the move. Stock prices usually fall faster then they go up, and when this happens, fear now steps up to the plate.

Lets look at the example above, where your stock went through your get out price and you held on because greed was by your side. The next morning the stock price gaps down. Their is heavy selling all morning long. Greed is telling you to hang in there the price will come back. The price keeps going down, now you get a knot in your gut, and your knuckles are turning white. Fear is now by your side, but by now it is to late, your nice profit has turned into a loss.

Everyone goes through this until they have mastered the ugly faces of greed and fear. Master this and you are well on your way to becoming a successful stock trader.

]]> http://ebloging.com/stock-market/greed-and-fear/feed/ 0 Choosing a Stockbroker http://ebloging.com/stock-market/choosing-a-stockbroker/ http://ebloging.com/stock-market/choosing-a-stockbroker/#comments Tue, 16 Feb 2010 20:26:47 +0000 arief http://ebloging.com/?p=195 It is true that even though you can choose your own investments you must still use a stockbroker to execute the orders. You do not have to rely in their advice though it may be helpful. You can make your own selections but you will still require their services to invest. There was a time when you had no choice about the type of stockbroker to utilize. There was only one type of broker, the full service brokers, and they controlled the market. The commissions that they demanded for their services were very high but this was the industry standard. This contributed to the notion that the stock market and stock market investment were beyond the means of the average person and only for the very affluent.
The initial loss of control of the market by these full service brokerages occurred in 1975 and discount brokers emerged. They charged a fraction of the fees the full service brokers did and as such were a big hit on the market. They offered the same great services but were affordable to the average individual as the cost were significantly lower. Another great innovation was the introduction of the internet. This was a great innovation as there was greater trading efficiency as a result.
The overall effect of all the changes on the stock market was that individuals now had access to a ton of information that was never accessible to them previously. It is a debate however whether these avenues have in fact enhanced investments and made better investors. In the case of persons that do their homework and seek out the truth behind the hype the answer is a definitive yes. The investors out their can now choose the type of broker they require from the range available.
There are four categories of brokers. These are the discount/online broker, the discount broker that provides advice, the full service broker and the money manager. The discount/online broker is basically an order taker. They do not offer advice and will not tell you when to buy or sell a stock. There may be research available and other account management tools but the choice of investment in the stock market is entirely up to you.
The variation of the discount/online broker that assists customers is the nest type. They do not offer full consultation services but will have more research than order taking sites. They will offer newsletters and investing tips but most likely not recommend particular stocks. You are not totally on your own with this option but you will still need to do a lot in terms of deciding on the best stock investment.
The full service broker will provide recommendations on specific stocks and the broker will also access your financial situation to determine your needs and investment options. This service is suitable for the investor that does not have the interest or time in making their investment decisions.
The money manager is made for the investor with a hefty investment sum. This broker will handle only significant portfolios and will invest and manage the entire account for a percentage of the assets under investment. This option can be expensive but very worthwhile in the long run.
Whichever option that you choose make sure it suits your purpose and that you are covered by the Securities Investor Protection Corporation. Ask about backups and other options in case of technical problems and ensure that your broker has your best interest at heart.

]]> http://ebloging.com/stock-market/choosing-a-stockbroker/feed/ 0 An Overview Of The Stock Market http://ebloging.com/stock-market/an-overview-of-the-stock-market/ http://ebloging.com/stock-market/an-overview-of-the-stock-market/#comments Sat, 15 Nov 2008 23:43:03 +0000 http://auditfix.com/?p=34 When you are interested in investing in the stock market one of the first things you will need is a reliable and affordable stockbroker. At one point in time, a stockbroker was seen as a very high priced person that was extremely hard to understand. In today’s world, stockbrokers have become much different, they have begun to make their services cheaper to obtain and in such a way that is easier to understand. This is an extremely wonderful change for the simple reason that you will not be able to trade in any way, shape, or form without a stockbroker.

One of the major rules within the stock market is that no person is allowed to trade within the stock market unless they are a certified stockbroker. A stockbroker, within the United Kingdom twelve million investor’s trade in the stock market, performs every trade that occurs and each one has enlisted the services of a stockbroker.

So you are probably now wondering, what exactly can a stockbroker do for me? There is a wide range of abilities and services that any stockbroker can offer you, at the same time there are also various ranges of fees that will be collected from them. Typically, a stockbroker will charge a commission, a set fee, or some combination of the two. In regards to the services a stockbroker can offer you, there are three basic levels that include only execution, portfolio management, and advice.

When a stockbroker only deals with the selling and buying of particular shares, per the instructions you give them, this is generally called execution only or in softer terms dealing only. With this type of service, they do not offer you any type of advice on any action you want perform. Typically, investors that are experienced or novice in investing will use this type of service. Execution only is cheaper and extremely efficient the fees the stockbroker charges can range anywhere between £20 to hundreds of pounds, this will depend on the specific stockbroker you choose.

Portfolio management is extremely detailed and the most expensive type of service performed and dealing with advice is typically a little more expensive than execution only, because the stockbroker will offer advice and views on what is happening within the stock market. The stockbroker at this level of service will also take the time to explain anything you may not understand very well.

Within the portfolio management service, you can separate these into two other categories these are advisory and discretionary. When under the advisory category, the stockbroker will create a proposal of a portfolio for you; however, he or she will not take any action without express permission from you. Within the discretionary category, your stockbroker will completely run all aspects of your portfolio and will give you reports as needs on how the portfolio is working.

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