You want to make money on the Stock Market and that's why you are here.
You will discover what you have to do, how much you can earn and if it really is possible .
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If you want to make money on the Stock Market , there are some things you have to know .
Those who insist on trying to make money in the financial markets without learning a few minimums only take sticks. Sticks and more sticks . If you are interested in investing in your training, you may be interested in consulting my complete trading course .
I am going to teach you the three basic things that you have to know so that you can understand and apply the tricks to make money in the Stock Market that I am going to explain:
Trick number 1 to earn money on the Stock Market
The Stock Exchange is not a casino . That's the first thing.
That is, there are no random dice that decide whether the price of your shares (or gold, or oil, or the IBEX35, or the euro / dollar, or whatever) is going to rise or fall.
Prices always move for something , for some reason.
But that does not mean that you can always know the reason. In fact, it is normal that it is not known .
When I speak of the motives that drive the Stock Market , I am not referring to reasons such as China's economic pressure or the like.
This is fine for newspapers , but they are not real reasons, but justifications .
The motives that drive price are always those of the law of supply and demand . That is what moves the Stock Market.
And after them, sometimes, comes the news .
Therefore, the one that operates based on news is always behind and always ends up losing money. Always . It's a matter of time.
Trick number 2 to earn money on the Stock Market
Still, the stock market and the casino roulette look alike in one very important thing :
Take a good look at roulette:
This roulette , even being one of the most benevolent that exists (American roulette is much worse), will make you lose money
always ; no matter how lucky you are. It is designed to remove the pasta .
In a casino roulette , you can bet almost 50% . For example, red and black or even / odd .
In other words, if you bet on red and it comes out red, you get back the bet and win the same amount , but if it doesn't come out red, you lose the bet .
This leads us to think that, if you bet many times, you will end up just as you were; because half the time you will win and half you will lose. And in the end, you get the same.
But it is that non-red is more likely than red : There is a green box (zero).
That kills you completely: Zero is neither red, nor black, nor even or odd .
Whatever you do , you are always more likely to lose than win.
Whatever you do, playing roulette is patiently losing money .
Well, this is the same in the Stock Market :
If you operate randomly , in the long run you always lose .
That is, if you buy without looking , closing your eyes on what you buy and when you buy it, in the long term you lose .
This is so because there are commissions (from the broker and the market, they are inevitable). It is as if there is always a green square of zero.
In addition, there is one more important factor : The market is incredibly well designed so that whenever you think it is a good idea to buy, you do it at the worst possible time . And the same thing happens when it comes to selling. Everything you do on impulse is practically guaranteed to be wrong .
Knowledge consists of knowing what to buy, but also many other things:
- Know what to buy
- Know when to buy. (People often forget this little detail. The when is as decisive as the what .)
- Know how much to buy. (This is one of the most important, and few people know how to do it well).
- Know when to sell. (This is the most difficult by far, and hardly anyone knows how to do it right.)
I can help you with these four parts. Teaching this kind of thing is my specialty , actually.
Trick number 3 to earn money on the Stock Market
With the right knowledge , financial markets are no longer a game of chance (loser) and become a game of skill .
Here the best wins , not the luckiest.
You don't need luck to win .
Still, since there are a million ways to make money in the markets, it is usual that people are constantly changing their method without actually learning one.
The apprentice trader usually very impatient . They want to earn money before they gain skill , and that leads them to go too superficially for what they have to learn. This in turn leads them to think that the method does not work and they switch to a new method.
So over and over again .
I know people who have been stumbling for many years, from method to method , from course to course, and from teacher to teacher. Without realizing that what they have to do is stop for a moment and get serious about what they already have.
They only need to specialize at once and endure one season there; but they don't realize it .
Of course you can.
The great underlying idea is that you don't rush.
All this is set up for the unwary to lose their money in the Stock Market and hand it over to the experts.
And this happens every day .
And again.
Don't be a fool .
Please, I ask you.
Everyone wants you to be. Except you .
Maybe you were looking for fast money or tricks to earn money on the Stock Market quickly , but you see that this does not work like this .
What people want is one thing, and how financial markets actually work is quite another .
The good news is that, if you stop for a moment to do things right, you have great possibilities ahead. You can earn a lot of money, but you have to do things well.
Just don't rush :
It depends on multiple factors , but basically they could be summarized in these:
- Size account
- Operation type
- Skill and experience
It is clear that, the greater the account with which you operate, obtaining the same results , the greater the benefit .
If you want a figure, earning between 10% and 20% per year by trading would be a really high target .
It is not easy, but if you do it right, it is not unattainable .
However, the type of operations you apply also greatly influences this figure.
It is not the same to make long-term investments , in which you can obtain a return of 6% or 7%, than to operate intraday , being able to multiply the return (and also the risk).
The 10% -20% annual consider it to swing trading .
You have to take into account that the profitability and, therefore, the money you can earn with the investment in the Stock Market, will also depend on your skill and experience .
At the beginning you will lose money yes or yes.
You will invest it in real time , training and practices , but you will realize how little by little you are achieving a more than respectable profitability .
Also, if you have a knack for this, you have a better chance of earning more than the average.
This topic is much more detailed in this article: Earn money on the Stock Exchange yes, but how much? Incidentally, it includes a final gift 😉
Many investors are aware of all the ways to make money from stocks . Anyone who believes that it is only possible to accumulate equity in the Stock Market in one way is wrong. The market offers different ways to enrich with stocks.
Stock valuation may be even the best known way to make money on the stock market, but it is not the only way .
Here I mention 5 ways to earn with Actions.
1- Capital appreciation.
It is the most common way to earn money from stocks. In it, shares are bought at a price considered low and sold when the price increases. Buying cheap and selling expensive is a practice widely used by those who trade daily. This is also a risky strategy, since the value of the shares fluctuates constantly influenced both by the indicators of the company and those of the national and global economy.
2- Dividends.
It is the part of the profit of the company that is used to remunerate the shareholders , which is divided according to the number of shares of each investor. By law, open capital companies on the stock exchange are required to distribute at least 25% of the annual net profit among their shareholders. Some companies even distribute more than that.
3- Interest on own capital.
Interest on equity capital also functions as a form of distribution of company profits to its shareholders. Although they are not required by law , but many companies end up paying as a way to attract more investors. For shareholders, this is a way to make money from stocks very similar to dividends . The big difference between them is in the distribution part. For the company, the main advantage of distributing interest on own capital is bookkeeping . Once this value is accounted for as cost and therefore reduces the amount of income tax paid by the company.
4- grant.
The bonus consists of the distribution of the company's results through the issuance of shares when the company decides to incorporate part of the profit in the share capital. Therefore, the new shares are distributed free of charge to current shareholders in proportion to the number of shares they already own.
5- Subscription rights.
Subscription rights are the right and priority in the purchase of new shares of the company in proportion to the amount withheld. This occurs when there is an increase in the capital of the company and more shares will be issued . So for current shareholders they have the opportunity to keep the same proportion of the company's capital or buy more shares, often for a cheaper value than they are listed on the stock exchange.
Subscriptions are one of the ways to earn money with shares that can be advantageous for those investors who want to invest in more shares of the company. The subscription rights are also negotiable, the investor who does not want to increase the acquisition of more capital of the company, can sell the subscription rights on the stock exchange.
As you can see there are different ways in which you can grow your capital in one of the most profitable financial markets.
You have probably heard a popular definition of what a stock is: "A stock is a stake in a company's property. The stock represents a claim on the company's assets and earnings. As you acquire more shares, your stake in company ownership increases. " Unfortunately, this definition is incorrect in some key respects.
For starters, shareholders do not own corporations; they own shares issued by corporations. But corporations are a special type of organization because the law treats them as legal entities. In other words, corporations file taxes, they can borrow, they can own property, they can be sued, etc. The idea that a corporation is a "person" means that the corporation owns its own assets. A corporate office full of chairs and tables belongs to the corporation, and not to the shareholders.
As the company continues to grow, however, there often comes a point where early investors become eager to sell their shares and monetize the profits from their first investments. At the same time, the company itself may need more investment than the small number of private investors can offer. At this point, the company considers an initial public offering, or IPO, transforming it from a private company to a public company.
In addition to the public / private distinction, there are two types of shares that companies can issue: ordinary shares and preferred shares.
Preferred shares operate similarly to bonds, and generally do not include voting rights (this may vary by company, but in many cases preferred shareholders do not have any voting rights). With preferred shares, investors are generally guaranteed a fixed dividend in perpetuity. This is different from ordinary shares that have variable dividends that are declared by the board of directors and never guaranteed. In fact, many companies do not pay dividends on ordinary shares at all.
There are two options when you invest in stocks:
1. Treasury shares.
When the shares increase in value you make a small profit by selling them. You also make a profit when dividends are paid on your shares.
2. Invest in stock trading
In this case, you do not physically buy shares as an asset, but instead buy a contract for the price difference . This allows you to build an effective investment portfolio and make tangible gains in a shorter period, although stock prices change less intensively than, for example, currencies.
- High and Low - These are the highest and lowest prices at which a stock has traded in the last 52 weeks (one year). This does not normally include the day before trading.
- Company Name and Stock Type - This column lists the name of the company. If there are no special symbols or letters after the name, it is a common action. Different symbols imply different kinds of actions. For example, "pf" means that stocks are preferred stocks.
- Quote symbol: This is the unique alphabetic name that identifies the stock. If you watch financial television, you have seen the ticker tape scroll across the screen and quote the latest prices next to this symbol. If you are looking for stock quotes online, always look for a company with the quote symbol.
- Dividend per share: indicates the annual payment of dividends per share. If this space is blank, the company does not currently pay dividends.
- Dividend Yield: The percentage yield of the dividend. Calculated as annual dividends per share divided by the price per share.
- Price / Earning Ratio: Calculated by dividing the current stock price by earnings per share for the past four quarters. For more details on how to interpret this, see our tutorial on the topic.
- Trading Volume: This figure shows the total number of shares traded for the day, listed in hundreds. To get the actual negotiated number, add "00" to the end of the number.
- High and low of the day: indicates the price range at which it has been negotiated during the day. In other words, these are the maximum and minimum prices that people have paid for the shares.
- Close: Close is the last trading price recorded when the market closed on the day. If the closing price rises or falls more than 5% from the previous day's close, the full list for that stock is in bold. Please note that you are not guaranteed to get this price if you buy stocks the next day because the price is constantly changing (even after the exchange closes during the day). The shutdown is simply an indicator of past performance and, except in extreme circumstances, serves as a stadium of what you should pay.
- Net change: This is the change in the dollar value of the stock price from the closing price of the previous day. When you hear that an action is "ready for the day", it means that the net change was positive.
The desire to earn large amounts of money has always thrown investors into the stock markets. However, earning money in stocks is not easy. It not only requires lots of patience and discipline, but also a great deal of research and a solid understanding of the market, among others.
The key to success is strategy in whatever form you choose to invest in stocks.
Although a sure-fire formula for success in the stock markets has yet to be discovered, here are some golden rules that, if followed carefully, can increase your chances of performing well:
1. Avoid thinking like a sheep
The typical buyer's decision is often heavily influenced by the actions of their acquaintances, neighbors or relatives. Therefore, if everyone nearby invests in a particular stock, the tendency for potential investors is to do the same. But this strategy is bound to backfire in the long run.
Needless to say, you should always avoid thinking like a sheep if you don't want to lose your hard-earned money on the stock exchanges. The world's greatest investor, Warren Buffett, was surely not wrong when he said, "Be afraid when others are greedy and be greedy when others fear!"
2. Make an informed decision
Proper research should always be done before investing in stocks, but that is rarely done. Investors generally take the name of a company or industry to which they belong. However, this is not the correct way to put money on the stock market.
3. Invest in business that you really understand
Never invest in a stock. Invest in a business instead. And invest in a business that understands. In other words, before investing in a company, you must know what business the company is in.
4. Don't try to control the market times
One thing that even Warren Buffett doesn't do is try to control the timing of the stock market, although he does have a very strong opinion on the appropriate price levels for individual stocks. However, most investors do the exact opposite, something that financial planners have always been warning them to avoid, and therefore lose hard earned money in the process.
5. Follow a disciplined investment approach
Investors who consistently invest money in the right stocks and patiently hold on to their investments have been generating exceptional returns. Therefore, it is wise to be patient and follow a disciplined investment approach, in addition to taking into account a broad long-term vision.
6. Don't let emotions cloud your judgment
Many investors have lost money in the stock markets due to their inability to control emotions, particularly fear and greed. In a bull market, the lure of quick wealth is hard to resist. Greed increases when investors hear stories of fabulous returns on the stock market in a short period of time. This leads them to speculate, buy shares of unknown companies, or create heavy positions in the futures segment without really understanding the risks involved. Instead of creating wealth, these investors burn their fingers. In a bear market, on the other hand, investors panic and sell their shares at rock bottom prices. Therefore, fear and greed are the worst emotions felt when investing, and it is better not to be guided by them.
7. Create a broad portfolio
Diversification of the portfolio across asset classes and instruments is the key factor in obtaining optimal return on investments with minimal risk. The level of diversification depends on the risk-taking capacity of each investor.
8. Have realistic expectations
There is nothing wrong with having high expectations for your investments, but you can be in trouble if your financial goals are based on unrealistic assumptions. For example, many stocks have generated more than 50 percent return during the big run in recent years.
However, this does not mean that you should always expect the same kind of return from the stock markets. So when Warren Buffett says earning more than 12 percent in stocks is pure dumb luck and you laugh at that, you surely shouldn't be laughing.
9. Invest only your excess funds
If you want to take risks in a market as volatile as this, then see if you have surplus funds that you can afford to lose. You don't need to lose money in the current scenario. Investments can also bring you great returns in the coming months.
But no one can be one hundred percent sure. That is why you will have to take risks. Needless to say, you invest only if you are up to date with excess funds.
10. Monitor rigorously
We are living in a global village. Any major event that occurs anywhere in the world has an impact on our financial markets.
If you decide to test yourself as an investor and make money from stock trading, Libertex is happy to offer you favorable terms for CFD trading . You must remember that any operation on financial exchanges carries risks. To minimize risks, Libertex offers a Demo account , through which you can simulate operations in the market without incurring losses, before feeling confident to carry out real financial transactions.
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