Psychology

One of the requirements when becoming a trader is keeping yourself up to date. Financial news releases are reported everyday. Apart from reported profits, forecasts by so called gurus and interviews by CEO provide information about the company that you may be investing or trading on. It is known that whatever happens in the news are mere confirmation of what's already in the market, but what about new releases?

Share trading is not as lucrative as anyone thinks. With the uncertainty of the market, you won't be able to turn $100 into a million, unless you have a big bankroll to make it happen and lots of time in your hands. Its natural for newcomers to lose as much as 10 percent of the capital. The word ''trader'' also conjures up a rather lonely and boring image for people. Someone who is sitting in front of two or more computer monitors, studying and crunching numbers everyday, vigilant not to lose any window of opportunity.

Much has been said about the debate whether which one is more efficient: Technical or Fundamental analysis. Some prefer to based their decision on a stock's movement in the market, while others prefer to look into a company to know what they are buying for. Technical analysts prefer to spend their time on price action and chart patterns without the need to research on the stock's company. Fundamental analysts on their other hand prefer to look into a company's annual performance to make sure that they are not buying some shoddy business.

There hundreds of companies that you can invest in. If you are a newbie scanning the market to decide what you should buy or where put your money in, the list can be overwhelming. Apart from that the research can be daunting. You have to go through a lot of websites or paperwork. But even before you begin what is it that you have to look for in a company that will make it a good investment?

It is often said that you can't predict what will happen in the market, the best you can do is ride it and get out when needed. As a newbie you may have heard experienced traders something about ''riding the trend''. Identifying and interpreting trends is one of the basic concepts in technical analysis, so its no wonder that its often used by traders when they establish general rules when trading. Even though a trend can be easily illustrated through a line graph, it has different parts that have different implications in an going trade. However what is really important in looking at a trend?

A lot of traders talk about strategies and pitfalls of trading, but all of that isn't possible when you miss a key component. Budgeting is the very core of all financing ventures. Saving up two grand will let you trade, but it won't earn you money in the long run when you don't know how to organise and maintain your cash flow. More importantly, even before you save up, you must have budget plan in hand so that you won't go flat broke when you jump into share trading.

Getting stuck in a losing streak is harsh, especially if your just a beginner. Trying to figure out where you went wrong is not easy for someone who's not that familiar with the ins and outs of the stock market. Even though every trader has a different methodology, there are common components that you have to go over. You can do all the research that you can but all data can only tell you want happened before not guarantee what will happen in the future. If you are in a losing streak, its time to go over your trading plan or rules.

Due to the possibility of turning a hundred dollars in thousands overnight, many newbies are lured into the stock market. They all dream of their own rags to riches story. There is no qualification to be a trader so any John Doe can make money with enough skill. Unfortunately, some of them are carried away by the hype, thinking that they struck an untapped gold mine and all they have to do is knock on the right place.

The Myth

There are wide array of methods and information for any beginner who wants to trade in the stock market. Trading the sharemarket can be overwhelming at first, especially if you don't know much. Some successful traders might tell you what you should do - or someone pretending to be a guru to prey on unsuspecting newbies - but others insists otherwise. Fortunately there are nuggets of wisdom that can be very helpful.

What you need to have: