Misunderstanding About The Stock Market PDF Print E-mail
Written by Shaun Rosenberg   
Saturday, 17 July 2010 10:41
The stock market is a fantastic place to grow your wealth over the long term. But there are a lot of misconceptions out there about how to profit from it and what the best way to approach it is. Here are just a few of those misconceptions out there for you to avoid.
by ShaunRosenberg


The stock market is a fantastic place to grow your wealth over the long term. But there are a lot of misconceptions out there about how to profit from it and what the best way to approach it is. Here are just a few of those misconceptions out there for you to avoid.

1. You Need to Be a Super Genus to Trade Stocks

Most people believe that in order for you to be successful trading the stock market you have to have an IQ in the 160+ range. That isn't true, there is very little in this world that the average man cannot accomplish.

IQ is not the major factor for success in this world. You can be a millionaire with a below average IQ and you can be a bum on the street with an above average IQ. The difference is vision and determination.

2. You Should Watch the News and Know Everything About a Company

One other misconception is that if you would like to be successful you will have to watch the news and learn as much as humanly possible about the specific company before getting into it. This is just not true. For starters it is not possible to know everything.

Second there are a lot of rumors and facts that are simply useless and will actually get in your way. There have been some very successful traders who like to stay away from the news because it harms their trading to watch it.

Traders that are successful tend to have their own systems and ways of determining if a stock is actually a good buy or if it is not.

3. Buy Low and Sell High

Buy low sell high is an interesting concept. But it does not classify what is low and what is high. It also fails to mention that stocks tend to trend. So, if a $50 stock drops to $40 it may be low, but it will probably continue to drop until some major event turns it around. It may not turn around until it is at $15. Everyone who bought at $40 would have to wait years before they can even break even, and that is if they do break even.

On the other hand you can make money buy buying stocks high; you just need to sell them higher.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

For some stock market tips on trading visit Shaun's site on the stock market basics This article, Misunderstanding About The Stock Market is available for free reprint.
Last Updated on Friday, 23 July 2010 19:09