The Stock Market Challenge for a Newbie Investor

This article is for a newbie trader who is new to the stock market and is ready to put his investment in to stock market. For all there was a day when it was every body’s first day in Investing. At that time we were dealing with the same question of how to invest in the stock market beneficially. We were all having the same illusions and committed the same mistakes. The experience of many investors has been nerve wrecking. For some people the investment is of such importance that they don’t want to lose any money. They wanted to have winning trades right from the beginning. They are not ready to accept the loss. But as experience of most of the investors and traders that loosing is the part of the game and one must accept losses as well. Nobody can have 100 percent profitable trades. Also the emotions play a major role in deciding the profits and losses in the trade. The emotions in general convert a profitable trade to a losing one. Thus emotions are very necessary to control. One must trade without the involvement of emotions and strictly act according to the rules of the strategy.

One of the essential aspects of learning about the stock market is learn about the fundamentals of the stock markets. Learn various ratios related to the stock market. The profits and the earnings as well as the P/E ratios and many other concepts need to be understood. Thus fundamental analysis is an important instrument to judge the condition of the company. In order to determine whether a company is worth of Investment, the fundamental analysis is the most important tool. Besides the fundamental analysis the learning of technical analysis is also important in anticipating the price movements. Thus both technical and fundamental analyses are the building block of stock market analysis.