Learn Stock Market Trading

Analyzing a company in order to decide whether or not to buy its stock is a complex process. Famous investors like Warren Buffet and Peter Lynch strongly advise choosing a stock based on the financial health of the company. Most of the time stock investing is decided on the stock’s past performance itself. It is always suggested to do your due diligence if you were to invest in the stock market. Especially nowadays, in this economic downturn, most experts were proven wrong and market volatility is sometimes nerve wrecking.. Here are 3 things you can look for in the company’s financial statements that can tell you a lot about it’s strength.
Cash flow per share is the amount of current cash revenue running through the business, divided by the amount of shares outstanding. Why is this important? Because a business can have a strong balance sheet and still run aground due to lack of cash.
Here’s how that can happen. A balance sheet with a high amount of accounts receivable can potentially show a large, healthy profit. But the accounts receivable are amounts that are owed to the company, not available cash in the bank. If an emergency arises that requires more cash than the company has available (think of a tornado demolishing a warehouse full of inventory, and a high insurance deductible), the company can find itself strapped for cash.
At the very least, if it can borrow money, it will incur a new debt and decrease profits. At worst, if it can’t borrow money, it could end up going bankrupt or entirely out of business. So cash flow per share is an important indicator of a strong company. Cash is always king whether a company is small or the biggest. The present economy has proven this concept to be very true.
Current ratio is another important number to look at. It is a measure of current assets divided by current liabilities. It includes short term assets (cash, inventory, current accounts receivable) and short term liabilities (payments due within the fiscal year).
It represents the strength of a company to pay its regular operating expenses, unexpected expenses and how well it is positioned to take advantage of sudden opportunities. You’re looking for a minimum ratio of 2 to 1 (assets to liabilities). The larger the ratio, the better.
The last factor is its dividend yield. This is a measure of the cash dividend that a company pays, dividend by its current price. It’s important to look at the dividend yield over a 12-month period of time. A good dividend usually indicates a strong company’s financials.
What you are looking for is a dividend payment that does not change, but a yield that is increasing. That indicates that a company’s stock may be currently undervalued, and may be a good investment. This is especially true if the cash flow and current ratio numbers are strong.

1. Cut your losses. Let your profit run.

Always remember to set stop loss point.

2. Learn from your losses.

Make each loss as a lesson to enrich your investment experience.

3. Don’t be greedy.

People always turn their large profits into losses because of greedy.

4. Never leverage in a losing position.

Most of people try to leverage in losing position. It’s a BAD idea.

5. Observing.

Standing aside is a good idea when you cannot judge which the coming direction is.

6. New mindset to beat the market.

Nowadays, fast money is the new market trend, long term trading already out dated.

7. Discipline and patience is the key to win.

Don’t chase high if you are not sure when will the market reverse.

8. Apply only few strategies to suit different stocks.

Using too many strategies will make you confuse.

9. Narrow down your focus.

Do not try to focus on too many stocks at once. Limit to 6-7 counters.

10. Find a good mentor.

A good mentor is the golden key to your investment success.

Dr. Steven Lee (Ph.D) is # 1 Best-Selling Author of Creating Wealth in Stock Market

Get your free ebook “Money Fish” from http://www.DrStevenLee.com

The AllSportsMarket is a financial exchange using a professional trading platform to buy and sell issues of sports teams. It is just like the stock market, but with sports teams! You compete with other players for real money. Money is earned from the ups and downs of the prices of teams and from dividends paid when teams win. The AllSportsMarket is 24 hours, 365 days a year – you can trade at anytime and as often as you would like.
You can fund an account for as little as $25 or try the “no catch guest entry” to check out the user interface. Unlike the stock market, where you need a hefty upfront amount to get started, and gambling where you can lose all your money at once, you can start off with a minuscule amount of money and not lose it all in one shot.
Buy Low and Sell High
Just like the stock market, you make money off of the ups and downs of the underlying security. In the case of the AllSportsMarket, the security is the issue of the team. Buying shares with the intention of selling them later at a higher price to make a profit is called long. In ASM, you make the difference minus the total commissions you pay.
This is the simplest way to make your gains, but it does take some timing and patience. The big question is what do you consider high low? A good thing to look at is the prices of the rest of the teams in the league. You should expect that the better teams will have higher prices, but there will be the occasional discrepancies for one reason or another. With that said, you have a range of prices and you should look to buy good teams that are in the low price range. Do as much research as possible to find out what teams are being undervalued.
Dividends
Another way to make money (and one of the keys to success in ASM) is dividend payouts. Every game your team wins, the dividend pot grows. You are paid dividends based on league specific pay outs and payout schedules.
The dividend strategy is an approach to make gains from dividend payouts. This is where you buy shares of a team specifically to capture the dividend payout. There are different dividend payout schedules depending on the league you own shares in. The teams that have higher dividend reserves pay higher dividends. Dividend reserves change from game-to-game depending on the leagues specific rules of dividend transfers for the winner and loser of the game. In the trading platform they list the highest dividend reserves (see the figure on the right).
Dividends are great in the sense that they reward for choosing winning teams. For example, over the course of a long season, the Detroit Pistons will likely win more than they lose, and will therefore pay out a good amount of dividends.
You need to be careful when buying shares solely for dividends – the share price may go down leaving you with a net loss even after you capture the dividend.
Selling Short
You can also make money selling short. This involves borrowing a share and selling it expecting the share to decline in price so you can buy it back at a lower price. Selling short can be more risky due the fact that you can lose more than what you put in since the price has an unlimited upside potential. When you long, the stock can only go as low as $0.00 and you only lose as much as you put in. When you short you could lose what you put in and more.
For more tips and strategies, visit http://allsportsmarket.sportslizard.com/ and download our free eBook.