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Volatile .. Eno beyt7arak fl as3ar bsor3a ..laama yb2a volatile awy .. El risk zeyada A statistical measure of the dispersion of returns for a given security or market index.
Before you can start to trade you have to know in which stages a stock can be in. The stages tell you what to do when trading. Going short, long, or just stand aside in cash
Stage 1 is the stage right after a prolonged downtrend his stock has been going down but now it is starting to trade sideways forming a base. The stock just drifts sideways without a clear trend. Everyone hates this stock! The sellers that were once in control are losing their grip and the buyers are showing up. This stage can be long, and when you get stuck in it, your money will be tied up for a long while. So at this point, keep your cash aside . Finally stocks break out into Stage 2 and begins the uptrend. This is where the majority of the money is made in the stock market. You should better be long in this stage . Finally, after the glorious advance of stage 2, the stock begins to trade sideways again and starts to “churn”. Novice traders are just now getting in This stage is a bit similar to stage 1, except stage 3 is the stage following after an uptrend (and not a downtrend). The stock starts to move sideways and buyers and sellers are equal. The pros already unloaded there stocks or are still unloading. Stand aside when you see a stock getting in this stage This is the dreaded downtrend for those that are long this stock . But, you know what the funny thing is? You guessed it. Nobody believes the downtrend! The fundamentals are probably still very good and everyone still loves this stock . They think the downtrend is just a “correction”. Wrong! They hold and hold and hold, hoping it will reverse back up again. They probably bought at the end of Stage 2 or during Stage 3. Sorry, you lose. Checkmate
Selected topics in stock market
Selected topics in The Stock Market By: Mohamed Hamdy
Agenda <ul><li>Volatility </li></ul><ul><li>Stock Market Stages </li></ul><ul><li>Margin Trading Stock Market </li></ul><ul><li>Long Term Investing </li></ul><ul><li>Risk and Diversification </li></ul>
Volatility A statistical measure of the dispersion of returns for a given security or market index
Margin Trading Stock Market <ul><li>Buying on margin is borrowing money from a broker to purchase stock. </li></ul><ul><li>Amplifying losses and gains to the same degree </li></ul>
Margin Trading Stock Market <ul><li>A buying power example: </li></ul><ul><ul><li>Let’s say that you deposit $10,000 in your margin account. Because you put up 50% of the purchase price, this means you have $20,000 worth of buying power. Then, if you buy $5,000 worth of stock, you still have $15,000 in buying power remaining. You have enough cash to cover this transaction and haven’t tapped into your margin. You start borrowing the money only when you buy securities worth more than $10,000 . </li></ul></ul>
Long Term Investing <ul><li>Long Term Investing requires a plan </li></ul><ul><ul><li>Criteria : </li></ul></ul><ul><ul><ul><ul><li>stock is a good value at the time of their consideration, This is done to try and buy a stock when it is under valued </li></ul></ul></ul></ul><ul><ul><ul><ul><li>The company has been profitable one way a company can express its earnings is to issue a portion of those earnings as a Dividend to its shareholders. </li></ul></ul></ul></ul>
Risk and Diversification: Diversifying Your Portfolio Diversification is the most important component to helping you reach your long-range financial goals while minimizing your risk. Keep in mind, however that no matter how much diversification you do, it can never reduce risk down to zero
Risk and Diversification: Diversifying Your Portfolio <ul><li>There are three main things you should do to ensure that you are adequately diversified: </li></ul><ul><ul><li>1) Your portfolio should be spread among many different investment vehicles. 2) Your securities should </li></ul></ul><ul><ul><li> vary in risk. </li></ul></ul><ul><ul><li>3) Your securities should </li></ul></ul><ul><ul><li>vary by industry. </li></ul></ul>