The Acorn of Investment

Posted on February 8, 2010
Filed Under day trading | Leave a Comment

The lucrative power of the stock market needs not be re-characterized or exaggerated to make this simple point: fortunes are made or undone via global financial markets. Your indulgence is much appreciated as such a statement is tantamount to stating two parts hydrogen to one part oxygen makes for a rather refreshing beverage. To be sure, the great Oz of finance, known collectively as Wall Street, trucks in fortunes. From the acorn of a small investment a veritable fortune can be grown.

I have stated the most obvious, but I humbly beg your indulgence. The real power of the financial markets is in the trade. An innocuous word, to be sure, but a powerful transaction. The purchase or sale of invested stock in a particular company can make or break a portfolio. In fact, it can make or break a bank account — or several millions of accounts. The key is knowing what to buy, when, and when to sell. So, for all practical purposes, it is a form of gambling.

The refrain from a Kenny Rogers song echoing through the halls of your mind, it would behoove you to, in fact, know when to hold them and when to fold them. What tends to foil the best and most clinical of investors is knowing when to sell. The covetous tend to hold onto their stock far too long, resulting in ruin. The over-eager tend to sell too quickly, cut short their potential profits. Success, of a long enough timeline, is contingent upon a happy medium.

The professional management of stocks has become something of a prestigious affair. Though a great deal of investment strategy can be gleaned and hired professionally, the prestigious financial houses adjacent to Wall Street have come to cater to this demand. But, for a price. The commission on stock sales would make the most overzealous opportunist blush. Accordingly, this has given rise to the most resourceful of characters, the day trader.

What your average trader could have learned in a moderately-ranked day trading course today would cause a rash of eureka head-slaps. It is no easy task to successfully trade stocks online. Note, the operative word is “successfully.” The fortunes and falls of a day trader are well documented, thanks in large part to the boom and bust of the Roaring Nineties. Alas, with the collapse of the Dot Com Bubble, so too did many a trader lose his shirt — literally.

If you are one of the bold, who has a deep desire to trade stocks online, take heed. Know your market and know your margins before venturing forth.

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