The stock market is a world all its own and is intimidating to some people. Those who engage in stock trading should do more than just roll the dice. They need to have general knowledge of how the market works and possess information to back up their investment and trading decisions. This requires a lot of time and research. There are easier ways to make some money within the stock market.
Step 1: Purchase stocks of companies that provide the best service or make excellent products. Remember, consumers do positive things for a stock price. Approach things from a consumer perspective, looking at the products offered and the financials of the company.
Step 2: During a bull market, stock prices rise faster than historical averages. Reap some profits while at the same time continuing to hold some stock. When the stock price begins to drop, sell the holdings in portions.
Step 3: During a flat market or bear market, upward bumps in stock prices can represent a way to make money. Look for stock with a short-term bump that is cyclical and will yield a profit when the cost of the trade is included. Buy shares when the stock is at the low end of the cycle. Sell those shares when it is at the high end. Though you may not make a lot each time, the money will add up as the gains are repeated every several days or weeks.
Step 4: Purchase stocks that pay dividends, which are portions of company earnings paid to shareholders. In a bear market, dividend percentages may increase due to the low stock price. When the market improves, the stock price will rise, providing the investor with the incentive to sell and make some profit. This is cash in your hand. Investors can also reinvest dividends to increase the number of dividend-producing shares.