The primary motivation at the back of every investors mind for buying any stock is profit, whether you choose to sell immediately or wait for a longer time before you sell to access your profit is a matter of choice, a decision I think you should take responsibility for instead of leaving it in the hands of your broker.

There are clues ever present in the capital market that tell you when to sell your stock, when fully understood can save you from loses and can also make you get the benefits for which sake you invested your money in the first place. You have to constantly be on the look out for these red flags or signs that remind you it is high time you bail out of certain stocks in your portfolio. Let’s get you started, shall we!

SELL WHEN YOU REACH YOUR TARGET PRICE

Before you buy any stock, you must settle in your mind by reason of sound facts available to you a target price that you intend to sell your stock for an appreciable return. When you reach your projected price, once you reach your objective that is the best and most reliable time to sell.

SELL WHEN YOU OBSERVE FUNDAMENTAL CHANGES

Changes that affect the fundamentals of a company must be taken very seriously. When you observe that the fundamental of a company is weakening or depreciating in terms of profit capacity, when a company profit potential has reached its peak and it starts declining is time to consider offloading your shares in such a company.

SELL AFTER THE CLOSURE OF REGISTRAR

If you are a stock trader, one who buys and sells stock actively in short durations; you might consider selling after the closure of registrar. If your goal of dividends and possibly bonus scrip in a company has been achieved, in other words, you bought into a stock because you want to avail yourself of the dividends and possibly bonus, after closure date of registrar is a good time to sell, because other stock traders like you will also be selling which can cause the price of the stock to rally down.

The bottom line of stocks trading is acquainting you with the appropriate time to buy a stock and the most suited time to sell, that in my humble opinion is the crux of stocks trading.

Basically there are two groups of stocks, preferred and common stocks. Preferred stocks are comparable to bonds because their returns are fixed. Preferred shareholders get first dibs on dividends in good times and in assets if peradventure the company goes under. In other words, the risk of a preferred shareholder is limited, they are mainly interested in dividends. Very few companies issue preferred stock.

When investors talk about investing in stocks, they are referring to common stocks. The vast majority of investors are found in this class, common stockholders take on a few dimension of risk compared to preferred shareholders though common share holders command more voting power at annual general meetings.

The five kinds of stock in discussion fall under common stocks. An understanding of these stocks will greatly enhance your stock trading prospect. I don’t know your goal  when it comes to investing, one thing I know however is that you will be able to find one among the five stocks that fits your goal and temperament.

GROWTH STOCKS: Are stocks with great potentials for growth, they grow faster than the economy and sometimes than the stock market itself more often than not. The risk level is minimal; investors are attracted to it because they have good earning growth over the long run. Investors in this stock know that over the long term their portfolio is secured.

INCOME STOCKS: Investors who buy into this kind of stocks do so because it doles out a large portion of its profits. Income stocks pay as much as 60% to 80% to investors as dividends compared to other stocks. Income stocks are almost immune to changes in the market because investors are confident that they will receive dividends.

BLUE CHIP STOCKS: Derives its name from the poker game, the blue chips usually have the highest value. They are sector or industry leaders. They are big companies that have been around for a long time, they have strong fundamentals. They pay steady dividends and most times bonus scrip. Though their prices don’t grow very much, they are good options for retirement portfolios; they are best suited for the long term.

VALUE STOCKS: Are under priced stocks that has great potential for growth; look at it this way, value stocks sell below their real value which make them very attractive. If you compare the low price of value stocks to its earnings, you will understand why stock traders are attracted to it. They are good options for investors interested in growing their portfolio.

RECURRING STOCKS: These are stocks whose performances are affected by the swings of the economy. When the economy goes up or down a recurring stock responds likewise. Their performance depends on the dictates of the economy; therefore, the best time to invest in recurring stocks is when the economy is performing well.

Your investment options ultimately boils down to you knowing what your goals are in the first place, that way you can hold a combination of these stocks in your portfolio for the purpose of balance.

    Every field of human endeavor have its own terminology that is associated with it, the stock market is no exemption. Therefore this article seeks to make you get familiar with some of the day to day terms of stock trading.

a. Share. Describes the total share holding of a company divided into bits or slices to be purchased by institutions or individuals.

b. Securities. The unit shares you hold are well protected to the extent you invested by the regulatory authorities. Once a share is created, it cannot be destroyed, stolen, and can only be transferred.

c. Equity. Means the distribution and sales of shares are equitably done i.e. once a price is fixed; it remains the same for everybody irrespective of where you live unlike property investment whose prices are affected by location.

d. Stocks. Describes the total volume of shares held by the individual in company.         

e. Rally. Means simply that the stock market goes up from whatever point it stood at when the rally started.

f. Blue Chips. Describes solid, quality stocks on the stock exchange e.g. Nestle, First Bank, Cadbury, Nigerian Breweries, Zenith Bank. The term is derived from the blue chip used in gambling especially in poker, which has the highest value.

g. Correction. When the market has moved rapidly in one direction, then changes (usually not so rapidly) in the other direction.

h. Long pull. How high an investor thinks a stock price will go before they sell.

i. Pull back. When the price rise reaches its peak, slows and then stops and begin to decline or fall back, people begin to sell at this point.

j. Bottom out. When the price has gone as low as it can, investors begin to buy again.

k. Liquidity. When we talk about liquidity on a stock exchange, we are talking about how easily and quickly a company shares can be converted to cash. If it is very liquid, it means is easy to trade in the shares.

l. Bull trend. Upward move or trend. It means the market is going up and is doing well, as reflected in share prices.

n. Bullish. Investor who believes that the market prices are going to go up.

o. Bearish. Investor who believes that the market prices are going to go down.

p. Stag. Investor who wants to make profits from new issues of shares. He buys the shares before they are listed. Then sells them at a higher price soon after they are listed.

q. Automated Trading. Is when the buying and selling of shares is done on a computer? dealers enter buy and sell orders for shares into an electronic trading system on a computer. The computer automatically does a transaction with the best selling and buying prices.                                                                            r. Brokers Contract Note. The broker’s contract note is very important. It shows everything about the deal that the stockbroker has done for you. It tells you how much you have to pay the stockbroker for the shares he has bought for you. If you have sold shares it tells you how much you will receive for the sale of your shares.

s. Certificate of Stockholding. Shows how many shares you own. It is a very important document. You must keep it safe place.

t. Capital Market. Refers to the Stock market, it is a platform for raising money or capital from the investing public to meet company’s financial needs.

u. Money Market. Refers to Banks and other financial institutions that offer loans investment opportunities and capital for businesses.

Getting familiar with stock trading terms is an invaluable asset to any investor worth its salt. Don’t disregard it, it could make the difference in your investing career.

It is important dear stock investor that you understand that irrespective of what stock  trading experts  have  put forward as the sure-fire reasons responsible for picking hot  stock’s, one foolproof truth that you need to understand, is that it is investor’s sentiment  towards a stock that ultimately drives the price of a stock either up or down.

Therefore,  it is imperative that you should familiarize yourself with this great but mostly  overlooked fact that has a great influence on the direction to which investors tilt their focus. If investors are favorably disposed towards a stock, they will generally patronise a  company’s stock, conversely, they will demonstrate indifference to such a stock if their sentimental drift says otherwise.

1. One of the principal reasons my friend you should not forget, that attract  investors towards a particular stock, is that investors always react favorably to companies that has consistently given increased dividend and bonus to their shareholders.

2. When a company’s product or service is widely accepted by consumers,  investors believe that such a company will always produce high returns for investor’s  portfolio.

3. Whenever an institutional investor invests into a company, investors’ interest are awakened because they think that the price of such a company most likely will appreciate, so  there will be rush to buy the shares of such a company.

4. High earning per share has always attracted the attention of investors. When you discover a company’s profit after tax standard is higher than the corresponding previous year, know that investors will react positively; the effect is that the price of the  stock will rally upward.

5. When a well respected expert predicts or picks a stock for his list, the word  goes round quickly; people begin to buy more of that stock which invariably jerks up the price of the stock. Don’t you ever undermine the power of word of mouth advertisement,  its influence is awesome.

6. The announcement of the latest trading style or trading software has a great influence on the sentiments of investors. The way investor’s sentiment works is amazing, when information gets to forums and communities online, or an investment newspaper carries a bold headline like… Stock Trading Robot Capable of Cranking  High Returns to Your Bank Account… as its headline, investors reacts the way ants are drawn to sugar.

Understanding the underlying reasons responsible for the direction or flow of the  sentiment of investors is a great and valuable asset that you must cultivate; keeping tabs on the factors that influences the sentiment of investors, will be an invaluable tool that will always assist you to enlarge your portfolio.

Mistakes are great learning tools of life; we learn and grow by mistakes. Some of the aspects of life you have mastered today are accumulations of mistakes that you did not give up on, but do you know that one mistake in stock trading action or decision can be disastrous, it can incapacitate your portfolio and therefore it is very important you understand how to avoid these stock trading mistakes. Lets get started shall we?

1. Overdependence on Stockbrokers

Stockbrokers are a fantastic bunch of people; a good stock broking firm would be one that has a sound research department. Your stock broking firm is supposed to be your backbone in terms of stocks picks, but these days stock broking firms have abdicated this very important responsibility for personal gains. Therefore, you must take responsibility for decisions bordering on stock picks, when to buy and when to sell.

2. Depending on hype to buy a stock

Many stock investment journalists are bias in their write up concerning certain stocks in the capital market. They do this either because they have vested interest in such stocks or they are sponsored to write sensational articles in their columns in order to create artificial interest about a stock, therefore endeavor to carry out your research employing sound analyzing tools that are readily available to you on different platforms both online and offline.

3. Overdependence on overzealous share analyst

Once every now and then, you get compelling tips from your share analyst about a hot stock that has a sure fire prospect, ensure you do your own thorough investigation about that hot sure fire stock before calling your broker to buy; otherwise you will be courting trouble with eye open. No matter how hot a stock is; common sense reasoning should warn you to cross check  your tip by considering information from several reliable sources. 4. Buying a rising stock without knowing the reason behind the rallying up

There are some investors that form the habit of watching daily trading activities in the pages of investment newspapers, observing stocks whose prices tends to be rising steadily, they get excited and take position by buying into such equities without knowing the force responsible for the upward pull. Understand that there are many reason why the price of a stock will rally up, ultimately there is a peak point where there will be a reversal of the price, if you don’t understand it, it could be disastrous avoid it; you could end up in a mess.

Information is key when it comes to making awesome profits from the stock market, get practical, workable and sound information concerning every stock you are interested in. Weigh each stock in their own strength; it’s not a difficult task if you know how to apply basic stock trading skills.

Four kinds of sentiments you must avoid as an investor if you want to make fabulous wealth from the  stock market.

1. Sentimental attachment2. Sentimental Rumor3. Sentimental feeling4. Sentimental hastiness

                    Sentimental attachment is when you have fallen in love with a particular stock to the point that you can no longer be objective in terms of current market facts that counts against one patronizing such stocks, listen dear investor you cannot afford to fall in love with any equity as a stock trader, it is absolutely dangerous to the health of your portfolio. Please avoid it like a rat avoids a cat.

 Sentimental rumor. Avoid at all cost, the dangerous habit of trading or buying stocks on the basis of unsubstantiated rumor, note rumors are good when they’re supported with solid fundamental facts. Sentimental rumor can be liken to the herd mentality… follow the direction that everybody is following… Don’t form the habit of trading or buying stocks because you see everyone buying a particular stock, please know the true facts behind the rush before you pitched your tent.

 Sentimental feeling. Avoid trading or buying stocks on the basis of what you feel about a particular stocks, My wife loves Close-up toothpaste with a passion but that cannot translate to making Unilever a sure-fire buy if the company does not have a strong fundamental credentials to encourage me to do so. Your feeling only counts if it is hinged on sound trading ethics or know-how.

 Sentimental hastinessThe hasty spirit makes one to act irrationally, when it comes to making quality decision. The fact that you bought a stock for 15 and it begins to make a loss does not mean that one should rush to sell. I bought both Lasaco and Cornerstone insurance for 3.15 and 4.28 respectively on the 11th of July, 2007, by September both had dipped to 2 and 3, I never panicked because I knew two things. One, that prices of stocks rises and falls according to the dictates of demand and supply. Secondly, I knew by available indices before me that the next sector that will experience a bullish session will definitely be the insurance sector on the basis of solid facts that were available to me, many investors panicked and sold, they recorded huge losses in the process, by the end of November the Federal Government had released the financial reserve of insurance companies back to them. I sold Lasaco 4.85 and cornerstone at 5.20 and both were still rallying up as at the time of writing this article in early January,  2008.

Stock trading realities supports that before you invest in any stock, you must first and above all things sit down and do a thorough analysis on all fronts before staking your money to a stock, this will aid you to be composed and confident. Your trading should be based on sound foolproof facts and not presumptions.

Investing in stocks is an art that has gained tremendous acceptance in recent years globally. Today, many a investors do trading online employing the services of stockbrokers via the internet, there are those that depend on online robots programmed to buy and sell stocks depending on trends per time. A vast majority of investors do offline investing which is more accepted, most investors are at home with offline investing since they are able to monitor almost directly their portfolio with their stockbrokers.

Generally, whether you do online or offline stocks trading, investors fall into five categories and they see stock investing from different perspective which I shall be highlighting in the course of this article. So let’s get you started, shall we?

SENTIMENT DRIVEN INVESTORS

The first kind of investor that form the bulk of the investing public are sentiment driven stock investors. These are men and women who depend on rumors, hype, manipulated articles of investment stock reports on some investment newspapers and magazines relating to specific stocks and the prediction of so-called experts for their investment choices.

EMOTION DRIVEN INVESTORS

Emotion driven investors are those who are emotionally attached to:1. Certain stocks because they made profits from such previously2. Certain stocks because they fall into a sub-sector or industry for which they have soft spot for.3. Certain stocks because they have fallen in love with the products or services of the company.4. Certain stocks because of their temperament and beliefs.

TRADITIONAL DRIVEN INVESTORS

Traditional driven investors are folks whose minds have been moulded by long years of outdated trading patterns that are no longer relevant in the present times of jet-age information. They refuse to accept modern sophisticated stock trading trends.

KNOWLEDGE DRIVEN INVESTORS

Knowledge driven investors are those who by reason of knowledge and understanding gained by consistent personal education in stock trading trends have been able to reduce risk to the barest minimum. Knowledge driven investors take responsibility for their trading actions and decisions; they don’t entirely leave their stock picking choices in the hands of stockbrokers and analysts. They have a direct input in the direction of their portfolio; they see the input of a stockbroker and analyst as complementary rather than authoritative.

In conclusion, I submit that with what is obtainable worldwide as far as stock trading is concerned, it will be of tremendous benefit to you, if you can spare some time and money to invest first in stock trading education, because in the long run, you shall be better off for it.

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 In this article I am going to give you vital lessons on stock trading, but I must warn you though, this is for serious minded people that want to have access to fortunes in the stock’s market. If you’re at all inexperienced at this sort of thing, you will probably find this website most refreshing and rewarding, happy reading.

Stock trading is an aspect of stock investment which in my belief has been greatly overlooked, undermined and misunderstood. The reasons are not farfetched; I’ll get to that in a moment but first let’s attempt to throw light to this “well of gold”.

I want to show you what you may be missing by not been actively involved in stock trading with statistics that may stagger your ignorance.  Do you know?

1. That the Value of the Nigerian capital Market is well over N12 trillion.

2. That the current (2008) budget of the Federal Republic of Nigeria is less than N3 trillion.

3. By implication, the Nigerian Capital Market…NSE… is Four times the size of what Nigeria thrives on yearly.

4. That Nigerian Stocks Market is ranked as one of the highest stock market with the highest returns on investment worldwide.

5. That only 10% of active investors make over 90%… N9.18 trillion… of the N12 trillion that exchange hands daily. 

6. That the Nigeria Stock Market holds the greatest opportunity for every Nigerian residing in the country and in the Diaspora to create wealth.

7. These 10% active investors are stock traders.

If you want to get on the train of stock trading, there are some basics you have to grapple with in order for you to perform excellently.

SECONDARY MARKET

There are two markets where investors do business in the capital market, namely primary and secondary market. The vast majority of stock investors (90%) do their business in the primary market, why? Basically because it is an all comers market, there are no restrictions since you can do business without necessarily depending on the famed stockbrokers. At the primary market you can easily buy shares across the counter, all you need to do is pick up a form, fill your data into it and pronto you are done, in another word, some level of ignorance of how the system works can be tolerated, but not so with the secondary market, it is highly regulated by the stakeholders of the Capital market which include The Nigerian Stock Exchange, Security and Exchange Commission and Central Security Clearing System Ltd.

TRADING ACCOUNT

For starters, you need a stock trading account with the CSCS Ltd to enable you trade at the floor of the exchange; this can be easily facilitated by a currently registered stock broking firm, Trading in the secondary market is done via stock brokers. You are charged commissions for every buy and sell that is done on their behalf.

A CURRENT ACCOUNT WITH ANY BANKA current account to facilitate your trading, when sales is made in your favour, you need a current account where you can easily pay your crossed checks into, unlike savings account that is not designed to accommodate checks.

A DOMICILIARY ACCOUNT FOR NIGERIANS IN DIASPORA

For Nigerians who resides abroad who are interested trading in the capital market, they can also actively participate. A domiciliary account can be processed for them where deposit of sales can facilitated for them; also, this account enables them to transfer money to Nigeria easily for trading purposes. My organization WINNING ATTITTUDE WEALTH IDEAS ENT as part of our array of investment services handles stock portfolios for Nigerian investors living abroad. You can have access to other informative and impactful articles at my website. 

Stock trading has always been a popular way to make money for the many people that are interested in taking a bit of risk. Now that the Internet is available many people are taking their skills and trying their hand at stock trading online. However for the new people wanting to get in on the action, it may be a bit daunting to figure out exactly how online stock trading works.
There is a great deal of jargon that is associated with stock trading so before you even begin, you may want to research the ins and outs of stock trading in general. It is good to look towards friends and family for advice on where they trade stocks online, any advice they may have to offer about how you learn about stock trading. It is good to network with someone who is very experienced so you know exactly where to begin.
Trading stock online starts with knowing exactly how much you can invest and how much you are willing to lose if your stock goes down. This depends on how much cash you have on hand, and how big of a risk you are willing to take. There are many ways to trade stock online that offer you less risk, but almost all of them come with some sort of threat of losing money. You should remember not to put all of your cash in one stock. It might be a better idea to spread it around to give you the best chance to make money.
From there you need to decide what you would like to trade. You have a choice of thousands of different stocks with different values and potential. If you are interested in one particular stock then you may want to watch it for a couple of weeks at least before you dive in and start trading yourself. Research the past ups and downs of the stock, and if you feel that it is a good time to trade you then jump in.
You need to find a good online broker. There are many choices in the United States as well as other countries. You need to do your research to find out which online broker is best for you. Look at their fees and how often you can trade, as well as their products and the information that they offer to the traders. It is always good to choose a broker that has an excellent customer support line in case you run into problems while trading.
When you first begin to trade stocks online you need to have realistic expectations and goals. Be disciplined and know what you are doing before you make your first trade.