Investing in the stock market requires constant evaluation and research. It is not commonly just a hobby. The black and white of the stock market is knowing yourself and knowing the market. Both are essential to success and avoiding shattering disappointment.

Choosing Stock for Your Investments

Different personalities call for different strategies when researching the stock market, although more and more people are integrating both. The rules of thumb are technical analysis and balance sheets. Before making a decision with your money, you must look at the company's balance sheets and study their trends. The balance sheets will tell you exactly how much the company has earned in the last quarter, year, etc..., if the company is in debt, and how much the company owes or is owed. All of these add up to a knowledge of how strong the company is at present, and whether it is growing stronger. These sheets will give you this information in the language of "assets," "gains" and "deficits." Another tool is to check out the stock charts. All of those symbols and numbers may be confusing for the beginning investor, but there are sites that will help you learn and decipher what they mean. These charts can be monitored at a daily, weekly, monthly or even yearly rate for an overview of how the stock has been trading, including how many investors have been trading in that particular market, the price, and whether it has risen or fallen in the chosen time period. The types of charts available also vary, but the most widely used and potentially most helpful is the candlestick charts. Looking at a stock's candlestick charts will tell you the starting and ending price of a given day and whether this change was an increase or a decrease. Look at these charts covering a period of 3 or 6 months to determine what investors call "trends." A downward trend is termed a "bear market," in which people are doing more selling than buying, and the upward trend is called a "bull market," in which there is a higher volume of buyers than sellers. Lastly, check out a trial stock market account and trade based on what you have learned, or follow others' decisions and learn from their success and/or failures. These trials are informative, as well as a lot of fun. Many sites will give you the option of checking out stock charts and seeing what other users are getting in on in the market. These trial accounts are set up to simulate actual stock market activity and give you updated information that is set typically 15 minutes behind what the actual market is doing. Using all of these tools will benefit any investor in making smart decisions when it comes to stock market investment.

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Visit updown.com to sign up for a free trial account for stock investment

Visit Forbes.com for sample balance sheets for study

stockcharts.com offers a wealth of information regarding stock charts and how to read them