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Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
Understanding Stocks
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Understanding Stocks

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Published on

http://www.CandlestickForums.com …

http://www.CandlestickForums.com

Understanding Stocks

Understanding stocks is the basis for investing in the stock market. The old saying about not seeing the forest for the trees applies to many new traders, bedazzled by the breadth of trading opportunities, the expanded trading abilities brought to us by leveraged trading strategies such as hedging, and the sense of power can go with online trading. Understanding stocks is the first of the basics of stock investing. Stock shares are partial ownership in a company. Owners of shares of stock share in the profits of the company but do not directly manage the company. The stock investor has a share in the overall value of the company but not in its individual assets or its debts.

The stock of a company is a representation of the first money put into a company. The value of stock in a company is dependent upon the ability of a company to make money either by selling its products, selling off assets, or being voluntarily or involuntarily bought by another company or individual. The total capitalization of a company is that of its share multiplied by share price and represents its market value. In understanding stocks it is important to differentiate between common stocks and preferred stocks.

Common stock is the usual means of stock ownership. Common stocks confer the right to vote for company directors and in other company decisions. Preferred stocks are a hybrid that gives the holder equity in the company, preferential standing for receiving dividends but, often, does not confer voting rights. Also, if a company is liquidated holders of preferred stock may have preferential rights to payment compared to common stock holders. Just like bonds that a company sells, preferred stock is rated by credit rating companies. Preferred stock often sells for more than common stock as it is deemed a more secure stock investment.

Understanding stocks also includes understanding how and why stock price varies over time. Long term investing in stocks typically means looking at the price to earnings ratio of a stock as well as cash flow ratios to determine what a stock is worth. These are fundamental analysis factors used to determine basic stock value. Technical analysis of a stock involves looking at price movements and comparing to known price patterns in order to predict future prices. Although traders in stocks and commodities have used fundamental information to guide their decisions for centuries the development of Candlestick trading tactics in the 17th century was the first real technical trading. Technical analysis tools such as Candlestick charting guide traders today in understanding stocks and their price movements. The old saying that Candlestick basics let the market tell the trader what the market will do is as true today as when Candlestick chart formations guided rice traders so long ago.

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  • 1. www.CandlestickForums.comwww.CandlestickForums.com UnderstandingUnderstanding StocksStocks
  • 2. www.CandlestickForums.comwww.CandlestickForums.com Understanding stocks is the basis forUnderstanding stocks is the basis for investing in the stock market.investing in the stock market.
  • 3. www.CandlestickForums.comwww.CandlestickForums.com The old saying about not seeing the forestThe old saying about not seeing the forest for the trees applies to many new traders,for the trees applies to many new traders, bedazzled by the breadth of tradingbedazzled by the breadth of trading opportunities, the expanded tradingopportunities, the expanded trading abilities brought to us by leveraged tradingabilities brought to us by leveraged trading strategies such as hedging, and the sensestrategies such as hedging, and the sense of power can go with online trading.of power can go with online trading.
  • 4. Before We Continue…Before We Continue… Click the links below to get yourClick the links below to get your FREE training materials.FREE training materials. Free Weekly Investing WebinarsFree Weekly Investing Webinars Don’t miss these free training events!Don’t miss these free training events! http://http://www.profitableinvestingtips.comwww.profitableinvestingtips.com /free-webinar/free-webinar Forex Conspiracy ReportForex Conspiracy Report Read every word of this report!Read every word of this report! http://http://www.forexconspiracyreport.comwww.forexconspiracyreport.com
  • 5. www.CandlestickForums.comwww.CandlestickForums.com Understanding stocks is the first of theUnderstanding stocks is the first of the basics of stock investing.basics of stock investing.
  • 6. www.CandlestickForums.comwww.CandlestickForums.com Stock shares are partial ownership in aStock shares are partial ownership in a company.company.
  • 7. www.CandlestickForums.comwww.CandlestickForums.com Owners of shares of stock share in theOwners of shares of stock share in the profits of the company but do not directlyprofits of the company but do not directly manage the company.manage the company.
  • 8. www.CandlestickForums.comwww.CandlestickForums.com The stock investor has a share in the overallThe stock investor has a share in the overall value of the company but not in itsvalue of the company but not in its individual assets or its debts.individual assets or its debts.
  • 9. www.CandlestickForums.comwww.CandlestickForums.com The stock of a company is a representationThe stock of a company is a representation of the first money put into a company.of the first money put into a company.
  • 10. www.CandlestickForums.comwww.CandlestickForums.com The value of stock in a company isThe value of stock in a company is dependent upon the ability of a companydependent upon the ability of a company to make money either by selling itsto make money either by selling its products, selling off assets, or beingproducts, selling off assets, or being voluntarily or involuntarily bought byvoluntarily or involuntarily bought by another company or individual.another company or individual.
  • 11. www.CandlestickForums.comwww.CandlestickForums.com The total capitalization of a company is thatThe total capitalization of a company is that of its share multiplied by share price andof its share multiplied by share price and represents its market value.represents its market value.
  • 12. www.CandlestickForums.comwww.CandlestickForums.com In understanding stocks it is important toIn understanding stocks it is important to differentiate between common stocks anddifferentiate between common stocks and preferred stocks.preferred stocks.
  • 13. www.CandlestickForums.comwww.CandlestickForums.com Common stock is the usual means of stockCommon stock is the usual means of stock ownership. Common stocks confer theownership. Common stocks confer the right to vote for company directors and inright to vote for company directors and in other company decisions.other company decisions.
  • 14. www.CandlestickForums.comwww.CandlestickForums.com Preferred stocks are a hybrid that gives thePreferred stocks are a hybrid that gives the holder equity in the company, preferentialholder equity in the company, preferential standing for receiving dividends but, often,standing for receiving dividends but, often, does not confer voting rights.does not confer voting rights.
  • 15. www.CandlestickForums.comwww.CandlestickForums.com Also, if a company is liquidated holders ofAlso, if a company is liquidated holders of preferred stock may have preferentialpreferred stock may have preferential rights to payment compared to commonrights to payment compared to common stock holders.stock holders.
  • 16. www.CandlestickForums.comwww.CandlestickForums.com Just like bonds that a company sells,Just like bonds that a company sells, preferred stock is rated by credit ratingpreferred stock is rated by credit rating companies.companies.
  • 17. www.CandlestickForums.comwww.CandlestickForums.com Preferred stock often sells for more thanPreferred stock often sells for more than common stock as it is deemed a morecommon stock as it is deemed a more secure stock investment.secure stock investment.
  • 18. www.CandlestickForums.comwww.CandlestickForums.com Understanding stocks also includesUnderstanding stocks also includes understanding how and why stock priceunderstanding how and why stock price varies over time.varies over time.
  • 19. www.CandlestickForums.comwww.CandlestickForums.com Long term investing in stocks typicallyLong term investing in stocks typically means looking at the price to earningsmeans looking at the price to earnings ratio of a stock as well as cash flow ratiosratio of a stock as well as cash flow ratios to determine what a stock is worth.to determine what a stock is worth.
  • 20. www.CandlestickForums.comwww.CandlestickForums.com These are fundamental analysis factorsThese are fundamental analysis factors used to determine basic stock value.used to determine basic stock value.
  • 21. www.CandlestickForums.comwww.CandlestickForums.com Technical analysis of a stock involvesTechnical analysis of a stock involves looking at price movements andlooking at price movements and comparing to known price patterns incomparing to known price patterns in order to predict future prices.order to predict future prices.
  • 22. www.CandlestickForums.comwww.CandlestickForums.com Although traders in stocks and commoditiesAlthough traders in stocks and commodities have used fundamental information tohave used fundamental information to guide their decisions for centuries theguide their decisions for centuries the development of Candlestick trading tacticsdevelopment of Candlestick trading tactics in the 17th century was the first realin the 17th century was the first real technical trading.technical trading.
  • 23. www.CandlestickForums.comwww.CandlestickForums.com Technical analysis tools such as CandlestickTechnical analysis tools such as Candlestick charting guide traders today incharting guide traders today in understanding stocks and their priceunderstanding stocks and their price movements.movements.
  • 24. www.CandlestickForums.comwww.CandlestickForums.com The old saying that Candlestick basics letThe old saying that Candlestick basics let the market tell the trader what the marketthe market tell the trader what the market will do is as true today as whenwill do is as true today as when Candlestick chart formations guided riceCandlestick chart formations guided rice traders so long ago.traders so long ago.
  • 25. www.CandlestickForums.comwww.CandlestickForums.com Understanding stocks and understandingUnderstanding stocks and understanding what drives price movements will givewhat drives price movements will give today’s trader the same advantages intoday’s trader the same advantages in trading stocks, trading options, tradingtrading stocks, trading options, trading commodities or trading futures that thosecommodities or trading futures that those practicing Candlestick charting techniquespracticing Candlestick charting techniques enjoyed in the days of the Samurai.enjoyed in the days of the Samurai.

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