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Crash Of The Stock Market

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1. The Stock Exhange



Worldwide, it is possible to buy and sell stocks. The only restriction is the opening hours of each exchange. Both the NYSE and Nasdaq for example operate from 9 - 30 a.m. to 4 - 00 p.m. Eastern Time from Monday to Friday. Other exchanges have similar opening hours based on their local time. The most usual hours are between 9 - 30 AM and 10 - 30 PM.

2. Major Exchange Locations

Japan - Tokyo Stock Exchange

India - Bombay Stock Exchange

Europe - London Stock Exchange

SWX - Swiss Exchange

China - Shanghai Stock Exchange

United States - NYSE, Nasdaq, and Amex

3. Good Stocks Equals Good Economic Health

When the economy is doing well the market is strong. A strong market is sometimes also called a bull market. Bull markets occur during times of high economic production, low unemployment and low inflation. Bear markets, on the other hand, follow downtrends in the economy - inflation and unemployment are rising and stock prices fall.

4. Change Is Good

The stock market is largely controlled by supply and demand. A rise in stock price might cause investors to jump on the bandwagon and thus the price will rise even higher. A falling price might have the same effect, causing investors to jump ship and try and sell all their shares as quickly as possible.

5. FOREX

As the largest in the world, the FOREX market buy one currency against another and individual investors profit from very small changes in value. Most FOREX trades exist only for 24 hours and so traders keep a very close watch on the market to make a profit.

6. The Options Market

The Options Market is similar to the Futures Market in that an option is a contract that gives you the right (but not the obligation) to trade a stock at a certain price before a specified date. This means that if you want to sell but want to hold out a bit longer for a better buyer, you can.

7. Futures

Significantly different from the FOREX market, a Futures Market is where contracts to buy and sell goods at specified prices are traded. Because market conditions make the actual futures contract fluctuate considerably in value, most investors in the futures market are not interested in the actual goods - only in the profit that can be realized in trading the contracts.
Crash Of The Stock Market
It all began 3 years or so ago when my insurance and finance company offered me 16 free trades with their brokerage.

It sounded like fun, although I knew absolutely nothing about the stock market. So I took the bait, sent them $500, and I was a "trader. I researched companies to death, requested info packages in the mail, called public relation departments, all to purchase 5 or 10 shares of their stock. Then I began reading books about investors and I was hooked. The 16 trades lasted me about 2 months and when it was over, I was almost $100 richer. Then they wrote me an e-mail telling me my free trades are up and from now and forward, that will be $20 a trade please. I'm not a genius mind you, but even that math didn't add up to me. That next $100 will cost me $320 leaving me with a $220 deficit. Nope, I'll have none of that. Way to smart to fall for their scheme. Now I'm looking around the Internet about stocks and trading. There is a whole universe out there. Then I see the "free 2 hour stock market class in your city". Well, if it's free, what have I got to lose?

I guess the proper word, the one they used anyway, was seminar. The "seminar" was hosted at the best hotel in town, here that's the Hilton, and was actually very professionally done.

I arrived, not knowing what to expect, but absolutely knowing what I wanted. To learn how I could get rich fast and easy. And to my surprise, they did. Well, almost. I had to come back for a weekend course, and it was there that I was to be enlightened on how easily I could make tons of money, just like all these guys had, by just clicking the mouse when the arrows turned green. It all sounded so easy.

But why then isn't everyone doing it? How exactly did it all work? Remember "if it sounds to good to be true....". Come back for a whole two day seminar, and we'll show you. By the end of that two days I had so much time invested, I may as well give them the $2000 they asked for to get me to subscribe to the web site. They showed me a whole lot of stuff I already knew from all the books I'd read. So i gave them another five to teach me about options. They gave me a book an e-book that explained what an option was. But...for another $5000 I could learn how to use option strategies. But I'd had enough. Fool me once, fool me twice, but three times? Not you guys, I'll go somewhere else for that. And I did. (To be fair, the website this particular company offered was actually a very useful and valuable tool. I used it for 2 years and once I figured out that the green arrows weren't the fountain of wealth, I made some use of it. Just not $7000 worth)

I went to services, guys that told me what to buy, when to, different methods, ect. ect. All to no avail. I just couldn't make any money. I didn't really lose money, except the money I spent on services, but stayed pretty even in the markets for a year or so. The people at the services were making money, but not me. Why, Why, Why.

What finally got me off the "pay someone else to do the trading for me" train was when I read about Dr. Alexander Elder and then read his book, Trading for a living. Apart from all the other most useful pieces of information, there a section about the harm you can do yourself by blindly following your "gurus", and getting off your....and learning to do the work yourself. And I did. And it worked.

There are books about strategies, books about candlesticks, books about Wall Street and books about anything and everything to do with the stock market. There are good books, useful books, worthless books, just all kinds of books. I read them all. Well, not literally, mostly because they begin to repeat themselves and there are so many of them. Seems if you can't make money trading, you can always write a book about trading. No, that's not fair, I take it back.

Anyway, I read books and developed a sort of style over some months, an evolving style, if you will, but at least I was trying it on my own. The funniest thing happened after that, I began to win more money than I was losing. Not a lot, but more.

By now I'm well into my second year of being in the market, (notice I didn't say trading as I was mostly giving) I've signed up with a discount broker with really cheap trades and I have discovered options. Yes, options. Sure I read about 'em and heard about 'em but had yet to "do it" with them. I had to get it OK'd through my broker and he was willing. Ask, bid, last, open interest bla bla bla. I knew you bought it at the ask price and sold it at the bid price. The first option I bought was one contract of AMX at the money. The very next day was a big day up for the stock, and the option made $100. Did you catch that...One Hundred Dollars on one contract in one day!! Holy crap. My heart was beating so fast, I couldn't push the button on my computer fast enough. $100 in one day. Of course it continued up, up, up directly after that, but no matter. A hundred bucks. Seriously, that was how I felt. Options were the way to go. Granted, I learned my lesson shortly after that and began to study options and try and learn the proper way to use them. And am still learning today.

When I discovered blogs, it all changed for me. Real people doing real work, rather than paid professionals working 8s. And what a wealth of information and training. Of course, the easy way would be just to match trades, or be an Internet "leech", as it is called, but I learned my lesson about that with all those pay for trades services. You know the ones. They give you a thousand trades to make, which you obviously can't afford, and when you complain that your losing, they tell you that you must follow them exactly. All the trades. Smooth.

Instead, I listened to their methods (the bloggers) Listened and read and learned. There are loads of blogs to sift through. Some, quite a few actually, that are genuine and helpful. Mentors. Yes, mentors. I remember the first. I just sort of stumbled across it and was fascinated. This guy was teaching me more in one night (by reading his site) than all the money I had previously put out. I mean shit about options I had never heard of, VIX(CBOE volatility index), charting, rules, discipline....I could go on and on and on. It was incredible, the motherlode. I, as well as all of us amateurs out here lurking about are, or should be, eternally grateful.

I started to put all of this advice and learning to use. Follow your rules, be disciplined, set stops, targets and plan your trades. I finally started to make some money.

Making money in the stock market, once I started, proved hard to hold onto. I had signed up with a premium research company. My account was growing and against my better judgment, actually I struggled with it at first, I began to with draw cash. It started with greed, of course. I figured I could take out a few hundred, and make it up. Which I did. Right away. Cool. So the next time I took out a little more. Then a little more. Now it was a habit. And a bad one. Taking money out periodically, just to have cash. I took a trip to Sweden, bought an engagement ring for my wife, eating out all the time, was really living it up, and beyond my means, but with real money I had earned. Problem was, my account quit growing. I would get to a number, and withdraw. Always keeping my account stocked and never going below a certain amount. I had learned to make money finally.

I remember when I first started to make some money trading. I had $2000 when I stopped and took a deep breath for a couple weeks. It was a struggle getting there, and I was terrified of losing it. I read the blogs and paper traded and learned something about forex too. When I came back to live trading, it was all there. I started making good, really good trades, and quite a few. The service I signed up with was giving me great ideas that paid off. Just in small numbers mind you, but real money I was banking in my account. Granted we were right in the middle of an unbelievably strong bull market, but still, I was trading up and down, to the short side, the long side. Cutting my losses early, winners were running, reading news religiously. Remember please, it wasn't tons of cash like the real traders, but a hundred today, 300 tomorrow lose 70 the next day, and so on.

Last year, late in the summer, when it started to go bad, I decided to go to cash with what money I had in the market. It wasn't easy, cause sometimes the urge to trade was just so strong. I had built my account up a bit, broken lots of bad habits, and finally realized I wasn't nearly as smart as I thought I was. Here I was, clipping along, feeling pretty good, "banking some coin" and really digging this trading thing, when it started to get a little complicated. It wasn't quite as easy as yesterday. I started to lose some when I should have winning. Started buying more puts than calls, and it wasn't always so obvious which way to go.

That's when I learned about direction and the market has a mind of it's own. Sometimes it's up, sometimes it's down. No one really ever knows for sure which way it will go. Sure, some more experienced traders can make very good educated guesses drawn from quality technical analysis and fundamentals of the economy at any given moment, but not even then can they be 100% positive. So I continue to learn every day, extract what I can from the market and watch my account grow.

And that's it. My beginning. It's certainly not an easy endeavor as I had first imagined, but takes work and dedication and time, regardless of all the stuff you'll read to the contrary. If you have read this far, all I can hope is that you take the lessons I learned and fore go the hustlers and scam artists and get on with your studies, then trading and start making money. Remember to be wary of the Gurus and easy money promises. There's no such thing.

Eventually you'll want to sign up with a premium charting and research company. There are a ton of them out there. I've been through a lot and have landed on and stuck with one that is owned by an ex-floor trader and money manager. The calls and screens they run are generally right on. The key is to find one with lots of services and that will answer your questions fast and honestly. Fortunately for myself, I truly believe I have found that key ingredient for my trading career.

Remember, take your time, learn all you can, use all you learn and be successful!
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