Stock Market: A Complete Guide Step-By-Step From Zero To Hero.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Stock Market Education from Zero: How to Learn the Stock Market?

Introduction.

Learning the stock market, just like learning to ride a bike, is possible by going step-by-step through trial and error.

One of the important advantages of the stock market is that it lasts for life. It is a process that takes years for investors who want to develop their capabilities and get the benefits. Strategies used twenty years ago are still used. Of course, the game continues with all its strength.

 What is the Stock Exchange?

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


First of all, let's briefly define what the stock market is. The stock market is the place where shares of publicly traded companies are bought and sold. Well-known American stock markets: Apple, Facebook, Disney, Microsoft, Amazon, Google, Netflix, Uber, and Pinterest.

Read Article: How To Make Money When The Stock Market Is Down?

There is a seller for every buyer in the stock market. When you buy 100 shares, someone sells you 100 shares. Likewise, when you sell, someone has to buy it. If the number of buyers (demand) is greater than the number of sellers (supply), then the price of the stock will increase. Conversely, if there are more sellers than buyers, the price will fall.


10 Great Ways To Learn The Stock Market For Free.

1. Open an Account with a Brokerage Firm.

2. Read a Book.

 3. Read Article.

 4. Find a Mentor or Friend.

 5. Review Successful Investors.

6. Follow the Stock Market News Daily.

7. Get Paid Subscriptions.

8. Attend Seminars, Attend Online or Live Classes.

9. Buy Stocks Now or Use Simulation.

10. Take Warren Buffett's Advice: Don't Get Stubborn With The Market!

8 Tactics and Tips To Making Money In The Stock Market.

1. Set Long-Term Goals.

2. Understand Your Risk Tolerance.

3. Control Your Emotions.

4- Do not follow the market and prices daily. Don't Buy-Sell.

5. Start with the Basics.

6. Diversify Your Investments.

7. Don't Get Investment Advice From Anyone.

8. Be Buyer When Falling, Seller When Rising.

5 Strategies To Track the Stock Market.

1. Track Interest Rates.

2. Analyze Weekly Market Movements.

3. Review Financial Statements.

4. Try to Talk to Company Executives.

5. Attend Companies' Year-End Meetings.


10 Great Ways To Learn The Stock Market For Free.

For those who want to learn about the stock market and buy and sell stocks, “How do I start?” 10 amazing answers to the question:

1. Open an Account with a Brokerage Firm.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Find a good online stock broker and open an account. Get familiar with the site's interface and take advantage of free investment and research tools available only to customers. Some brokerages offer a very useful tool for virtual investment with affected money.

 2. Read a Book.

You can find as much information as you want in books and they are more affordable compared to lectures, seminars, and training kits on the internet. If you do your research, you can find many important investor and author names such as Warren Buffet and Michael Lewis.

 Our recommendation is the book "Smart Investor", which is also a favorite of Warren Buffet, and "How to Make Money in the Stock Market" by William O'Neil. is the book.

 3. Read Article.

Articles are great resources for free education. You can find dozens of articles suitable for all levels in our category titled " Exchange ". If you want English resource advice, Investopedia is currently the most popular investment education site.

 4- Find a Mentor or Friend.

Someone you know from your family, workplace, professors, or any other place with basic stock market knowledge can mentor and guide you. A good mentor is someone willing to answer your questions, help out, recommend useful resources, and give you a boost when things go wrong. He has been a mentor to all successful investors in the past or present.

Read Article: How To Gain Profit In Stock Market.

Although obsolete by now, online forums are still in use and can be a great place to get your questions answered. But be careful who you listen to. The vast majority of participants are not even professional traders, let alone successful traders who have made a profit.

 Do not take the advice from the forums into your life without thoroughly examining them and do not follow the investment advice under any terms and conditions. In addition to these, you can be informed about current information and developments by following certain Twitter accounts and benefit from the stock recommendations given.

 5. Review Successful Investors.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Learning about the lives and doings of great investors in the past is very important to have a new perspective, to be inspired, and to understand the value of the stock market. Names such as Warren Buffett, Jesse Livermore, George Soros, Benjamin Graham, Peter Lynch, John Templeton, and Paul Tudor Jones are examples of legendary names.

6. Follow the Stock Market News Daily.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


You can become familiar with economic trends by following the stock market news a little every day, and you can master the investment language by examining the analyzes of third parties. On the other hand, watching the share prices in a graph, looking at the news headlines, and examining the basic information of the companies through investing is another useful effort.

Another way to get involved with the stock market is television. Bloomberg is arguably the most popular channel in this regard. Even watching 15 minutes a day will increase your knowledge. Don't let the jargon or the news style scare you. Just watch. 

Read Article: 10 Thousand Investment In These Shares Became 1.30 lack Rupees.

Let your brain slowly digest the comments, discussions, and interviews. Keep in mind, over time, you might think that most TV shows about investing are just distractions and adrenaline distractions rather than useful.

Keep in mind that it is very rare for advice given on television to turn into profit.

7. Get Paid Subscriptions.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Funding research and investment ideas can be educational. Some traders may find watching or observing their professionals in the market more beneficial than trying to apply what they have just learned. There are many websites on the internet where you can get paid subscriptions. The key is to find the one that suits you best.

CAUTION – Many of the paid memberships marketed online, especially through social media, are from individual investors who claim to have incredible return rates and can teach you how to be successful. 99.99% of them are very bad investments and work at 99 to 199 $ per month or even higher. The biggest harm is when you try to do what they do and spend too much money on a stock tip and exhaust yourself when it doesn't work.

8. Attend Seminars, Attend Online or Live Classes.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Seminars can provide you with valuable insights into the market in general or specific forms of investment. Most seminars focus on a specific area of ​​the market and how the speaker has been successful over the years using their own strategies.

 Also, not all seminars are paid. Some are free and can be a rewarding experience. But what you need to be extremely careful and aware of about free seminars is the future of pitching in the end no matter what. Whatever they offer, you can politely decline!

Online or live classes are often expensive, but they can be just as useful as seminars.

CAUTION - Just like paid memberships, be careful about lessons and courses. Most costs over $500 and are often sold with promises that they contain valuable information. The fantastic sales funnels will draw you in and get you excited during the lesson, leaving you with a strategy that was profitable 5-10 years ago and is no longer valid. Of course, the strategy they give is successful and you may not have the expertise to implement it.

9. Buy Stocks Now or Use Simulation.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


The next step after opening your online brokerage account is to directly buy the stock you have decided on. Don't be afraid to start small. 1, 10 or 20 shares will also serve their purpose.

If entering the stock market with your hard-earned money will strain your nerves, consider starting with a virtual account first. Some online brokerages offer virtual investment services for you to practice.

CAUTION - One of the most common mistakes beginners make is buying too many shares in their first trade. Taking too many risks as a beginner will likely result in unnecessary losses. Instead, start more cautiously with small steps and increase your investment by buying more stocks over time.

10. Take Warren Buffett's Advice: Don't Get Stubborn With The Market!

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Warren Buffett, the greatest investor of all time, advises individual investors to simply invest passively and buy and hold for the long term rather than trying to beat the market.

Because trying to predict when the market will fall and when it will rise cannot go beyond a futile effort. No one in the world knows that. The market is like an emotional teenager. Sometimes while inflating the prices, sometimes with extreme pessimism, it can drive the prices to the ground.

 All you need to pay attention to here is to calculate at what prices the stock you want to buy is expensive and at which prices it is cheap. If you know the true value of the stock you will buy, you will not make a loss by buying it at a very high price. The cheaper you buy the stock, the higher your return will be in the long run.


Tactics and Tips To Making Money In The Stock Market.


1. Set Long-Term Goals.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Why do you want to invest in the stock market? Will you need your cash after 6 months, 1 year, 5 years, or more? Are you investing for retirement, buying a house, or giving your children?

Before investing, you should know your purpose and when you will need this money in the future. Knowing when you will need this money in the future, you can calculate how much you need to invest and how much income you need to earn from your investment to get the result you want.

Expanding your portfolio depends on three closely related factors.

  • Your main money invested.

  • Your annual net income on your principal.

  • The amount of time you will invest.

2. Understand Your Risk Tolerance.



Risk tolerance is a genetically inherited psychological trait, but it can be positively affected by education, income, and wealth (the higher they are, the higher the risk tolerance) and negatively by age (risk tolerance decreases as you get older).

 Your risk tolerance is how you feel about risk and the level of anxiety you experience when the risk occurs. In a psychological sense, risk tolerance is defined as “the extent to which one will give up what one has for a better outcome”. 

In other words, everyone's tolerance for risk is different and there is no criterion to consider the "right" balance. While some may risk 1000 $ for 100 $, some may risk only 100 $ for 1000 $.

In addition, risk tolerance is also affected by the way a person perceives risk. For example, flying or driving in an airplane was considered very risky in the early 1900s, but as traveling by airplanes and vehicles became more frequent, this risk began to be accepted by people. 

Conversely, many people today think that horseback riding is very risky due to the danger of falling because we don't see many people riding around anymore.

The phenomenon of perception is especially important when it comes to investment. The more you learn about investments (for example, how stocks are bought and sold, how much price change usually occurs, and the liquidity of investments) you will be taking on less risk than you thought before making your first investment.

Read Article: Stock Market Investment For Beginners.

 As a result, when your investment intensity is less, your concerns and risk tolerance will not change much because your definition of risk perception will also change.

By understanding your own risk tolerance, you avoid investments that cause worry. In general, you should not make an investment that will disturb your sleep. 

Worry stimulates fear, which causes you to react emotionally (rather than logically) to the stressor. In situations where financial uncertainty prevails, investors should remain calm and follow analytical decision processes.

3. Control Your Emotions.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


The biggest obstacle in front of profit in stock market investments is the inability of people to control their own emotions and as a result, their inability to make logical decisions. In the short run, the prices of companies reflect the combined sentiments of the entire investor community.

 Prices usually tend to fall when most investors start to worry about a company, just as prices are likely to rise when investors start to think positively about the company.

People who have negative thoughts about the market are called "bears", while people who have the opposite are called "bulls". The constant battle between bears and bulls during business hours is reflected in the ever-changing prices of securities. 

These short-term fluctuations are driven by gossip, speculation, and hopes (feelings) rather than a logical and systematic analysis of the company's assets, management, and plans.

Prices that fluctuate against our expectations create tension and insecurity. During these times: “Should I sell my stocks to avoid losses? Should I hold it and buy more, hoping prices will rise again?” Questions like these occupy our minds.

Even if the prices go in the expected direction, the following questions come to mind: “Should I sell the stock I bought while making a certain profit before the prices fall? Or could the prices go even higher, so should I hold on? ” Such thoughts come to our minds, especially when we constantly monitor prices. When our emotions are the main factor in our actions, the decision we make will most likely be wrong.

If you have a good reason to buy a stock and your reason is logical, short-term and sudden changes in price should not affect you. However, in case you realize that your reason was a wrong decision, you should also plan when to sell your possessions. In other words, you need to have an escape strategy in case you do damage.

4. Do not follow the market and prices daily. Don't Buy-Sell.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Watching Bloomberg TV every day or following stock market papers online; creates a perception in your mind that the stock market is an exciting “100-meter running race”. The stock market, however, is a long marathon rather than a short running race. The important thing is not to be the first, but to reach the destination line.

“If the price of your house was published on the Internet or TV, for a penny every day, would you be able to live happily ever after?”

“If you didn't check the value of your house minute by minute, would you prevent it from gaining or losing value?”

So why treat it differently for stocks?

In an experiment conducted in the 1980s by Harvard psychologist Paul Andreassen, it was observed that investors who were informed daily about their stocks earned only half as much as investors who did not receive any information. What could be the reason for this?

To answer this, we can look at the following studies in the field of neuroscience.

According to groundbreaking research in the world, if an event is repeated 2-3 times in a row, our brain waits for this event to happen afterward, and if this expectation is fulfilled, dopamine, the happiness hormone, is released and our brain is filled with happiness. 

Likewise, when a stock rises for 2-3 days in a row, we think that it will continue and we are extremely happy if it happens. This causes us to become dependent on our predictions.

When the stock starts to drop, the part of our brain, which manages fear and anxiety, starts to work. This is the part that produces the "fight or flight" response, which is the survival instinct found in all animals. As our stocks drop, we fear and worry. For this reason, we want to sell the shares and get rid of this feeling.

Read Article: Top 10 Largest Companies in the World.

In addition, according to Nobel Prize-winning researcher Daniel Kahneman, we react to losses 2 times more intensely than gains. No matter how happy it feels to earn 1000 $, losing 1000 $ will hurt at least twice as much. That's why we can't help ourselves from selling our stocks at very low prices in a market where prices are falling day by day. 

However, the fact that a stock that we trust in the long run and that we know is cheap in price has fallen for a while doesn't change anything. On the contrary, it has created a better buying opportunity by getting cheaper.

Given all this, trading can tempt your mind and cause you great harm. Therefore, do not follow the market daily and do not trade!

5. Start with the Basics.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Before making your first investment, take the time to learn the basics about the stock market. In a stock market, your focus should be on companies rather than the entire market. Because market movements are unpredictable. There are very few times when stock movements of all companies can be in the same direction, even when the stock market is in a big drop, some companies' stocks are always going up.

Here are some areas to consider before making your first investment:

  • Understanding Companies.

How does the company make money? Where does it mostly come from? How does it differ from its competitors? How long can he maintain this advantage? How satisfied are their customers? How does he spend his earnings? How to invest in what and how to invest for growth? How much debt does he have? etc. You must be able to give clear answers to questions.

  • Financial Measurements and Definitions. 

You need to know metric definitions such as P/E ratio, earnings per share, profit margin, and annual growth rate. You should know how these are calculated and have the ability to compare different companies using metrics and other important things.

Popular Methods in Stock Selection and Timing. You have to understand how fundamental and technical analyses are done, how they differ, and which ones are most useful in each stock market strategy.

  • Exchange Order Types.

 You need to know the differences between stock orders, stop orders, orders to avoid losses, and the like, which are used by traders.

Different Types of Investment Accounts. Although cash is the most common, margin accounts are required by regulations for various transactions. You need to know how margin is calculated and the difference between margin requirements.

Knowledge and risk tolerance are linked. As Warren Buffett said: “Risk comes from knowing what you're doing.”

6. Diversify Your Investments.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Experienced investors like Buffett avoid stock diversification by doing all the research necessary to identify and measure their risk. Andrew Carnegie is known for his quote: “The safest investment strategy is to put all your eggs in one basket and watch that basket.” Don't make the mistake of thinking like Buffett and Carnegie, especially in the early years of your investment career.

The most popular way to manage your risk at the start is to diversify it. Prudent investors own stocks in various companies, in various industries, and sometimes in various countries. In this way, they prevent a possible bad event from negatively affecting their assets.

7. Don't Get Investment Advice From Anyone.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Never take investment advice from people you don't trust.

It has been proven in psychology that we become overly attached to sensations that we consider secret. For example, a friend of yours may want to tell you that he knows someone from within the company and that the prices will increase a lot in the future, or you may hear this in some way. Ignore such sensations.

Every investment is personal. When it comes to your future and investments, you need to take control. Therefore, you should constantly educate yourself and take responsibility for your investment decisions. Of course, you can get support from your professional investment experts. They can inform you about many things. 

Of course, if you ask the right questions. Your main goal should be to find companies that have been growing steadily over the years and are cheap for their current price.

8. Be Buyer When Falling, Seller When Rising.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Wouldn't you like the price of the food you've eaten all your life to drop? So why worry about the stock that you can buy more when the price drops?

So over time, things can go wrong and prices can go down. If there is no deterioration in the main indicators of the company, you should see this as an opportunity to buy more.

It should be noted that the market overreacts to events and news. It is either very optimistic or pessimistic. That's why prices can go down and go up. For example, in the internet crisis of 2001, Amazon's share price plummeted from $130 to $10.

 However, there were no problems with the company's activities. The company continued to grow and multiply its revenues. One Amazon stock is hovering above $3,000 today.


Strategies To Track the Stock Market.

 

1. Track Interest Rates.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


You don't have to follow the market movements every day. However, you must be aware of the movements in the market. That way, you spend less time on difficult things like gossip or insider information. The best way to overcome investment anxiety is to listen to concrete, objective, and accurate information, not uncertain information.

There are two important issues you should pay attention to Interest rates and commodity prices.

High-interest rates mean that the price of stocks drops. Because companies have to pay more loans under high-interest conditions, and this will harm their earnings. Low earnings mean the stock goes down. On the other hand, low-interest rates cause both companies and people to spend less money on interest payments. Increased earnings also cause stock prices to rise. 

Read Article: What are the steps to Invest in Stock Market?

Therefore, knowing the current interest rates allows you to see your future more clearly both for today and for the future.

Investors should also follow commodity prices and fuel prices. Because fluctuations in the price of such things also affect their current investments. For example, the logistics sector is directly related to fuel. The increase in the price of crude oil reduces the earnings in the logistics sector.

 On the other hand, for oil exploration companies, an increase in the price of crude oil is a very good thing. The increase in steel and timber prices also negatively affects furniture and construction companies.

Increasing labor costs may adversely affect retail firms in particular. For example, a huge grocery chain, most of which consists of personnel working for minimum wage, is adversely affected by the increase in the minimum wage compared to other years.

 For example, companies such as Boyner or BİM are adversely affected by an increase in the minimum wage. Therefore, you should know what kinds of events affect the companies in your investment portfolio, and follow the course of these factors throughout the year.

2. Analyze Weekly Market Movements.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


You don't have to constantly watch Bloomberg TV or the market or visit investing.com. Doing so may make you feel like you are playing a horse race. Moreover, “ How Does Our Brain Affect Our Investment Decisions? As we mentioned in our article, we feel the losses 2 times more intense than the gains.

 Therefore, following the stock market as an eagle watches its prey can make you make wrong decisions without your control. However, it is very important to follow the financial news periodically, to watch the financial analyzes of important economists on Youtube, and to improve yourself in the field of financial literacy.

Read Article: Pulse Candy Success Story, Company Earning Rs 1 to 300 crores.

Remember, geopolitical developments can affect the status of your portfolios. Currency fluctuations, taxes, new laws directly affect the stock market. Therefore, analyze what is happening in the world every week, if not every day, and consider making adjustments to your portfolio accordingly.

Acting immediately will be extremely against you. Again, do not listen to rumors about certain sectors on social media. Learn about the general trend and ignore the rest of the gossip financial information. The question you should always ask while watching financial developments is: “How will this development affect my investments?” never mind.

3. Review Financial Statements.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Read the financial statements companies publish quarterly. Be sure to read the balance sheets of the companies you invest in.

Look for answers to these questions in these reports:

  • Is the company management optimistic or hesitant about the future?

  • Are there any serious signs that earnings will increase in the coming period?

  • Is there a possibility that the company will be acquired by another company?

What is the company's credit rating? How does this affect the growth of the company?

In general, written and official texts are very valuable for the investor to understand the internal state of the company. Because the information presented at investor meetings is often prepared in advance and given in a certain structure. In the financial balance sheet reports, what is and what is not, is expressed with great clarity.

4. Try to Talk to Company Executives.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Meeting company board members face-to-face is often difficult. But you can wait for the appropriate time for this. For example, you can identify a period when the workload is not high and talk to these people about the route the company will follow. 

There may not be such an opportunity for small investors, but you can also get an idea by watching television programs and videos on the internet attended by the members of the company's board of directors.

If you get the opportunity to talk to one of the managers of the company you invest in, it would be appropriate to ask this person the following questions?

  • Where is the company headed?

  • What are the biggest risks facing the company and the industry?

  • To what extent do the company's market value calculations reflect reality?

5. Attend Companies' Year-End Meetings.

Stock Market: A Complete Guide Step-By-Step From Zero To Hero.


Call the investor relations department of the company you invest in and state that you want to attend the company's year-end conference. These conferences usually take place over the Internet. Considering the pandemic process, we can easily say that these meetings will be held entirely over Zoom from now on.

Listen carefully to the words of company executives in these teleconferences. To what extent do they believe what they say? Are they really excited and motivated about the future of the company? By reading such signs, you will perhaps want to buy more shares in the company or sell the shares you hold.

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