Trading Stocks Is Not Gambling – Gambling

Trading stocks is difficult and we all know there are ups and downs, but it should not be treated as gambling. Gambling is also known as hoping, so if you catch yourself “hoping” that you shares of stock will be worth more tomorrow than they are today then it’s the first sign that you’re gambling instead of trading stocks.Smart Trading1. Buy tomorrow what you’re looking at today.2. Research the company.3. Are they over-valued or under-valued compared to their actual net worth?4. What are their plans over the next year, 5 years and 10 years?5. Who is the owner, or CEO? Mark Zuckerburg cares more about his company than the amount of money he makes. Others may be more apt to put giant bonuses in their pockets.6. Pick a follower. Warren Buffett has a long history of great decisions. You can look at the companies he’s bound to and choose to purchase those shares.Doing research on the company will allow you to make better decisions. If you’re hoping for a jackpot winner then go to the nearest casino. If you’re looking for a million dollar winner in a single day then play the lottery. However, if you’re looking to make 10-15% per year on your money, buy solid companies that are performing today and planning to perform over the next 5 years.Gambling – Clear Signs1. Jumping into a stock because it’s hyped up in the news. If you’re reading the news online you’ve already missed the jump in price.2. Getting mad because your stock didn’t increase in an hour or a single day.3. Not telling your friends or family members because you think they would disagree with the penny stock you purchased.4. Riding stocks to the end. Have you ever bought a stock that dropped 5 days in a row, then 10 days in a row, and you held it the whole way? You might think that it’s going to turn around, but it may not. Get out while you can. Smart traders tell you to always pick a “stop loss” number. If you buy a stock at $5.00 you can set it to automatically sell if the stock drops $1.00 or 5% or 10%, your choice. That way your crazy thoughts won’t alter your smart decisions.First things first, stop saying “trading stocks” or “day trading”, and start saying “investing in companies”. If you buy shares of GOOG you are a part owner of Google. If Google’s sales increase your stock increases. If good news comes out on Google your stock increases, and so on.Are they going to be around in 10 years like GE, IBM and Microsoft? Or are they too new to judge like Facebook, Twitter and YouTube? Facebook replaced MySpace, so another company could possibly replace Facebook. That’s one risk in the negative column before I decide to buy FB or not.