Stock Market Exchange: Beware Weekly

    Every Thursday from now on will have a "Beware Weekly" post.  It will be about how to avoid and be aware of the various illegal methods used to scam legit investors.  It is important to steer away from these things, and never use them!  They will land you in jail, or broke.  This week will cover the method known as "Pump and Dump".

Pump and Dump: Beware!
    There is an illegal method out there known as the "pump and dump".  Essentially a financial predator will log into investor chat rooms and try to convince people to buy a certain cheap stocks.  This cheap stock is usually in a small business and the predator will have bought quite a lot of their stocks already.  Then when they convince enough people to buy them, using all sorts of deceit, the stock price will raise.  Say they bought a stock for $1, and bought 100 shares.  They convince people to buy, and the price raises to $3.  They triple their money, and the business looks like it is doing really well.  So whats wrong with that?  The predator will suddenly sell all their stocks dropping the price substantially and can leave a business in rubble.  They make a killing and leave everyone else to deal with the mess.  This is an illegal method that all investors should be aware of!

Golden Rule: If it sounds to good to be true, it probably is. 

Stock Market Exchange: Oracle drops the ball

    Oracle's stocks dropped 8% after missing their 3rd quarter goals.  This is another great example for the opposite of the spectrum - how you can lose money.  According to sources the quarter failed because of the bad sales executions, and for a software company this means trouble.  Say you invested some money in Oracle, let's go with one million dollars just for example.  An 8% loss for your one million dollars in stock means you lost (1,000,000*0.08) is eighty grand.  That is a pretty big loss, but there are companies that go completely under and your stocks become worthless.  That is a one million dollar loss.  This is just how the game of stocks works - lose big, win big.  Of course we aren't dealing with millions of dollars, but you still don't want to lose money.  For Oracle this is a tough blow, because they have been ranked down on many sites placing around 3rd, or even 4th best software company.  Each stock also lost around $3, which is another tough blow for investors.  For their sake I hope they recover.

Stock Market Trading: Fluctuating Example

    Remember how I said the stock market fluctuates, Dow Jones is a prime example.  When prices drop - people sell fast and cheaper.  Making the prices go down even more.  Overnight you can lose tons of money in stocks.  However, this is also a good time to buy in certain cases.  The prices of this example drop drastically, and if you knew your stuff you would have bought at these cheap prices.  Those prices have increased dramatically and if you bought enough stocks you would be a millionaire.  This is a lesson most people who play the stock game learn fast.  Adapt or die is my motto of stocks.  When people go into stocks they should be aware of it ferociousness, and its quick strike than can leave you broke.  Never forget that.
    As you can see from the diagram below this stock has changed quite about recently.  The prices skyrocketed and I am sure fetched a pretty penny for some smart investors.  Know your stuff and this is what you can get.

Stock Market Trading: Research is key

    Money is not made on a gut feeling.  It is made with precision, and the people that rake in the cash are the people who do their research.  You might be asking yourself, what do I research?  You research everything about your investment before you even consider buying.  Who owns it, their reputation, their families reputation, who will step in if the owner steps down - everything.  I said it before, I'll say it again Google is your friend.  Go through article after article, take notes and get as much information as you can.  If you haven't already you should be looking at how the company has been doing financially.  You can find most of theses things with a quick search.  Keep in the loop with business sections of websites.  Realtime markets are great, because they will automatically refresh and show you how the stock is doing.
   A few good websites you can use to keep updated on your stocks are:
Google Finance
Wall Street Journal
Yahoo! Finance
CNN Money

Stock Market Exchange: Timing

    Timing is important with stock exchanging.  If you have made some good money, it is not always smart to stay with that business.  As I said before the market fluctuates.  This is when selling comes in, you can find more information on selling stocks: Here!
    If your timing is too late, something could happen to your business and you could lose money.  If your timing is too early you can lose potential money.  The rule "better safe than sorry" only applies to some people.  Some risks pay off BIG.  Others lose BIG.  It is close to gamble, but it couldn't be farther from it if you are smart with your investments and research.  You really can make a killing in the market if you know what is going on with your investments.  On the other hand if you are dealing with serious cash, your buyer will most likely know what is going on too.
    You might be asking yourself how people stay ahead of the game.  Some people use insider trading to manipulate the market.  You should be aware of this, and it's legal and illegal components.  I'll leave that for another time, but for now you can find more information: Here!

Stocks Market Exchange: Practice & Research

   Those are just some of the things you are going to need if you want to be successful.  To get the swing of things you are going to need some practice.  Stock simulators are good for this, and can be a useful tool if you want to just "test it out".  Think of it as dipping your toes in the water, if it's to cold or hot, don't go swimming.  If the temperature, or the stock market in our case, is right for you - dive in.  A good simulator to try can be found:
Here!

   Research can be done anywhere from a computer.  Research how the market works, the basic components, and try out the simulator.  Then move on to the advanced components and try out the simulator again, and again until you have a handle on it.  Research can also be done on companies you are thinking of investing.  Check the business section of news sites and even your newspaper.  Know what your investments are doing, keep an eye on the company you chose!

Trading Stocks: Intro

    Trading stocks can make or break you financially.  Make a good investment and make a fortune, make a bad investment and go broke.  This is the way of the stock market.  Stock prices fluctuate, so keeping a close eye on the market and the companies you choose to invest in is a must.
    Stock exchanging is not easy, so if that is what you are here for, leave.  If you are lazy you will lose money - if you keep your head in the game and make smart moves you'll succeed.  Of course this is no guarantee.  You could lose thousands overnight by a bad move on your business.  Making sure the companies "higher ups" have good moral stance is important.  Stock market is largely based on image.  For example:
 Let's say your investment was in a company that that sells frozen foods.  You bought a stock for $0.10 and it went up over time to $5.  You just made 50 times what you initially invested.  Now let's say your company had to recall thousands of frozen food products due to contamination - people boycott the company.  The company goes under, your stocks are worthless.  If you had poured thousands of dollars in that investment, you would have gotten 50 times that and lost it all in the matter of days.
    To be cliche, that is just the way the cookie crumbles.