One-Stop Primer to Investing and Trading

 

Why Invest?

The annualized returns on the S&P has been at least 10% for the past 30 – 50 years. This is one of the best ways to increase your personal net worth. This is a good way to prepare for your interview as you get yourself abreast with the latest market news.

Why Trade?

Make some quick bucks. Learn the thrills of trading to learn more about sales and trading an investment bank.

How to get started?

Setup a brokerage account now. Etrade and TDAmeritrade are good ($10 per trade). Sogotrade ($3 per trade) not too bad. Zeccotrade ($4.50 per trade) okay.

Investing vs Trading

Investing	Trading
Buy and hold Consume less time More fundamental analysis	Day trade or swing trade Takes up a lot of time Requires technical analysis

Investment Primer

Look for undervalued stocks with growth potential. Generally, low P/E, PEG ratio indicate cheap stocks. But some low P/E could also mean little growth potential. This is why it is important that you understand the growth prospects of the company.

The higher the growth, the P/E should be higher.

Trading Primer

Technical Analysis. Learn the basics such as the 5 main trading patterns

1. Head and shoulders
2. Double bottom, double top
3. Flag
4. Trend channels
5. Support and resistance

Also learn some indicators like

1. Moving Averages
2. Fibonnaci
3. Stochastics
4. MACD