May 01, 2021
6 mins read
Hi guys, welcome back. Now that we've covered HOW TO HANDLE and MANAGE our money, let's learn how to MAKE MORE MONEY. The main reason why we're all here 😅. If you don't need to make more money this is still, also for you. Because for this reason 👉🏼 Haven't you ever wanted to join discussions with people whenever they'd talk about the stock market and crypto market? By knowing all of these terms and understanding them by heart, you will be able to join in the debates, share your knowledge, AND most importantly, not make a complete fool out of yourself by saying the wrong things 😂. Trust me. I've been there! (LOL!!!) Gave some of my insights before and said things that did not make sense, and everyone looked at me in a very embarrassing way. Now that I know all the terms, my past self has no idea how embarrassed I feel right now..... Anywaysss... Feel free to grab yourselves a cup of coffee and some snacks because this may be a little long. While you're at it you can go ahead and buy me a virtual cup of coffee as well. ☕️😊
Before we start, I highly recommend that you first manage your expenses (which I explain in my previous post), calculate your 70-15-10-5 budget, and calculate how much you can actually invest into the game of trading. (That's right, I called it a game.. But hell no it ain't a gambling game. Lots of people say trading is called gambling. Well yeah, for those who DON'T KNOW how to use strategies, technical and fundamental analysis, those who don't do any research, and for those who have no trading plan AT ALL.) To become successful in trading we'll need to learn everything I just mentioned above. So first, let's learn the important terminologies that YOU MUST KNOW and UNDERSTAND before we get into the strategies.
💎First, let me explain what STOCK MARKET is. The stock market is an exchange that allows people to buy and sell stocks and companies to issue stocks. A stock represents the company’s equity, and shares are pieces of the company. When people talk about buying and selling stock, they mean that they’ve bought or sold one or more shares of a particular stock. The purpose of the trader is to make money.
For example, if I buy 100 shares of Apple's stock at $190 and sell it six months later for $210 per share, I’ll make a profit. If Apple crashes (which is unlikely), I lose money, in which case I’d want to sell quickly to limit my losses. 💎
🚀Now here are the most important terms you'll need to know before you start (Don't worry I have simplified it to the point you won't be able to misunderstand 🤜🏼🤛🏼):🚀
Buy – Means to buy shares or take a position in a company.
Sell – Getting rid of the shares as you have achieved your goal or want to cut down losses.
Ask – Ask is what people who are looking to sell their stocks are looking to get for their shares.
Bid – Bid is what you are willing to pay for a stock.
Ask-Bid Spread – Spread is the difference between what people want to spend and what people want to get.
Bull – A bull market is a market condition where investors are expecting prices to rise.
Bear – A bear market is a market condition where investors are expecting prices to fall.
Limit Order – A limit order is a type of order which executes at the price placed for buy or sell.
Market Order – A market order is a type of order which executes as quickly as possible at the market price.
Day Order – A day order is a direction to a broker to execute a trade at a specific price that expires at the end of the trading day if it is not complicated.
Volatility – This means how fast a stock moves up or down.
Going Long – Betting on the stock price will increase so that you can buy low and sell high.
Averaging Down – This is when an investor buys as the stock goes down so as to increase the price at which purchased.
Capitalization – This is what the market thinks a company’s value is.
Float – This is the number of shares that can be actually traded after deducting the shares held by insiders.
Authorized Shares – This is the total number of shares that a company can trade.
IPO – It is an Initial Public Offering that happens when the private company becomes a publicly-traded company.
Secondary Offering – This is another offering in order to sell more stocks and to raise more money from the public.
Dividend – Portion of the company’s earning which is paid to the shareholders.
Broker – A broker is a person who buys or sells stocks on your behalf.
Exchange – An exchange is a place where different types of investments are traded.
Portfolio – A collection of investments owned by you.
Margin – A margin account lets a person borrow money from the broker to buy shares.
Sector – A group of stocks in the same sector.
Stock Symbol – A one to three character alphabet root symbol which represents a company listed on the exchange.
🚀Here's some additional information you will need to sound like a professional trader: 🚀
How does the stock market work?
The stock market is made of many traders and investors who are willing to buy and sell the stocks. The transactions start when the buyer and sellers start trading the stock. The prices of the stocks rise and fall based on the demand and supply for those stocks. The stock exchange provides a safe platform for the transaction of these stocks.
What knowledge do I need to start investing in the stock market?
You need to have basic knowledge of how the stock market works. You should gain knowledge on the stock market-related topics like Fundamental analysis, Technical analysis, Options trading, Commodities, and Currencies, etc.
What is long-term investing?
Long-term investors are those who want to invest in financial assets for more than one year. Long-term investors can invest in financial assets like stocks, mutual funds, bonds, etc. which give more return in the long term. Long-term investors can take the advantage of compounding.
It takes time as well as dedication to grasp the intricacies of securities trading, but when you do, the stock trading terminologies above will become a part of your daily vocabulary.
Did you guys like this post? Did it make you feel sleepy? It did for me since I was typing this at 2:30AM! 😴🛌 If you liked my content please do buy me a cup of virtual coffee ☕️. It would really help in giving me energy to fuel me to make more posts like this. I'll be starting on my strategies on my next post, and will be doing that at this time again. So please, some virtual coffee will really go a long way in keeping me up! Thanks guys! Don't forget to check out the Thank You Message once you buy me a coffee and subscribe to one of my memberships! See ya! ☕️🍪