There are two ways of making money in stock market – trading and investing.
TRADING
Trading is a very risky process. you need to know more about technical analysis. Traders have only a short-term view on the market. He can buy and sell the stock in a single day or carry forward a few more days in the view of making profit from that. There is no guarantee that he can make profit from that. Sometimes it may end up with losses as well.
To be a successful intraday trader, you should
- Learn the Fundamental Analysis & Technical analysis of stocks.
- Monitor the markets every single day.
- Keep watching stock related news
- Have a trading strategy that works.
- Read the best trading books available
INVESTING
It is a process in which investor hold the stock for a longer period like several years in the assumption to get a decent profit from it. As an investor he should study the fundamental analysis of the companies or stock to become a successful investor.. There are two primary ways to earn money from investing in shares – through capital appreciation and from dividends.
Difference between technical and fundamental analysis
Technical analysis mainly focuses on the study of price, volume and volatility of the market. It is helpful for day traders and short-term trader by the analysis of price trends, chart patterns, volume and momentum indicators, moving averages and support and resistance levels.
Fundamental analysis mainly focuses on overall economy and management of the companies. For a long-term investor, it is essential to understand the fundamentals of the companies before investing in those companies. Investor must go through the earning, expenses, assets, and liabilities to make a final decision to invest in a company. Fundamentally strong company’s stock prices will move up and create wealth for investors.
Conclusion
The secret to make dollar in stock market is stay invested. We should invest in best performing stocks to increase the profits over time. More over that we can get good dividends from the invested stocks which is also an additional income. Trading is not a bad option for making dollars provided you are well versed in trading strategies and monitoring stock related news daily.