When you don’t know much information about the stock market, any word that you can hear from someone related to this topic will surely interest you. Perhaps you know someone who won a large sum of money in the market or who regretted that he had lost all his property. The stories of these people are contradictory: one calls you to the market, the other advises you to stay away from it. It’s difficult, because you really don’t know what’s what. In addition, it cannot be argued that people telling you these stories are well versed in what is happening on the exchange.
There are a lot of rumors about the market structure, as well as about traders. Some topics are covered even in various news. For example, in 2014, a young man named Mohammed Islam, who was a high school student, earned $ 72 million in the stock market, and the whole world knew about it. But the next day, this information was denied. It was reported that on Black Monday, which took place on August 24, 2015, one-day traders also earned $ 34 million.
One of the most interesting stock market stories
American billionaire investor Carl Icahn "made money on tweets." He first announced via Twitter that he had received a large number of shares from Apple. As a result, the value of the company's shares and the income of Ikan increased. He then wrote that he had acquired a 9% stake in Family Dollar, a company whose shares also rose in value. These two tweets helped him earn $ 149 million in two months.
The story of Billy, who started working at Goldman Sachs
A tragicomic event occurred on the French Riviera.
In a small town on the coast of the Riviera, the season cannot be opened due to debts. Every resident owes someone money. One day, by chance, one client comes to a rich Russian hotel, gives $ 100 at the front desk and leaves for the room. The owner of the hotel takes the money and pays his debt to the city. Butcher gives money to the wholesaler. A wholesaler gives money to a prostitute who works on credit. A prostitute takes the money and arrives at the same hotel and repays her debt. At this time, the Russian client returns and receives the money back, saying that he does not like the number. No one made money in this case; but everyone paid their debts to each other. "
And this story resembles the logic of buying with a low price and selling with a high. A retired teacher walks along the road, and a car drives up to him. A young man sitting in a car addresses him: "I will take you wherever you want." However, the driver does not know the companion. The young man introduces himself and the teacher recalls. Then the teacher asks the guy: “Where did you get the money, because you were a bad student?” To which he replied that after school he went into business, and soon earned some money. The teacher was surprised, because the student did not know mathematics well, but the student answered: “Well, I do not know mathematics. I buy goods for 1 dollar and sell for 4 with a difference of 3%.
About Exchange Legends
The stock market will soon disappear, there will be no more profits on it and an economic crisis will ensue. What just do not say on this topic. There are many legends that people believe in. We are going to talk about one of them now. Its essence is that the stock market is connected with gambling! Is it true? Of course not! The stock market, above all, plays a large role in a market economy. It ensures the formation of a single price in the markets, is important in the fight against inflation, is one of the largest intermediaries in providing funds to various companies. Gambling does not have anything to do with it.
And there is evidence for this. For example, if you intend to trade stocks on the stock exchange, you are actually investing in the company that owns the stock. It is necessary to study information about the company and try to find out whether the investment in it will be successful. But in gambling this cannot be done. You cannot count cards in the hands of players. Similarly, on slot machines, it all depends on the lever that you turn. In gambling, every game has an end. In the stock market, transactions are a cycle.
The analogy with gambling and the stock market can only be drawn as follows. You need to risk a lot of money in order to earn more, both in the stock market and in gambling. For example, in poker, a player puts more money in his hand and raises the pot. Similarly, if you see stocks are promising and if there is great hope that they will win, you will take them more. In any case, if your guesses are correct, you will earn more. This is called "risk management." In the stock market, the data is more reliable.
Story of billy
Billy buys a donkey for $ 100 from a farmer. The farmer was supposed to bring him a donkey the next morning. The farmer came, but without a donkey, reporting that the animal had died. Billy asks for his money back, but the farmer has already spent it. Then Billy wants to pick up the dead donkey. To the farmer's perplexed question, Billy replies that he came up with the idea of playing it in the lottery.
A month later, the farmer met with pleased Billy. The guy said that he was playing a donkey (without informing anyone that he was dead), he sold 500 tickets for $ 2. The farmer asked if people really didn’t understand that the donkey had died. Billy replied that only the person who won had learned about it. He was very angry, then Billy just returned him $ 2. The profit of the resourceful guy was $ 998.
"The stock exchange is rich!"
There is a legend in the stock market that only the rich have money. In fact this is not true. There are no restrictions on the amount of money that will be invested in the exchange. You can enter the market, invest in it and earn 100 pounds, initially having the same amount. When you come in with big money, you earn more.
"Rising stocks always fall"
According to this theory, the rules of physics in the stock market do not work. Because a growing investment instrument in the stock market will not be attracted. Stock growth may continue. For example, a stock whose value rises from 10 lira to 20 lira will obviously grow. She can continue her growth and rise to a new level. In other words, you must take into account that it will continue to grow, even if it was initially thought otherwise.
"Falling stocks should rise"
This is one of the main legends of the stock market, and it is also erroneous. Some people think that a stock may rise even if its value has been decreasing over time. But, first of all, you need to find out about the cause of the fall and examine the company if this is a long-term fall. Because the company's affairs can go very badly, even if an increase in the value of shares was previously foreshadowed. But also your bankruptcy can become a reality.
“I'll ask someone for advice,” some say. Yes, advice can sometimes be useful, but they are of no use in the stock market. You can get useful advice, for example, regarding nutrition, and it will help, but they rarely help in the stock market. Because trading in the stock market is individual for everyone. Therefore, a useful trading tactic for one person may be useless for another.
You need to strive to gain experience on your own, without any advice, and trade using your own strategies.