The good news was that. The bad news is that these businesses will only sell you the tools and services. They don't sell you anything that is a sure way to succeed. No matter how much money you make or lose, the trading company will still get its fee for each trade.
If you're thinking about investing in the stock market, you probably want to get a big return on your money. This return should also be better than what you'd get by putting your money into mutual funds, which are less risky than single stocks, or even certificate of deposits (CDs), where you're guaranteed to get your money back.
Well, how do you make such money? The answer is obvious and simple: buy low and sell high. You will be a good stock trader if you do this most of the time. The first problem is figuring out when to buy. There are probably a few ways to do that, but we're not going to talk about them here. Let's just assume that you know or think you know how to do it. Let's say you got lucky and the stock is going up after you bought it, just as you had planned.
Now comes a new problem: when to sell? What do you do when the stock has gone up 20%? Should you sell it now, or wait until it goes up 50%, 100%, or 200%? Do you pay attention to investor news and do what everyone else does, such as sell, buy more, or keep holding the stock? How much of the stock should you buy or sell if you choose one of the first two options? Or, if you keep the stock, are you sure it will keep going up? If not, you might end up waiting until the stock price goes back to where it started, at which point it will be worth less and you will have lost money.
The truth is that some people do know most of the time how to answer those questions and make money from it. The question is whether or not you can do as well as those people. Most people lose money when they try to guess and time the market. If you are new to this game and don't plan to do much research, you will probably lose. You will be up against professional traders, big players, and insiders, most of whom make money because most people lose. Plus, how likely is it that you can guess the market? There aren't many chances.
Some may argue: "I had that stock, and I sold it when it was up 20%. If I hadn't sold it when it was up 20%, it would now be up 300%. How dumb I was to sell it, because if I hadn't, I would have made a lot of money. I have to keep doing this. It really shows that I can easily make a lot of money there." You can make a lot of money, but it's not as simple as it seems. Let's say you didn't sell the stock when it went up 20% and it was up 20%. Then why do you think you would wait until it's up 300 percent? You might have sold it when the gain was only 25%. Or, it could go down several times below a 20 percent increase. You might have thought it would go down forever and sold it for less than a 20 percent profit because you thought it would go down forever.
In the end, it's easy to look back and see all of the mistakes you've made. But it is very hard to act in the right way for the future. If you don't know market trends, related industries, and the financials of stock companies, you probably won't be able to make trades that make you money. Even the best traders make mistakes and lose money sometimes. If you are not one of them or don't plan to become one, your best bet is to put your money into CDs, mutual funds, or your own business.
