How to Use Stock-Trading Jargon
One of the greatest barriers into making money in stock trading and the securities markets is learning to use the jargon that experienced traders are so fluent with. A few steps can help you get a grip on the stock-trading vocabulary.
- Difficulty:
- Moderately Easy
Instructions
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1
Learn about the very basic stock-trading jargon by looking up a stock on just about any news service. There you'll see the term "share," which is one unit of a company's stock and the "market capitalization" or "market cap" of the stock, which represents the total amount of stock the company has sold. Also pay attention to the 52-week range, which is the important term for the spread between the stock's highest and lowest amount over a year.
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2
Read an introduction to stock trading and securities either online at a site like Wealth Effect or in a book such as "Trading for Dummies." These resources will offer you definitions of the jargon and stock trading vocabulary in addition to an understanding of the relationships between things like the "Buy Rating" and "Sell Rating," mutual funds and the various financial ratios people use to rate stocks.
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3
Get onto a financial information or investing forum such as the well-known The Motley Fool forum where you can start speaking in stock-trading lingo as you ask questions or even respond to the questions of others, in order to use the vocabulary. Stay open to being corrected in your usage to you can improve your stocking trading jargon.
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4
Do some stocking trading since only by buying and selling stock are you forced to use this specific vocabulary or find the exact definitions of words you don't know. Online services like Charles Schwab or TD Ameritrade allow you to trade stocks with no minimum investment and very small service fees, making them a great way to use stock-trading vocab.
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