How to Invest in Stocks for Research as a High School Student
If you are in high school and want to learn how to invest in stocks there are a lot of educational tools available today that weren't around even just a few years ago. There are simulators to trade with so you never have to risk a dime as well as plenty of free charts and analysis tools. Knowing how to invest is an invaluable skill and the younger that you get started the longer you will be able to compound your gains.
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Instructions
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Open a free trade simulator account with Investopedia.com by simply submitting your e-mail address. Here you will compete against 350,000 other investors in managing your own fictional portfolio, which begins with $100,000. You can buy and short sell stocks and even purchase options. You will compete in existing competitions or create your own private ones with classmates.
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Determine the overall trend of the stock market. Before you begin investing you want to decide what the overall trend of the market is. As much as 25% of a stock's movement can be determined by the trend of a market index like the S&P. For example, if the S&P 500 is above its 200-day moving average, the stock market is in an uptrend and you should have a preference for buying stocks. If it is below the 200-day moving average, the market is in a downtrend and you want to either short sell stocks or exit the markets and stand aside until it changes to an uptrend. You can go to MarketWatch.com to find free charts and indicators like the 200-day moving average.
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Learn technical analysis. After you determine the trend of the overall market you will need to decide which stocks you want to purchase. Technical analysis is a complex topic and there are literally thousands of indicators and systems that you can learn, some more effective than others. The 200-day moving average mentioned above is a technical tool to gauge the overall trend of the market but you should also apply additional indicators to your individual stock.
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Learn fundamental analysis. Examine things such as earnings, cash flow, and debt of the company in question. One way to do this is to study Investors Business Daily, a newspaper and website, which provides grades for stocks based on fundamental data.
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Study, study, study. If you want to learn how to invest in stocks you will need to read and study as much as you can.
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