Trading For Dummies

Trading For Dummies
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Trade your way to a more profitable portfolio

Savvy traders can make money in both up and down markets—and now you can, too! In Trading For Dummies, investors from every walk of life will benefit from sample stock charts, position trading tips and techniques, fresh ways to analyze trends and indicators, and all the latest information on trading stocks wisely in any type of market.

Taking the stress out of the stock market, this no-nonsense guide walks you through all the steps to trade with authority—and takes your portfolio to exciting new heights. Whether you're an investor looking for a clear guide to successfully trading stocks in any type of market, or an investor who has experience trading and are looking for new, proven methods to enhance the profitability of investments, you'll find a proven system for eliminating doubt, decreasing risk, and, ultimately, increasing return.

Understand market cycles and choose a great broker

Manage your risk exposure

Build a balanced portfolio

Develop your own custom trading strategy

If you're in need of basic strategies and stock valuation methodologies that let you make smart trading decisions, this book has it all!

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Trading For Dummies, 4th Edition

Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030‐5774, www.wiley.com

Copyright © 2017 by John Wiley & Sons, Inc., Hoboken, New Jersey

Published simultaneously in Canada

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Library of Congress Control Number: 2017941824

ISBN 978‐1‐119‐37031‐4 (pbk); ISBN 978‐1‐119‐37033‐8 (ebk); ISBN 978‐1‐119‐37032‐1 (ebk)

Introduction

Trading used to be the purview of institutional and corporate entities that had direct access to closed securities trading systems. Technical advances leveled the playing field, making securities trading much more accessible to individuals. After the stock market crash of 2000, when many people lost large sums of money because professional advisors or mutual fund managers didn’t protect their portfolio principal, investors chose one of two options – getting out of the market altogether and seeking safety or finding out more about how to manage their own portfolios. Many who came back into the market ran from it again in late 2008, when the market saw its worst year since the Great Depression. In 2017, the stock market roared to a high of the Dow Jones Index topping 21,000, but will they be spooked again after the next correction?

The concept of buying and holding forever died after that 2000 stock crash; it saw some revival from 2004 to 2007 but then suffered another death in 2008. People today look for new ways to invest and trade. Although investors still practice careful portfolio balancing using a buy‐and‐hold strategy, they look much more critically at what they’re holding and are more likely to change their holdings now than they were before the crash. Others have gotten out of the stock market completely.

Still others have moved on to the world of trading. Many kinds of traders ply their skills in the markets. The ones who like to take on the most risk and want to trade as a full‐time business look to day trading. They never hold a position in a security overnight. Swing traders hold their positions a bit longer, sometimes for a few days or even a few weeks.

But we don’t focus on the riskier types of trading in this book; instead, we focus on position trading, which involves executing trades in and out of positions and holding positions for a few weeks or months and maybe even a year or more, depending on trends that are evident in the economy, the marketplace, and ultimately individual stocks.

About This Book

Many people have misconceptions about trading and its risks. Most people think of the riskiest type of trading – day trading – whenever they hear the word trader. We’re definitely not trying to show you how to day trade. Instead, we want to introduce you to the world of position trading, which is much safer, less risky, and yet a great way to build a significant portfolio.



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