Audioburst Search

What Are Stocks - How To Buy and Sell Stocks And Why Volume Is Key

Automatic TRANSCRIPT

Hey guys Mubarak in Penny Stock Kobe. Doing well in this episode of WanNa Talk to you guys about how you can get started trading stocks. All right I wanNA Nicole little bit more in depth about the specifics. You know the basis basics of stocks shares in. What's the difference even if there is one on You know one of the differences between stocks and shares and really want to discuss some of the fundamentals of the stock market. Are I cover. Cover all of that in this episode. Stay tuned and finally we're going to end with the discussion of stock price fluctuations in what really affects the price of a stock and then how to buy and sell so. Let's get right into it. What I want to start talking about is stocks right so for those of you guys weren't beginners? You should know. The stocks are very attractive alternative form of investment for people with not a lot of cash on pat right so I mean you have the headphones in the billionaires are also by hundreds of thousands or actually millions and billions of dollars worth of stock. But the best thing about it is that that you can get in without any barriers entering the very easy to set up a trading account which I did a few episodes back on the podcast and You know there's there's a certain amount of risk involved in participating in the stock market but you can control that risk and we're gonNA discuss how you can do that so the basics about stocks right making informed purchases will always limit your liability and that will allow you have better revenue revenue than other traders right. So essentially there's a different types of stock investments that you can be involved in and the one that usually we get comfortable with or no common stock right so when you see a share on public market you can kind of see that Pretty much see. I don't know public market. You can buy and sell facebook. Google Twitter Netflix. All of these stocks. And they you know they go up. I've been down on a daily basis but when you buy the share I want you to understand that. It's essentially buying ownership in the company right. The share is apart of the whole of the company so even though most people you know think about it as if they're doing certain type of gamble right that's kind of what you think of when you think penny any socks when you're buying stock it's actually a part of the actual company as a whole so in that fashion. You can make sure that you are buying into the right type of investment like if you go to Warren Buffett method right. He invested over forty years fifty years he wasn't looking to to do quick flips or quick traits all right and in that scenario when he was looking for is very sustainable very profitable businesses with a very good management team at he could trust to continue building the business so that's the type of messing heated right and so you just just WanNa go over some quick differences between the terminology of stocks shares Just so you are more familiar with again because stocks will be the more on the concept of earning equity in the company and and usually they're paid up in full right. The difference is that when you're buying shares or when you're given shares shares through a certain company. This is usually happening when you know you're a you're an employee of the company so say there's a startup STARTUPS STARTUPS usually tend to not have as much cash flow as more mature in a fortune. Five hundred fortune one thousand businesses. So with they do that. They'll give you a salary right but will tend to be either average or maybe even sometimes below average because you know the company can't sustain that type of cash flow so that type of payroll that they would. Oh you so instead what they do is they also give you a portion of shares will usually be vested within the next year or so and so those shares are the different right so when you're talking about shares company that's one element but what we're talking about in day trading and investing in Penny stock we're talking about actual trading right in so trading is when you actually buying and selling stocks within the same day within the same week or even having a plan that stock price is going to be volatile enough to go up or down in a certain fashion that will allow you to receive some type of profit or return okay so in terms of stock price fluctuations. Right if you look at the stock market as one huge auction or one. Huge like exchange often embody. That'll help you understand more about the stock market okay. The price doesn't actually reflect the true value of the company. The price is simply the demand in the market. So the more people WANNA stock the higher prices go up and the more people want to get rid of a stock. The price will go down so this means right. The reason this is important to understand is that you have to be wary. That just because you're buying into a stock doesn't necessarily Nisa -sarily mean that you believe that the stock is going to go up in value or domin value right. You're not really necessarily talking about the true enterprise value value the stock. You're just trying to figure out that your little widget that you own those certain amount of shares or stocks that you bought in the company a you're able to make a profit on that so you know the value of the company is usually discussing concept called market capitalization again that is only the stock price multiplied by the number of shares outstanding. So you might hear in companies with a billion dollar multi billion dollar market capitalizations. That doesn't necessarily mean that that's the exact value of the company just one of the indicators keep in mind so so I hope that gave you guys a little bit more insight into the basics of stock trading all right just very intra level information about understanding y there's advantages in trading stocks and understanding. What that even means basically what you have to keep in mind mind of and will be go more in depth? That in Penny Stock University is when you're buying and selling stocks you need to make sure that there's a market for it are that concept is known as has liquidity. If you're liquid that means liquid refers to cash right cash is best because you can buy sell quickly if you buy a house. You're not necessarily liquid because even though that house hasn't asset value and say could be worth half a million or millions of dollars the thing is at liquidity quitted liquidity. That's what it's the right tournaments center. How quickly you converted to cash so you can use it to buy and sell alright cash? Hashes Kim cash is what you need to pay your debts bills all that stuff right if you have to pay off some debt. You can't just say Oh. Yeah take my bedroom in my house. You know. That's not a real way of exchange or at least not in most places Until the liquidity factor is very important. And that's what makes stocks Interesting and attractive. Investment is that you can buy stock in five seconds and then you can also sell a stock pretty quickly as long as you make sure that the stocks that you're buying and selling have inactive market okay so the key metric you WANNA keep in mind there is what are the volume of shares being traded rated R. I.. Unless you WanNa make sure that when you're looking at stocks anew looking at every time either you'll yahoo finance or if you go to finish his is that's F. I N. V. I. Z.. Dot Com or at in Penny stock itself. We have great tool. That's free. You just go to impending stock dot com slash stocks and you you have a free stock screener there and one of the metrics at the bottom of the price chart will be the amount of shares traded right. That's what volume is so that that is probably the most key component or metric that you have to keep in mind when you're looking to buy and sell stocks because volume is going to determine I'm in how fast you can get in and out of the position around the position. Meaning you know when you buy a stock. That's your position than when you want to sell it. You're getting out of your position. So that's just the terminology that traders use. But that's definitely something that you want to keep in mind because the liquidity is the key component that gives do the advantage in trading stocks. So hope you guys enjoyed that if you WANNA learn more and get more in depth about had against started trading check out our free trial compeny stock dot com slash free trial. It's going on now as a black Friday cyber Monday sales so definitely check it out again. That's in penny stock dot com slash slash free dash trial. Okay or you can just go check out the homepage and you'll see there but if you do have any questions or Wanna learn more always feel free to email me at Admin. That's eighty M I N at in Penny Stock Dot Com from you guys.

Coming up next