Wednesday, December 03, 2008

Stock Market: when can we start trading stocks with comfort?

In my earlier post, we presented a figure covering the last century (almost) of the DOW. There we figured that the stock market can go down below 6000 and not even break the trend, and if it does, not below 5500.

Many of us may be tempted to go into stock trading because I said in that post that: Be ready - jump when the time comes, as these kinds of lows and opportunities only comes once or twice in a hundred years.

So let me give you an overview:

Stock trading or online stock trading deal with trading stocks i.e. buying and selling of stocks for a profit. In stock trading, you or your broker (you primarily) should correctly identify the direction of stock prices. It is important to anticipate the timing of the price fluctuations because a bad price fluctuation could result in a loss in a short period of time. Timing is very important in online stock trading, which makes new investors apprehensive while taking up trading. But then, in this kind of market, I would be careful – I am not sure if we have already seen the bottom.

IMO, once the general perception of the market improved, i.e. recession is over. Get any blue chips, and wait until the market returns to 10000 or more.

This is all for now.