How to make money in the stock market. It discusses various techniques that will yield a profit.

Essay by fosk10College, UndergraduateA-, March 2003

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How to Make Money in the Stock Market

When I was 17 years old, I was always looking for a quick way to make a fast dollar. I invested my hard earned cash into a risky penny stock. I got this so-called hot tip off the Internet. I then called up my broker and executed the trade. I was now the proud owner of 1,000 shares of a technology stock named Computer Concepts. The stock was 70 cents per share and they had negative earnings, but I didn't care because this stock was red hot. I was excited the next day because the stock rose 10%. This wasn't enough profit for me, so I waited another day. The next day the stock rose 70% and I thought I better sell while I still had a good profit. I sold the stock that day and made an 80% profit on my initial 700 dollar investment.

I thought to myself, wow, it's really easy making money in the stock market. If I keep this up I won't have to work another day in my life.

I then invested another 1,000 dollars in the hopes of at least doubling my money this time. I got another hot tip off the Internet again and purchased a medical stock. As I diligently watched this stock move into a downward spiral, I decided to cut my loses after the stock went down 70%. I then realized that I didn't really know what I was doing. Now, since I have majored in finance, I know a little bit more what to do now. The steps mentioned below are only the basics of how to invest your money in the stock market.

First of all, the one thing you shouldn't do is get a stock tip off the...