Eeeey, Susia, that\'s how the world rolls. You have to be on top of things of you wanna succeed. A lawyer who\'s not on top of things loses cases. Doctors, who play with their work, usually leave instruments in the body cavity of patients. If you want to play with your money, the casinos are open. But if you wanna work with your money, you have to stay on top of things.
Actually, you don\'t need courses to be able to trade, unless you\'re planning to work in Wall Street or look for employment in a brokerage firm. I didn\'t take any courses, but I\'m trading.
You really don\'t have to know the direction of prices. If you knew that, you\'d be the richest woman in the entire universe. What you do is predict. If you\'re right, you win. If you are wrong, you lose. That is where stock analysis comes in. To help you predict.
Imagine you are in the grocery business. Now, the weather people say there\'s gonna be a bad hurricane and Florida will be hard hit. If Florida is hard hit, you know that orange groves can be devastated. Given all the circumstances that influence the weather, the weather boys may be wrong or they may be right.
You have a choice to make. Do you buy up oranges and fill your warehouse so that if something happens, you\'ll have enough to sell to your customers and keep your business alive and maybe charge a little more, when the shit hits the fan. You don\'t want to miss out on all that action
Do you let it ride, hoping your supplier has a plan. If your supplier fails you, you will not have oranges to sell when the storm hits and thereafter. You customers will have to go elsewhere to satisfy their orange craving. In the process, they may discover a store that charges less they you do or is cleaner than yours, or friendlier than your employees. You don\'t want to go find out; they may never come back.
This is where you do what amounts to analysis, in the stock business. You listen to the news to be sure you heard right about the storm. What are other people saying about it. Is this one special? Is it trendy? What has happened in past hurricanes like this?
Then, you call up the weather center or tune in to the weather channel. How sure are the weather people? How far inland and what is the target area? What is the expected intensity and has it been categorized?
Next, you call your supplier and find out what they know. Have they heard about the storm? Have they dealt with this kind before? What are their plans for this thing? Do you have any other options, if push comes to shove?
What you?ve been doing this far is analyzing the orange stock. Depending on the information you get, you make a decision, to fill your warehouse or not. That\'s the decision you make to buy or not to buy stock.
But what, after all the hoopla, the storm hit Cuba and went back into the sea. Or it could, instead of taking Florida head on; change course and move north, and never makes land. Florida didn\'t take a hit. The orange groves will be just fine. Maybe, the rain that came with the peripheral winds will do their body good.
What happens to you warehouse full of oranges? Orange prices just dropped because other stores had done the same as you. What do you do? It\'s getting warmer and your orange may rot. You simply have to unload you stuff. You sell at a loss.
That, my friend, in a nutshell, is the business of stock trading.