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Is trading stocks a gambling?

Most of the people, who hear about trading stocks and investing in them consider this way of earning money to be something like a gambling. They claim, that it’s based on some randomness, which can’t be predicted. As a result, a person can’t control anything and uses his or her luck only. Of course, it’s not true. In this article we are going to prove it.

Stock is a key to accessing the actual profits of the company, to its cost and its value. Investors, who buy stocks, get some revenue, which is formed of the money, that gets into the company after it gets to the shareholders. So, investors buy something real – some part of the business, which is, though, presented in a virtual stock. If an investor wants to get his money back, he can exchange the stock for its price. If the company increased its value, the final price of such an exchange will be bigger, than the money he invested in the very beginning. This is the simple explanation of the earning process of investors.

On the other hand, gambling doesn’t create any additional value. Money, which are ‘invested’, are simply taken away by the casino and, according to some random combination, are paid back with some profits or taken away forever. A person can’t exchange his bet.

So, as you can see, gambling and stock investing are absolutely different in its core. Calling stock trading a ‘gambling’ is wrong.

Why do you think, that the stock price turns back?

A lot of investors make similar mistakes in their actions. Some of them can be really calle ‘the group mistakes’, because they are made by several people at the same time. The belief, that the price of a stock can turn back again is one of them. Let’s draw a simple example, in order to show the real picture of this myth.

Imagine, that there are two stocks – X and Y. The price of X was 10$, while the price of Y was $50. In 5 years the situation changed – the X’s price was equal to $25; while the Y’s price was $20. How do you think, which of them is much more attractive for the majority of investors? Right, it’s the Y stock.

People believe, that things are going to become same, as they were some years ago. If we are talking about the stock prices, it’s a belief, that they can raise or fall down again, as it was earlier.

On the other hand, if we see that the price of any stock is growing, we can make a similar mistake. People can think, that the price is growing now, but it will fall down later again. That’s why another company – with more expensive stocks in the past, is a better perspective. Surely, it’s a false.

There is no any magic power, that will bring the stock prices back. It’s only the actual reflection of the market, of the company condition and the processes, running inside.

Creating you own trading strategies

Trading strategy is a way you make decisions on your trading – how you behave in any situation, tracking the movement of the graphs. It determines, which steps you take, in order to gain profits, trading stocks and currencies. Strategies can be either found in the public access, or they can be sold as a private information. In this article, we would like to describe the tips for creating your own strategy.

First of all, it’s worth mentioning, that you need an access to the charts, reflecting a time frame and showing the actual price of the stocks and currency you trade. The specialists claim that watching these charts and noticing the dependance between them can bring you some useful ideas on how to predict the movement of graphs in the future. That’s the theoretical basis for your strategy.

Second, your ideas must be checked in a practical way. Let’s say, you feel that you discovered the actual conditions, which prove the future behavior of the charts. If you want to get the real strategy, you need to meet the same conditions on practice and trade, following your own strategy.

Third, while creating a strategy, you need to narrow your trading field. Let’s say, you should definitely know, which stocks you should work with and which time frames you choose. These could be either the minute-, or the day-trading options to work with. So, keep it in mind and follow these limitations.

And remember, that each strategy, just like any kind of rule, can have its own exceptions.

 

Doubling your investments

There are different ways to double your investments (or even triple it, there is no any difference). Each of them can be used by you to earn some money withing your trading career. So, let’s look at them closer.

1.Earning slowly

The most simple, but, at the same time, one of the most difficult ways to get your investment doubled, is a slow earning of money. You should invest in some blue-chip stocks or investment grade bonds, in order to ‘keep it rolling’. This strategy won’t lead you to a great failure, but its income will be not so fast, as you probably wanted.

2.Smell the opportunity

Another way to double your capitals is waiting for a good moment to buy. There such a famous phrase of Baron Rothschild, like ‘buy when there is blood in the streets’. It’s a great example, which shows how the real financiers feel the market opportunities and act when it’s needed to.

3.Safe way to invest

Another interesting way to earn the profits is buying zero-coupon bonds. They allow the investors doubling their money pretty fast, though the actual risks are moderate.

4.Speculative way

Another way for people, who prefer the ‘now or never’ way is speculations. This strategy can be used by those investors, who are familiar with the actual financial statistics of any company. So, hitting the market can change this company’s stocks price and, as a result, to bring some profits as well.

 

How to improve your credit score?

It’s not a secret, that a good credit score can play a huge role, when you apply for the loan. No matter, if it’s a personal loan for buying a car or a boat – you can save thousands dollars, if your score was higher than it is. So, how can you raise it fast with minimum efforts? Let’s find out.

1.Errors

If your credit report has got any errors – you should immediately dispute them. If you are sure, that the credit bureau has made some mistakes, you should point their attention to this fact, if you don’t want to pay more in the future.

2.Paying Off is a key

In order to improve your credit score, you should think well about paying off the debt. It’s a key to lowering the debt-to-income ratio. As a result, it makes you a more appealing person for lending the money, from the bank’s point of view. So we advise you to pay off.

3.Opening a second credit card

Another credit card will definitely raise your credit score, just as you like. Besides, it can be used for shopping needs on your own, allowing you to purchase more.

4.Raising the credit limit

If you have got a credit right now, you can ask your lender for increasing the credit limit. Even if you don’t actually need this money, you willl be able to leave them with no movement. However, you credit score will be improved.