Saturday, March 21, 2009

The literacy of understanding on investments

The literacy that is referred to my major is to understand stock data and charts on investments. Every day the first thing I need to do is open my Scottrade account to see stock market, and usually I would like to concentrate on one or two stocks’ quotations. I need to understand the price of Day High, price of Day Low, P/E ratio, and Earning per share ratio. Also, I anticipate stock price trend by analyzing stock chart, using many chart tools such as MACD and Bollinger Bands. However, these are not enough to earn money; the most important understanding on investments is to track stock market’s surroundings to know when the large investment organizations, such as mutual funds companies, decide to “raise” stocks price. What they usually do is attract other investor’s attentions on one stocks (they have many shares on this stock on very low price) by buying large amount of the stock’s shares at very short time, which leads to the price increasing; if successful, more other investors are willing to buy this shares, which pushes the price up; then these large investment organizations start to sell shares to earn money. To track this process, I need to analyze each day’s transaction volume from stock chart to make a decision that predict the period of time these large investment companies start this process, and buy the shares to follow them. I really enjoy doing this because I can obtain amounts of money without hard-work; I also have to take a few risks. Therefore, to earn money, I am not only able to understand data and charts, but also need to pray for luck.

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