Download Financial Health- Understanding the Market

UNDERSTANDING
THE
STOCK MARKET
My Sad, So Very Sad Story
1972 -1973
Who remembers
what happened
in those years?
Oil Embargo – Market Crashes
1979?
Who can tell
us what
happened?
Iranian Hostages and Massive Inflation
2001 DOTCOM Crisis
Have I learned my lesson Yet?
NO, I had to get hit over the head
One Last Time
Basics I Learned
1. Stockbrokers are salesmen
2. There are two types of traders
Fundamental Traders
Technical traders
3. How stock market functions
4. Simply economics of supply and demand
5. Stock market is slow to move up and fast to
move down
ECONOMICS 101
When Supply is High Do Prices go up or down?
2 Types of Traders
Fundamentalists
Technical
OPTIONS CONTRACTS
Strike Price: The “Right” to buy or sell stock at a
certain price
Expiration Date: The right to buy or sell has a date
it expires on
Steps To Take
1. Educate Yourself – 6 months
2. Develop Personal Trading Rules
3. Practice with Paper Money
LIKE IT IS REAL MONEY
4. Refine Rules as You Paper Trade
5. Set up a Trading Account and
GO FOR IT!