how to make money in stocks and how to get rich_38

During a bear market, stocks frequently open strong early in the morning

and close weak by thend of the day. During bul markets, stocks tend to

open down and come back later in the day to close up strongly. (The

market opens at 9:30

a.m. and closes 4:0 p.New York time, 6:a.m. and 1:0 p.California time. But it isubjecto periodichange.)

Catch a shift with this easy test: se if you show profit on any of your

last four or five purchases. If you haven't made a dime on any of them,

you might be witnesing a negative shift in the overal market.

Aditionaly, if stop-los orders are used and either placed on the

stock exchange specialist's bok at specific prices or mentaly recorded

and acted upon, the market that is starting to top out will mechanically

force you, robotlike, out of many your stocks. A stop-los order

instructs the

specialist in stock on thexchange flor that once stock drops to your specified price, ithen becomes a market order and

wil be sold out on the nextransaction.

In general, I think it is usualy beter to not enter stop-los orders.

Watch your stocks closely and know ahead of time thexact price at

which you will immediately sell to cut a loss.

If, on the other hand, you can't watch your stocks closely or you are

the vacilating-type investor who can't make decisions to sel and get out

when you are losing, stop-los orders might helprotect against

your distance or indecisiveness.

If youse them, remember to cancel the stop-los order if you change

your mind and sel a stock before the stop-los order is executed; otherwise,

you could later acidentaly sel a stock no longer own. Such

errors can cost you money.

One of the biggest faults investors have is that it takes time to reverse

their positive views. If you sel and cut loses 7% or 8% below buying

points, you will automatically be forced into selling as a general market

corection starts to develop. Thishould make you begin shift into a

questioning, defensive line of thinking soner.

A sophisticated investor who uses charts and understands market

action wil also find there are very few leading stocks that corecto

buy at a market-toping juncture. There is also greatendency for laggard

stocks to show strength at this stage.