by Blonde Rose

Created on: January 27, 2008

The sure-fire way of making money in the stock market is to never forget the three R's, research, research, research. Educate yourself about how the stock market works and the risks it involves. Once you understand the risks you can devise strategies to minimize them and make the stock market work for you.

The most important thing to understand about the stock market is yourself. Yes you, because the kind of personality you have will determine how you prefer to make money in the stock market.

How much money do you want to make, how much do you want to be involved in the process and what level of risk are you prepared to be exposed to?

Do high levels of risk turn you on or do they terrify you? Would you rather keep your risks to a bare minimum or maybe you are a slow and steady wins the race kind of person, preferring low to medium risk with the odd high risk thrown in? All ways are good ways; it just depends on your comfort zone and how hands on you want to be.

Do you like strategy, gambling, enjoy reading charts and speculating whether they will go up or down? Or do you just want to kick back, relax and collect dividends, patting your bottom drawer every now and then while sipping on a drink with an umbrella in it next to a swimming pool?

If option one sounds like you and you also like adrenalin rushes and respond well to pressure, you have the makings of what is known as a "Day Trader" or a speculative investor. Day Traders generally buy and sell stocks within one trading session, hoping to sell them at a profit before the market closes for the day, hence the term "Day Trader".

Day trading is like a full time job; you can't afford to take your eye off the ball if you want to achieve success.

Background history and information regarding past and future earnings of a company are usually of little interest to the Day Trader. In other words "fundamentals" are not a concern to them. The elements they are concerned with are the company name, the sector it is in, any company announcements the company makes to the stock exchange that may impact on the stock price and predicting how the market reacts to the announcement.

For them the main factor is the psychology of the market and analyzing it to try to determine whether the market is in an opportunistic rising mood (bull market) or a pessimistic falling mood (bear market) and predicting which way the herd will run if it is in a crisis.

You may be familiar with the saying "herd mentality", otherwise known as the option that

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