In case you want to be a smart investor in stocks one of the foremost things that you will have to learn is to gain knowledge in reading stocks. Reading stock not only involves knowing the price of the stock on a particular day but also knowing about the past and current trends of the stock in question.
How To Read Stocks By Checking Websites And Papers
You can have a look at stock prices from different sources such as online stock sites, online business and news sites, business newspapers, etc. The best sources for reading stocks are online sites like Yahoo Finance as the prices of stocks get updated almost immediately.
You can also start reading sticks by following the tickers on news channels and stock sites. A ticker is an abbreviation for a stock and it is displayed in three or four letters. For example the stock of Microsoft Corporation is represented as MSFT.
You can quickly find the company’s stock price and hence it will become necessary for you to at least memorize the tickers for stocks that you are dealing in.
You should also get access and learn how to read real time stock charts on business sites such as Yahoo Finance. The stock charts are in the form of graphs such as bar diagrams and line graphs that show the decrease or increase in stock prices over a period of time.
Identify And Capitalize On Trends
Hence you can quickly come to know the trend of the stock prices. The most important question to be considered here is how to limit your data reading to what you think is important and profitable to you.
One good tip would be to sort about 75-100 stocks in descending of their prices and then check the percentage of increase or decrease of prices in these stocks. That way you will be able to decide which stocks you can buy depending on stocks that you will let you earn good margins.
Learn To Read The Stock Charts
Ads mentioned before you can have a look at charts that depict the overall movement of stock prices over a period of time. In the chart you will see different columns such as company name, high and lows, etc. The first two columns are usually the highest and the lowest prices at which the stock has been in the marker for the last one year.
The previous day’s trading is normally excluded in these columns. The third column contains the name of the company issuing the stock. The fourth column contains the ticker symbol just like the ticker strip that moves at the bottom of the screen in stock news channels.
The fifth column shows the annual payment of dividend per share and the sixth column shows the percentage return on dividend. The seventh column shows the price to earning ratio which is calculate by dividing the present stock price by the earnings per share in the last four quarters.
The eight column shows the total trading volume in a day while the ninth and the tenth columns the price range at which the stock has traded during different parts of the day. The eleventh column indicates the price at which the stock closed for the day.