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The Basics of Reading Stock

There are a few things one should know when they are getting ready to take steps to start trading stocks.  After knowing what stocks are, you need to know the basics of reading stock reports.

First thing to know in the basics of reading stock is what all those letters mean, when you are watching them zoom by.  You know on the electronic bill board type looking thing.  The one with the thousands of letters, or so it seems, rapidly moving across the screen.  Yes those letters and numbers that look like complete and utter gibberish at times.  Those letter number combinations that look like nonsense are abbreviations for the companies, whose stock you would be purchasing.  So you would need to know the abbreviation for your chose of company to know how to track their progress.  This is another component in the basic of reading stocks.  Perhaps one of the most important one or so some people believe.

Now we know about the ticker with the abbreviations for what, we know symbolizes the companies.  There is another basic of reading stocks.  The reports from the exchanges.

There happens to be three of them.  The largest one is the NYSE or New York Stock Exchange, which is actually the auction for stocks.  The NASDAQ, the electronic trading platform.  Where everything is done naturally, electronically, via a computer and the AMEX or American Stock Exchange.  A smaller less conservative exchange.

Also in the basics or reading stocks there are reports; some of which are found in newspapers.  The most extensive reporting can be found in some periodicals and publications such as the Wall Street Journal (most widely known) and Inventors Business Daily to name a couple.  Some local papers may carry some reports, although they are not as near extensive as the other popular publications.  It’s best to keep in mind that each publication may be different.  But they will carry a legend of a type to assist you in following their way of reporting your stock information.

Another important item to know in the basics of reading stocks is to know the performance or strength of the market.  We currently determine this by using indexes to measure the strength and weakness of the market.  The most widely used index is the Standard & Poor’s 500 index.  Often widely known as the S & P, as well as the NASDAQ index and the AMEX index.

As with any basic, the most important things in the basics of reading stocks is that you review the information that you learn and read as much informational material as possible.  This will help you move from the basics of reading stock to becoming very versatile and comfortable with reading stocks in the long run.

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