There are three primary differences between savings and investing:

• Ownership: When you purchase stocks you are becoming an owner in the company in which you invest. This does not occur with a savings account.
• Potential for gain: A savings account typically pays a stated return on your dollars. Owning stock comes with a possibility of company growth, higher profits, and, of course, higher value (gain) versus the stock purchase price.
• Real risk potential: Savings accounts carry minimal risk. While your favorite bank is not likely to double your interest rate, even if it fails, your savings dollars are protected by federal insurance. Whether you are investing in penny stock or blue chips, you always have risk of partial or total loss of your money.

The other stock market basics include understanding that the NYSE, American Exchange, NASDAQ, and all other global markets work like your neighborhood flea market on a grand scale. People look at stock market investing odds and decide to buy if they think a stock price will increase and sell if they believe a market value will decrease. All of the varied technical data available only reinforces these beliefs.

Stock Quote for Ford (F)

Reading the Wall Street Journal and viewing market quotes can be a huge challenge for the new investor. Nevertheless, like most puzzles or new skills, once you understand the components, your goal to learn to read stock market quotes will become easier. Ready?

The New York, American, and NASDAQ exchanges use the following format. Ten columns cover each stock. Column number definitions include:

1. 52-week high and low price range. Also includes column 2.
2. See above.
3. Company name and stock type.
4. Stock or “ticker” symbol.
5. Annual dividend amount, if any.
6. Percent yield (annual dividend return for each share divided by current market price).
7. Price-Earnings ratio (PE), which helps you analyze a stock’s relative value.
8. Daily trade volume for prior day’s activities (expressed in “hundreds”).
9. Hi/Lo, which displays the high and low prices of shares traded today.
10. Closing price and net change for the day.

NASDAQ also uses an abbreviated (four column) quote format for small cap stocks. These quotes include company name with dividend, volume traded, final price of the day, and amount of change from the prior day’s close.

Good beginner stock market training, like the Investing 101 eCourse, will give you comfort with understanding stock symbols and help you learn to read stock market quotes. Playing a stock market game in simulation form also gives you some experience in the real world without the money risk.

While many colleges and universities, through their continuing education (CE) programs, offer a series of investing courses, the Internet is a wonderful source to find stock investing basics. New potential participants in the stock market game, like you perhaps, must start at the beginning. First consider courses that stress the following two basics of stock market participation –

• The glossary of investing terms: The language of investing can be confusing at first. Learn the common terms used in online stock market trading basics.
• Beginner stock market mavens need answers to common questions: What are bonds? How to trade stocks? How to start investing? How to read stock charts? How to find the right stock symbols? What are Bollinger bands trading, Fibonacci ratios, selling short, position trading, and many other common techniques and strategies?

There are some excellent beginner stock market trading courses, like Investing 101 from WallStreetSurvivor.com. These low cost, but valuable investing courses provide the stock market basics needed to start creating a profitable portfolio.

First, understand that there are different definitions of penny stock, which is more of a generic term than a numeric target. For example, in the U.S., penny stocks are typically those that sell for less than five dollars and are traded over-the-counter, outside of the large exchanges. However, in the U.K., the term usually refers to small cap stocks.

Unfortunately, there is one penny stock constant. When you learn to read stock quotes and learn to read stock charts, you will see some good or disturbing patterns and trends that apply to penny stocks. Understand the risks associated with this stock type and do your research just as diligently as for a higher priced stock. If you pay attention to your investing course, learn how to trade stocks properly, and play a simulation stock game seriously, you might find some hidden winners.

First, locate beginner stock market trading and technique training that stimulates you. The key word is “beginner” as more advanced courses may only confuse and frustrate you. Excellent new trader courses, like Investing 101 from WallStreetSurvivor.com, cover all the stock investing basics, including learning stock symbols, avoiding day trading mistakes, how to read stock charts, and all other beginning tools to play the stock market game.

Speaking of the stock game, you can then play a real world stock market simulation game, like the one offered by WallStreetSurvivor.com. You can practice your new skills learned during your investing course in a real world environment without risking your own money. You will gain valuable experience regarding how to trade stocks profitably, learn how to read stock market quotes, and build the confidence to enter the fray as a new investor.

Focus on long-term investing. Simple. Being lured by the excitement of day trading often creates unwanted stress and early losses for the new investor. Learning the basics of online stock market trading does not qualify you to profitably participate in day trading or short-term timing techniques. Sure, you might get lucky and win with your first few trades. However, understand that your victories will involve more luck than skill at this point.

Initially, a buy and hold strategy, made famous by investing legend, Warren Buffet, may be less exciting. However, if you pick your stock paper carefully, it typically delivers profit over the longer-term. This strategy also allows you to continue to build your knowledge base and experience without overt high risk.

As you gain more experience, you might consider being more adventurous and executing more trades. This can be enjoyable, particularly if you are playing the beginner stock market game with “house money” (profits you’ve already made). Keeping your eyes on the prize—investing profitably—reduces both stress and the probability of making day-trading mistakes as a new investor.

Beginner stock market investors should relax and understand the “bottom line” for all stock charts: Should you risk your own money by purchasing or selling this stock? To keep this process simple, concentrate on only three major issues.

1. Stock stages: The four common stock stages are consolidation, uptrend, another consolidation, and downtrend. Learn to identify a stock’s current stage to learn if trading (buying or selling) is warranted.
2. Stock trends: Determine the current trend (up or down) and project where in the cycle the stock resides. A “breakout” indicates the start or early stage of a trend. If the trend is up—increasing from lower left corner toward upper right corner of the chart—this indicates a good time to buy. When the stock reaches the apparent end of an uptrend, this may encourage you to consider selling the security.
3. Stock waves: Wave theory states that stocks experience five waves during a normal uptrend. Wave one is the uptrend right after breakout, while wave two is the first “pullback” (short flattening or downtrend). Wave three is an uptrend and wave four is another brief pullback. The final wave signifies the end of the current uptrend and projects a future consolidation.

Your online stock market trading decisions can disregard the many other notations. How to read stock charts effectively involves becoming comfortable with these three components. You can quickly analyze a stock in less than 10 seconds using this method.