In order to get you started we have compiled a list of some of the common stock market terms. This way you might be able to talk the talk before you walk the walk.

Stock Brokers: Stockbrokers come in all shapes and sizes. Essentially stockbrokers guide their investors through the market. Beginner investors often find it useful to have an active broker, who will tell them when to buy and sell stocks. Stockbrokers take care of all of the buying and selling, the good ones stay on top of all the stock movements and the specialist ones take care of certain sectors of the market. A broker generally provides their clients with up to date market results, trends and market hypothesis. There are different kinds of brokers that offer different types and levels of services.

Full-Service Brokers: If you have the money to spend a Full-service broker is probably the easiest to way to navigate the market. As the name suggest a full-service broke, will offer you their full service, which means they will give you reports and results on a frequent basis and will take a high commission for doing so.

Discount Brokers: As their name suggests a discount broker will charge you a lower commission. In return you will receive a fair and reasonable service, but not an exubrent one. Discount brokers don’t give their clients reports, market analysis’ or additional advice. Discount Brokers are recommended for people who have been in the game for some time. It is not expected that you will only use one type of investor, many use both the discount and full-service broker.

Online Broker: Most brokers (both full-service and discount brokers) have a website where they also provide online brokerage. Online brokerage is the cheapest form of brokerage, mainly because the services are provided online rather than in person.

Trading Account: When you first start working with a broker, you will be asked to set you a bank account that your broker can access. The amount you need to put in the account will be set your broker. The broker will also require you to place their additional fees in that account , so that it doesn’t become overdrawn. You broker’s annual or monthly fees will also be taken out of this account.

Cash Accounts: There are two types of trading accounts, one of which is the cash accounts. Cash accounts do not have their own line of credit. Which means the investor needs to stay on top of crediting the account as needed and must also pay the full market price for stock.

Margin Accounts: Contray to cash accounts a margin account provides the investor with a line of credit. The investor is able to purchase their stocks on a margin. Investors with margin accounts are able to purchase more stocks than those with cash accounts. Which also means they can profit more, and lose more. Margin accounts are therefore the riskier of the two and are not recommended as a starting point.

Penny Stocks are usually priced below a dollar and trading with them is fickle and risky game. While Penny stocks look like they follow the “more bang for your buck” principle, having a lot of penny stocks is very risky. Penny stocks are also referred to as small caps and micro caps. As with all trading penny stock trading has its ups and downs. Penny stocks can give your large profits over a short time; they can also give you huge losses in the same short time. Because of the high risks and alluring prices of penny stocks traders should be mindful of a few things;

• Traders should spend some time investigating the current ownership distribution of the stock they are interested in. If stocks look unappealing to you, and you decide not to buy them, it is highly possible that if you had brought them you would have a hard time selling them. Simply because if you were apprehensive other traders will feel the same. For instance if a particular stock is priced very low, and most of the shares are owned by one overseas account, generally once an ‘at home’ investor invests there will be some heavy selling will then occur. Then once the stocks price (your stocks price) starts climbing other traders will be less interested in your stocks. Which leaves you will useless stocks. So be careful when buying stocks that have uneven ownership distribution.

• While it seem silly to include this point, many traded get duped by illegitimate stocks, so it’s worth mentioning. As with any stocks you would spend some time researching the corporation and checking how legitimate they are. The simplest and easiest way to check out a corporation is to phone them. Even if they are not legitimate they still may have a phone number. So look up their website and check their contact details with the local telecommunications provider. Then cross check that information using the interest and taxation websites. If you cannot find contact information for a company it’s probably not a good idea to invest in it. Also if you feel that the company is ‘too friendly’, perhaps the CEO speaks with you personally, then forget about it. Over interested normally means that that company isn’t already in good standing.

• Take a look at the companies history. If the penny stocks that you are interested in are at that low price for a reason, that means that they are risky and possibly not a good idea. For instance if a company has been through a lot of splits and mergers then you can never be sure what will happen next. Also if the company hasn’t been around for long, there isn’t a track record for you to rely on.

• As with purchasing any stocks you should look at your own finances before purchasing stocks of any value. Just because penny stocks can be purchased for very little it doesn’t mean you can afford to lose the amount. Have a look at your bankroll, which refers to the amount of cash you are willing to lose. Penny stocks are risky so if you can’t afford to lose the money don’t play the game.

Penny stocks are often associated with corporations with little history and information out about them. Getting on at the bottom floor can sometimes be a good thing, leaving you with high profits but if you make a mistake it can leave you with high losses.

Surety bond plays a major role in the development of the economy. In every business environment surety bonds are the most needed requirement to fulfill their aspects in a correct form. Nowadays, trends have been changed and people want to compile their requirements legally. So, every obligee requires their business to be done legally. Surety bond explains the essential factors and their requirements in the economy. The main purpose of issuing surety bonds is to give a guaranteed performance of contract. Generally, most of contractors enters in to a contract and do not complete the contract as per the terms and conditions of contract. Each party involved in the process has a defined responsibility and role with one another.

In case of breach of contract by the obligator, this surety bonds will be more helpful for the obligee to sue both principal and surety in the court of law. Surety bonds are issued in different types and at different premiums as per the requirements of the obligee. Nowadays, surety bonds are needed in all business environments. A surety bond determines the responsibility and roles of different people who are engaged in the contract. When the person engaged in the business, he is obliged to obtain a license from the department. To obtain this license, the applicant is required to procure surety bonds of many kinds as per their business. Without license, no person can engage in the business, also without surety bonds no person can obtain license from the prescribed department.

Therefore surety bonds describe the responsibility and role played in the economy. Surety bond classifies the main aspects needed for the business and provides a better solution to solve the problem. It offers responsibility to the people engaged as per their functionality and requirements. The roles and responsibility of surety bonds offers a better solution and benefit for the persons engaged. The roles and responsibility of surety bond determines the functionality and consideration of various activities involved in the process. The process will be made essential when it is organized by the contractor properly. It is the responsibility of the obligator to complete the contract within the time and contract price mentioned in the terms and condition of the contract.

The surety bond explains the roles and responsibility of the person involved in the contract, namely the principal, the owner, the surety. The obligator is a person who performs the contract as per the terms and conditions of the contract and gives a guaranteed performance to the owner. The obligee is an owner who has to make payment appropriately to the contractor within the contract time. Surety is a third party involved in the roles of surety bonds. A surety is a person who guarantees the obligee that the principal will perform the contract as per the terms and conditions of the contract. The surety explains the responsibility of the contractor to the obligee with a guaranteed compliance. When the principal fails to perform his obligation, the surety can be asked to complete the contract or pay any compensation for the loss incurred. Therefore surety bond will perform the roles and responsibility for the economy in the prescribed form.

In recent years exchange traded funds (ETF's) have become the talk of the town. I have recently ventured into the world of ETF's and have been quite impressed with them.

An ETF is similar to a mutual fund with the exception that it is traded like a stock. The nice thing about ETF's compared to mutual funds is the initial cost. Most quality mutual funds will require a $3,000.00 initial deposit; while ETF's can be started for as little as $500.00. ETF's usually track a specific sector or index, and new ones are being created all the time.

The advantages of ETF's are their cost, liquidity, and the ability to give investors instant diversification. It is much easier to buy an ETF than to buy a basket of stocks on your own.

Some argue that the disadvantage of ETF's is that they are relatively new and do not have a long enough track record. However, I think ETF's have been around long enough now that investors who take their time can build a very solid portfolio consisting of ETF's.

If I was given the chance to start over again, I would definitely purchase ETF's before I started to invest in individual stocks. Investing in individual stocks for a person that is completely new to the market is simply not the way to go in my opinion. There is so much to know and learn about investing in individual stocks that make it almost impossible for a new investor to be successful. Therefore, I think the best advice for a person new to the markets is definitely to start with ETF's or at least a mutual fund.

Remember there are sharks out there on Wall Street looking to take the money out of the hands of the small individual investor. However, if you keep your investment portfolio well-diversified it is harder for them to manipulate the markets as a whole as opposed to one individual stock.

Did you ever want to go back in time, and just do the opposite of what you actually did? Well then maybe you should become a contrarian investor. A contrarian investor is someone that prefers to do the opposite of what everyone else is doing. These investors search for well-known companies that mainstream investors have forgotten about.

In the 1990's when other investors were buying the high-flying technology stocks contrarian investors stayed away from them. After these stocks crashed, contrarian investors waited in the wings and then bought up shares in companies like Xerox. This was based on the fact that Xerox was a sound company that other investors had fallen out of favor with even though eventually it would rebound.

This type of trading involves a lot of fundamental analysis to figure out which companies will actually rebound, even though many other investors currently want nothing to do with it. Contrarian investors also love it when the media talks bad about a well-known company. This is because it will more than likely cause some investors to sell shares in a panic thus lowering the price of an other-wise sound company.

I personally agree with some aspects of the contrarian investors mind. I think chasing and believing news stories about stocks that everyone else is chasing too; is one of the worst ways for an average investor to make their investment choices. A contrarian investor has much more discipline and patience than an average investor who is just following the crowd. With that being said, many people simply will find it difficult to adapt into the contrarian investors mindset because people tend to follow the crowd. It is hard for a simple investor to buy a stock that no one else appears to have a desire to own. However, if you have been following the crowd and getting burned with your investments; then maybe it is time to start doing the opposite of what everybody else is doing.

In the late 1990's many investors fell victim to the momentum investing craze that was sweeping the country. It seemed that no matter what stock someone bought the price of that stock would always go higher and higher. Many new investors even quit their jobs to become day-traders. Unfortunately, this all came to a crashing end when once high flying internet stocks came crashing back to reality.

Momentum investors look for stocks they feel are ready to take off with explosive growth upwards such as the internet stocks of the 1990's. These investors buy stocks that may already be considered high priced with the belief that the stocks are going to continue to go up in price.

In the 1990's simple news stories were sending stocks soaring even if those stories were not necessarily based on facts. Some stocks actually jump as much as 20 points in one day based on rumors alone.

Momentum investing is definitely based on the belief that an extended bull market is in effect. This method also requires a lot of knowledge about technical analysis. The biggest problem with being a momentum investor is you simply do not know for sure when your momentum will run out such as it did in the late 1990's. While a momentum investor may have some success with an occasional huge gain; they will also more than likely get stuck with over-priced stocks that simply take a sudden and drastic turn for the worse. Many professional traders will tell you the average investor will lose if they try momentum investing, because the professional investor will always have the upper hand when it comes to drastic downturns in the market. Therefore, the average investor who is trying to chase a stock higher will be left holding the bag of a stock that will soon be crashing down.

I am personally not a fan of chasing stock prices higher. It simply is a bit too much of a gambling method for my taste. I truly believe that smart, slow, and steady investment strategies will always result in wiser investment decisions.

The most well-known investment strategy in the world is the buy-and-hold strategy. The thought is that if you buy stock in a fundamentally sound company, then overtime that stock should be worth more than what you paid for it to begin with. One of the advantages of the buy-and-hold strategy is that the investor does not have to constantly watch his or her stocks. Investors who bought into companies such as IBM and GE in the early days saw their investments rise dramatically year after year without much effort. Another benefit of this strategy is that you will not be paying a lot in commission cost, because you are not constantly buying and selling stocks. This strategy works very well as long as there are more bull markets than bear markets.

Buy-and-hold investors try to hang on to a stock as long as a company remains fundamentally sound. They do not tend to chase stock charts or news. They simply look at the bottom line of the company itself. One of the most successful buy-and-hold investors in the world is Warren Buffett. If you look at many of his investments they tend to be in boring companies as opposed to high-flying technology stocks.

The main problem with the buy-and-hold strategy is it fails miserably in bear markets. Individual investors who hold onto stocks no matter what may find themselves losing everything they have gained if they can not recognize the signs of a bear market. This is brought on by the belief that eventually all stocks they own will have to return back to their original price. The truth is though that many stocks may never return to their past glory thus leaving the buy-and-hold investors hanging onto a huge loss year after year.

I personally have never been a big fan of this strategy, and feel it holds back potential huge gains that can be made with a little more hands on involvement with your portfolio. If you are someone that prefers the hands off buy-and-hold strategy, I still believe it is a must to use stop-loss orders to protect your investments when bear markets occur.

While preparing for a big tournament, no matter what it is, you will spend many hours planning and preparing. If it is a physical sporting type of event, you will train and work out extra hard. If it is more in the thinking category, you may study and work your brain in memorizing. An individual retirement account is much the same. You will need to plan and prepare for your future. There are things about the planning that you should consider much the same way as preparing for that big tournament. You want to come out a winner and not a loser. If you don't put some effort and time in it, you will not be victorious in the end. This article will expose the truth about what an individual retirement account is for and some things to consider when you are in the planning stages.

We need to be training up our young people in the importance of an individual retirement account. I can remember thinking in high school that I hope my parents live long enough to see me married and have children. My parents weren't that old, but to me at the time it seemed they were. Maybe as people are living longer lives this might not be so with young people, but I know it is with grandchildren because my own have said things to me that reminded me of what I used to think. Now is the time to get them thinking of college and their own futures, and an individual retirement account can and should begin at a young age.

Some things to consider when planning an individual retirement account is how much money it will have acquired at the age of retirement. This will help you in determining if this retirement fund will be enough for you to live on at that age. You will need to look into the future and set a future budget that you can reasonably live on. Make sure you include extra expenditures and trips that you may want to take. Once you have somewhat determined this amount of money requirement, then you can know if the plan you have is going to be enough, or if you will need to add more to your individual retirement account.

There are many businesses that can help you plan your individual retirement account. They can help you somewhat determine how much money you will need to have acquired in order to live the lifestyle you plan to live. There are many calculations to consider when planning a retirement. Will you be debt free. Will you own your own home by then and if not, can you afford the mortgage payment. Don't let your individual retirement account become an overwhelming project, but a wise person will make plans for their future. Don't be caught off guard because the unexpected can happen. Just remember an individual retirement account is for your own welfare in the future, so whatever you do, don't wait too long to get one started.

Want to make money trading stocks online? If you follow these five simple tips, you’ll be way ahead of the pack.

1) Listen to the charts

You may have found a great stock, and it could have the best fundamentals in the world, but here’s the truth-- that’s not enough! Even if a stock has a million fundamental reasons to go up, it’s not going anywhere unless people are buying it. People don’t always act rationally, so you can’t assume that a stock will behave as it should. That’s where technical analysis (chart reading) comes in. By learning to read charts, you can spot stocks that are poised to move up, or conversely, stocks hopelessly headed down. Reading stock charts will allow you to find stocks which actually will move up, not just stocks you think should move up.

2) Use stop losses

No one is ever right 100% of the time. That’s just the nature of the game. Even the best stock pickers sometimes pick lemons, but that’s not necessarily a problem. Picking losers, which is inevitable, is only a problem if you let them kill your account. You absolutely must set stop loss orders every time you make a trade, otherwise you may wake up and find your entire account decimated. Remember, to make money trading stocks online, you don’t always have to pick winners-- your winners just have to be bigger than your losers. You accomplish this by always cutting your losers early, and then letting your winners run.

3) Don’t step in front of a speeding train

One of the biggest myths about making money by trading stocks online is that you have to buy low and sell high. That’s a very dangerous way of thinking. Why? Because people, searching for stocks to buy low, eagerly buy stocks which are spiraling downward. They hope, often falsely, that soon after they buy the stock, it will turn around, go higher, and then they can sell for a profit. But ask any experienced trader and he’ll tell you that stocks which drop precipitously tend to keep dropping. Don’t step in front of a speeding train. Instead, find stocks which are healthily moving up and will keep moving up. Think of it not as “buy low and sell high,” but “buy high and sell higher.”

4) Ignore the people on TV

There is no shortage of media personalities who love to recommend stocks. Follow their advice and you’ll become rich, right? Wrong. If you could make millions by following the guy on TV, everyone would be rich. You’ve got to do your own homework. You see, it’s not necessarily that the people in the media don’t know what they’re talking about. They often do. It’s that by the time that information reaches you, it’s too late! Think about it...there are professionals who spend all day looking for the next great stock to buy. Do you really think that by the time a stock pick reaches the general public on TV, the smart money hasn’t already bought it? Of course it has, and by the time the little guy buys himself, he’s left holding the bag. If you want to make money trading online, you’ve got to think independently. Otherwise, you’ll be behind the curve.

5) Don’t overpay on commissions

Let’s say you start trading stocks online with one thousand dollars. Now let’s say you’re paying ten dollars per trade. And finally, let’s assume you make thirty trades per month. If you do the math, you’ll see that you’re doomed regardless of how good your stock picks are! People often get so excited about trading stocks online, they forget about all the money wasted on commissions. If you want to be successful over the long term, you have to find a broker with low enough commissions for your trading style. With some brokers charging as low as one penny per share, there’s no reason to waste all of your money in fees. In this way, researching online brokers is just as important as researching stocks.

Producing a high probability trade forecast is not easy. Just as difficult is determining the best trading strategy and vehicles to capitalize on the forecast. Read on to learn some of my favorites trading strategies.

How about futures contracts? Is there a way to reduce our risk when buying futures? The risk problem with futures is they are marked to the market. This means they always have a “delta” of 1.0, meaning they track the cash market closely. With options, as the market moves against you, the delta will shrink and erode more slowly. Plus, you can only lose what you paid for the commodity option.

With a futures contract, it’s more like trading on a razor’s edge. The advantage is the futures contract does not erode in premium like an option. Generally, if a cash market does not move for two months, the future stays flat with little or no loss while the option will surely lose its premium value.

So how do we hedge our futures contract? Here’s how: Let’s say we go long a futures contract. We then buy a put option with a strike price that is near the current futures contract price. If the market went sharply against us, normally the loss could be very large - holding a naked future.

But with the put option hedge, loss is limited to the premium we paid plus the difference between the option strike price and where we put on the futures contract. Bottom line is we can use the option as our synthetic futures contract “stop loss” order. If the maximum we can lose with the put option hedge is $1,000, we know our true risk no matter what happens.

The advantage here is STAYING power. Let's say the futures contract (with no hedge) took a $3000 dip against us, but then rallied to finally make a big profit. We would have probably been stopped out holding the naked futures contract, whereas the option hedge would let us ride through the adversity with a maximum limited loss at any time of $1,000, until option expiration. In addition, we have protection from an overnight market gap surprise. This one benefit alone may be worth the hedge.

Trading futures while using this option hedging technique will take some "insurance premium" profit out of the bottom line, but when you consider the possible risks of holding naked futures overnight, one has to wonder why someone would not always want to make their stop loss order in the form of a hedged long put. (Or for a short future, use a long call hedge)

Just having a market forecast is not enough. Not every “low-risk, high probability” trade works as we expect. Some turn into high-risk, low probability trades. Having a few strategies like this to reduce our risk will shave profits somewhat, but will usually help our equity curves to trend smoother without the chaotic dips.

Account survival is first, but second is a smooth, up-trending account equity curve. It is well worth the small hedging premium we pay. Scaling in and scaling out in both price and time will also help to smooth out this curve.

Having these techniques available to you will give you more confidence to hold through adversity for the bigger moves. It will also reduce your fear of market unknowns.