Greed and fear are the main players in the stock market. These are the two emotions
driving force behind almost all market participants – institutional mangers, stockbrokers,
Investors, traders and yourself.

You might say to yourself that greed and fear can never get in my way of trading,
but believe it or not they will be. It is not something to be ashamed of. It ’something that is
I have to admit to, come face to face with, If I could become a trader or a stock
investor.

What greed and fear of appearing like the stock market trading arena?

You have been watching a particular material for some time now. It has set up perfectly, so as to pull the trigger. You bought the perfect price and now is moving higher, as was thought.

Now greed steps up to the plate and says to you, this will be a rocket ship. So you buy more shares. Or your stock moves a few points and go over the price that you decided to leave. Greed is said that this child is higher tomorrow so that they hang up.

Stock picking is a very complex process and investors have different approaches. However, you should follow the general instructions to minimize the risk of investment. This article will explain the basic steps for stock picking performance.

Step 1. Decide the time and the general investment strategy. This step is very important because it will dictate the type of stocks to buy.

Suppose you decide to be a long term investor, you want to find stocks that have sustainable competitive advantages along with stable growth. The key to finding these stocks is to look at the historical performance of each stock over the past decades and do a simple SWOT (Strength-weakness-opportunities-threats) analysis on the company.

If you decide to be a short-term investor, you want to join one of the following strategies:

Investing in conservative blue chip stocks may not have the charm of a hot high-tech investment, but can be very rewarding, however, as good quality stocks have outperformed other investment classes over the long term.

Historically, investment in shares has generated a return, over time, between 11 and 15 per cent a year depending on how aggressive you are. Stocks overcome other investments since they incur more risk. Stock investors are at the bottom of the corporate “food chain”. First, firms must pay their employees and suppliers. Then they pay their obligations. After it is preferred shareholders. Companies are required to pay all the actors first, and if there was the money paid to shareholders through dividends or undistributed. Sometimes there’s a lot of money left for shareholders and in other cases there is not. Thus, investment in shares is risky, because investors do not know exactly what they are to receive for their investment.