When it comes to investing, many people just have no clue how to invest nor do they realize what they’re investing in. Many people use either use financial advisers to help them invest or they put their money into a 401k for retirement. However, these activities create situations where you don’t have access to your money. In this article, I’m going to be breaking down the basics of how to invest along with how to use technical analysis to know what to invest in. Let’s get started!
1. Buy low, Sell high
This one is pretty common sense but most people get it mixed up. A lot of investors will invest even after a stock has taken off. You don’t want to do that. Instead, you can take advantage of a recession by investing in high quality companies at a low stock price. Many people view declining stock prices as a bad thing. During a recession, you are merely purchasing a stock at a discount. In other words, you get more bang for your buck!
2. Know a stock’s support and resistance levels
When a stock fails to exceed a certain price multiple times, this is considered a resistance level. Similarly, a stock’s support level is a price that a stock fails to fall under. When the price of a stock exceeds a known resistance level, this resistance level becomes a new support level and vice versa. In other words, old resistance levels become new supports levels and old support levels become new resistance levels.
3. Get to know what you’re investing in
Before you invest in anything whether that be a business, a stock, real estate, or a bond, do your research and make sure it’s an investment you’re familiar with. Never invest in something you don’t understand. Also, never risk more than you’re willing to lose on a certain investment.
All in all, I hope these tips can help you when it comes to investing.