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Answering some Basic Investor Questions of Knowing Just Enough to Make Money

by Jeffrey Lin

Many of my friends, mostly guys in their late 20's, have recently shown interest in the markets and what I do.  I guess after graduating college and holding a decent job for a few years, they've saved up enough to start thinking about the future.  But many of them are afraid, just like a lot of people in general are afraid of the stock market, because there's so much emphasis on special inside information and knowing news before they happen.  So, naturally they're shocked when I tell them most of the professional investors and traders I know don't use special pieces of news to make money in the market day in and day out.  There are all types of people even far far away from Wall Street that make money daily, from soccer moms to old retirees.  So I decided to write two short lessons on HubPages.  The first, probably the most important stock investing skill of going with the trend, explained in an analogy to sports games and streaks each team has during the course of a game.  The second, I explain a bit about how the different "big players" in the market such as governments, big funds, and investment firms like Goldman Sachs cause trends to happen in the stock market.  We, as small investors, don't really care who or why we make money if we can just recognize the patterns or trends thats happening and just go with it.  There are traders who just trade the first hour because they know the tradable patterns specific to that time, and I believe Dr. Brett Steenbarger had blogged statistics about just buying stocks at the end of the day and selling it in the morning and being able to make profits.  Of course, you have to figure out the investment strategies and trading system like those mentioned above that has a pattern you can make money with. But if you stay with the trend and don't try to second guess it or outsmart it, I've found that to keep people out of a lot of trouble.