| Investors may use various methods when they are | | | | to follow patterned behavior. |
| stock picking. Some of these methods may include | | | | Stock analysis can also be done through using |
| fundamental or technical analysis. They will take | | | | fundamental analysis. This is where a company is |
| their time and perform stock analysis before they | | | | analyzed on different fronts from management, |
| make their decision to buy. Before you begin trading | | | | financial statements and balance sheets, to the |
| stocks in the stock market today, you really need to | | | | industry sector. Investors will look at who the |
| know what you are doing, otherwise you will end up | | | | management are and what abilities they have to |
| losing money. It may look easy enough buying stocks | | | | steer the company to success. They will delve into |
| and selling them at a profit, but there is a lot more to | | | | the backgrounds of top management to insure that |
| it than meets the eye. To make sure that you are | | | | they are all competent individuals. It is important that |
| not putting your money into a company that will go | | | | they have experience in the field that the company is |
| bankrupt, or see its share value decline due to poor | | | | in, and that they are in the position they hold through |
| revenues, it is crucial that you research a company | | | | honest means. |
| carefully. | | | | The income statements of the company will be |
| Stock analysis can be done through looking at stock | | | | reviewed to see how much money it made and how |
| charts and chart analysis. This method is mainly used | | | | much it spent. Analysts look at the profit that the |
| by technical analysts who will look at past data on a | | | | company makes, and if it is paying dividends to its |
| stock pick and see how its price and volumes moved. | | | | shareholder. They will take into consideration the |
| There are various schools of technical analysis like | | | | company's assets and liabilities. This is an area that |
| candlestick charting, Dow Theory or the Elliot wave | | | | investors are attracted to because they like |
| theory. Many analysts will combine the different | | | | companies that have liquidity after they have paid |
| methods, while others may strictly adhere to just | | | | off debts. Stock analysis is used frequently by most |
| one. The reason past pricing information is so | | | | investors and should be considered an essential part |
| important is because price action tends to repeat | | | | of your research before buying shares in any |
| itself as a result of the investor's collective tendency | | | | company. |