The stock market can be scary for many people. The two most common fears expressed about share trading are:

1. It is risky
2. I do not know what to do

There is no doubt that there is risk in shares and all other financial markets and asset classes. The biggest risk is not knowing what you are doing.

The first thing you need to know is what to buy, when to sell and how to sell. If you are buying based on someone's red hot tip, your best guess or the feeling that something may be going up - we can only say good luck!

If you are buying shares based on very specific rules that you have developed and tested yourself, based on some stock market learning, then you are in much better shape to make money in the stock market.

Similarly, if you are going to sell by waiting until you finally see the newspaper with tumbling share prices days after it has been falling and you plan to call a broker and yell down the phone "sell, sell, sell" - then the market is fraught with danger for you!

If you are selling based on the same rules, that you have developed and tested yourself based on some stock market learning and you are able to implement this with the use of an "automated stop" then you will be able to sleep much better.

An automated stop is where you are able to pre-arrange with your share broker or provider to exit a share if it falls below a particular price (i.e. you place an order that will exit you at the first available time once the share hits your specified price level).

One of the best ways we can demonstrate the value of a HomeTrader Membership is by showing you actual client trading results. Take a look at some of our clients who have achieved over a 200%* return in just three months.

Want to know more? Register here for HomeTrader's FREE Intro Seminar.

Understanding the Stock Market

While most people agree you can make money from shares the most common barrier stopping them from entering the stock market is that they do not understand it. Well here are some facts worth considering:

The stock market is not rocket science. Learn a bit about it and you can potentially make a lot if you know what you are doing.

You can learn how to make money from shares just like thousands of Australians are doing everyday and it is cheaper and much quicker than a university degree.

You can choose not to be at the mercy of investment advisers who will earn a fee whether you succeed or fail.

Shares are one of the very few things that allow you to make money when prices are rising - and when they are falling. Surprised? Then find out more.

Every intelligent person fears risk. If you want to make money from shares learn how to manage risk.

If you are going to get any education, get some proof that other people have used that education to make money.

Some questions about the stock market which are commonly asked include:

Why has the share market performed so well in the last couple of years? You will hear all sorts of reasons from good financial management, gold prices, resources booming, exports and all manner of things. Which of these are true? In many ways, all of them are. Do you need to know about them all to make money in shares? No.

Will shares prices continue going up? Well, that depends on many factors and the bottom line is that no one can really tell you the answer. Again, you will hear loads and loads of opinions on things like resources demand from China and India, the American market, interest rates and various other factors. And again they are all correct in some way. Do you need to know about them all to make money from shares? Again, the answer is no.

Some Investment Mistakes to Avoid

Some common mistakes you should avoid when it comes to shares:

1. Buying a stock when it is trending down in price. Stocks are usually down in price for a reason.
2. Buying low priced stocks. These stocks are usually cheap due to problems. Many institutional investors do not even look at low priced shares and institutional support is one of the ingredients needed to help propel a stock's price higher.
3. Wanting to get rich quick without doing the necessary homework. To make money in the stock market, you must spend time doing research, educating yourself, and learning from previous mistakes.
4. Buying on emotion, tips or rumours. Often gut-instinct when it comes to shares is unreliable and most rumours tend to be false.
5. Acting on poor advice from those who may not be qualified to give it. Most investors are not able to find good timely information so it is critical to educate yourself as much as possible.
6. Not buying stocks that rise to new highs. 98% of investors are afraid to buy stocks as they begin to move into new high ground. It just seems too high to them. Do not allow your fears to dictate your purchases. Emotions are far less accurate than markets.
7. Not using correct portfolio management strategy and cashing in small easy-to-take profits while holding onto small losses.
8. Putting price limits on buy-and-sell orders. Novice investors rarely place orders to buy or sell a share at the market price. This procedure is poor because the investor is quibbling for eighths and quarters of a point rather than getting out of stocks that should be sold to avoid substantial losses or buying into popular stocks.
9. Procrastinating and having no trading plan as to when to buy, sell, or hold a stock. This is a sign you are trading blind. You need precisely defined entry and exits rules which tell you when and why to buy a share and when and why to sell a share.
10. Not implementing a risk management strategy. Not using stop losses to help you limit potential loss and reduce the risk of losing all your capital and not understanding position sizing and how to calculate exactly how much of each share or other product to buy.

Come along to a HomeTrader's FREE Intro Seminar at a training centre in your city and find out more.

Case Study - Women and Trading

HomeTrader Trader of the Year Jewels Kemelfield is living proof that a 241%* stock market return is generally made as a result of a good education and not from luck, magic or red hot tips.

Mother of 3, including a 3 month old, Jewels has been trading since 2002.

She chose trading not due to any love of the stock market. The truth was she just wanted to be able to produce an income whilst she had her family. Her research told her share trading was a good idea. It was a means to an end, making an additional income. Jewels began trading from her own knowledge and reading before getting any formal training.

Jewels tried the rounds of other "free seminars" on wealth creation in the stock market to get some tips, before coming to HomeTrader.

"The people at HomeTrader seemed genuine and they knew what they were talking about."

Less than two weeks later Jewels was a HomeTrader member. Jewels said HomeTrader's approach seemed logical.

"They teach things like understanding how to manage your risk and having a clear cut strategy for exit. And they give you what you really need, which is support, to follow through."

Jewels believes that HomeTrader helped her develop the temperament to make money trading shares.

"Initially, I thought it would be exciting, but it's actually turned out the opposite. Making a subjective decision in trading doesn't work for me. I have faith in my system that I developed with my HomeTrader training because it's been backtested so I know it works for me."

"Nothing is scary if you understand your risk and how to exit."

Backtesting her system as she was shown by HomeTrader was what gave Jewels the confidence to trade consistently. Seeing her system make money in real conditions before she traded with real money meant she could be confident with her trading.

"When you are new to all this you can make mistakes like not being aware of risk.  The problem is you hurt yourself financially so you can never trade again. I think that would be the worst."

Jewels says that everyone considering trading should be careful of leverage or at least be aware of the risk.

She also sees traders procrastinating as a barrier to trading that needs to be overcome or they'll never start.

Now a self proclaimed ‘obsessed' trader, Jewels is firmly ensconced in the trading family which she says now runs second to her real family, in terms of her time.

And what is the future for Jewels?

"This is an education I will pass onto my kids and get them started on making money trading shares when they are old enough."

To find out more about how Jewels developed her trading system, come along to a free introductory class. Click here for dates and times in your city.

This testimonial was provided to us by the individual member. All testimonials are provided voluntarily, without payment, inducement or other benefits and are from genuine HomeTrader members.

* Past performance is not a guarantee of future performance.  Results have been provided by individual members and are not typical of what every individual will achieve.  GunTrader entrants trade in a number of financial products including shares, CFDs, options, warrants, foreign exchange and futures.  These results have been achieved using leverage.  Leverage increases the risks of losing money.