However, it is worth mentioning that although the stock exchange is able to generate significant profit, it is also a place where you can lose money. The key to successful investment is proper knowledge of the stock market, as well as specialized knowledge from the world of finance.
Know the market, learn the rules
Although this sounds very trivial, but everyone, even the most seasoned stock market shark is able to confirm this principle. Knowledge is the basis for starting to invest on the stock market, because it allows to accurately assess risk and multiply your capital. The stock exchange is not a gamble, although luck is an important factor, but it is only about 5%. The other 95% is extensive knowledge of how the market works, its rules, and which companies or projects it is worth investing in.
Bull market and bear market - the basic knowledge of every stock exchange investor
Without knowledge of the bull market and the bear market it is not even worth trying to invest capital in the stock market. In the vast majority of cases, it will end in a terrible failure, which hurts even more because you lose your own hard-earned money. Knowledge of how the market works, i.e. the natural cycles of the bull market (growth) and bear market (decline) allows to invest wisely and helps avoid chaotic, emotional and nervous decisions. This is why it is so important to know the rules of the market and understand them thoroughly.
Why is knowledge and composure so important in stock market investing?
Let's assume a hypothetical situation - you invest in a company whose share price one day begins to plunge. There may be innumerable reasons for such situation, however, you need to have a cool head and proper knowledge. If the situation of company is stable, reports indicate that it is developing adequately, then it would be foolish to sell such shares, because you would lose your capital, as shares can immediately go up again and reach their all-time high.
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