Increasing your stock market vocabulary can help to increase the profits you make in your stock market dealings. How I hear you ask. Well the simple fact is that any investor with a good stock market vocabulary is someone who has a good grasp of all the various options open to him or her in the market.
Simply by being able to understand the jargon of stock and shares you will feel more knowledgeable. And by having greater knowledge of the marketplace you, like any other investor, will have greater confidence in your investment decision making. Having increased confidence in any activity naturally leads to a better overall performance.
Let us look at an example of how an increased stock market vocabulary can help you gain that greater confidence. Say for example you didn’t understand the language of traded options do you think you would feel safe and confident investing in them? It’s not very likely that you would is it? If you couldn’t understand the difference between a put and a call you would be foolhardy if you placed your hard earned money into an investment using them.
So how can you do increase your investment vocabulary? In exactly the same way you would increase your vocabulary in any other field, by studying it. It just takes patience and commitment. You could get started by buying yourself a specialist stock market dictionary and looking up any word or phrase that you come across which doesn’t make sense to you.
Nowadays there is a new style of stock market dictionary that instead of listing words alphabetically lists entries in related groups. This makes understanding the jargon that much easier. For example if you are new to using technical analysis in your decision making process you could turn to that section to discover the meaning of any phrases you don’t recognize. And with such gems as long legged doji, « rickshaw man », hammers and gravestones just in candlestick charts alone you could probably do with all the help you can get!
A quick word of caution here, if you decide to increase your vocabulary by reading up on different terms online make certain to cross reference your sources. That way you can ensure that the definition you find is correct.
Whichever way you choose to do it you will definitely benefit from increasing your stock market vocabulary.