To start trading stocks on the internet, it is necessary to have an account with a brokerage firm. There are many such firms. You can find them by entering "stock brokerage firms" in a search engine. It is also possible to see the ads for brokerage firms at any financial page, such as the Yahoo.com Financial page or just look in a financial magazine or newspaper. Some of the firms are tdwaterhouse.com and ameritrade.com. I have had accounts with both those companies.

Once you have an account and your check (no credit cards are used for starting an account with a brokerage firm) has cleared, you will be given a user name and password and info about how to trade. You may then buy some stocks.

I have put up a page with general language about the market at this page.

Some basic beliefs and sayings of the market are

1. There are no Rules
2. The Trend is Your Friend
3. Buy Low, Sell High
4. The Santa Claus Rally (stocks go up near Christmas)
5. The January Effect (stocks, especially small cap, go up right after the first of the year)
6. Earnings must beat expectations
7. Buy the Rumor, Sell the Fact

Fundamental analysis is when stocks are studied by someone who looks at the company earnings, news about the company product, bond ratings of the company and anything that would seem to affect the company's business prospects going forward. Technical analysis is when someone looks at a chart that shows where the stock has been and where it is now and if certain trends continue, where it is likely to go next. If the stock was $10 in January and $11 in February and $12 in March, the technician would guess the stock will be $13 in April without regard to any news or changes in the company business.

More than anything else, surprises are what drives the market. If someone asks you "Are you expecting any surprises?" the correct answer is always, "yes" and the correct answer is always "no." The reason the answer is "yes" is because there are always surprises so we expect surprises all the time. The reason the answer is "no" is because if we expect a surprise it is not a "surprise."

Good surprises make the stock price go up. Bad ones have the opposite effect.

I bought Chrysler stock shortly before it was announced that Chrysler and Daimler would join into one company. The stock price jumped about 25%. I sold. After that the stock went down. I made money on Imclone without knowing Martha Stewart. When I had a nice profit, I sold. Shortly thereafter the stock plummeted when insider trading was announced. I owned a lot of different gold stocks when it was discovered that one gold mining company was "salting" their new mines with gold dust to make the mines appear to be rich finds. One gold mining company president died in a mysterious fall from a helicopter. The bad news of murders and dishonesty made gold stocks go down for several years after that. I did hold my stocks and made good money on them even after they appeared to be nearly worthless.

No. Buy and sell when you have enough profit. If the price goes down and you believe in the company, buy more at the lower price. I bought more of several stocks while the price went down. I made money that way on FCX, RJR, TWX, DYN and others. It is OK to buy and hold if you have a reason like high dividends or if you own a stock which you have been selling in small quantities from time to time and you already have taken all your investment out of the stock. If you have a gravy train stock hold it if you want to but don't hold stocks just because you love them.

1. Don't buy options, puts, calls, futures, commodities until you have "played them for funsies" on paper for a year with excellent results and not even then.
2. Don't go to a seminar where you pay money to learn how to make big bucks in the market whether it goes up or down.
3. Don't have a margin account. That means you are borrowing money from your broker to trade stocks.
4. Don't pay attention to experts.
5. Don't buy a "partnership" stock. The tax papers are messy. You might have to fill out state income tax forms for every state where the partnership does business. (Partnerships are tempting because of their high dividends.) Partnerships trade like other stocks on NYSE. Check before you buy.
6. Don't be a "Day Trader." The day trader philosophy is to make your money by watching closely for a slight uptick in a stock on which you bought a call option. As soon as the stock moves up a little, you sell and get rich. The day traders sell all their positions each night before the market closes. Most day traders lose all of their investment.
7. Don't buy annuities. Some are OK but look at the small print. If there is a penalty for cashing in the annuity before a certain date what happens if you need some cash before that time? Is there a commission for the salesperson? Ask.
8. Don't buy a mutual fund that has a "load." There are lots of "no load" funds available. I do not recommend any mutual fund unless you are just starting your investing and have a limited amount to invest and you do not have the time to study individual stocks. If you buy a mutual fund, buy a "no load" fund with the lowest expense ratio and best 10 year performance record.

Usually when one company buys another, the stock of the company being purchased will go up. The price of the company that is doing the buying will go down. Some sectors have many M&A activities each year. Banking and medical sectors often find big conglomerates buying promising smaller companies.