How to Read Stock Reports

If you are going to trade in stocks, you need to learn how to read stock reports if you are not doing that already. The stock reports are the stock traders bible, and these reports can give you valuable information to help you in your stock trading decisions. The first step you should take is to make a list of the stock acronyms that you have included in your portfolio, so that you can track these stocks and determine whether they are rising, falling, or staying the same. The Wall Street Journal is the most used stock report when it comes to finding out how stocks are doing, as well as the mood of the market.

When you learn to read stock reports, always start with the indexes first. The first section in the stock report will generally report the market movements recently in the indexes. This is where you will find whether the Dow Jones Industrials went up, or if NASDAQ went down. The indexes are extremely important when it comes to trading stocks. Make sure you know what markets the stock you hold are in, and the size of the company itself. The Dow index usually consists of larger companies and businesses, while the Russell index will normally consist of smaller businesses and companies. Knowing the indexes to watch will alert you to whether the stock you hold is moving along with the market or if the stocks you hold are moving because of a change that is specific to that single company or industry.

After you have read and studied the indexes, look for your stock symbols. Right next to the symbol the opening price for that day will be listed, as well as the high price, the low price, and the closing price for that day. The high can be tricky however, because the stock may have only stayed at that level for a short time during one single day. Look for the cost change that occurred that day, and also the change in percentages. If a stock that started at one dollar a share when the market opened was one dollar and five cents at the market closing, then the stock gained five cents per share, and went up by five percent.

Next you should look at the trading volume for your stocks. This will give you an idea of how active your stocks are in the market currently. The higher the trading volume is, the more actively traded your stocks are. This means that liquidating the stock will be much easier than if the trading volume is low, because there are fewer traders purchasing the stock. This can affect whether you get market price for your stock or not. The next thing you should check when you learn how to read stock reports is the high and low for the last fifty two week period. These two prices will reflect the highest and lowest prices that the stock has traded at in the last fifty two weeks.
Stock Earnings Ratio

The next couple of columns in the stock report will help you understand the returns you will see. The first column will show any stock dividends earned and paid, while the second column will show what percentage the return is. To know how to read stock reports, you must also understand what the PE is. PE stands for the stock price to stock earnings ratio. The last column in the stock reports the percentage the stock has grown or gained during the last year. It is not difficult to learn how to read stock reports if you understand what each section and column is for.

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