For one thing, the difference between stocks and bonds is that the stock certificates show ownership to the company. This means that you will be able to share in the successes of the business as it gains more profits. The process of sharing is usually done through the use of dividends that are issued annually.

On the other hand, bonds are certificates that represent an amount loaned by you to the business corporation. This would mean that you will become a creditor, and the company will owe you money for the amount stated plus interest in the bond certificate.

When it comes to the time value of the stocks, you can easily buy and sell them at the exchange market with the current prevailing rate. This means that if you feel that the stock value of the business is about to fail, you can easily sell it at break even or minimal loss. The bonds, meanwhile, still have to be retained by an investors until the time of maturity, though they can be sold to another investor. Often, if the investor chooses to sell earlier that the maturity date, they would have to risk that the value of the bonds will be considerably lower than the face value.

It is essential that as a new trader you have to distinguish between the two, though both can be successfully incorporated into a real or mock portfolio. As they are investments, they should offer you rates of return that you can fully use to your advantage.

The first pattern to watch out for is the cup and handle pattern. From the name itself, this is a bowl shaped pattern or a U shape which has a handle, similar to that of a teacup. The U reflects a gradual decline in the stock price. What comes next is basically an idle state, noting no changes in the stock price as well as in trading volume. After that follows a slow increase in both factors mentioned above. One thing that you must note in the cup’s handle is that its low point should not be too low. It should just be somewhere around the top half of the cup. An increase should follow this decline.

The second pattern that you should watch out for is the double bottom. This features two downtrends with a moderate peak in the middle. If the cup and handle forms a U shape, the double bottom forms a W shape. You should look for a V pattern in the first downtrend and a rounded U for the second downtrend. With respect to time, the moderate peak in the middle must be a few weeks old. The price of the first downtrend should also be near or close to the price of the second downtrend. Don’t expect that both downtrends will be equal. Usually, one is higher or more definite than the other.

Stock market investing brings a lot of anticipation since trends change from time to time. You don’t become an expert overnight so it is better to practice recognizing what trading patterns to look out for. There are trading simulations that you can practice on which will eventually give you a stronger basis for buying.