With employment security not guaranteed in these tough economic times, many people are looking to earn money from various places. Learning how to play the stock market is just one of these many options.

It can seem quite easy from the outset; buy some stocks at a low price, wait for them to rise and then sell them for profit. But of course there are many things you need to learn before you put your hard earned money on the line. Here are some tips to help you win rather than lose:

Have a Cash Cushion

If you don’t have any cash set aside to live on, you are running the risk of having to sell your shares if the market goes down. But by having enough cash to live on, you can ride it out until the market rises again and get more for your money when you sell. The majority of stock market experts suggest you should have at least 3 months worth of cash to live on. This cushion allows you to keep your money where it will earn the most.

Don’t Chase the Money

When you see stocks that are really flying, it can be easy to want to put your money into them. While this can often bring in returns, it can also be a bad judgement to keep chasing these types of stocks. Quite often you will have more success investing in stocks that not everyone else is buying into.

Balance Your Portfolio

It is also a good idea to have a good balance in your portfolio. If you don’t invest a lot, then your returns will be less than you probably want. But if you invest too much, you have a chance of losing a lot of money if a certain market drops suddenly. So you should find a good balance that gives you the return you need whilst still remaining at a level you are comfortable with if things change. Look for different sectors in different countries and spread your risk.

Hopefully these tips will help you to play the stock market, enjoy doing it and make a lot of money at the same time.