An Authur, by the name of Aswath Damodaran stated in his book "The Little Book of Valuation" that "Valuation is really a mechanism behind the wondrous ability to trade cash for claims".

By peeling back the layers, lies the jewel about what trading is all about. Simply stated, when you trade on the Nigerian Stock Exchange you are literally exercising your ability to take disposable income to purchase a share in a claim; a claim that the future price of the particular stock will improve and if selling the claim that the future price will fall.

The mechanism through which you can successfully exercise this ability is Valuation and not speculation, the herd mentality, nor your gut feelings, but studying to show yourself approved before taking a position.

Like anything in life, to excel you need to understand and master the art.

Read more about things you need to know before investing; http://www.mongranfinancials.com/101-investments/2012/2/19/valuation-simply-explained.html