Sounds impressive eh? You have visions of dollars floating through your head. Dreaming of fast cars, luxury holidays etc.
easy money to be made just look at the newspapers there are lots of people making millions everywhere that’s if you believe all that you read in the newspapers and what you see on television.
Well it’s time for a reality check, for things are not as they seem. Sure there is money to be made especially in a bull market, (rising share prices.)It can be very easy to make money. The drawback is that the beginner is unprepared for the inevitable downturn in the share market.
Before they know it they have suffered a couple of reversals only to find that they have lost a goodly proportion of their capital and having burnt their fingers severely, leave the market very disillusioned never to return.
The market place is littered with the broken hopes and dreams of the would be share trader. And if again in the future they decide to try their luck again they are doomed to failure because their attitude and training hasn’t changed from their last foray into the marketplace arena.
So What Is The Answer
Now taking the “Lady Luck” factor out, you are rewarded proportionately to the amount of effort you put into learning the foibles and idiosyncrasies of the share market, and learning that one of the biggest problems you will face in the market is “Yourself.”
So What Do I Have To Do To Become Successful?
Firstly there are a few things to look at before you start trading in the market.
You need to ask yourself a few questions and be very honest in your answers.
1. Why do I want to trade in the share market?
2. How much capital do I have to invest?
3. How much can I afford to lose if things don't go the way I’ve planned?
4. How much profit do I want to make? (Be realistic.)
5. What am I prepared to do to become successful?
6. Where can I get the information that I need to get started?
7. Which broker shall I use? How much will I pay for their services?
8. How much time can I spare to be a share trader
We shall now look at the above questions in a little more detail.
Why do I want to trade in the share market?
The first thing that comes to mind is obviously to make money and not to lose it too quickly.
But really, only you can answer this question. But again be honest with yourself.
How much capital do I have to invest?
That depends mainly on you and your financial commitments. But to be practical you would need around the $2,000 mark at minimum to start with.
One reason is brokerage .You will be paying around $50. That’s $25 for buying your shares and $25 for selling them. So that is 2.5% profit you have to make to break even. Therefore if you made 10% profit which equals $ 200.00 less $50.00 for brokerage, this will leave you a profit of $150.00 or 7.5% clear profit.
(I haven’t allowed for capital gains tax in this.)
How much can I afford to lose if things do go the way I’ve planned?
Personally I would have a stop loss in place for around the 7.5% to 10% level. (For more information on stop losses see past post called “stop losses”)
But this is an individual thing as to what you are comfortable with. Also this depends on how large the amount is that you have invested in the first place.
How much profit do I want to make?
A million I hear someone say. Now that is a nice round figure but there are a few things to take into consideration first. One is to realistically pick a time frame in which you intend to achieve your monetary goal. The amount you have to invest plays an important part as well. Because the smaller the stake you start with the longer it will take you to make your financial goal. So be realistic in your goals and expectations.
Because of financial constraints I had a personal goal to begin with of only achieving $100.00 a week profit. But over time I have built the original $500.00 portfolio to around $12,000 in around three years. I have continually added my profits back in. And I have had a few losses and minor setbacks along the way.
What am I prepared to do to become successful?
The first and most important is to study, study, and more study in fact you never stop learning. Allocate time to do this on a regular basis.
I have experienced the largest learning curve in my entire life since I became serious about becoming a share trader. And the biggest problem I have faced is “The person in the mirror” Myself! For I found that the emotions of “Fear and Greed” were the first things that I had to deal with. And they still trip me up from time to time.
The person in the mirror can be your biggest enemy or friend. You will find that your emotions, attitudes will govern how you trade and react to market conditions. I am not going to go into any details here as you will find past articles in this website which amply covers all these areas.
As I have stated before the amount of profit that you make is directly in proportion to the effort you put in.
Where can I get the information that I need to get started?
Too easy! Well you have made a fantastic start by just reading this article plus there are over “500”just in this web site alone. All you have to do is take the time to go through the different categories/downloads and pick out the ones that help you the most. And they are all free!
If the information you are seeking is not there, give me an e-mail and I shall endeavor to find it for you, or failing that I will tell you where to go to get it.
Which broker shall I use? How much will I pay for their services?
This will depend on what sort of services you require. Usually the more “bells and whistles” you want the dearer the broker. The one I use at the moment is E-TRADE. I am quite happy with the services that they provide as I have a preference for doing my OWN research so if I make a mistake then I have only myself to blame.
9. How much time can I spare to share trade?
This depends on the commitment you are willing to make plus the goals you want to achieve. But the rewards definitely reflect the amount of effort that you put in to it.
But of most importance is that your life should not revolve around the stock market. You need a balance even when you have become a professional share trader.
Of course there are questions that I haven’t covered, but these are the basic ones that will help you to find your footing on the rocky road to financial freedom through share trading.
Happy Trading!
Nov 14, 2008
Stock Market History
A stock exchange (stock market) is a place where company stocks and other securities are traded. Nowadays trading is less and less linked to take place in such a physical space. Modern markets are electronic networks that deliver advantages of speed and low cost on transactions. A stock exchange is one of the most important components of a stock market.
Historically, the first "brokers" mentioned, surface in 11th century France. Such brokers were men who managed the debts of agricultural communities on behalf of the banks and in some cases they traded in debts, therefore can be considered the first brokers.In the 13th century an individual named Van der Burse started a gathering of commodity traders at his home in Bruges, Belgium, and such gathering became institutionalized into "Bruges Bourse".
This concept rapidly gained popularity and spread with the opening of "Bourses" in Ghent and Amsterdam.Bankers started to trade in government securities for the first time in the middle of the 13th century in Venetia. The practice spread in 14th century to independent city states of Pisa, Verona, Genoa and Florence also began trading in government securities.Later in the Dutch started joint stock companies allowing shareholders to invest in businesses and to share in profits. In 1602 the first company to issue stocks and bonds was created, called the Dutch East India Company, issuing shares on the Amsterdam Stock Exchange.
Stock trading did not begin in London until 1688.On May 17, 1792, twenty-four stock brokers signed the Buttonwood Agreement outside 68 Wall Street in New York under a buttonwood tree. On March 8, 1817, they were renamed into "New York Stock & Exchange Board".In the 19th century, exchanges (generally known as futures exchanges) were established to trade futures contracts and later options contracts.There are now numerous stock exchanges in the world.
Below is a list of the world's 20 largest stock exchanges sorted by market capitalization: NYSE, Tokyo stock exchange, NASDAQ, London Stock Exchange, Hong Kong Stock Exchange, Toronto Stock Exchange, Frankfurt Stock Exchange, Shanghai Stock Exchange, Madrid Stock Exchange, Australian Securities, ExchangeSwiss Exchange, Nordic Stock Exchange, Group OMX Milan Stock Exchange,
Bombay Stock Exchange, Korea Exchange Sant Paulo Stock Exchange, National Stock Exchange of India, Moscow Interbank Currency Exchange, Johannesburg Securities Exchange, Taiwan Stock Exchange.
Historically, the first "brokers" mentioned, surface in 11th century France. Such brokers were men who managed the debts of agricultural communities on behalf of the banks and in some cases they traded in debts, therefore can be considered the first brokers.In the 13th century an individual named Van der Burse started a gathering of commodity traders at his home in Bruges, Belgium, and such gathering became institutionalized into "Bruges Bourse".
This concept rapidly gained popularity and spread with the opening of "Bourses" in Ghent and Amsterdam.Bankers started to trade in government securities for the first time in the middle of the 13th century in Venetia. The practice spread in 14th century to independent city states of Pisa, Verona, Genoa and Florence also began trading in government securities.Later in the Dutch started joint stock companies allowing shareholders to invest in businesses and to share in profits. In 1602 the first company to issue stocks and bonds was created, called the Dutch East India Company, issuing shares on the Amsterdam Stock Exchange.
Stock trading did not begin in London until 1688.On May 17, 1792, twenty-four stock brokers signed the Buttonwood Agreement outside 68 Wall Street in New York under a buttonwood tree. On March 8, 1817, they were renamed into "New York Stock & Exchange Board".In the 19th century, exchanges (generally known as futures exchanges) were established to trade futures contracts and later options contracts.There are now numerous stock exchanges in the world.
Below is a list of the world's 20 largest stock exchanges sorted by market capitalization: NYSE, Tokyo stock exchange, NASDAQ, London Stock Exchange, Hong Kong Stock Exchange, Toronto Stock Exchange, Frankfurt Stock Exchange, Shanghai Stock Exchange, Madrid Stock Exchange, Australian Securities, ExchangeSwiss Exchange, Nordic Stock Exchange, Group OMX Milan Stock Exchange,
Bombay Stock Exchange, Korea Exchange Sant Paulo Stock Exchange, National Stock Exchange of India, Moscow Interbank Currency Exchange, Johannesburg Securities Exchange, Taiwan Stock Exchange.
Nov 9, 2008
How To Deal With The Constant Stress Of A Battered Economy: 80% Of Americans Stressed About Economy
Which comes first – fear or economic chaos? Companies as varied as Yahoo, American Express, and Time Inc. are laying off employees. Corporate profits are dropping. The stock market is in a chaotic panic. Housing prices have plunged. Consumer debt is on the rise. The U.S. economy is in a full blown recession, and possibly, a depression.
Money and the economy are at the top of a long list of stressors for Americans as reported in a recent study by Harris Interactive and the American Psychological Association (October, 2008). Eighty percent (80%) of Americans are stressed about the state of the economy.
So how do you manage the unyielding stress that comes with difficult economic times?
Identify Fear, Anxiety and Stress
The first step to overcoming stress is to correctly identify it. When you are afraid, your blood gathers in the large muscle groups such as those in your legs, preparing your body to flee. Your body freezes for a moment to gauge your possible reactions such what is the quickest escape route. The brain sounds the alarm to put your body on alert, making it edgy and ready for action. Accompanying this is an overwhelming flood of anxious, fearful thoughts which seem to be uncontrollable. This intense cycle of fear and worry can paralyze you. It also paralyzes the rational mind, making it difficult to think clearly.
Fear and stress are closely linked. When fear is sparked, the emotional brain begins its dance of anxiety, forcing the brain to focus on the perceived threat. The fearful mind spins in an endless loop of negative thoughts. Fear lies at the heart of all stress.
Stress is a Chronic, Low Level of Fear
Stress is fear stretched out over time. It is the general alarm reaction sounded by the nervous system when you perceive that a demand is being made on you that you cannot handle. Once the alarm has focused your attention, the negative thought spirals, the racing heart, and the muscle tension are of no further assistance to you. On the contrary, long-term stress causes damage to your body on a number of levels – difficulty thinking clearly, damage to arteries, killing brain cells, and limiting the number of options open to you.
On the bright side, stress and fear can be managed depending on how you approach them. Nothing is more important right now than learning to manage your stress – the fate of the entire world may depend on a critical mass of people staying calm and overcoming stress.
Turn Off the Alarm
Once the stress is identified, the second step is to turn the alarm off. This is done through exercise, deep breathing, meditation, prayer or other means to clear your mind of negative thoughts. If you have not yet learned to clear your mind, a good place to start is my book, 'Guide To Self: The Beginner’s Guide to Managing Emotion and Thought.'
Courage, Bravery and Heroism
The third step is the realization that courage is the antidote to fear. Courage is not the absence of fear. Courage is overcoming fear. This step involves taking concrete actions to keep moving forward in a constructive direction. By reframing the question as, “What am I willing to try?” you can make change exciting, rather than paralyzing. Courage is not the absence of fear but the exorcising of it. Feel the fear and push through it anyway. It is the conquering of the fear that makes one courageous. One cannot be brave without fear. Think of courage as a virtue to be exercised daily rather than imagining it as expressed only in acts of heroism. You are courageous…every day.
Focus on Gratitude
Another way to bounce back from stressful times is to direct your thoughts daily to those things for which you are grateful. This simple act connects you with your higher, more centered self. To do so, think about the following:
You are alive.
You are loved by others.
You can see, hear and breathe on your own.
You can read and comprehend these words.
You can vote in a country with freedom of speech and of religion.
All of these are basics which are often taken for granted. Make your own daily list of things for which you are grateful. By cultivating gratitude, you consciously move your thoughts away from the thousands of voices adding to the environment of fear and begin to stem the tide of stress.
Look for the Positive Meaning Amidst the Rubble
Finally, look deep into your current situation and seek any and all positive meanings that may be pulled from it. Every situation exists to teach you something. Your best strategy is to uncover those life-altering lessons in difficult times and use them to motivate you towards positive, constructive action. An example of a life lesson in this situation is the realization that you are resilient, you will survive. And with that knowledge comes power (“If I can survive this, I can survive anything.”).
With complete awareness, allow yourself to calmly and rationally consider what options are available to you to create your best possible future.
Remember that our country has survived such economic hardships in the past and we will survive this one. Americans are highly resilient. We will bounce back from this difficulty with more energy, greater innovation, and more wisdom than we had prior to it. That is what we do, for we are Americans. We don’t just roll. We bounce.
Money and the economy are at the top of a long list of stressors for Americans as reported in a recent study by Harris Interactive and the American Psychological Association (October, 2008). Eighty percent (80%) of Americans are stressed about the state of the economy.
So how do you manage the unyielding stress that comes with difficult economic times?
Identify Fear, Anxiety and Stress
The first step to overcoming stress is to correctly identify it. When you are afraid, your blood gathers in the large muscle groups such as those in your legs, preparing your body to flee. Your body freezes for a moment to gauge your possible reactions such what is the quickest escape route. The brain sounds the alarm to put your body on alert, making it edgy and ready for action. Accompanying this is an overwhelming flood of anxious, fearful thoughts which seem to be uncontrollable. This intense cycle of fear and worry can paralyze you. It also paralyzes the rational mind, making it difficult to think clearly.
Fear and stress are closely linked. When fear is sparked, the emotional brain begins its dance of anxiety, forcing the brain to focus on the perceived threat. The fearful mind spins in an endless loop of negative thoughts. Fear lies at the heart of all stress.
Stress is a Chronic, Low Level of Fear
Stress is fear stretched out over time. It is the general alarm reaction sounded by the nervous system when you perceive that a demand is being made on you that you cannot handle. Once the alarm has focused your attention, the negative thought spirals, the racing heart, and the muscle tension are of no further assistance to you. On the contrary, long-term stress causes damage to your body on a number of levels – difficulty thinking clearly, damage to arteries, killing brain cells, and limiting the number of options open to you.
On the bright side, stress and fear can be managed depending on how you approach them. Nothing is more important right now than learning to manage your stress – the fate of the entire world may depend on a critical mass of people staying calm and overcoming stress.
Turn Off the Alarm
Once the stress is identified, the second step is to turn the alarm off. This is done through exercise, deep breathing, meditation, prayer or other means to clear your mind of negative thoughts. If you have not yet learned to clear your mind, a good place to start is my book, 'Guide To Self: The Beginner’s Guide to Managing Emotion and Thought.'
Courage, Bravery and Heroism
The third step is the realization that courage is the antidote to fear. Courage is not the absence of fear. Courage is overcoming fear. This step involves taking concrete actions to keep moving forward in a constructive direction. By reframing the question as, “What am I willing to try?” you can make change exciting, rather than paralyzing. Courage is not the absence of fear but the exorcising of it. Feel the fear and push through it anyway. It is the conquering of the fear that makes one courageous. One cannot be brave without fear. Think of courage as a virtue to be exercised daily rather than imagining it as expressed only in acts of heroism. You are courageous…every day.
Focus on Gratitude
Another way to bounce back from stressful times is to direct your thoughts daily to those things for which you are grateful. This simple act connects you with your higher, more centered self. To do so, think about the following:
You are alive.
You are loved by others.
You can see, hear and breathe on your own.
You can read and comprehend these words.
You can vote in a country with freedom of speech and of religion.
All of these are basics which are often taken for granted. Make your own daily list of things for which you are grateful. By cultivating gratitude, you consciously move your thoughts away from the thousands of voices adding to the environment of fear and begin to stem the tide of stress.
Look for the Positive Meaning Amidst the Rubble
Finally, look deep into your current situation and seek any and all positive meanings that may be pulled from it. Every situation exists to teach you something. Your best strategy is to uncover those life-altering lessons in difficult times and use them to motivate you towards positive, constructive action. An example of a life lesson in this situation is the realization that you are resilient, you will survive. And with that knowledge comes power (“If I can survive this, I can survive anything.”).
With complete awareness, allow yourself to calmly and rationally consider what options are available to you to create your best possible future.
Remember that our country has survived such economic hardships in the past and we will survive this one. Americans are highly resilient. We will bounce back from this difficulty with more energy, greater innovation, and more wisdom than we had prior to it. That is what we do, for we are Americans. We don’t just roll. We bounce.
Stock Market Trading Fundamental Principles
Economic recession has cast its glooming shadow on the season of festivities. However, investment options available in the capital markets should not be blamed for the losses incurred by investors. More often than not, retail investors fail to segregate low risk investment options from lucrative options that are more prone to risks.
Wise investors regard the following as a fundamental rule of stock market trading-invest only in stocks of organizations you know inside out. You need to understand the business as if you run it. It may sound ironical but it's actually your money that runs the company.
If you think about all the losses suffered by the retail investors, it will clearly show the majority of their losses took place when they plunged into unknown areas like stock options trading because they were not prepared with a solid designing option trading strategy.
If your investments are under water because you barged ahead without an appropriate option trading strategy, the best thing for you to do right now is step back and reevaluate your plan. To panic and cash out of all your investments would be the worst thing you could do as it would turn a paper loss into a real capital loss.
One fundamental principle of stock market trading is that stocks will hit a bottom. Over time, they will hit an all time low at a particular price level, but eventually appreciate again in value. However, fundamental factors like financial fraud or manipulative accounting can break this principle. When a company goes under, the stock may never recover its share price.
After a stock has taken a big hit it may take a long time for it to get back to where it was, but it is better to wait for the long climb back then it is to wait for years only to get back less than you put in. If your stocks are already way down due to profit taking by foreign or institutional investors, then it is already too late for you to time the market and join them.
It is a general practice, when stock market trading, to invest in well established businesses who are leaders in their industries. These stocks have a history of faster recovery when the stock market falls than companies who are not segment leaders.
Wise investors regard the following as a fundamental rule of stock market trading-invest only in stocks of organizations you know inside out. You need to understand the business as if you run it. It may sound ironical but it's actually your money that runs the company.
If you think about all the losses suffered by the retail investors, it will clearly show the majority of their losses took place when they plunged into unknown areas like stock options trading because they were not prepared with a solid designing option trading strategy.
If your investments are under water because you barged ahead without an appropriate option trading strategy, the best thing for you to do right now is step back and reevaluate your plan. To panic and cash out of all your investments would be the worst thing you could do as it would turn a paper loss into a real capital loss.
One fundamental principle of stock market trading is that stocks will hit a bottom. Over time, they will hit an all time low at a particular price level, but eventually appreciate again in value. However, fundamental factors like financial fraud or manipulative accounting can break this principle. When a company goes under, the stock may never recover its share price.
After a stock has taken a big hit it may take a long time for it to get back to where it was, but it is better to wait for the long climb back then it is to wait for years only to get back less than you put in. If your stocks are already way down due to profit taking by foreign or institutional investors, then it is already too late for you to time the market and join them.
It is a general practice, when stock market trading, to invest in well established businesses who are leaders in their industries. These stocks have a history of faster recovery when the stock market falls than companies who are not segment leaders.
Nov 4, 2008
Day Trading – Good Or Bad
Day Trading is seen by many people as a way out of the daily grind of having to get out of bed to go to a job and make good money at the same time, which is most people’s goal. But while there are a lot of advantages to day trading, there can also be pitfalls that you need to avoid.
The good stuff : You can work when you want, you have no boss on your case, you can dress how you like, take breaks when you like, take time off when you like, spend more time with your family and friends, you don’t need to get yourself to work, you just fall out of bed and you’re there.
You have time to do what you want when YOU want to do it and, if you get it right, you can make a stack of money!
The bad stuff : You have to discipline yourself to do the job properly and not take silly risks, you have to learn when to get out of a trade (not necessarily right at the top), and if you’re losing you need to know when to cut, because if you get this wrong, you could lose everything.
You must only use money that you can afford to lose. Day trading is just another form of gambling, but if you work at getting it right, the rewards can be fantastic.
You can find a lot of help and information on the Internet, and while some isn’t very good, a lot is excellent. There is also software available to help you to trade more safely and even free software that allows you to simulate trading. You would be wise to try this first before you invest your hard earned cash.
The good stuff : You can work when you want, you have no boss on your case, you can dress how you like, take breaks when you like, take time off when you like, spend more time with your family and friends, you don’t need to get yourself to work, you just fall out of bed and you’re there.
You have time to do what you want when YOU want to do it and, if you get it right, you can make a stack of money!
The bad stuff : You have to discipline yourself to do the job properly and not take silly risks, you have to learn when to get out of a trade (not necessarily right at the top), and if you’re losing you need to know when to cut, because if you get this wrong, you could lose everything.
You must only use money that you can afford to lose. Day trading is just another form of gambling, but if you work at getting it right, the rewards can be fantastic.
You can find a lot of help and information on the Internet, and while some isn’t very good, a lot is excellent. There is also software available to help you to trade more safely and even free software that allows you to simulate trading. You would be wise to try this first before you invest your hard earned cash.
How To Select A Stockbroker
To get the best returns in the stockmarket, one needs to select a good broker. This article is a 5-step guide that tells what to look for when selecting a stockbroker. It will save you time and potentially a lot of money by helping you avoid the traps and pitfalls for the unwary.
To help you get the best returns from your trades, you will need a good broker. I would recommend staying away from online brokers and those offering discount brokerage and instead focus on finding a good traditional broking service.
It will cost more per trade but believe me, this will be a small price to pay for better order execution and service rendered. A good broker will always get you in and out of the market at better prices that an automated online system and will be there for you at all times. And this will make a difference to your profits. Here’s a few rules on what to look for when selecting a broker.
5 Steps to Selecting a Quality Broker:
1. Must specialize in the market you are going to trade. Ask them how long they’ve been transacting on the particular market and what their level of experience is. Give preference to a broker that’s been around for at least 10 years and seen some ups & downs.
2. Must allow Contingent Order placement. That is, allow you to place a buy stop, stop limit, stop loss and take profit orders that are triggered based upon the price action of the stock. Since the last few years, a lot of brokers have finally caught up and begun offering this facility. Don’t ever trade without it.
3. Must execute your orders at all times exactly as specified by you, without a question. You should decline advisory service your broker may want to offer you as it can cloud your judgment. You want a broker that transacts, not questions your orders.
4. Must be reachable by telephone at all times during working hours. On the occasion, you may need to contact your broker by phone to discuss matters that would otherwise be lengthy via email. Make sure you only deal with a broker who is happy to be there for you, at all times, and can be reached when needed.
5. Must not be a friend or relative. Keep your relationship with your broker professional. That is, your broker should probably not be your cousin or close friend. The reasons are obvious.
To help you get the best returns from your trades, you will need a good broker. I would recommend staying away from online brokers and those offering discount brokerage and instead focus on finding a good traditional broking service.
It will cost more per trade but believe me, this will be a small price to pay for better order execution and service rendered. A good broker will always get you in and out of the market at better prices that an automated online system and will be there for you at all times. And this will make a difference to your profits. Here’s a few rules on what to look for when selecting a broker.
5 Steps to Selecting a Quality Broker:
1. Must specialize in the market you are going to trade. Ask them how long they’ve been transacting on the particular market and what their level of experience is. Give preference to a broker that’s been around for at least 10 years and seen some ups & downs.
2. Must allow Contingent Order placement. That is, allow you to place a buy stop, stop limit, stop loss and take profit orders that are triggered based upon the price action of the stock. Since the last few years, a lot of brokers have finally caught up and begun offering this facility. Don’t ever trade without it.
3. Must execute your orders at all times exactly as specified by you, without a question. You should decline advisory service your broker may want to offer you as it can cloud your judgment. You want a broker that transacts, not questions your orders.
4. Must be reachable by telephone at all times during working hours. On the occasion, you may need to contact your broker by phone to discuss matters that would otherwise be lengthy via email. Make sure you only deal with a broker who is happy to be there for you, at all times, and can be reached when needed.
5. Must not be a friend or relative. Keep your relationship with your broker professional. That is, your broker should probably not be your cousin or close friend. The reasons are obvious.
Day Trading – What Is It?
Day trading is basically the buying and selling of stocks over a relatively short period of time, sometimes minutes. It was once only available to floor traders and investment banks but now the Internet has made day trading accessible to anyone with a computer system. There is good money to be made (and lost) using this method.
As an example, a day trader might buy 1000 shares of stock A at 10:00 as the price begins to move upwards on good news, then sell it at 10:04 when the stock price has risen (for example, by $0.50). The day trader would make $500 profit, less his commission which with today's low commission rates of around $30 or less per trade, that's a nice $440 or better, excluding taxes.
Day trading usually follows one of two approaches, either beating the spread or attempting to catch short term trends. The spread is the difference between what is being offered for a stock (the bid) and the price being asked for the stock (the ask). With spread trading, you attempt to buy at the ‘bid’ and sell at the ‘ask’ as many times as possible. Spread traders can make hundreds of this type of trade every day.
ECNs or Electronic Communication Networks are a recent development. They are completely electronic exchanges with very low commissions and very fast execution of orders. As a method of encouraging traders to use their networks, some ECNs offer incentives in the form of a rebate. In some cases, this can allow a day trader to make money simply from buying and selling a stock at the same price.
Day trading can be very profitable if you get it right, but you need to research as much as possible and take advantage of the free simulation software that is available for you to practice with before you take the plunge. Remember, day trading isn’t for the faint hearted!
As an example, a day trader might buy 1000 shares of stock A at 10:00 as the price begins to move upwards on good news, then sell it at 10:04 when the stock price has risen (for example, by $0.50). The day trader would make $500 profit, less his commission which with today's low commission rates of around $30 or less per trade, that's a nice $440 or better, excluding taxes.
Day trading usually follows one of two approaches, either beating the spread or attempting to catch short term trends. The spread is the difference between what is being offered for a stock (the bid) and the price being asked for the stock (the ask). With spread trading, you attempt to buy at the ‘bid’ and sell at the ‘ask’ as many times as possible. Spread traders can make hundreds of this type of trade every day.
ECNs or Electronic Communication Networks are a recent development. They are completely electronic exchanges with very low commissions and very fast execution of orders. As a method of encouraging traders to use their networks, some ECNs offer incentives in the form of a rebate. In some cases, this can allow a day trader to make money simply from buying and selling a stock at the same price.
Day trading can be very profitable if you get it right, but you need to research as much as possible and take advantage of the free simulation software that is available for you to practice with before you take the plunge. Remember, day trading isn’t for the faint hearted!
Invest In The Stock Market – For Beginners
If you have a little extra cash and are trying to figure out the best way to grow that money, you might have considered investing in the stock market. You hear how all of these people have made thousands or hundreds of thousands of dollars doing it, and it sounds intriguing.
You also hear that people just spend a few minutes here and there doing it, and still make all of this money in just a short amount of time.
You work hard for your money, but would love to find a way to make more, especially without the hard work. But how can you invest in the stock market? It may seem daunting, especially when you don’t know anything about it.
The key is that you shouldn’t do anything until you learn a little bit about the stock market. If you blindly throw money into it, you’re bound to lose it. Losing your hard earned money because you didn’t know exactly what to do is not what you want to happen.
How can you learn how to invest in the stock market then? The good news is that it doesn’t take too much time to learn the basics. There are many websites that will teach you what you need to know before you invest at all. There are also many books that were written just for people like you, beginners who want to invest, but don’t know where to begin.
Once you have read some of these books, or gone to some of these websites, you’ll know the basics, and will then be able to put your money in the stock market, and know that you have a good chance of making money instead of just putting your money in randomly and just hoping that it works out.
The good news is that with all the available help out there, before you know it you will become an expert in the stock market, how to invest in it, and know exactly what you want to do – and what you are comfortable with investing. Then you can be like everyone else, checking the stock prices every day, to see how well you did!
You also hear that people just spend a few minutes here and there doing it, and still make all of this money in just a short amount of time.
You work hard for your money, but would love to find a way to make more, especially without the hard work. But how can you invest in the stock market? It may seem daunting, especially when you don’t know anything about it.
The key is that you shouldn’t do anything until you learn a little bit about the stock market. If you blindly throw money into it, you’re bound to lose it. Losing your hard earned money because you didn’t know exactly what to do is not what you want to happen.
How can you learn how to invest in the stock market then? The good news is that it doesn’t take too much time to learn the basics. There are many websites that will teach you what you need to know before you invest at all. There are also many books that were written just for people like you, beginners who want to invest, but don’t know where to begin.
Once you have read some of these books, or gone to some of these websites, you’ll know the basics, and will then be able to put your money in the stock market, and know that you have a good chance of making money instead of just putting your money in randomly and just hoping that it works out.
The good news is that with all the available help out there, before you know it you will become an expert in the stock market, how to invest in it, and know exactly what you want to do – and what you are comfortable with investing. Then you can be like everyone else, checking the stock prices every day, to see how well you did!
Where Can I Learn About The Stock Market?
If you want to learn about the stock market, there are many places you can do so. The good news is most of them are free; so you will be able to learn and keep the money you saved for investing!
One of the easiest ways to learn about the stock market is by getting a book that is a basic investing book. You can either buy it, or get it out of the library for free.
Here you will learn the basics such as the difference between a stock, mutual fund, and bond, and how the whole stock market process works. It’ll tell you everything you need to know, and probably won’t take too long to read.
If you want even more information, you can just go online. There are many websites (that are free) dedicated to teaching others about the stock market, and about investing. They’ll also give you all of the basics, as well as teach you about any advanced investing terms you would like to know about.
One of the best ways to learn about the stock market is to watch it in action. Take a look at a stock ticker on TV during the day, or look at one online. You can also listen to the radio at a business station, and see how things work. You’ll hear that as bad news comes out about a specific company, their stock will go down. Or you might hear that oil prices are going up, so lots of stocks are going down. You’ll be able to see how little things affect the stock market, and how prices change because of it.
If you spend some time watching the stock market, especially after having read about some of the basics, you should have learned enough to be able to get ready to invest on your own. You can then start researching specific companies (if you want to invest in stocks), or mutual funds to see how their history has gone.
By looking at how things have gone, and what is going on with the stocks or mutual funds now, you’ll be able to see if you are interested in investing in it, or if you should find something else to invest in.
Once you have done all of that, you’ll start to realize that you know quite a bit about the stock market, and will be able to start investing on your own! You’ll feel confident, and will be able to pick what stocks or mutual funds you are interested in, and be able to invest with confidence.
One of the easiest ways to learn about the stock market is by getting a book that is a basic investing book. You can either buy it, or get it out of the library for free.
Here you will learn the basics such as the difference between a stock, mutual fund, and bond, and how the whole stock market process works. It’ll tell you everything you need to know, and probably won’t take too long to read.
If you want even more information, you can just go online. There are many websites (that are free) dedicated to teaching others about the stock market, and about investing. They’ll also give you all of the basics, as well as teach you about any advanced investing terms you would like to know about.
One of the best ways to learn about the stock market is to watch it in action. Take a look at a stock ticker on TV during the day, or look at one online. You can also listen to the radio at a business station, and see how things work. You’ll hear that as bad news comes out about a specific company, their stock will go down. Or you might hear that oil prices are going up, so lots of stocks are going down. You’ll be able to see how little things affect the stock market, and how prices change because of it.
If you spend some time watching the stock market, especially after having read about some of the basics, you should have learned enough to be able to get ready to invest on your own. You can then start researching specific companies (if you want to invest in stocks), or mutual funds to see how their history has gone.
By looking at how things have gone, and what is going on with the stocks or mutual funds now, you’ll be able to see if you are interested in investing in it, or if you should find something else to invest in.
Once you have done all of that, you’ll start to realize that you know quite a bit about the stock market, and will be able to start investing on your own! You’ll feel confident, and will be able to pick what stocks or mutual funds you are interested in, and be able to invest with confidence.
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