Trading Stocks: How Trading Stock Shares Can Make or Break Your (Trading) Day Some people have a sixth sense knowledge of how to pick a stock. They can close their eyes and their magical knowledge will lead them to the stock that is about to blow up sky high. Maybe they are just lucky. Maybe they pay a little more attention to the financial news than others do. No matter why they are successful, they are and in this particular time, that is a rare thing to find indeed. Trading stocks sounds like a fairly easy proposition if you think about it. We all understand the concept of “trading” and we all have an equally fair understanding of what a stock is. But trading stocks is not as simple as it seems and can lead you to quick financial ruin if you do not have some semblance of an idea of what you are doing. You do not walk up to a broker and trade so many stocks for the equal number of a different one, it just does not work that way. When you consider that the financial market system has a capacity for handling literally billions of trades each and every business day, it can really boggle the mind. If you are new to the stock trading market, it is better to seek the advice of a broker and to work with them until you are more confident in your abilities as a trader. Make predictions on paper alone and track the stocks movements to see how much you really do need to learn. Once you are comfortable with this “mock” trading you can spread your wings and start trading stocks on your own. A “trade” is the act of buying or selling stocks- period. Although there are many complicated terms and jargon involved with the stock market, this is one that is straightforward and should be simple to comprehend. It does not matter if you wish to trade ten shares or ten million shares, the term remains “trade” in the end. Trades happen in one of two basic ways, either electronically (online) or on the exchange floor. Many markets are moving their trade activity to computer networks rather than on the exchange floor for a variety of reasons. In fact, experts are debating how much longer there will be an actual “trade floor” that involves real people shouting back and forth. While it is tradition and time honored, it may not be as cost effective or fast enough to remain competitive in a computer based world any longer. Although it will not eliminate the broker from the activity- (the novice and casual traders will not have access to all market aspects) it will potentially speed up the process and lower some of the costs involved.

Essential Trading Equipment: What You Need to Trade Successfully

The stock market is not a place for the weak at heart or the timid, especially right now. It is not a learn-as-you-go process, nor is it a safe place for the poorly prepared. You would not build a house without the right construction knowledge or the right tools, building a stock portfolio should be no different. Preparation, planning and education along with the essential trading equipment are the keys to making you a successful trader.

1. Preparation. Before taking on the stock market, you must take careful stock of your personal finances. Budget an amount for investing, making sure that you know what your absolute limit is and not going over that amount. (Loss cap) Once you know about how much you can comfortably invest and potentially lose in the market, you can start working on the next step to successful trading.

2. Planning. You know your initial investment amount, now you should write out your clear and realistic goals for what you would like to accomplish. Your plan should cover all angles, including what you would do with your profit margins as they grow and what your exit plan will be if you do not invest wisely. An exit plan will keep you from sticking with a stock that is either going to slow down to much to make it worth keeping or completely fail. Your plan should also include how you will facilitate trades as well. Will you use a broker? Will it be a full-service broker or a discount brokerage house that you work with?

3. Education. Even if you are working with a full service brokerage house, you should have some knowledge of what stock and other market terms mean. You should be able to understand the basics of a stock chart so that you can begin to track stock progress yourself. You should be able to tell the difference between a penny stock and a more traditional stock. And you should always be aware of how the market is trading- by volume, by price or by other leading indicators.

4. The Essential trading equipment. For a first time trader or a novice, a full service broker is probably about the most important aspect of your investing experience. Once you have gained some market knowledge and want to move to the lowered prices of a discount broker you will want to add other equipment to your arsenal. That equipment should include, a good computer, a fast Internet connection, and excellent stock trading software. These items, along with preparation, planning and education can make your trading experience more rewarding and less risky.

How To Day-Trade: The Life of a Financial Cheetah

 The cheetah is the fastest land mammal on earth, running at speeds that put some poorly maintained rolling Detroit iron to shame. In the world of stock trading and finances in general, the day trader is the cheetah, making his moves with cat like reflexes and mind blowing speed, leaving the trend trader behind in abject bewilderment. Knowing how to day trade can be taught, but having the inborn ability to pick the right stocks and know when to move them is probably something you are either born with or not.

 Of course, it goes without saying that knowing how to day trade involves knowing the many types of trading, and the advantages and disadvantages of each type. It also helps to understand that the term “day trader” should not be meant to imply that these traders just fly by the seat of their pants, making hap hazard, willy-nilly trades without careful consideration. There is a lot of knowledge and finesse that goes into knowing how to day trade, so, you can make good trades and succeed, or you can make a few bad trades, lose all of your money, and no longer make trades at all.

To get started as a day trader, it is probably advisable that you be familiar with the stock market in general, preferably from working closely with a broker. Begin by making “on paper only” trades, and tracking these pretend trades for performance. Know the ins and outs of the market in general before striking out on your own. Know the day trader regulations, including how to calculate day trade buying power (DTBP) and what the new minimum equity requirements are for day traders. Know which market you will trade on, and which is the most amenable to day trading in general. Also know which financial instrument (stocks, commodities, futures, currency, etc.) that you plan to trade, some of which are best dealt with by the day trader, and others are better off being handled on the more traditional market. Will you be using day trader software, and if so, have you investigated which program best suits your needs and trading level?

 The life of the day trader can be relatively sedate, or it can turn into a full blown chaotic windstorm in the course of a few hours on any given trading day. Economic news pouring out of Washington may cause an onslaught of trading activity in Japan that will affect your every trade. You must be able to roll with the punches, know your financial limits and play to your own strengths. If you have the know-how and the nerves, being a day trader can net you huge, fast returns. But, in life, there is the knowing how to and the knowing why you do it. Knowing how to day trade might seem simple to those suited to the career, but they might have more problems answering the why.