FAQ about Day Trading

Q. What is day trading?

A. Day trading is the high-risk/high-return buying and selling of stocks. You connect through the Internet through a brokerage firm to a network that exchanges stocks between sellers and buyers.

Q. How high are the risks?

A. There is a relationship between reward and risk – as your reward increases, so does your risk. When you are trading, you are competing against other day traders as well as institutional traders, and you are all after the same thing. It is important that you minimize your risk as much as possible in order to make a profit. An acceptable ratio for reward to risk should be about 3 to 1. In other words, the trade potential is three times the amount that you might lose.

Q. Can I start day trading part time?

A. Yes, you certainly can. You control all the different facets of your online day trading. However it’s recommended that you take a training course before you begin.

Q. How much do I need to start?

A. In most cases, a minimum of $2,000 is needed to open a trading account. However, most brokerage firms will limit the number of trades you can complete within a certain time period. If you should hold onto the stock overnight, it will not count towards this number. Usually, $25,000 gets you unlimited trades.

Q. What is paper trading?

A. Paper trading is a learning tool that is very important to your skill development. Before you begin online stock trading with real money, you track what you would believe to be good trades on a piece of paper. You can evaluate how you performed and if you were successful – that means if you made money. Most brokerage firms offer an electronic form of paper trading in real time. You can develop the skills you need before you make your first deposit. The best part is that most of these types of services are free!

Q. What is swing trading?

A. Swing trading is when you buy a stock and you hold onto it for a day or two. One of the reasons why it is so popular is because this type of trade does not go against the daily limits for those with lower account balances.

Q. How much does it cost?

A. Besides your initial investment, you will pay commissions and brokerage fees for each trade. These fees can vary, depending on the brokerage firm you use. Make sure you understand all the fees associated with your account before you begin.

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Friday, July 23rd, 2010 Day Trading No Comments

How to Find Financial Freedom

If you are like most people today, the recent economic downturn has affected the way you live your life. Even if you don’t feel the crunch in your daily life, interest rates, credit reports and even the price for a gallon of milk have all climbed. Today, it is harder than ever to find financing without exceptional credit. Even the housing market has plummeted to all time lows.

If you are looking for financial freedom away from lenders, loans and interest rates, then you are going to have to start thinking outside of the box and away from the norm. Buying and selling real estate used to be a surefire way of creating wealth, but that’s no longer the case. Far too many homeowners are now in foreclosure and many times, it’s due to the fact that they can’t sell their home when they needed to.

If you have considered investing in the stock market, you may have held short of it due to the falling stock market prices. However, there is one gigantic market that is gaining momentum quickly and that is the foreign exchange market. Financial freedom isn’t easy – you are going to have to work for it. The currency market certainly is not something you will learn overnight. It is going to take some time and you will need to get your hands on several different training guides. This will give you a good start on what you need to know.

The Internet is really a great resource for finding tips on the foreign exchange market. Since there are marked difference between this market and the traditional stock exchange, you should also become familiar with new terminology. One of the biggest differences is that there are no commissions. Instead of brokers, there are dealers, which take on the market risk. They are the counterparties to your trades. It is a unique system and it is not regulated, except by the participants. For years, this market was almost exclusive to huge financial institutions, hedge funds, and multinational corporations. Since day trading has become so popular over the last decade, more individuals are now trying their luck in currency trading.

Financial freedom is not something you can find without work – at least in most cases. It takes dedication, a will to succeed and sometimes, it takes sacrifices. If you are ready to get rid of the loans, bills and all those other expenses, take matters into your own hands. Can you imagine what the end result will feel like? The peace of mind you will experience is worth it!

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Friday, July 23rd, 2010 Financial Advice No Comments

How to Make Currency Trading Work for You

If you’ve considered investing in currency trading, you are not alone. Currency trading is quickly becoming a very important subject for investors, especially those who are trading at home. It is quite a bit different from a traditional stock exchange in that it is not controlled by a central governing body. In addition, there are also no clearinghouses to guarantee the trades and there’s no arbitration panel, either.

However, currency trading is the largest market in the world. It depends on the proverbial handshake across cyberspace. For those that are used to a very structured environment when it comes to investments, such as those through the New York Stock Exchange (NYSE), the foreign trading market can be very confusing at first. Insider trading does not exist, so to speak. You can buy as much Japanese yen or Euros that you want, as long as you have the capital to back it. Self-regulation works well because both the buyers and sellers are both competitors and they must cooperate with each other.

If you are interested in currency trading, you should become familiar with many of the terms associated with it. It is time to hit the books and start learning as much as you can about this market before you make your first investment. Keep in mind, that the currency trading is not the not the same as the stock exchange and you can lose money very quickly. However, there are no commissions, which many investors find quite appealing. Instead, you will find dealers – not brokers – who actually assume the market risk by becoming the investor’s counterparty.

The Internet has really changed the way people invest their money. Currency trading is not just limited to day traders but also financial institutions, hedge funds, and multinational corporations. It is one of the most liquid markets in the world and trades continue 24 hours a day, from 5 pm on Sunday to 4 pm on Friday (EST). Because of the sheer size of this market, it is considered the most accessible market in the world. However, you are certainly going to want to do your homework before you begin.

There are a number of different resources available on the Internet with a wealth of information about the foreign exchange market. You can also purchase a number of different books, DVDs, and other media that will teach you how this works and some of the best tips to help you make some cash. However, when it all comes down to it, the day you make your first trade will be the day that you decide if you are really ready to continue.

Friday, July 23rd, 2010 Financial Advice No Comments

How To Make Online Stock Trading Work For You

You’ve heard the stories about how a day trader made millions by buying stocks and bonds online. Unfortunately, there are a hundred other stories about investors that lost a lot of money with online stock trading. If you’d rather be in the first group, then here’s some important information you should know.

There are a number of different companies that offer online stock trading. You simply download their software, watch a few tutorials, make a deposit, and you are ready to start trading. Hold on just a moment. Don’t make that first trade just yet! There is a lot to learn before you start jumping into something you may not know enough about!

The best day traders know the market inside and out. They follow every piece of daily news, corporate press releases, and all the opinions from the expert. They have studies historical stock prices and understand how an upcoming event may change the entire flow of the market. It’s a business all to itself and it changes so quickly that you could get left behind.

There are several courses available on the Internet that will give you a basic understanding of how to buy or sell shares. The terminology is explained and you can practice buying and selling to see how you do. Unfortunately, you need more than a few practice sessions. Consider taking a course at your local community college or spending some time with an experienced trader.

If you are sure you are ready to begin, start slowly. Build your portfolio based on your analysis of the current market. Don’t be afraid to trust your gut instincts, but it’s always best to have research to back it up. Once you have gained valuable experience in online stock trading, you can invest more as your budget allows. Remember, that you don’t want to put your eggs in one basket and there really isn’t anything that qualifies as a “sure bet.”

In closing, online stock trading can be very profitable when you’ve done your research. Make sure you understand the market, what affects stock prices, and don’t be scared to ask for guidance if you need it. From your financial standpoint, don’t invest more than you can stand to lose and always put some money away for a rainy day. When all is said and done, hopefully you will be the one that walks away with a great deal of money!

Friday, July 23rd, 2010 Online Stock Trading No Comments

How to Manage Your Forex Trading Accounts

Some of the wealthiest people in the world have made their fortunes in the Forex trading market. If you are just starting out, you may wonder if you will ever get to that point, too. The truth is that the currency market is one of the most liquid markets in the world. Since trading starts at 5 pm on Sunday and ends at 4pm on Friday (EST), people from around the world can trade 24 hours a day.

One of the reasons why Forex Trading is so popular is that there are no commissions, unlike regular trades on the stock market. Instead of brokers, there are dealers and they have a marked interest in the trade. Make sure that you use a National Futures Association member firm. This ensures that they have already agreed to binding arbitration, should it be needed.

There are a number of different software programs that can help you track your accounts. Some of these programs are free, but they are usually quite simple. If you spend most of your day trading, you will want to invest in a top-of-line program. This will help you stay on top of all the activity and you can watch your money grow – at least that’s the plan!

Once you understand the market and all of the terminology, you’ve set up your program to track your accounts, and you’ve got the capital to begin, the sky is really the limit. One of the most common mistakes that people make is investing in this market without truly understanding it. Besides the lack of regulations, there are a number of facets that are completely different from traditional stock markets. Because the buyers and sellers must cooperate and compete with each other, it creates a rather unique situation. The self-regulation works, on nothing more than a virtual handshake.

Managing your accounts, staying abreast of current news and other factors that might affect the currency market, and understanding how everything works is the best way to help you make money. The gigantic financial institutions and large hedge funds account for more than 80 percent of the trading on the Forex Trading market. This percentage is based on their opinions and what they think the next few days or weeks will turn out. Everything from a private golf course announcing its opening in Japan to a civil war in Africa will affect the market.

In closing, it is important to understand the market in order to manage your accounts. If you need to learn more, there are a number of resources available on the Internet. Don’t let a lack of research end up costing you money.

Friday, July 23rd, 2010 Forex Trading No Comments

The Best Way to Use Option Trading

If you are not really familiar with option trading, you may be missing out on an opportunity to make some serious money. Options are contracts to buy a stock for a set price on a set date. You will pay the money up front for the option, depending on whether you think the stock price will go up or down. The call option will go up or down with the stock price. Sounds simple enough, doesn’t it?

There are basically six pieces of data that will determine the price of an option; price, volatility, strike price, expiration date, dividends and interest rates, and supply and demand. The price of the stock is the first one, and the call will go up as the stock price goes up or down. Volatility is the second one and it means that if the stock prices vary greatly, then you’ll spend more on the option. The strike price goes up, so will the option. This is the third piece of data that will affect the price. The fourth piece of data deals with the expiration date. If it’s expiring soon, the price will be less than if you are buying several months out. 

The fifth piece of data involves dividends and interest rates. As interest rates rise, so will the price of the option. Finally, supply and demand affects virtually every aspect of the stock market and option trading is no exception. If more people are buying a stock, the option price will rise.

If you are feeling a bit confused by now, then you probably should not be trading just yet. The good news is that with a bit of research and some training, you can begin trading effectively. It is not completely uncommon for someone to get a 500 percent return on option trading. Obviously, it does not happen daily or this would be all that people do! However, since this can be one of the most confusing parts of the market, many people avoid it. They do not take the time to understand everything about it and without that knowledge, a loss could be substantial.

In closing, if you are ready to try your hand at option trading, it’s time to hit the books. Learn all you can before you begin and ask for help from someone who is familiar with this aspect of the stock market. Not everyone is comfortable with this type of trading and there are other ways to invest your money. It is only a great idea if you are not losing money!

Friday, July 23rd, 2010 Option Trading No Comments

Top 3 Questions You Need to Ask Before You Buy Trading Software

Trading software is a great tool when it comes to investing in a stock or currency market. From real time information to resources such as historical stock prices, these programs allow you to follow your accounts and investments in minute details. Before you make your purchase, however, there are three questions you should ask.

#1 What Is the Learning Curve?

You don’t want a trading software program that is very difficult to use. While most will require the use of tutorials, you should not feel completely lost when you finish them. If you’ve never used any type of program like this before, you can’t expect to open it and start trading. There should be step-by-step instructions, practice sessions, and help, when needed. There should also be frequent upgrades to work out any bugs, as well as to deal with any type of market changes.

#2 How Much Does It Cost?

Most trading software programs are available for a set fee. Some are even free, but the features are more limited. There are also some that require you to pay a monthly fee for access. Before you sign up for these programs, you should understand all the fees associated with the system. If you can’t afford the monthly fee for access or if the site is not secure for purchase, move onto another one. Otherwise, you may be throwing your investment money away.

#3 What Do the Reviews Say?

One of the best ways to see if trading software is going to be effective is to read through the reviews. Don’t worry about the reviews on the site selling the software. Those are usually just the positive ones. Find a website that lists many different types and reviews each of them based upon their own merits. See what real users think about it and if they recommend it to others. You can find out many of the difficulties people have had in the past, as well as some of the better features. This is great way to learn before you make that final purchase.

In Closing

Trading software is a fantastic way to track your accounts and investments. Most have terrific reports available, so you can watch when and where your money is. Online support is important, as well. You should have access to support services 24 hours a day, especially if you use a Forex program. Don’t get stuck with the wrong program. It’s hard enough to make your investments profitable as it is.

Friday, July 23rd, 2010 Trading Softwares No Comments

Top 5 Reasons You Need a Forex System

If you have never traded in the foreign currency exchange (Forex) market, you may be in the minority these days. In recent years, more and more individuals are diving into this investment opportunity. In years past, huge financial institutions and gigantic multinational corporations were typically the only ones that really played this market. However, the Internet has changed how many people investment their money and this market is no exception. If you are just starting out, you will need a Forex system and here are the top 5 reasons why:

#1 You Want to Make Money

Of course, the reason you invest is to make money. When you first begin trading, the right Forex system will help you understand and track your accounts. Most offer real time information, too, so you can have the most up-to-date information before making your choices. It is the best way to follow the market and your accounts.

#2 It’s Easy to Use

Most of the Forex systems are really easy to use. You will have to put in some time learning the ins and outs of the system, in order to get the most of it. However, that’s going to be the case with just about any program you use for investing. Some will offer quick start guides, but do not start putting all your money out there after just an hour’s time. Make sure you understand each part of it completely.

#3 Affordable for All

No matter what your budget is for this type of program, you will find one to meet it. There are free editions available, as well as those that cost several hundreds of dollars. Some of the free Forex systems are really good, while others may leave something to be desired. However, that’s the case for some of the programs, too. The best thing to do is to check several different reviews and see which ones will best meet your needs.

#4 Free Trials

Another great feature of many of the pay programs out there is that many have free trials. You can use the programs and see if they deliver the results promised. Most trials are for two weeks and some offer you the chance to set up a mock account, too. You can see how you do without actually investing any money.

#5 Secrets of the System

You will find some of the programs offer a great selection of tips and secrets to help you maximize your earnings. You can also find a list of resources, as well. A good Forex system will help your investments.

Friday, July 23rd, 2010 Forex Trading No Comments

Top 5 Things to Consider Before Choosing a Forex Broker

If you are new to the world of foreign currency exchange (Forex) trading, there are a few things you should know. First of all, this is a self-regulated market and it is not the same as trading stocks on the stock exchange. Secondly, the right Forex broker is a must. There are five things that you should consider before you choose the one you feel is right for you.

#1 The Spread Amount

The difference between how much you can sell or buy a currency at a certain time is call the spread. The spread can be quite different, depending on the Forex broker you use. Some have a variable spread, while others have a fixed spread. A long term, fixed spread is usually safer.

#2 Execution of Your Trade

You will want to find out how fast your order will be executed. Perhaps they offer automatic execution. You should ask if they trade against their own clients and how much you can trade before you need to request a quote. The best way to find out a lot of this information is to try and open a paper trading account and see how you do.

#3 Leverage Options

The ratio between your actual capital and the total capital available for trading is called leverage. It works like this: suppose you have a ratio of 200:1. For every dollar of actual capital that you have, your broker will lend you $200. This is a critical part of the foreign exchange currency market, because of the deviations in the currency prices are set in minute portions of a cent. In most cases, there is a flexible margin, so you can pick the leverage that’s best for you.

#4 Types of Accounts

Mini accounts are fantastic for getting your feet wet and seeing how the whole system works. It is great for those people with a limited amount of capital. You can start some accounts for only $300 or even less.

#5 Type of Trading Platform

You want a great software program that will continually show you live prices. It should also allow you to place Stop and Limit orders that you can attach to an entry order. You should also find a Forex broker whose software allows you to put in your trade and let the software finish it.

In Closing

These are the most important things that you need to look for in a great Forex broker. There are plenty of scams out there today, so it is important to make sure you are getting someone who has your interests at heart.

Friday, July 23rd, 2010 Forex Trading No Comments

Why Won’t Future Trading Work for Me?

If you are one who really does not like to gamble, then future trading is not for you. This is one of the riskiest kinds of investments but on the flip side, it also has the greatest rewards. While there are many people who have lost their entire savings in future trading, there are just as many others who have made millions. Here is some more information about this type of investment strategy and why you could be missing out on a great opportunity – if you play your cards right!

Future trading is the buying or selling of contracts for specific commodities, such as wheat, oil or gold. These contracts are bought and sold for delivery on a certain date in the future. It’s very different from traditional stocks, because you do not have to buy or own the commodity. Here’s an example: you believe the cost of coffee is going up in the near future so you will buy coffee futures.

Most of this type of buying and selling are done by speculators. They buy the contracts and then sell them before the delivery date. They take either a profit or a loss from the transaction and they are not responsible for the delivery of the commodity. Hedgers are investors that are actually interested in the delivery of the commodity.

It’s not without criticism, as many critics allege that this type of trading cause the shortages and price gouging so common today. However, it can also be a positive influence on the economy. Some of today’s economic problems have really affected the future trading market, but even so, it’s becoming more popular than ever.

The key to making a profit is timing, as it is with just about any investment you make. You should research the commodity you’re interested in. While not all past performances will predict future performances, it can give you a good starting point. You also should understand the liquidity of the market to make sure you can buy or sell when you want to. If there is no buyer or seller for your futures, you could be stuck holding a very expensive bag!

It is not wise to begin future trading without understand all that goes with it. This means getting online and reading all you can about it. Talk to experienced traders who have made and lost money in the stock market. They can help you get started; however, it is inadvisable to put all your money in at once. Since this is just about the riskiest investment you can make, you want to exercise some caution.

Friday, July 23rd, 2010 Future Trading No Comments
Forex Automator Pro - Advanced Trading Manual

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