Learn About The Stock Market

Have you ever watched a newscast or financial channel such as CNBC? In know that's a silly question. Of course you have, right? And you've noticed that line of numbers running along the bottom of your screen. You probably told yourself that's just stock market stuff, and ignored it. Some where out there, someone else is glued to that 'stock market stuff' because it can make them a bundle. Yes, fortunes can be made day trading the stock market, but they can also be lost of you don’t understand some basic concepts.

First of all, the stock market deals in the trading of shares. Shares are the units actually offered by companies on the stock market, and the money that the company makes from these sales are called stocks. So you are not actually purchasing a companies stocks. What you actually purchase is shares in a corporation that is traded on the stock market, and that makes you a shareholder.

There are stock markets in countries all over the world, but one of the most well known is the NASDAQ market in the United States because it was the first all electronic market. The stock markets in the United States have the worldwide distinction of being the most active of all world markets. Because of the volume and reputation, the NASDAQ can exert quite an influence on other stocks. The Dow Jones Industrial Average, commonly referred to as just Dow Jones, is another key US based stock market.  Both are used extensively by day trading robots and other traders to make a living.

If you do not know what you are doing, its not expected that you try to trade or invest int he stock market on your own. There are professionals who can do it for you. They are called stock brokers and they typically have a lot of experience dealing with the stock market. Becoming a stock broker can be a very lucrative career move, but you must understand all the ins and outs of the stock market. This is because every transaction in the stock market carries a commission, so every trade done by a client pays you a fee.

While it is nice to have some help, everyone should learn to invest on their own as well. If you’re serious about investing or day trading, you’ll want to learn to trade and invest on your own. That way, you'll at least have an idea of what's going on. A great way to get started in the stock market is to find a reputable broker and some good research to start learning. There are many good stock research providers online who offer their services for free, and can give you advice on the stock market.

Making Money from Online Investments: Share Dealing, Spread Betting and CFDs

Leading economic commentators agree that the financial crisis we are entrenched in could reach an unprecedented scale, with only the smallest chance of a genuine recovery. Nevertheless there is still the opportunities for traders, investors and enthusiastic amateurs to earn a good income by making use of the variety of online share dealing and trading websites that have revolutionised our access to the stock market.

The history of our global boom and bust economy shows that the periods of downturn always mean the weakest links in the chain don’t survive. Only the strongest and most adaptable survive. Well, this applies to investors as much as businesses. In the past, if an individual wanted to buy and sell on the stock market, the fees involved could become exhorbitant. There are brokers who would take a 20% cut on investment profits in addition to a 2% fee annually. That can turn a 10% return into just 6% – even less depending on your management fees. This is magnified by the fact that the stock market collapses of late have reduced the levels of profit being made by investors. Investors today are struggling to earn the kinds of profits they were just a few years ago by traditional means.

But times, they are a changing. As the digital age matures, we’ve got access to instant real time information, high speed internet and sophisticated trading software. Essentially this means cutting out the middle man and recovering some of those lost profits for yourself. Online share trading services allow you to manage your own portfolio at minimal cost.

The other great thing about having your trading portfolio online is being able to look at your investments from along term point of view. It’s a far smarter approach than only looking at the short term quick wins

A consequence of the lack of predictability of the markets in the current financial climate, means that trading techniques such as financial spread betting are also on the rise. Rather than buying shares at one price and selling when they rise, spread betting doesn’t involve ownership at all; you simply bet on whether and how much the price will rise or fall. There is no doubt risk involved – yet skilful spreadbetting decisions can mean significant profits. A variant of financial spread betting is CFD trading, or Contracts for Difference. These are, quite simply, contracts between two people where each agrees to pay out on the difference between initial and final stock prices over a period of time. Both are an increasingly appealing option to actual share ownership for many investors. They are both also really simple to get into online, which has also lead to the increasing usage of online CFD trading and spread betting of late.

The moral of the story? Exactly like businesses and corporations, individual investors need to be thinking about cutting their costs, improving efficiency and looking for new opportunities. As far as safeguarding yourself against the slings and arrows of outrageous recession is concerned, the strongest tool in your belt might be to switch to online trading.

 

Online Commodity Trading At A Glance

Many people find online commodity trading as a whole different thing but exciting for trading on the internet. If you know what you’re doing, interest in the market is actually increasing, so that means larger potential for gaining profits.

You can join some schools who provide courses, even only last for few days, but they teach people about the basics of the stock market and online commodity trading.

It is very important for you to understand everything, at least some basics about commodity trading before you get started and learn how to place or how to control your orders in the commodity market.

It is advised to learn from professionals who make money thru selling and buying, since it will give you a good samples on how you need to conduct yourself though the market you will be joining will likely be smaller scale. This also include learning how to use stock market software.

You need to learn which online commodity trading transactions involve the most risk so that you can control your exposure to major losses. It doesn’t matter even if you find the russian stock market seemed to be more lucrative than the one in the US for example.

A bit of education will help you to reliably determine which investments are likely to be profitable and which should be avoided due to risk factors. It is possible to utilize different types of contracts at the same time to increase your leverage. Such as dow index.

If you want to do well in the online trading market, you must have discipline and move carefully with a solid plan and established knowledge about the market and software you are using. Everything makes the trading looks complex, but if you do it correctly, it can actually give you profits and with less risky.

Many people find that online commodity trading is very lucrative and make it become a full time career. So if you put the time learning the market and carefully make a decision, you may find yourself want to make the online commodity trading become a full time career, too.

Thank you to the internet since it makes the online commodity trading become much more flexible, so that you can start slow and increase the volume whenever you feel comfortable.

Key Pieces Of Google Stock Price

In August 2004, Google stock prices started out at only $85 per share. That time many analysts debated whether or not Google was really worth it.

Google value was intellectual property instead of real property, and that time the market was not ready to the idea how an online companies can be so on demand and valuable.

Long story short, there is absolutely no reason to debate about this anymore, since Google stock price is 5 times its initial value and 5 years later the company has the market value of $175 billion dollars.

The initial climb was the most impressive as the Google stock price rose to over $100 in the first day, and then doubled within the next three months.

Analysts still debate the value of the company but it is more a matter of how much more it will grow and how quickly. Many investors in the Australian stock market also join in this debate.

It is clear that early growth of Google company was really not realistic and not sustainable, but it’s been the past few years their stocks has settled into more traditional growth pattern with the exception of today’s reccession which has been hit the entire sector and marketplace.

No stock comes with a guarantee, but investors have shown that they are confident that Google is a solid, reliable company that is not likely to significantly lose value, at least not relative to the market as a whole.

The up to date Google stock price can be found at any time by searching using the company’s exchange symbol “GOOG.” Not only Goog, there you will also see Nasdaq futures.

Note that Google has two types of stocks, that is Common and Preferred. Usually Preferred stock prices are higher since the holders are paid dividends before they are distributed to all the common stock holders. However, both of them have voting rights.

Things You Should Know About Online Stocks Trading

If you have ever considered online stocks trading, now is a great time to get involved. Stocks are still down across the board but we are getting close to the turning point in this recession where everything will start to go up. This is great news if you are just starting out because chances are any stock you pick is going to increase in value as the whole market ride a wave to recovery.

A Century of historical data shows that the stocks market always rises over the long run eventhough a lot of us learned over the past year and half that there’re never any guarantees with the market.

Indeed, “The long term” is the key to online trading success. If you are patient and willing to hold on to a stock it is likely to make money for you eventually. It is usually the people betting on short term gains that get badly burned in the market.

So if you have started to think seriously about online stocks trading, you need to first make yourself a budget. Simply put, the money you can afford to lose is the money you can afford to invest in the stock market. If you need it to pay a bill next month, then it should be in the bank where it is safe.

That way, if you are never forced to pull money out of the market, then you will rarely lose any. The stock will usually recover in time even if it goes down. All you have to do is hold on to it, and wait.

To get started with online stocks trading, you need to create an account with a reputable online broker. Pick one that is well known as they will have the most secure websites. You don’t want to rist yourself with identity theft, so this is very important for you since you will be sharing your personal banking info and credit card to set up an account. The stock market is risky enough!

Once you have found a brokerage site that you like, you can start researching and picking stocks. Buy small amounts of cheap stocks to start if you’re just starting out with online stocks trading. If any of your picks turn out to be bad you will not spread risk around or wipe out all your portofolio

Online stocks trade should fun and by investing small amounts you can get involved with more companies which increases the rate at which you will learn about the market. My advice is buy a few reliable stocks and then take a little more risk with those that are volatile. It prevents you from losing it all while gives you a chance of hitting it big.

What are the futures market and how does it work

Most people have heard of the futures market, and it does get mentioned on news shows such as CNBC or MSNBC. However, a lot of people dont understand what the futures market is. Learning how to utilize it properly will help with entry timing when day trading, swing trading, and even investing (after all, who wants to be down immediately after entering a position?)

 

It’s actually quite simple. The futures market is just a bet on where an index will close at a future date in time. It is no different than saying ” I think GE will be 5 points higher in 3 months”. Now imagine thousands or people, or even hundreds of thousands all betting on where GE will be in 3 months. Not tomorrow, 3 months from now.

 

This aggregate valuation call would be considered a futures market. It could be higher or lower than where it is now, but you also have to remember that there is 3 months time to be right. This time has a value - the more time you have to be right, the easier the call is. The market puts this time value into the price of the futures, each day that goes by a fraction of that is taken out. This 3 month time in this example is a fixed time, it does not scroll forward. So if the bet is the 31st of July, 2 weeks from now the GE bet would still be based on the 31st of July, but the time value associated with that bet would be a bit lower because there is less time left to be right (or wrong).

 

If this still seems confusing, think about this example:  Every day an analyst says “The market will fall 300 points today."  If that happens in 1 day, he gets a bonus of $40,000.00.  The more days you give him to be right, eventually, even just by random chance, he will be right.  So the time increase you might give him to be right would DECAY the value of the prediction.  Lets say you give him 1 month, but he is now only paid $10,000.00.  If you give him 3 months, that is only worth $1000.00 and so forth, this is a type of time decay.

 

This basic concept is then carried over to the stock indexes. Traders and investors place bets based on current and anticipated information and research for what they think the value of the index wil be in the future. One thing to remember is at the expiration date, the futures contract AND the cash contract (the index) will be identical. So if the S&P 500 index is at 1400 on expiration, so will the futures contract trade to this price. Because of this fact, there is what is called arbitrage between the 2 (cash vs futures) since they trade separately. I can make a bet on the futures market (buying or selling) without doing anything with the cash index. In just the same way, I can buy a large basket of stocks in the index without touching the futures market. This give and take causes the 2 of them to fluctuate independently.

If the futures push to high relative to stocks (the spread widens), there is free money since at expiration the value is equal. So you can sell the futures, then buy the basket of stocks that make up the index and lock in free money if you hold it until expiration. There are whole other program trades that simply day trade stocks vs futures all day long based on the premium to cash being too high or too low.  By selling the futures, you have agreed in principal to sell the basket of stocks comprising the index at that futures price. If the current price of the futures is 1430, cash value is 1400 and computed time value 20, the futures should be priced at 1420. At 1430, I can sell the futures, then buy the stocks and lock in 10 points for free. Doing it in real time is not this easy, but the basic underlying concept is.  Anyone who wants to learn to trade needs to understand how the futures market works.

The Way To Win If You Are New To Trading

Everyone wants a shortcut to learn day trading or any other kind of short term trading – someone to teach them the “secret sauce” that will take 10-20 years of experience and allow them to come up to speed in a few months. If you needed brain surgery, would you want the guy who got his degree online in 6 months OR the guy who spent 10+ years in med school + residency + specialization? Is that even a fair question?? Well, it's lucky for everyone that trading is far harder than brain surgery … not really but it can seem like it. In reality there are some easy things everyone can do to dramatically increase the chances of winning and decrease the learning curve - but do not expect a single, easy secret that will solve all the issues and make it easy. That knowledge is learned. The one huge key to the path of winning is simply to do things that will not cause you to lose money.

First off, you really need to treat  day trading as a profession. This means act like its a real job and your only way to make money. You will need a dedicated computer for trading only, with 2 monitors - a single monitor cannot show enough data. Do not try to use some 5 year old computer that is underpowered. I can assure you that computer will fall behind of the task. You do not want lagging data, there is nothing worse as a trader - this will cause you to lose money. Trading is super data intensive, make sure you have a computer with at least the following specs:

1. A minimum dual core chip, ideally you want a quad core chip. Each core on the chip can run a separate application, and this really lessens the chance the computer will stall out. Make sure the chip has a decent amount of L2 cache. If you dont know what this is, ask a local computer nerd, they will help you.

2. A minimum of 2gb memory, the more the better. If you want more than 4gb you will have to use a 64 bit operating system. Before you take this step, make sure whatever software you are using is fully compatible. You should be able to get by with 2-4gb fine. The faster the memory the better, but no need to really pay up for special memory.

3. An add on graphics card from Nvidia OR AMD. Make sure the card can handle at least 2 monitors. You do not need a high end gaming card, you should be able to get something decent for about 100-150 bucks easy. Do not use thebuilt in graphics on the motherboard - they are really cheaply made and are underpowered. Trading is extremely graphics intensive - think about real time charting, indicators, order entry, bid ask in real time etc - it adds up.

You will only need this on your main computer that will be traded on and used for charting. You want 1 dedicated screen for order entry and 1 screen for charting. If you have any other computers that are older, those are totally fine for surfing the net, getting news, IM chat and other stuff. Once your trading computer is setup, you should keep it uncluttered with other applications - install those on another computer. You do not want it to crash or lock up during trading hours.

Just like a real office, you need a dedicated space that will serve as your trading center and workplace. It should be setup like you would a desk in an office - phone, light, supplies, computers etc. Remember to succeed, you really have to treat learning trading as a real business, not some kind of hobby. A hobby is fine, but you cannot expect to become an expert unless you treat it seriously. When you are concentrating on trading, do not let outside influences distract you. This means chatting on the phone to friends, watching tv shows, and doing other things while “kind of watching” the market. If this type of behavior would not be acceptible in a normal office, it will not cut it for trading either.

Once your office is setup, you really need to get serious about learning how the market works. The internet and free blogs are a great source of information, but you should not expect to learn everything online. Go to amazon.com.or other sites like Trader's Galleria - search for the term "charts" or "stock charts". You want a beginning book and an advanced book on charting. To learn to trade you have to understand the mechanics of how price moves, which means you have to learn to be an expert at charting. This can and will take some amount of time, and is not easy. As you get better at it through practice, it is much easier to learn new ideas and concepts because you have the background to understand them.

Expect learning charts to take about a year to get good, but in a month or 2 you can get a good start. Again, do not fall into the trap of thinking “if I throw some money at this, someone will show me secrets and shortcuts”. If you don't have the foundation to understand what is going on, no amount of shortcuts will fix that since you dont understand the underpinnings of how stuff works. One word of caution - do not attend any seminars until you have at least mastered basic charting - your money and time will be wasted. When you think you are ready for the advanced book, then you can consider attending a seminar to learn more. Again here there is no substitute for experience. Every day you have to plan time to watch the markets live, even if its just for an hour or two - ideally for the whole day if possible.

You really need to watch it live AND go over static charts after the market has closed. If your time is impacted because you have another full time job and cannot watch the market here is a secret: Get some screen capture video software (records your screen to video) and an external usb hard drive, probably 500gb will do. Set up a real time chart of the market and a few stocks on your screen before you leave for work. Set up the recording software to save to the external usb hard drive. You can set up a macro (there are free programs out there that can do this, search Google) if you are not home when the market opens. Set i to record at least an hour of video of the market open and any charts you have open. At night you can then replay this recording in real time (or even speed up time) and watch for chart patterns to learn from. If this does not appeal to you, some of the brokerage firms or data vendors have market replay that can replay parts of the prior day for you.

I have not touched on one last thing - charting software. There are tons of them out there. I have my own preferences I like, but that hardly matters. You need to find what you are comfortable with. Some programs are very complicated, some are simple to use, and yet others will let you code custom indicators and trading systems. From the start, I would suggest that most people go with simple. What good is having 500 things you have no clue what they do or how they work?? All that does is confuse more and add things you are not ready to use. Just make sure its a fully robust charting package – meaning all charts are live, you can put tick charts AND minute based charts up (not delayed data, live data) AND its not web based. Web based means the program is running in a browser, rather than running as a separate executable. For the most part, you always want a standalone, executable program - they are far faster and speed is money. You do not want web based order entry (browser) for active trading, its just too slow - you need real time profit and loss and the ability to watch positions in real time. It is too slow in general to be of any use. Web based is totally fine for buy and hold, longer term investing. Winning at trading is about time, even 5 seconds delay can cost you 50c or more per share in lost profit if the market is moving fast. That is a real cost and can cause you to turn what would be a winning trade into a losing trade.

While this was not a tutorial on how to trade, I tried to touch on a few subjects often overlooked when people are trying to learn to trade. They overlook these because they either cost money (charting software, real time data, computers) or they think they take too much time so lets find a way to skip this or that part.

As in every business I know, there are some fixed, monthly costs that are a part of doing business. If you are a trader, data costs and charting package costs are one of many. Often you can get them minimized or waived if you are active, but for probably the first year expect to pay for them as you are learning.