It is important for every capital investor to know just how stock trading operates. Whether you are planning to pursue it as a career or not, knowing the ins and outs of the business is essential if you are to trade successfully.
You need to have a working background on stock trading especially if you are still a beginner. This will make the difference in getting the best day trading stock tip and information, or losing big or a wrong stock pick. To jumpstart your stock trading education, signing up to an online trading firm is your first stepping stone.
Sign up with online trading firm that offers free registration for your account. Choose a site that offers clear and easy instructions. Don't rely on sites and traders who state all you have to do is sign up, punch your credit card credentials, then sit back and relax, and let them do all the hard work. That could be a fraudulent operation in the works. So choose one that you're most comfortable with and know to be reliable. Many sites will also show the steps and ways for you to manage your stocks, keep track of your stock investments, as well as offer the best day trading stock tip updates, and other stock options and news.
There are mostly trading sites that also offer online stock services to support beginners who want to learn more about buying ans selling stocks using vital stock reports and day trading stock tip updates and information. Many online brokerage sites offer real-time day trading stock tip and stock quotes to keep you informed of the shifts and movements on the floor. Some may even offer after hours stock tip and updates for your mutual fund options and stock investments.
Of course, nothing beats a site that offers ways for you to get firsthand information from the market. These sites offer day trading stock tip developments, stock quote data, and other stock trading information. Getting real-time stock information is essential especially for day trading and direct stock investments.
Trading stocks online is not done in real time or as instantaneous as it is on the floor, though. A lag time of twelve (even up to twenty-four hours!) may pass from the moment you act on that day trading stock tip you got, till the offer is closed, twelve or even twenty-four hours, may have elapsed. If your stock firm doesn't tell you this, consider yourself forewarned especially if the stock you're interested moves in a rapid clip. That day trading stock tip you got could become worthless.
This is because, the Internet cannot duplicate the market hours. So while you're learning the ropes, avoid stocks that are volatile and make the most of daily news and day trading stock tip updates available to you. Keep a pulse on what's happening on the stock market floor so you you can make the necessary adjustments.
Keep yourself updated with the latest stock information is the best way to make any day trading stock tip work for you. And keep this in mind: When you're starting, start small, buy safe and keep away from the shares that swing wildly. As your experience grows, you can develop a working stock trading strategy, so be patient and learn as much as you can, when you're learning about stock trading.
Sunday, September 6, 2009
Monday, January 12, 2009
A Guide to Stock Market Depressions
The idea of stock trading during depression is widely misunderstood by investors and non-investors alike. There are a lot of misconceptions about when it is a good time to invest (or not invest), what you should do during an economic downturn, and even what a "depression" is. With this guide to stock market depressions, you will hopefully end up being better equipped to know what to do in an unfortunate economic situation to make sure that your own fortunes make a turn for the better.
When people think of the word "depression", they inevitably think of the Great Depression that followed the stock market crash of 1929. However, depressions are not all that uncommon, though an epic one such as the one experienced at that point in time are relatively rare. Still, the economy is a cyclical beast, and upswings and downturns occur naturally. As a smart investor, it is your job to learn how to make money during either type of period.
Stock market depressions are often misinterpreted as a time to sell all of your stocks and go into hiding while you wait for everything to get better. This is really not a practical solution to what is a temporary problem. In fact, sometimes it is best to invest during a depression, as one of the basic guidelines for investing on the stock market is to buy low and sell high. Well, when is the price of a stock ever lower than in a time of depression or recession? As you can see, these are not times to "shut it down" and wait it out, but instead to make smart, informed investing decisions while the prices of stocks are relatively low. When the upswing inevitably comes, you will stand to make a nice profit!
Long-term investors especially should be prepared to take advantage of the conditions caused by stock market depressions. If you are willing to be patient and hold onto a stock that you buy at a low price during a downturn, you will definitely see it rise in the future, if you made the right decision. As with all parts of investing, however, it is of paramount importance that you know what you are doing and what moves to make!
Regardless of your skill level in online stock trading, there is a lot of money to be earned trading stocks if you know a few simple tips and tricks. Visit our website to access more valuable information and additional resources for stock trading: http://OnlineStockTradingInformation.com Article Source: http://EzineArticles.com/?expert=Jayda_Kaycee |
What Are the Main Advantages of Using CFDs Versus Traditional Stocks?
Whilst Contracts for Difference (CFDs) are a relatively new financial product the advantages of using CFDs versus traditional stocks are many. Today will have a look at the main advantages of using CFDs compared with traditional stocks.
The top 3 advantages are...
- Leveraging your account allows more profit and loss;
- Small initial outlay - CFD margin; and
- Trade world markets through the one CFD trading account
Leveraging your account allows more profit and loss
By far the greatest advantage of CFDs versus traditional stocks is the ability to leverage your capital. If you had $10,000 in share trading account then the most you could ever trade is $10,000. If your capital was all tied up in positions that you found another trading opportunity you would have to either sell an existing position or let the trade go by.
On the other hand, a CFD trading account with $10,000 in it would allow you to trade up to $10,000 and if you noticed another opportunity then your CFD account will allow you to take that next trade. This is called CFD leverage and it's by far the greatest advantage of CFDs versus traditional stocks.
The important thing to remember about CFD leverage is to keep it very, very small. As a basic rule of thumb you should not leverage your account at more than three times if you are a new or inexperienced CFD trader.
Small initial outlay - CFD margin
The next major advantage of trading CFDs versus traditional stocks is the fact that you only need a small amount of money upfront in order to control a much larger amount. This is known as a CFD margin. For example, if you wanted to trade a $10,000 position on Rio Tinto you would only need around 5% or $500 upfront in order to control that $10,000 position.
Contracts for Difference are almost exactly like trading shares except the CFD margin means your money is working so much harder you. You can imagine if you had a $10,000 position in Rio Tinto with $500 of your own money and the price of Rio moved 5% your favour then you would be sitting on a $500 profit. As you only put in $500 of your own money this would result in a 100% return cash on cash.
Trade world markets through the one CFD trading account
The third greatest advantage of trading CFDs versus traditional stocks is the ability to trade many of the world's stock markets from the one CFD trading account. If you have an account with a market-maker CFD broker it is quite common to be able to trade in excess of 15 worldwide exchanges through the one trading account. In addition to that you can also trade spot forex, indices, sectors and most commodities from the one CFD trading account.
Action: Discover the 7 most Critical CFD Trading Tips and 2 of the most common CFD Trading Strategies. Learn more about the CFD revolution by going to http://www.learncfds.com/ Article Source: http://EzineArticles.com/?expert=William_Potter |
Can I Hedge My Stocks Using Contracts For Difference (CFDs)?
A common question asked is "Can I hedge my stocks by using CFDs?" First we will begin by having a look at exactly what is hedging?
What is hedging?
To quote the dictionary: "A hedge is an investment that has taken out specifically to reduce or cancel out the risk in another investment."
So for this example we will consider that trader X has 2250 BHP shares and would like to hedge their risks by using CFDs. Basically trader X will be looking to short sell 2250 BHP CFDs in order to perfectly hedge their current BHP exposure
A Perfect 1 for 1 Hedge
Prior to CFDs becoming mainstream, the main way for people to hedge their share positions was to use options. One of the limitations of options is the fact that most options are in multiples of 1000 shares which means if you had 2250 BHP shares you could only hedge either 2000 or 3000 shares.
CFDs on the other hand enable you to perfectly hedge one-for-one. So if you had 2250 BHP shares that you could perfectly hedge that exact about using CFDs by shortselling 2250 BHP CFDs.
You get paid to hedge your long positions
One of the interesting aspects of hedging using CFDs is that when you take out an opposing short position using CFDs, the CFD broker will pay you every day you hold the position short. Now you may be asking yourself why anyone would pay you to protect your position and to be honest the answer to that is a little complicated. Suffice to say that every day you hold your position short you earn a small amount of interest. Normally you will earn the overnight cash rate -2% per year calculated back as a daily rate.
You can hedge using a CFD index across the broad index
Another way to hedge your portfolio using CFDs is by using the CFD index. For example you may have a $200,000 portfolio of Australian stocks based on the ASX top 200 and you may wish to hedge that $200 overall position. Instead of hedging each individual stock, you could instead hedge using the Aussie 200 index.
The benefits of hedging using an index CFD are that brokerage is normally free and the CFD margin required may be as little as 1%. This means that in order to control $200,000 worth of a CFD index you would only require $2000 of your own money.
Partially hedging gold stocks
Whilst this strategy is a little more advanced it can be applied by anyone who requires this particular method. In this instance you may have $50,000 worth of Lihir Gold CFDs long and you notice after the 4 PM close on the ASX market that the price of gold is plummeting.
If overnight the price of gold came off say 6-7% then it would not be uncommon for the Gold stocks like Lihir Gold or Newcrest Mining to retreat an equal amount. One alternative to waiting for the ASX market to open the next day is to hedge your $50,000 position by shortselling spot gold CFDs overnight.
Action: Discover the 7 most Critical CFD Trading Tips and 2 of the most common CFD Trading Strategies. Learn more about the CFD revolution by going to http://www.learncfds.com/ Article Source: http://EzineArticles.com/?expert=William_Potter |
Who's Really Watching the Stock Market?
When I studied public relations at New York University's School of Commerce, Accounts and Finance (now the Stern Business School,) a sage old professor told the story about a financial magnate who stopped to get his shoes shined on the way to his Wall Street office.
The garrulous shoeshine man waxed poetic about the stock market, eagerly talking about how everybody was making a killing in the market that was headed sky-high. He even offered the financier a few stock tips. The magnate couldn't get to his broker fast enough -- to sell! When optimism about the market reaches the man on the street, the theory goes, that's as clear a sell signal as you can get.
Some market watchers say there's a new economic paradigm -- the old rules no longer apply. They talk about the Internet, computers -- anything with a tinge of technology -- turning the economy upside down. Maybe.
Certainly computers, the Internet, et al, are here to stay. They are improving productivity by leaps and bounds, and they're developing at an astronomical rate. There's little doubt that many of the top companies will grow rapidly in the years to come, at least those who offer new, innovative services or provide the hardware or software for companies that do. A lot of investors in these businesses will find themselves filthy rich.
But, the red flag is waving.
As the saying goes, what goes up must come down. That hasn't changed, and never will. Neither will the various other economic fundamentals. Supply and demand, inflation, deflation, disinflation, recession, depression and the rest.
Wise investors have little to fear. America remains strong and continues to be the world leader, not only politically but economically. Long-term investments in our country's leading corporations are as much of a sure thing as you'll ever see.
But, I believe, Federal Reserve Board Chairman Alan Greenspan and the U.S. Treasury Department are not doing enough to protect the growing number of sheep-like investors from the growing number of financial wolves. They need to do more than jockey interest rates around while the potential for abuse of unsophisticated investors grows by leaps and bounds.
Any casual market-watcher can see there's more than normal "market forces" affecting stocks -- and the overall market. There's no way to prove it, of course, but it's clear the "big money interests" play the market like an accordian.
I've been watching the ups and downs of the market for some time. I've been following a number of Dow 30 stocks, the technology companies and various other market leaders for some time. I've learned, more than anything, that the current price of any stock is not based on earnings, the competence of management or its potential for profit. Rather, a stock's price is based on whether the "money men" want it to go up or down.
Big investors can't make money on a stock market that doesn't move significantly. They make their money either way -- up or down -- provided they know, and can influence, the direction. One thing's for sure. You, and I, will only know when it's too late!
I am a retired newspaper reporter and editor having worked for The Hour newspaper of Norwalk, Conn., for 32 years. I am a 1964 graduate of New York University where I majored in journalism and minored in marketing under a public relations program. I served three years in USA Army in Public Information in Germany and Colorado, 1954-57. I currently hold the position of Adjutant with the Veterans of Foreign Wars, Robert F. Garrison Post 3350 in East Rockaway, New York. I am a lifelong fan of Bing Crosby, the greatest singer of the 20th Century and an Oscar-winning movie actor. I am a hubpages.com author who writes on a wide variety of topics, including politics, government, crime, transportation and entertainment. You will find my opinions and commentary on current events at my new Blog at this address: http://torpeyhour.blogspot.com/ For more of my work, please visit my Profile Page at the following address: http://hubpages.com/_wwft/profile/William+F.+Torpey Article Source: http://EzineArticles.com/?expert=William_Torpey |  |
Stock Market For Beginners
If you don't know about the stock market and are trying to learn about it, you are most likely to experience a severe case of information overload.
Do a Google search for "stock market education" or "learn the stock market" and you'll be literally inundated with information. The same holds true if you look an Amazon or walk into a brick-and-mortar bookstore. The choice of books for stock market beginners is simply astounding.
In part, the reason why there's such an abundance of information on the stock market is because of the interest many people have in it. There's a market, and publishers try and cash on it. But on the other hand, there also is a lot of information to offer on the stock market. No single book can give you all the information you need.
As a beginner in the area of stock market investing, what must you do? The first thing you must realize is that a very well-written book about the stock market can be totally useless to you if it's inappropriate for your knowledge level.
You need to accept you're a beginner and go for a beginner's book or a website that caters to beginners. After you're absorbed that information, you can go back and look for more information that is better suited to your new knowledge level.
Nevertheless, you need to at least have some very basic knowledge. The stock market is nothing but a platform where shares of publicly traded companies are bought and sold. A share of stock is a claim of ownership in a given company: if you own a share of stock, you are entitled to a return on your investment if the company is profitable.
A publicly traded company is one where the shares are sold to the anyone who wishes to buy them, as opposed to a private or a family company, where the shares are not sold to the public at large.
But there's a great advantage to being a stock market beginner in current times. Because of the advent of computers and the internet, you can learn, build a paper portfolio, and follow "your" portfolio to see how it performs. The purpose of this exercise is to get you into the mindset of an investor without taking on the risk.
As you're learning and getting more comfortable with the investment world, you can consider getting a brokerage account so you can begin investing. Make sure you're aware of the requirements and terms of the account you will sign for, as well as the fees you will be charged.
One word of caution, though. Many people get involved in the stock market expecting to make a fortune in a short amount of time. Those are the people who fall for the first get-rich-quick scheme that is offered to them. Very educated people have entered the stock market and failed miserably. If you think making money in the stock market is going to be a walk in the park, you are mistaken.
Your best bet is to go for the long term. All the investing greats (Warren Buffett, Peter Lynch, and so on) emphasize that long-term investing is the way to go. Over a short period of time, the stock market is just too unpredictable, but as your investing horizon lengthens, the likelihood of losing money decreases.
Over 25-year periods, the stock market has always produced positive yields. So if you buy some stocks in solid companies with good fundamentals and hold on to them, chances are you're achieve decent returns.
Another good rule about the stock market for beginners is the need to diversify your portfolio. Simply put, your likelihood of losing money decreases as you invest in a broader spectrum of companies.
Of course, there are such things as bear markets, where stock values plummet across the board. But generally, when you diversify, your losses in one company or industry stand a better chance of being offset by gains in other companies or industries.
Understanding and getting into the stock market is all about being disciplined. As an investor, your ultimate goal is to remove the emotion factor from your investment decisions. You have to train yourself not to overreact to either an skyrocketing or plummeting stock.
You're essentially looking for signs of when to buy or sell a stock. You can't be emotionally attached to your portfolio. That's pretty much the mindset that will lead you to success while you're soaking up more and more knowledge about the stock market.
Learn about understanding the stock market and stock market for beginners on my personal finance blog. Article Source: http://EzineArticles.com/?expert=Wilfrid_Baptiste |  |
Understand the Activity Ratio - Investing in Stocks
The activity ratio shows how quickly a company can turn their inventory or what they sell into cash or sales. A company almost always wants to convert what it sells into cash because this leads to higher revenues and less expenses. I value this ratio very highly because it shows whether or not a company can sells thing with ease. If a company can't sell something with ease it means that they will incur more expenses in both time wasted and services bought to sell their goods. In other words if I have a company that people just love, and I DON'T have to advertise or hire sales people since people just flock to my business and spend their money, I should have a high activity ratio, plus an advantage in the market against my competition.
One thing too look for when trying to find companies that have a high AR, and the most important one of all, is simply the price charged for most the goods sold. Companies that can charge less for their products and get away with it are subject to high liquidity and thereby their inventory is turned to cash very rapidly. It has been long known that companies that can change price up or down slightly and not lose their liquidity have a great advantage and a better company in the marketplace. There are many companies like this especially if their products rely on addictions or habitual practice. One of the industries that I can think of right away is the video game industry. The video game industry has habitual players that will not only pay a lot for games but it can also RAISE prices in order to generate more revenue without seriously damaging the sales and thereby adding more cash to the inventory they sell.
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