I trade only stocks right now but I’ve heard people swear by trading futures or forex. I’ve never tried either. Is one more volatile and therefore easier to make more money?
The main difference between trading stocks and futures is the leverage involved.
In a stock margin account, you can trade at 2:1 or 4:1 leverage. In a futures account, you can trade the E-mini or Dow mini futures with 20:1 or 40:1 leverage. This causes your profits and losses and account value to be extermely volatile, and very dangerous if you trade at maximum leverage. In a futures account, you can lose more than you have invested.
Forex is just another form of futures account, except here, the maximum leverage is 200:1. Wo, how much trouble can we get into now? You have to be aware of the economic reports for the currencies traded and the US reports, like GDP, retail sales, and particularly interest rate adjustments and differentials. Unless you are willing to trade gap trades, the opportunity is very little here compared to the huge move from the report. These trades can be very plodding, in between reports. Or some big news announcement will break, or someone declares war, or sets off a bomb, and blows you completely out of the trade. Trading the forex is not for the beginner or faint of heart. Find a good simulator and practice, practice.
I’m 19 years old and I want to start trading stocks online. I was wondering how much money I should save to start trading and also which online company would be the best for me to use. Any useful tips are also appreciated ( ;
As for where to go, I personally like Scottrade. They are inexpensive, and have always been very good to me.
As for how much to save, here are some things to help you decide:
Think about transaction costs. Even if you can put in a trade for $7, that ends up costing you $14 for a buy and a sell later. If you only have $100 in your account, and you buy one stock, and sell it after a 10% gain, you will still end up with only $96 (a loss of 4%) when all is said and done, due to the trading fees. But if you buy $10,000 of that stock, get a 10% gain, and then sell it, you end up with $10,986 (a gain of 9.86%).
Think about diversification. If you only own one stock, you have a lot of exposure to risk, and are in a lot more danger all the time. If you want to diversify to say 10 stocks, that’s great, but each one will have its transaction costs, as outlined above. So the more stocks you own, with a decent position in each one, the more money it takes.
I am absolutely NOT looking for a stupid book that just tells me to buy low and sell high. I want to be able to analyze stocks that are underpriced and overpriced. The book can even have a lot of mathamatics in it if that is what is necessary in order to determine that. I do have very little experience when it comes to trading stocks, but would like to have a book that goes in a lot more detail. I would want to make a career out of this.
check out jim cramer. you can see him on cnbc’s "mad money" or online. he’s written a couple of good books on investing. he’ll give you some very practical advice on investing based on his decades of experience. personally, he’s been spot on in terms of his overall read of the markets.
I have never traded stocks online but I would like to start. What site is best for trading? How do I pick stocks? Where can I find good fundamental and technical analysis? Are there any sites out there that seem to pick consistent winners?
I can tell that you are a value investor. You want to ask 3 questions for the price of 1… well, here you go.
What site is best for trading?
Every one has different needs. If you’re new and don’t keep much money in your brokerage account, then Scottrade is probably good for you. They’re real time charts are pretty good, but no CD’s are available, the cash account only pays about 0.5%, and they charge pretty heavily for mutual funds. If you want to leave money sitting in a MM that pays 5% while you’re out of the market, like a choice of no load, no fee mutual funds, has an excellent site for research, want to buy competitive CDs on line, all in one place, then you might like fidelity. It’s what makes you happy. If you don’t like the sevice, then you can always change.
How do I pick stocks?
An answer would take volumes to provide, so let me suggest some literature:
I would recommend William O’Neil’s "The Successful Investor" as a good starting point. Follow that up with Peter Lynch’s "Beating the Street". That should provide you with two strategies that you can learn from in building your own investment strategy.
Other good books include "The Motley Fool Investment Guide" by Tom and Dave Gardner or "Real Money" by James Cramer.
I have read all these books and many others and devised a strategy that adopts a bit from each one.
Another thing you can do is invest using a fictional portfolio. Let that run for a few months to see if you are ready to start trading with real money. In the meantime, invest in mutual funds. Once you are ready, sell the fund and invest on your own.
Remember, the time spend learning about investing is far less then the money lost by not being prepared.
Where can I find good fundamental and technical analysis?
You’re on your own for this. There’s a multitude of excellent sites out there, where you can get fundamental ratios. Try Zack’s, Yahoo Finance, MSN finance, and a multitude of others are out there for free. As far as technical analysis, you need to research and find what works for you. As far as charting goes, Bigcharts is a good free site. Personally, I like Telecharts, which has a fee, but well worth the 50-75cents per day for the sorting capability, fast way to cycle thru many charts, and the ability to write your own personal critera.
Are there any sites out there that seem to pick consistent winners?
No. And anybody that says they can is a liar.
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I am starting out day trading stocks and want to minimize the taxes I will have to pay. Does anybody have good tips or tricks to doing this? I will not be holding them for over a year. Also any good programs or websites I might want to use. I use Scottrade currently but want something for charting.
If you have at least $25K on your brokerage account then you are classified as a pattern or full time trader and you can deduct trading commissions as regular business expense. That’s the most you can do. You will always have to pay taxes whether you sell ice cream cones or trade stocks.
Also you pay less taxes if you hold stocks long term. The more time that passes the less the percentage. I don’t remember the exact numbers right now but you could check on sec.gov . So traders basically pay more tax % than long term investors.
I am completely new to the world of trading stocks or currency, but I want to get started. I see ads for all these different websites (ameritrade, etrade, etc.), and I was wondering, which (if any) would be the best for a beginner? I’m not looking to get rich quick, but I would like to start investing my money for the long term.
Also, which if any of these sites offers a way to trade currencies? Ideally, I would become a member of the site with the best combination of both of these (trading stocks and currency).
Thanks
There is no “best” on-line company
Mostly all brokerage firms provide their clients with on-line services, including trading platforms, latest market & financial news and research.
Customer need to select the site that is best for them. Traders have requirements in a site, while investors have other requirements.
Although most sites are geared to general securities and commodities, however customers may have special needs for the types of products they trade, and the markets in which they trade.
It seems that the most popular firms for on-line investing all of which provide excellent platforms and services are; Scottrade; Chas.Schwab; TDAmeritrade; Fidelity; E-Trade and Thinkorswim.
Based on your question, the last thing you should be looking for is an "on-line" site,
You should first educate yourself about the securities markets and the products traded on each.
Get to learn the terminology, the rules and the various strategies.
visits to some websites like MSN Money and Yahoo Finance. (http://moneycentral.msn.com/home.asp http://finance.yahoo.com/ )
While at MSN following the strategy lab analysts to get a feel for what the pros are doing and why. This site has some basic information for beginners. If any site offers free information, take it. Other website that can provide instructions and help with procedures and terminology are
Investopedia – http://www.investopedia.com/ Stock Charts – http://stockcharts.com/
Other – http://www.investorshub.com/ http://www.1source4stocks.com/
I want to invest in penny stocks and mainstream stocks but some major online brokers dont offer penny stock trading. What do you use / think is the best?
scottrade.com is best for both beginners and professionals.