Tag: trading

All trading related articles are found here. Educative, informative and written clearly.

  • Leverage Trading Stocks – The More Leveraged the Better

    Leverage Trading Stocks – The More Leveraged the Better

    3 min read

    Leverage Trading Stocks - The More Leveraged the Better

    Leverage trading stocks is a concept that can enable you to multiply your exposure to a financial market without committing extra investment capital.

    However, you need to understand leverage trading to help fully immerse yourself in the stock market.
    The idea behind leverage trading stocks is to increase your potential payout on a play. However, it doesn’t always work out the way you want, and it can prove dangerous for your portfolio and trading account, especially when you’re new to the stock market.

    Leverage is the ability to trade a large position with only a small amount of trading capital. We are sure you already find the articles that suggest that trading using leverage is risky. Also, you can find that new trader should only trade cash-based markets, like individual stock markets, and avoid trading highly leveraged markets.
    Well, we disagree with this in full. Trading using leverage is no riskier than non-leveraged trading. Also, for certain types of trading, the more leverage that is used, there is the lower the risk.

    What Is Leverage Trading Stocks?

    In the stock market, leverage trading stocks are using borrowed shares from your broker to increase your position size in a play. So you can potentially make more money on the other side. Options trading, futures contracts, and buying on margin are all examples of leverage trading. But buying on margin is maybe the riskiest.

    When you buy on margin, you’re essentially financing your position in the stock.

    Actually, it’s just like buying new furniture. For example: Say you want a new kitchen and you talk the salesperson down to $25,000. You don’t have $25K in cash, so you put $2,000 down and finance $23,000 over five years. Every month, you pay the lender your furniture note. That includes the principal, which is the amount financed, and the interest, which is money paid to the lender in exchange for financing you.

    People do this every day with i.g. cars and other physical kinds of stuff.

    Well, it doesn’t sound so dangerous.

    But even a furniture purchase can leave you in financial trouble.

    Let’s say you put $2,000 down on your new kitchen and drive it off the lot. A few days later, you lost it in a fire accident. The insurance company pays the kitchen’s market value, which has already depreciated below what you paid for it. In other words, you have to keep paying off your kitchen note even though you don’t have a kitchen.
    That’s what usually goes wrong with leverage trading.

    Leverage Trading Stocks - The More Leveraged the Better 1

    How Does Leverage Trading Stocks Work?

    Leverage trading stocks work by allowing you to borrow shares in stock from your broker.

    For one example:

    Let’s say you have $2,000 to invest. This amount could be invested in 20 shares of Microsoft stock. But in order to increase leverage, you could invest the $2,000 in five options contracts. You would have 1000 shares instead of just 20.

    Instead of investing in options contracts, you can buy a certain number of shares. Leverage is always expressed as a ratio, such as 2:1. In that case, you could double your position size by borrowing twice what you actually buy.

    When you exit your position, you’re responsible for paying back the broker for the shares you borrowed. Whatever you have left is your profit, minus your own initial investment in the shares.

    2:1 leverage example

    2:1 leverage means you can borrow twice the amount of your investment from your broker.

    For example, you want to invest $50,000 in stock, but you only have $25,000 in your trading account. Using leverage, you could buy on margin at 2:1, giving you $50,000 to invest.

    It doesn’t come free, of course. You have to make an initial deposit or down payment to your broker for the privilege of buying on margin.

    But what happens to your investment?

    Let’s say you bought $50,000 worth of stock at $50 per share. The stock climbs to $55, and you sell.

    At that point, you have to return the borrowed shares or money to your broker. The brokerage firm extended $25,000, so you owe that back, plus any interest required. The rest you keep as profit.

    If the stock price drops, though, you’ll still have to pay back your broker. Plus, you’ll have to cover any losses your broker incurred during the trade. And your own, too.

    The Leverage is Incorrectly Considered Risky

    Leverage can be highly risky because it can boost the potential profit. But also the loss that trade can make. For example, you make a trade with $1,000 of trading capital but has the potential to lose $10,000 of trading capital.

    This is based on the theory that if a trader has $1,000 of trading capital, they should not be able to lose more than $1,000. Therefore should only be able to trade $1,000. Leverage allows the same $1,000 of trading capital to trade perhaps $5,000 worth of stock, which would all be at risk.

    Well, this is theoretically correct. But it is the way that an inexperienced trader looks at leverage, and it is, therefore, the wrong way.

    Leverage Is a High-Risk Strategy

    There are no secrets, investing risk increases with reward. The higher the potential payout, the higher your risk for great losses. This is especially true when you’re trading with leverage because you’re playing with the house’s money.

    Brokerage firms require margin account holders to maintain a certain minimum balance. Your cash and owned securities serve as collateral for whatever you’ve borrowed. It reduces the risk for the broker. Though, it increases your risk, because if you borrow too much on a losing position, your account can get wiped out instantly.

    The Real Truth About Leverage Trading Stocks

    Leverage is actually a very efficient use of trading capital. The professional traders value it because it allows them to trade large positions. Such as more contracts, or shares, etc. And with less trading capital. Leverage does not modify the potential profit or loss that trade can make. Contrary, it reduces the amount of trading capital that must be used, thereby releasing trading capital for other trades.

    For example, you want to buy 1000 shares of stock at $20 per share. That would require maybe $5,000 of trading capital. So, the rest of your initial leaving the remaining $15,000 available for other trades.

    This is the way that a professional trader looks at leverage. Therefore, this is the correct way.

    The bottom line

    Leverage trading can be a slippery slope.

    On the other hand, the more leverage the better. Professional traders will choose highly leveraged markets over non-leveraged markets every time. Telling new traders to avoid trading using leverage is essentially telling them to trade like an amateur instead of a professional. Every time that pros trade a stock, they always use the highest leverage they can. They would never trade a stock without using leverage.

    The next time that you are making a stock trade, consider using a leveraged market instead.
      

    risk disclosure

  • PENNY STOCKS – How much does it cost to invest in

    PENNY STOCKS – How much does it cost to invest in

    3 min read

    PENNY STOCKS - How much does it cost to invest in 1

    Penny stocks sound cheap, don’t you think?

    Yes, because they are. They are also called micro-cap stocks

    Penny stocks describe shares of a company that trades for low amounts. It is usually between $0.01 to $2.00. But some institutions count a penny stock is anything that trades for less than $5.00 per share.

    They’re not expensive, so what’s the catch?

    So why trade penny stocks?

    Everyone who entered the stock market knows that penny stocks equal a bigger risk than regular stocks.

    The reason for inflated risk is simple. The companies that hold penny stock typically have no profits and minimal operations.  

    Many of these companies are speculative because they are thinly traded, usually over the counter instead of on major exchanges like the New York Stock Exchange.

    They usually trade on the pink sheets or on FINRA’s over-the-counter bulletin board (OTCBB) and are not required to file with the Securities and Exchange Commission (SEC).

    These stocks have low liquidity due to a lack of buyers and sellers. Hence, orders may not be filled right away or even at all. Moreover, volatility tends to be high among OTC (Over-the-counter) stocks, and bid-ask spreads are frequently large.

    Investors in penny stocks should be prepared for the possibility that they may lose their whole investment.

    Plus, penny stocks are notorious for being part of so-called pump-and-dump schemes. The scammers buy up shares and then promote it as the next hot stock on blogs, message boards, and e-mails. Once the stock price is unnaturally pumped up by all the gossips, the scammers sell their stake. The investors stay with big losses.

    But…

    Where penny stocks have the advantage is the low cost.

    Also because of the simple math of penny stocks. If you buy shares for $0.40, and if the stock goes up by $0.20, then your profit is at 50 percent. That’s the pie-in-the-sky scenario.

    However, it’s just as easy for your $0.40 share to go down by $0.20 and lose 50%, instead.

    So, a $1,000 investment could lose value pretty quickly.

    Of course, not everything is so dark.

    Several years ago, CNN published a story about a young man who made his first million dollars from trading penny stocks.

    He decided to begin with his life savings of $1,500. And 3 years later his portfolio was worth more than $1 million.
    See how worth it was.

    So, how to trade penny stocks?

    We warned you but, yet you still want to trade penny stocks.

    It is possible to trade penny stocks successfully.

    If you trade penny stocks successfully, they really can offer the greatest risk-reward ratio of any investment type. But take care, the odds are not in your favor if you don’t understand what you’re doing. The must is, you have to learn. You must have the knowledge, education, in order to understand the market to successfully trade penny stocks.
    PENNY STOCKS - How much does it cost to invest in 3
    And you must stay far away from scammers. Read the fine print on any email or ad you see on social media and in emails. If you find a disclaimer at the bottom of a social media post or an email, be cautious.

    That means that someone’s getting paid to post an ad.

    YOU WOULD LIKE TO READ The awesome thing is that you can invest in stocks online for free. See HOW!

    It’s possible to profit when you understand the game, but the odds are against you when you don’t. And worse: manipulators and scammers often run the penny stock game.

    For investors who can’t afford shares of Apple, for example, the potential gains from trades like this are too good to pass up.

    So penny stock trading prospers. With a relatively small investment, you can make a nice return if the trade works out.

    So, if you spot an advertisement that promises dollars from your pennies just remember these several rules:

    Never trust the sweet stories

    You must not believe the penny stock stories that are touted in emails and on social media websites.

    And you have to say no. Let’s say, you can’t invest in penny stocks as if they were lotto tickets.

    Unfortunately, that’s what most people do, and they lose over and over. Think of penny stocks as people that you can’t trust.

    Instead, focus on the profitable penny stocks with solid earnings growth and which are making 52-week highs.

    Read the disclaimers

    Penny stocks are sold more than bought. They come as tips in emails and newsletters.

    Remember, the free penny stock newsletters are not giving you tips out of the goodness of their heart. Read the disclaimers at the bottom of the newsletters. And you will see. They are getting paid to pitch a stock because their investors want a presentation for the company. There is nothing wrong with that, but almost all penny newsletters make false promises.

    YOU WOULD LIKE TO READ Online stock brokers make investing easier than ever

    You have to know something. There is a difference between stocks making a 52-week high based on an earnings breakout and stocks making a 52-week high because three newsletters picked it. The disclaimers at the bottom of the email or newsletter, which the SEC requires,  reveals very often a conflict of interest.
    They are being paid to pump up the stock, but they rarely tell you when to sell. Usually, it’s far too late.

    Sell your penny stock quickly

    The charm of penny stocks is you can make 20% or 30% in a few days. If you make that kind of return, sell quickly.
    Never get greedy, aiming for a 1,000% return. The penny stock is getting pumped up, take any profits. And move further.

    Never trust company management

    Don’t believe what you hear from companies in this penny stock’s world.

    The companies are trying to get their stock up so they can raise money and stay in business. That’s okay, but there is no reliable business model or accurate data. So, most penny stocks are scams that are created to enrich insiders.

    There are large circles of the same people run promotions using different press releases and companies.

    Never sell short

    Don’t do it.

    Penny stocks are too volatile. If you’re on the wrong side of the trade, you could lose 50% or more on a short squeeze. Another problem is that it’s difficult to find shares of the penny stock to short. Leave shorting penny stocks to the pros.

    Focus on penny stocks with high volume

    Stay with stocks that trade at least 100,000 shares a day. It could be difficult to get out of your position if you trade stocks with low volume.

    Traders Paradise suggests that you trade penny stocks that are priced at more than 50 cents a share. Penny stocks that are trading less than 100,000 shares a day and are under 50 cents a share are not liquid enough to be in play.

    Don’t trade large positions

    You really need to be careful with position sizing. Never learn the hard way not to trade big. Famous traders rule is not to trade more than 10% of the stock’s daily volume.

    The limitation of position size will provide you to get out of the stock faster.

    The bottom line

    If you want to invest in penny stocks you have to learn.

    By the way, learn from Timothy Sykes, who is famous for turning his Bar Mitzvah gift money of about $12,000 into millions by day-trading penny stocks while in college. For the past years, Sykes has been teaching his strategies through the sale of instructional newsletters and video lessons. You can find his lessons very easy.

  • Online stock brokers for beginners

    Online stock brokers for beginners

    2 min read

    It is easier than ever to find good online stock brokers. The benefits are numerous. You can learn and invest in the comfort of your own home. The research team at Traders Paradise made some research. We tried to find the options on the market that are good for you. So, we wanted to find the best online stock brokers for beginners and super investors alike.  We had to deep into the financial world with stock experts.

    And we hope that this research will help anyone get started.

    The popularity of index fund investing and robo-advisors is rising. It may seem the trading of individual stocks is lost. But, it isn’t the truth.

    Millions of investors continue to trade individual stocks and other securities. Because online stock trading sites make investing easier it’s important to do so using the best online stock trading sites.

    Investors should know the best online stock brokers to trade with. They have the right to know. Some online stock brokers are known for their award-winning customer service. But the others are known for low-priced stock trades or powerful trading tools. Traders Paradise-Finance wants to highlight some of the best brokers available today. Actually, we want to give you some tips for choosing a broker.

    Criteria for the best online stock brokers

    The best online stock brokers offer low fees, great customer service, and smart research tools.

    Discount brokers charge as little as $4.95 for online trades. Compare that to the $100+ that many full-service brokers charge. It seems like a no-brainer choice to choose the discount broker. But, you must know how to pick the right one.

    Trading online is a self-directed practice, and you need the right broker backing you up.

    But it is a stormy time for online stock brokers.

    Between significant cuts in commissions and a few major acquisitions, the competition is fierce.

    YOU SHOULD READ Stocks Online for Free – How to Invest

    So, let’s like this, there is no one best online stock broker. But each one has different strengths and weaknesses. Our aim is to spotlight them and help you find the best one for your investing style.

    Every trader should care about cost. A few of the fees we analyzed include:

    Cost per transaction:

    Commissions are typically an investor’s biggest cost base. For example, in 2016, a usually unassisted transaction fee averaged about $8. But early 2017 brokers decrease their commission. Fidelity, E*Trade, and TD Ameritrade, also did that. Now, you can trade for as low as $4.95. No matter what the price, though, for us, transparency is key. We wanted to see affordable pricing structures.

    Account minimums:

    Seeing your wealth shrink due to a tough market or bad strategy isn’t fun. It’s worse if you’re also getting dinged by your broker’s minimum account balance requirement.

    Charges for data and tools:

    The best online stock trading sites have quality market data like real-time quotes, educational resources, and stock-screening tools built right into their platforms. But some, we have to say, like Fidelity and TD Ameritrade, stand out for also providing top-shelf resources. And it is totally free of charge.

    Extra costs:

    Executing a trade over the phone, for example, can increase an $8 commission fee to $25 or more. Some platforms offer free education on sophisticated strategies but require an upgraded platform with an annual fee. Besides cost, we valued educational material, reports and tools, and the usability of the platform itself.

    After Traders Paradise conducted this research, the following to be our top picks:

    The best for cheap trading is Ally Invest. But beginners would like E*Trade. Speaking about the platform the best has TD Ameritrade. Best research and tools have Fidelity.

    Online stock brokers for beginners 1

    Why use a discount broker

    A discount broker costs you much less money per trade. You won’t have the steep commissions that full-service brokers charge. What this means is more cash in your pocket and the opportunity to make more trades.

    The main reason is cost.
    But here we will break down who would do better with a full-service broker and who could get by with a discount broker.
    Because cheaper isn’t always better.

    Let’s see in this way.

    Do you have a large number of large investments?
    Or you not have the desire nor the know-how to handle your portfolio?
    Can you afford high commission fees?
    Maybe you not have time to manage your portfolio effectively?

    If your answers are “yes” to each of these questions, a full-service broker might be the best option for you.
    But, if you want to save money on each trade made or like to be in control of your investments, the discount broker will suites you better.

    Because you don’t want to be pressured to take other investments and you want to make frequent trades.
    The other things to consider when you have to choose your online stock brokers are:

    Minimum deposit/balance:

    Some brokers require a minimum deposit to open the account. Others don’t have a minimum. Yet others require a minimum average balance over the life of the account. Determine what you can afford to keep in the account if choosing accounts with a minimum requirement higher than $0.

    Customer service:

    Take a trial run on any broker’s website that you are considering. Check out the support they have readily available on their website. But you should also email and call them with questions. See how long it takes to get an answer.
    A discount stock broker can save you a lot of money and save your portfolio. But they aren’t for everyone. Here are a couple of other choices you may want to consider:

    Robo-Advisors: If you are familiar with a completely “hands-off” approach, robo-advisors can save you even more money. The automated system uses an algorithm to invest your money for you. After you input your risk thresholds and investment goals, the computer does the rest.

    YOU SHOULD READ Automatic Trading – What Is It

    Peer Lending: This is those who want to stay away from stocks and bonds for now. If you are one of them, consider peer-to-peer lending. You decide how much money you want to invest and what type of risk you want to take. The minimum investment is often about $25. You can break your investment up into as many loans as you want. This helps diversify your portfolio.

    Full-Service stockbroker: If you have a lot of money to invest or need that in-person advice, a full-service stockbroker is for you. You’ll find them at your larger brokerage houses, but keep in mind that their commissions are higher than discount brokers. In the most common situations, you will have to pay $100 – $200 per trade versus $4 – $7 per trade.

    The bottom line

    Using a discount broker is a great way to trade and keep your profits. Choose your broker wisely by paying attention to hidden fees and understanding account minimums. A discount broker is a great way for beginning and experienced investors alike to invest in their future.

    To find which online brokers suits you the best, you should read Traders Paradise’s WALL OF FAME.

    Risk Disclosure (read carefully!)

  • Buying Stock Without a Broker – Ways to Do

    Buying Stock Without a Broker – Ways to Do

    Buy Stocks Without Broker - Ways to DoIs it possible to buy stocks without a broker? Why shouldn’t be? Here is how to do that.

    By Guy Avtalyon

    Buying stock without a broker offers some advantages and disadvantages. Young investors are worried about investing in the stock market.

    The financial crisis of 2008 strongly disturbed our formative professional years. We can still feel its specter lingers a decade later. Only 33% of millennials own stock, according to a 2016 Bankrate survey.

    The other survey, a 2015 Harvard University survey found that just 14 percent of millennials trust Wall Street.

    As any good stockbroker or experienced investor can tell you, you can find bad brokers more often than the good one.

    Being “bad brokers” means those who put their own interests above that of their clients. We have a list of bad reputation brokers here on Traders Paradise’s wall of shame.

    So, we must consider how to buy stock without a broker.

    However, that worst brokers do this in a perfectly legal way, by causing desire and weaknesses to their clients’.

    How do they do that?

    Here are three main practices that bad stockbrokers practice. They claim to their clients that aiming for stability rather than growth. Wrong!

    Usually, they force clients to obtain an income from two different sources, typically in an illicit way. Also, some of them are emphasizing low-risk, low-return, high-fee structured products in client accounts.

    That’s why many new investors ask how to buy stock without a broker.

    Because of the lack of confidence in brokers, many millennials don’t have the startup cash to fund an IRA or a brokerage account. That typically requires either automatic monthly payments or a minimum investment of around $1,000-2,500, plus commission fees of around $4-7 for every trade.

    For those people who want to go down this path to business ownership, one option can be to check out direct investment plans.

    But it is with varying degrees of success. Of course, there is no requirement that you have to work with a broker to invest in stocks or particularly equity funds.

    Buying stock without a broker offers some advantages and disadvantages.

    You will need to measure them based on your personal situation. But our goal is to provide you a good handle on how to invest without a broker.

    But it’s up to you to make a decision about whether such an approach is appropriate for you. You have to know your unique circumstances and preferences. Because there is no unique solution for everyone.

    Let’s say, you had a broker but you noticed that your broker sometimes uses unfamiliar words and phrases to describe investment concepts. Some of this stockbroker jargon is simply a shorthand that brokers use amongst themselves. They use them to refer to familiar situations without having to go into any detail on the underlying concept.

    Your head is going to explode hearing every time some strange words that cause suspicions.

    But investing can be simpler if you buy stock without a broker. Just by investing in shares through a company’s direct stock purchase plan.

    The first and easiest way to buy stocks without a broker

    It is when companies, often blue chips, fund a special type of program. It is called a DSPP or Direct Stock Purchase Plan.

    The main goal of these plans originally was designed as a way for businesses to let smaller investors buy ownership directly from the company. In the beginning, they were working through a transfer agent or plan administrator. They still do the same. Most plans allow investors to buy stock without a broker if they agree to either have an amount taken out of their checking or savings account every month for six months. Often $50 is the acceptable minimum. The other way is to make a one-time purchase, which will cost you $250 or $500.

    These plans are surely not as comfortable as getting a broker. You can’t just buy and sell a variety of company stocks at any time, for instance. Plus, you won’t have a diverse portfolio if you only own stock from a few companies. Moreover, with some plans, you won’t even escape fees. So, you have to be careful about what you sign up for.

    This means trades without commission

    But we have to say, direct stock plans are a good way to experiment with the stock market without putting too much money into the game.

    Ordinarily, the plan administrators use your cash to buy shares of the company. It can be on the open market or freshly issued from the business itself, on predetermined dates. The average cost of the purchases is weighed out.

    Also, they can use some other methodology to equalize the cost among investors. And the direct stock purchase plan statement arrives quarterly. All with a listing of the number of shares you own and dividends you receive.

    Some direct stock purchase plans trades without commission. Others charge small fees. Usually $1 or $2 plus a few cents per share, for each purchase. A larger fee, about $15 and a few cents more per share, for a sale. This is a lot lower than what you have to pay at a full-service broker.

    Buy stock without a broker by taking advantage of the dividend reinvestment program

    In this way, you can add additional shares to your holdings.

    This means to enroll in a stock’s dividend reinvestment program or DRIP. DRIPs provide you to take cash dividends, paid out by the company you partially own. And you may plow them back into buying more shares, charging either nominal fees or nothing at all. It depends upon the individual plan.

    Have this on your mind. For a typical stock, that’s a lot of transactions over 25 or 50 years on which you aren’t paying commissions. The typical stock may pay out a dividend four times per year. So, count! DRIPs usually come with cash investment options that resemble direct stock purchase plans.

    This opportunity means you can regularly have money withdrawn from your account, or send in one-time payments whenever you like.

    A lot of long-term investors have become skilled at building wealth through these types of accounts. Buying stock without a broker for years, even decades is a very nice way. You must be heard stories about some housekeeper who left behind $5 million opulence.

    They did it just on the way we said above.

    You can buy stock without a broker by obtaining a single share through a specialized gifting service

    Unfortunately, the financial industry’s decision is to move away from paper stock certificates.  And this has become a bit shaky.

    But, up until recently, you could use companies that allowed you to buy a single share of stock to get your name on a corporate shareholder list.

    Hundreds of companies offer these plans, but each has its own rules for eligibility. It’s normal to be careful about investing in stocks. But some estimates that the average millennial would lose about $3.3 million in retirement savings by avoiding investing completely. Direct stock plans are an easy way to learn the basics and establish a portfolio.

    All without spending money, time, and nerves on brokers. Anyway, buying a stock without a broker may be a clever move for investors.

    Learn how to trade in the financial academy.

  • The minimum amount of money you need to start investing in the stock market

    The minimum amount of money you need to start investing in the stock market

    2 min read

    The minimum amount of money you need to start investing in the stock market 3
    There are no rules that tell the minimum or maximum amount of money you need to start investing.

    It may be less than you think.

    Let’s say you have $1000 aside.

    Is that amount enough to enter the world of stock investing?

    Yes. Even $5 is enough to start investing.

    But if you can invest more it is better. For you.

    But before you jump head first into the world of stocks and bonds, there are a few things you need to consider.

    One of the biggest considerations for investors with a minimal amount of funds is how to go about investing.

    Here are some questions to answer before hitting the “buy” button.

    First of all, what are your goals?

    You have to define what you want your investments to accomplish. It will help guide you in the right direction. That’s advice from investors and experts.

    What does it mean? You have to create a kind of road map. Like you are traveling to some unknown area and you need Google maps to show you the road.

    So, let’s go back to the main question.

    Do you want to save for retirement? For a new home? Or for a kids college fund? The answer will determine how risky you want to be with your money.

    There are some very low priced stocks available.

    You can begin investing in the stock market with a lot less money than many people think.

    Here’s how much you need.

    The minimum amount of money you need to open an account

    Some online discount trading platforms have account minimum requirements. Minimums for several popular ones range from as little as $0 to $2,500.

    It is for the self-directed account.

    If you want to open a traditional full-service, broker-assisted account, you will need several thousand dollars.

    The minimum amount of money you need to start investing in the stock market 6
    However, all financial institutions have minimum deposit requirements. In other words, they won’t accept your account application unless you deposit a certain amount of money. With a sum as small as $1,000, some firms won’t allow you to open an account.

    If you really want to start with the small, minimum amount of money you can use an app.

    They will allow you to begin investing with just $5. Some apps offer you a choice of several funds to invest in. You basically end up owning part of the stock.

    When you get to $5, the app invests that money for you into a diversified portfolio. In essence, it is a mix of stocks and bonds.

    The other question is the minimum amount of money you need to buy stocks.

    Golden rules for investing in stock market for beginners

    The minimum amount of money to buy stocks

    If you want to buy a stock, you’ll need enough money to buy one or more shares of that stock. And you have to add the cost of brokerage commission.

    Yes, we know you would like to start your investing with little money. But you must be aware. Stocks trading below $5 per share can be extremely speculative and dangerous. Usually, it is not worth dabbling with them.

    Truth is that a single share can trade from pennies for some companies to hundreds of thousands of dollars for an A-class share.

    But many companies’ shares cost, say, between $10 and $100 individually.

    There are some very low priced stocks available. But before investing in the share market you should know some basic financial ratios.

    Check valuation of stock’s price

    It is equally important to buy shares at the right price points.

    To earn money in share market, buying stocks at its right price is necessary.
    What does it mean by the right price?

    Estimating the intrinsic value of stocks requires a special skill. It isn’t quite as simple as it sounds.

    There are several methods you can use to estimate the intrinsic value of stocks. Different methods will give different values of intrinsic value.

    This itself is enough proof that how complicated it is to estimate the intrinsic value of stocks.

    People who have the real art of estimating the right intrinsic value of stocks has become Warren Buffett’s.

    You have to use financial ratios to value stocks

    You can start by checking how the stock price has behaved in the last 2-3 years.

    Suppose in the year 2012 the stock price was $35. After three years it has climbed to $50. That means the company has a growing tendency.

    But it is also important to check if the stock price has touched overvalued levels?

    You can know this in a variety of ways.

    Start by comparing the stock price with its book value. If the Price to Book Value ratio is less than 1.5, we can say that stock has not touched overvalued levels.

    If the book value of a stock is $100 and it is the market price is $160, it means its P/B ratio is 1.6.

    This is a hint that stock price has touched its overvalued levels.

    The amount of money a broker requires to open an account is the answer to the minimum amount. For a host of reasons consider opening an account with one that has a local office.

    Here is a more expansive look at things to consider when beginning investing.

    If you want to begin investing, consider reviewing at least some of the major tenets of personal finance.

    For example a multiple-month living expense safety net and paying off high-interest debt, e.g., credit cards, before beginning investing.

    You don’t have to invest all amount at once or in one stock. Rather diversify your money in different companies and different time of purchasing stocks.

    YOU WOULD LIKE TO READ How to Become A Trader or Investor in Just 10 Minutes

    How to collect the minimum amount of money

    Begin to set aside a sufficient amount of money to open a brokerage account. Consider $1,000 or more as a minimum amount of money to do so. Lesser amounts, e.g., $100, 500, are insufficient to invest effectively.

    Investing is a lifelong learning experience.

    Consider investing only the money you can afford to lose.

    Consider investing in stocks as part of an overall strategy that may include participation in employee retirement plans, payroll savings plans, and IRAs. There may be tax advantages to be had.

    You have to recognize the differences in philosophies and approaches to investing versus trading.

    Investing means long-term, but trading is short-term.

    Be aware that trading stocks as a novice are most likely a recipe for disaster. Day trading is not recommended.

    The literature is filled with evidence that the vast majority of those new to the market quickly lose significant money.

    Do take the time to read and study first.

    Risk Disclosure (read carefully!)

  • Forex Trading – Simple Tricks to Master it

    Forex Trading – Simple Tricks to Master it

    4 min read

    Forex Trading - Simple Tricks to Master it

    Forex trading could lead to high returns of investment. This article will explain how

    Forex trading – the CONCEPT:

    Forex represents the foreign exchange/currency market. The word forex itself is made of two English words: foreign and exchange and signifies the purchase of currencies from different countries.

    Forex Trading - Simple Tricks to Master it

    Unlike other stock exchanges, Forex does not have its physical seat in a city. It exists in an electronic network consisting of large financial institutions.

    Also unlike other financial assets – Currency needs to be at a balance point!

     

    Why Forex industry has to be at a balance point (UNLIKE STOCKS for example)?

    Because let’s think about a country, like the USA. Its currency is USD and you can invest your money on USD comparing, say, Euro. So if the USD is increased (or Euro is decreased) you gain a profit.

    But inside the USA – the interests are different.

    Forex trading is an industry of importers and industry of exporters.

    Let’s say I’m an importer that lives in the USA, and I import apples from Mexico. And just for the explanation, we say that 1USD (US Dollar) = 2 MXN (Mexico’s currency).

    Now I make a deal with my fellow Mexican that I buy apples for the worth of 2 million MXN (and it costs me 1 million USD).

    Now, if the USD will get stronger, and now we say that 1 USD = 3 MXN.

    See? I’m losing money because I could have bought my goods for a lot more money at the same price I spend (1 million Dollars).

    But let’s say it’s the opposite – I’m the exporter. My fellow Mexican buy from me apples at the same original deal. This means he buys from me at 2 million MXN and I get 1 million Dollar. But then, the Dollar is rising and now it’s worth 1 USD = 3 MXN. He still buys at 2 million, right? So now those 2 million worth approx. 0.67 million USD. Now I’m LOSING money because of MY OWN currency worth more. That’s Forex. It has to have a balance point because if not we’ll have our own people losing.

    Today, Forex is the largest financial market, which has a daily turnover of around $ 5.5 trillion a day. You can complete this whole process online.

    The term currency market means the sale of one currency with the simultaneous purchase of the other.

    As currency pairs are traded, in order to profit from the shift in the exchange rate, you need to buy the currency that you think will strengthen and sell the other.

    YOU WOULD LIKE TO READ about How to Become A Trader or Investor in Just 10 Minutes

    There is no need to wait for a growing market to profit. At any moment, one currency will strengthen in relation to the other.

    The Forex market is constantly creating opportunities for investment.

    Since nothing concrete and tangible anything is bought and sold, this type of trade can be a little confusing. You should think that you are buying a part of the value of a country.

    If you buy a Japanese yen, you are buying a part of the Japanese economy that is in direct correlation with what the market thinks about the current and future health of the Japanese economy.

    Generally, the established exchange rate of the two currencies is a ratio that reflects the state of one economy in relation to the state of another economy (the state, the currency).

    What Do You Know About Forex Trading? 5

    Forex is opened 24 hours a day, except on weekends, so that Sunday trading starts on Sunday from 21:15 CET and runs until Friday at 23:00 CET. During the day there are several time intervals that coincide with the working hours of the world’s largest stock markets.

    Who trades on the FX market?

    Forex traders can be classified into two groups, hedgers and speculators.

    Hedgers: governments, companies (importers and exporters) and some investors who are exposed to exchange rate changes.

    Speculators: This group, which includes banks, funds, corporations, and individuals, creates artificial pressure on the course in order to profit from variations or price movements.

    YOU WOULD LIKE TO READ about Algo/Algorithm trading in financial markets

    Basic terms of Forex trading

    Pip – Represents a change in the ratio of the currency by one decimal. It is the smallest unit change course. Pip is the last decimal in a currency relationship

    Stop and Limit – Orders –  Often the trader wants to limit the loss in the position he has opened (in that case he sets the “stop” order). Or the trader wants to take profit at a certain level, which is acceptable to him/she (in this case he sets a “limit” order).

    LongUsed for the purchase order

    Short Tension used for a sales order

    BidBid price

    Ask The price that is claimed

    BuyShopping

    SellSale

    SpreadThe difference between the sale and purchase price

    Chart – Graph

    Timeframe – Time period

    Leverage – Multiplies the amount of money you invest

    Candlestick –  Candlesticks show that emotion by visually representing the size of price moves with different colors. Red means the starting price was higher than the closing price at a certain time. Green means it ended higher than the starting point.


    How to read candlestick graph: To every time period

    Open – The price of an asset at the start of a time period
    Close – The price of the same asset at the END of the same time period
    High –  The highest price the asset reached during that time period
    Low –  The lowest price the asset reached at the same time
    Time period – Can be from 1 minute to one year

    What is needed to trade on Forex?

    Before you start trading the currency, you need to open an account with a Forex broker. Our recommendation is that before you decide on trading on Forex, open a demo account with one of the brokers.

    You can use a trustworthy Forex broker. 


    So that through the use of the platform, you will be able to monitor market activities and learn more.

    YOU WOULD LIKE TO READ about the best Forex trading styles

    Conditions for Success Forex trading

    You must have a good knowledge of technical and fundamental analysis, as well as managing your account. You should also know the psychological aspect of the trade and that you are disciplined. Also, in Forex trading, you should learn about the country you’re betting on or against.

    To be able to trade Forex successfully, there is a whole world of education, really extensive analysis. Also, the countless hours of tracking a very large number of relevant and potentially relevant information.

    YOU WOULD LIKE TO READ How To Choose The Best Forex Program

    All without any guarantee that the right decision will be made.

    So once again, the investment rule has been confirmed: high risk must be taken to achieve high income.

    Risk Disclosure (read carefully!)

    67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether
    you can afford to take the high risk of losing your money.

  • A chaotic December in equity markets

    A chaotic December in equity markets

    2 min read

    A chaotic December in equity markets 1Image from shutterstock.com

    What caused a chaotic December? A chaotic December in equity markets is closing. But, at the end of the year, these were not usual circumstances.

    It’s “completely bizarre,” says Stephen Innes, head of trading for the Asia Pacific at Oanda Corp. “It’s incredible just how harmful markets veer when sentiment slides.”

    Innes mostly is keeping his money on the sidelines. But he has been taking profit on some winning investments. And, also, from blue-chip stocks whose valuations have dropped in the December sell-off.

    Like many other traders in Asia, he’s been watching events play out in the U.S. from a distance, astonished at what he sees.
    So, what he did see?

    A chaotic December in equity marketsSource: Bloomberg

    The S&P 500 Index posted its biggest upward reversal since 2010 on Thursday. Just a day after the largest advance since 2009. Despite this two-day gain, the measure is still down almost 10 percent in December alone.

    That’s the largest drop for each key market barometer since 1931, according to data from LPL Research. But those Depression-era losses were much bigger: the S&P 500 plunged 14.5% while the Dow plunged 17%.

    Two golden rules have been broken.

    First, since 1945, December has produced the highest average gains of any month. But December is the worst month of the year. Second, since the 1970s, the S&P 500 has never slumped when earnings growth was more than 10 percent.

    Mark Matthews, head of Asia research at Bank Julius Baer & Co. in Singapore, is planning to ride it out. “I remain invested through good times and bad,” he says. “Not being invested, over the long term, is like betting against the house in a casino.” He is a long-only investor.

    The December 2018 chaos is making investors nervous.

    This chaotic December in 2018 could have an impact in the future. The investors are worried that the economy could slow in 2019 because of continued trade tensions with China and rate hikes by the Federal Reserve.

    The Dow and S&P 500 are both in the red for the year, their worst annual loss since the 2008 Great Recession, and first annual loss since 2015. Last year, the S&P 500 returned 22%.

    For the past, eight to nine years never happened the U.S. market dropping at this magnitude and speed.

    Maybe the solution is to go overweight cash for the time being. The volatility will continue until year-end until investors get a clearer picture from the holiday earnings season, say experts.

    But longer-term, it is unknown if this will prove a “healthy correction”. The investors may find the S&P 500’s low valuations are attractive and earnings come in above expectations. Or it will mark the end of the bull run. Either way, one thing’s for certain, this movement is definitely unusual.

    This market turbulence isn’t normal.

    Maybe investors should keep away from new trades and tend to the existing investments. Anyway, investors opinion is very bad.

    Yes, most of them don’t think that this huge volatility will continue. But also, they are thinking that it is not a quite good idea to trade stock while the market is like this.

    The investors can’t hope that the markets will turn around in the year’s final days. They are here and it is obvious that nothing will change.

    In the past years, December was usually a very solid month for the market. Professional money managers used to buy top-performing stocks. That made their portfolios look good. This phenomenon is known as window dressing.

    There was also the somewhat mysterious Santa Claus rally effect. The market was very well in the final week of the years.
    There was some chalk up to light trading volume with so many people off for the Christmas holiday.

    But volatility remained this year. Stocks are down.

    It is, as we can see, unusual for this time of year. But the people take holidays. They have hope that the U.S. economy is robust and the sell-off will bottom out.

    For this time of year, some people are probably a little more focused on the market.

    But trying to explain short-term movements in the markets is an exercise in futility because generally, it is pretty random.

    Not only stocks, but Bitcoin has also had a brutal 2018.

    This chaotic December in 2018 had an impact on cryptos too.

    The world’s largest cryptocurrency by market cap is nearly 84% since its meteoric rise topped out at an all-time high of $19,870 in December 2017.

    But just after bitcoin (BTC-USD) peaked, technical trader Peter Brandt made a fantastically prescient call. This has recently resurfaced in crypto circles. In January, he called for an 80% retrace of bitcoin’s parabolic advance, predicting a $3,933 price target. Bitcoin is currently trading around $3,600. It was very close.

    But as ever, there were different opinions.
    A chaotic December in equity markets 3
    The dominant Bitcoin price prediction was that Bitcoin would reach the $14,000 mark by the end of 2018.

    However, that prediction is blown out.

    Despite some optimists who were hoping that Bitcoin will break through the $100,000 barrier till the end of this year. In fact, Jim Cramer was predicting that Bitcoin will go as far as shattering the million dollar threshold one day.

    To do so, market capitalization should surpass 1 trillion USD just on BTC to reach $66,000 per coin, a 10x increase. Well, the entire market cap is at $212 billion. The BTC market cap was $170 billion almost a year ago. Now it is $115 billion and it was at $800 billion in January 2018.

    So, who knows what can happen.

    Today’s price of BTC you can see here

    One thing is certain. After this chaotic December in 2018, next year will be difficult and uncertain. Markets will be full of volatility. Permanent ups and downs.

    Anyway, it will be interesting.

    Risk Disclosure (read carefully!)

  • Market signal – HOW TO USE IT

    Market signal – HOW TO USE IT

    1 min read

    Market signal - HOW TO USE IT 2

    What is a market signal and how to use it?

    The market signal is an unintentional or passive passage of information or indication between participants of a market. 
    For example, If a firm issues bonds it indirectly shows that it needs capital and also desires to retain control. Thus instead of equity capital, it prefers loan capital.

    It is based on the technical indicators and usually is the sign for when to sell or buy a particular product.

    It also brings the attention of users to the other options available, abnormal growth and short-term interests.

    Using signals in volatile markets can help to point out opportunities to the investors and also will signal them if they disappear.

    The market signal is indication or information passed passively or unintentionally between participants in a market.

    For example, a firm issuing bond indirectly indicates that it needs capital. And that there are reasons for which it prefers loan capital over equity capital.

    The reason can be the desire to retain control of the firm.

    Every company doesn’t market in a static environment. The competitor and member of the outlet will make prediction and reaction to enterprises.

    Their decisions process is a dynamic market mechanism. And based on rival actions or reactions.

    The market signal is any activity of rival.

    We want to understand rivals motive, intention and direct and indirect target news and competitive signals such as reduced price.

    So, we have to understand the new product introduction and adopting new engineering technology.

    The information delivers to the market mainly through the market signal.

    If we identify, search, study and analyze the market signal, we take the strategic decision and contribute to analytical behavior trend. We also improve enterprise results.

    For example, a well-reputed company can be judged by its income i.e. if its sales increases then its reputation in the market also increases.

    Let’s take a look at the experts’ definition market signal.

    In contract theory, signaling is the idea that one party (termed the agent) credibly conveys some information about itself to another party (the principal).

    For example, examine Michael Spence’s job-market signaling model.

    Potential employees send a signal about their ability level to the employer by acquiring education credentials.

    Market signal - HOW TO USE IT

    The informational value of the credential comes from the fact that the employer believes the credential is positively correlated with having greater ability and difficult for low ability employees to obtain.

    Thus the credential enables the employer to reliably distinguish low ability workers from high ability workers.

    Signaling took root in the idea of asymmetric information, meaning a deviation from perfect information.

    That says that in some economic transactions, inequalities in access to information upset the normal market for the exchange of goods and services.

    Market signal - HOW TO USE IT 1

    Let’s suppose that two parties could get around the problem of asymmetric information.

    How?

    By having one party send a signal that would reveal some piece of relevant information to the other party.

    That party would then interpret the signal and adjust her purchasing behavior accordingly. Usually by offering a higher price than if she had not received the signal.

    There are, of course, many problems that these parties would immediately run into.

    So we can say, the market signal is any action by a competitor that provides a direct or indirect indication of its intentions. Also, motives, goals, or internal situation.

    A short note about George Lane (1921 – 2004).

    He was a securities trader, author, educator, speaker, and technical analyst. Lane was part of a group of futures traders in Chicago.

    He developed the stochastic oscillator (also known as “Lane’s stochastics”), which is one of the core indicators used today among technical analysts.

    A March 2007 article quoted George Lane’s description of his famous indicator: “Stochastics measures the momentum of price.

    If you visualize a rocket going up in the air – before it can turn down, it must slow down.

    That’s the essence.

    The market signal is developed by George Lane.

    Momentum always changes direction before price.

    This means as prices move down, the close of the day has a tendency to crowd the lower portion of the daily range.

    Just before you get to the absolute price low, the market does not have as much push as it did. The closes no longer crowd the bottom of the daily range.

    Therefore, Stochastics turns up at or before the final price low.

    Lane was also President of Investment Educators Inc. in Watseka, Illinois. There he taught investors and financial professionals basic and advanced technical analysis methods.

    He popularized the stochastic oscillator, a momentum indicator that uses support and resistance levels.

    The term stochastic refers to the point of a current price in relation to its price range over a period of time.

    This method attempts to predict price turning points by comparing the closing price of a security to its price range.

    The 5-period stochastic oscillator in a daily timeframe is defined as follows:

    %K = 100 * (Price – L5) / (H5 – L5)
    %D = ((K1 + K2 + K3) / 3)

    The H5 and L5 are the highest and lowest prices in the last 5 days respectively.  While %D represents the 3-day moving average of %K (the last 3 values of %K). 

    Usually, this is a simple moving average, but can be an exponential moving average for a less standardized weighting for more recent values.

    There is only one valid signal in working with %D alone — a divergence between %D and the analyzed security.

    The market signal is an indicator that measures the relationship between an issue’s closing price and its price range over a predetermined period of time.

    Risk Disclosure (read carefully!)

  • Best-Paid Job In 2019!

    Best-Paid Job In 2019!

     

    3 min read

    Best-Paid Job In 2019! 3

    The best-paid job is so close to you, close to the new year, so think about them.

    Ways to make money online are numerous. Our goal is to present you as many profitable deals as possible. 

    We want to help you find the best-paid job for you. And it is your goal too. To find the best-paid job that suits you more than any other.

    You may not become rich, but certainly, this way of working will provide you additional and not small income.

    But this is one of the best-paid jobs from home.

    And know what, those of us who have worked from home for years wouldn’t dream of going back to a corporate office. Ever. At any point!

    It won’t always be easy, and you have to work very hard, you will make mistakes and failures along all that path.

    But be honest, the internet has opened up so many possibilities to people regardless of age, location, or background to build a sustainable, online business or side project that can make extra money online every single month.

    So, let’s start. What can you do from your home and earn decent money?

    1. Trade or invest from home is one of best-paid job 

    Trade from home is a totally online job.  

    And it can provide you a quite nice income. Or to be one of the best-paid jobs.

    Once upon a time, people relied on the services of a stockbroker, who would make buy and sell orders on the customer’s behalf.

    Today, individuals are able to execute buy and sell orders themselves in a fraction of a second using computerized trading services.

    But, reading online articles doesn’t make you qualified to trade from home.

    Reading the classics of investment literature could be helpful. But the best way is to set aside six months to practice trading with real-world data before investing your money.

    You can use some demo account and practice.

    Before deciding to buy or sell any stock, you should carefully research the company, its leadership, and its competition.

    Make intelligent decisions about what you can afford to invest. Consider investing a portion of your money in an electronically traded index fund, which holds many stocks.

    To that end, we present our top three stocks to buy for the long-term:

    Buying marijuana stocks can be a best-paid job

    The trade becomes more fundamental than gambling. There lies the opportunity and it can become one of the best-paid jobs in 2019. The concept is viable. Moreover, the use of pot will increase because of the legalization trend propagates. The millions of more potential users will access it.

    It would be wise to take small positions. Don’t just lay the bet on one perfect entry point. Also, there are no guarantees when investing in stocks.

    It’s important to consider the size and never bet more than you can afford to lose.

    When looking at potential marijuana stocks to buy, it’s important for investors to remember that there are many ways of trading a concept. Also, not one method is perfect.

    Here are three marijuana stocks to buy in 2019:

    • Canopy Growth (CGC)

    The first reason, the Constellation Brands invested $4 billion in it. So, you can be comfortable joining them in their bet on CGC stock.

    If you are going to risk money on this market, you would like to do it in the one that has a strong balance sheet.

    Best-Paid Job In 2019!

    It sounds like CGC has good plans to open up more markets to follow the legal path expansion. Constellation made a multibillion-dollar bet on Canopy Growth because it thinks cannabis is a “once-a-century disruptive market transition” and that Canopy Growth is the best marijuana supplier in the world.

    Constellation believes the total addressable global market could top $230 billion within the next 15 years. So, projects that Canopy could realistically claim up to 40% of the Canadian market and between 5% and 15% of the market in the rest of the world, including the United States.

    • KushCo (OTC: KSHB)

    KushCo is a dynamic sales platform. It provides unique products and services for both businesses and consumers in the cannabis industry.

    It regularly services more than 5,000 legally operated medical and adult-use dispensaries, growers, and producers across North America, South America, and Europe.

    Best-Paid Job In 2019! 1

    An ancillary play, they have the opportunity of supplying both the legal and black market with their packaging products.

    We believe KushCo to be the best additional play in the current market. They have a strong management team. Also, solid execution track record, and servicing the market. We really think their stocks are good investments.

    • Innovative Industrial Properties

    Stocks of REITs can be attractive for marijuana investors in comparison with pure-play marijuana stocks because REITs spread their risk across multiple leaseholders.

    Best-Paid Job In 2019! 2

    Even if one or two fail, it’s not catastrophic to the whole investment. Innovative Industrial Properties currently owns nine properties, all of which are either greenhouses or indoor facilities used for cultivating marijuana.

    2. Launch and grow a startup

    Launching a startup can be a very exciting experience and best-paid job.

    The first mistake is that founders tend to over zeal their efforts to monetize their products and services. Instead to build a strong base from which the startup can turn into a realistic company.

    To avoid mistakes make your list of knowledge areas/special skills on the one side and passions on the other. Then try to connect each of them.

    Your knowledge and skills should hybridize with your genuine passion. It means that you have a passion for some job to work and, at the same time, you have knowledge or skills which job requires.

    The truth is that you need to love what you do and be damn good at it as well.

    Startup founders face a lot of factors and barriers that can stay in the way of success.

    Testing your business expectations should be done without investing too much time and money. When you found a winning product, double the original bid on it and focus on the winner.

    That’s the whole truth and wisdom!

    This world is content obsessed. And we are obsessed by trying to find the best-paid job. This one can be that one in the coming year.

    3. A virtual assistant is a defenetely best-paid job

    A virtual assistant is a contact made over the internet that assists in day-to-day tasks. Yes, like an assistant, only virtual! And this is one of the best-paid jobs. 

    These assistants don’t just help someone business run smoothly, they help their life run smoothly.

    Whether it’s sending a thank you card to a friend or researching potential investors, a virtual assistant can do just about anything.

    They take charge of not only the day-to-day business tasks but can even take hold of day-to-day personal tasks so you can keep focused on what’s at hand.

    They can send flowers, thank you cards, or even just schedule an Uber or Lyft so you can go from one venture to the next without a single hiccup.

    However, it is just about anything.

    Setting up your own Virtual Assistant business may seem like hard work, but we have to tell you that it’s actually the easy part. Moreover, we think it can be the best-paid job.

    Being a successful VA isn’t simply helping someone with their admin or supporting their business, it’s knowing how to manage and communicate with them. 

    If you want to be a VA because you think it’ll be an easy life and easy money then you’re in for a shock because the reality is very different. It’s a brilliant life once you’ve nailed it but there can be a steep learning curve at first.

    Virtual assistants charge anywhere from $1 to $100 per hour. Sometimes even more.

    But the sweet spot is generally between $15 and $30 per hour for executive assistant services and $40-$75 per hour for higher-level marketing or financial tasks.  This definitely may be the best-paid job in 2019

    Bottom line: We, here in Traders Paradise, found a lot of very interesting and profitable jobs for 2019. More about them you will read soon, in our new ebook. It’s up to you just to pick one of the best-paid.

    Risk Disclosure (read carefully!)

  • The First Trade – How To Make It

    The First Trade – How To Make It

    2 min read

    Trade Crypto And Stocks / Forex - How To Do That
    The first trade should be like a selection of a school.

    You’ll need to decide on the kind of assets or securities you want to trade. After that, you’ll need to make is choosing the right broker or brokerage firm through which you’ll access the markets.

    That’s very important because the broker you choose will have a direct influence on securities you’ll be able to trade. Also, on the tools, you’ll have at your disposal. On how much you’ll pay in fees. Hence, what final returns you can expect on your trades.

    You have to find a broker that would charge relatively low fees and provide you with a full package of resources to make your trading experience easier.

    And you have to choose the right strategy.

    FEW WORDS ABOUT TRADING STRATEGIES

    The main difference between trading and investments is that a trader seeks out market movements for profit.

    On the other hand, an investor waits to profit from long-term price movements in the assets in their portfolio.

    A trader will make tens or hundreds of trades within a week while an investor will buy and hold an asset for months or years.

    The first step in creating your trading strategy is to have a trading plan.

    The First Trade - How To Make It 1

    The trading plan is like writing a business plan for some entrepreneur. A trading plan will help you to make a realistic decision in periods of rapid market movement when your emotions might lead you to make impulsive decisions.

    The trading strategy should include specific goals such as: getting out of debt, retiring early, making your first million.
    Also, your trading strategy should include your asset allocation and diversification moves.  

    As a beginner, you should not have more than 5% of your trading capital on any single trade. Make sure your trading strategy contains a mix of fundamental analysis of global events, like wars that impact oil prices.

    But also technical analysis like trading rules based on price and volume transformations.

    It is important because you can use this information to determine your entry into trades, your exit when the trade goes your way, and your escape when the trade goes against your plans.

    For you, your best interest is to develop the disciple to incorporate stop/limit loss orders into every trade you place.

    New traders can use technology to lower the entry barriers to trading by automating many of the activities.

    THERE ARE SOME OF THEM:

    * Trading bots – This is simply computer programs with instructions based on a predetermined set of market indicators and parameters.

    You can use automated trading systems to trade stocks, options, futures, and foreign exchange products.

    Trading bots
    It is based on a predefined set of rules, which determine when to enter an order, when to exit a position and how much money to invest in each trading product.

    Trading bots are especially helpful to beginner traders and sometimes, a bot can be an important market ally for reducing your losses.

    * Stock screeners – That can help you filter the stocks in the market to narrow down potential winners before their big breaks.

    The First Trade - How To Make It 3

    It will help you identify top gainers and losers, stocks on turbo momentum, and stocks that are about to break out above resistance or break down below support lines.

    * Social trading – This is simply a type of trading in which traders rely on user-generated financial content, collected from a variety of networks.

    Social trading

    Social trading provides you the platform to be part of a community of successful traders and you can purify the wisdom of the crowd and make you able to make your own trading decisions.

    The first trade isn’t like a first love, it is more about how to choose the best school

    Always use a trading plan, don’t underestimating the importance of a trading journal, change trading strategy after every trade.

    Test your trading skills on FREE DEMO ACCOUNT in a virtual environment before you start risking your own money.

    Practice trading strategies so that when you’re ready to enter the real market, you’ve had the practice you need.

    Risk Disclosure (read carefully!)