how do you trade stocks?

Question

I want to learn to trade stocks in order to make extra cash to pay for my college tuition. can anybody help me out ?

Answer 1

I see you are interested in investing in the stock markets. Start trading stocks is as simple as opening a trading account and then picking a stock and then buy. However, that simplicity is truly the wolf beneath the sheep's skin.

There are quite a number of things you need to learn before you can even start thinking of the stock markets ...

1. You need to understand how the stock market works and what it is exactly about.

2. You need to know what are the different styles of trading in stocks and shares.

3. You need to read about why so many people lose their shirts in the stock markets so that you can avoid their mistakes and also decide if this is a risk you want to take.

For all these issues and more, you can read about them from some of the articles that I wrote at http://www.mastersoequity.com/articles.htm

After you are adequately armed with the basic concepts and ideas, you need to know how to find profitable stocks to trade or invest in. You can do that the easy way by subscribing to stock pick services (example http://www.stockpickmaster.com ) or you can learn to use charting tools and softwares to find stocks with parameters that you can pre-define. (example http://worden.mastersoequity.com/)

Remember, the slogan "Just Do It", Just won't do for the stock markets. If profiting in the stock markets is as simple as buying a single stock , then why are so many people still poor?

After you have all the above mentioned knowledge, you need to ask the following golden questions before you can decide whether a stock is worth buying or not :

1. Why are you of the opinion that this stock will rise?

2. Is your opinion valid in the first place?

3. When are you expecting it to rise? Can you hold on for that period of time or longer?

4. What is your expected entry price? After what price would your expected profit margin be too thin to enter upon?

5. Where is your expected stop loss point? What is your stop loss point based on? Where will you tell yourself that it is time to take a loss and get out?

6. Where is your expected profit taking point? What is your profit taking point based on?

7. Does the way you are buying the stock allow you to hold on until your expected profit taking point?

8. How much of your money should you dedicate to this one trade?

9. What is the level of primary, secondary and idiosyncratic risk you are undertaking when deciding how much of your fund to use?

10. What is your cashflow need? Does your cashflow needs allow you to hold the full lifetime of the stock?

After you are able to answer all these questions confidently, THEN you are ready to... PAPER TRADE your stock strategy. Yes, even at this point, you are NOT READY to trade for real. You should trade on PAPER for at least 6 months and become consistently successful BEFORE you take your stock strategy into real life.

Then.. you are ready to start... but there is still no guarantee of success as paper trading is very different from real trading. You will need another maybe 1 year or 2 trading very little money and be consistently successful BEFORE you are ready to increase your stakes.


So, as you can see, success in the stock markets is not easy at all the the less knowledge you have, the more risk you undertake. I lost hundreds of thousands in the stock markets before I become successful.

Take heed and good luck.


All in all, investment and trading is a lifelong education and non stop learning. No one is ever done learning and catching up with changes in the markets.

If you care to read about how I went from completely broke to retired millionaire trading stocks and options by 28 years old, you can go to http://www.mastersoequity.com/


In conclusion, what I am saying here is that trading stocks and investing for profit is a professional game that takes years and a lot of money to learn, so it is not something that someone in need of college fees should do ... now.... but you should certainly start to learn about it right now.

Hope these information helps.


http://www.optiontradingpedia.com/

http://www.mastersoequity.com/

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Answer 2

1

Answer 3

I think you want to know how to buy stock. Trading is not a very good term, beacuse you're not really "trading" stocks as if you were trading baseball cards. Buying and selling of stocks is best done with the use of an advisor, such as Charles Schwab. You only need to pay a small commission and the broker takes care of the rest. Mutual funds would be your best bet. They have the highest pay back with the smallest risk. This is not fast money. You will need to put a large lump sum of cash, maybe $3000-$5000 to start with. Gradually, your money will increase over many years.
Day trading is very risky and is only for the pros. You have to be able to spot a stock that is really on an upward trend and jump in with at least $5000-$10,000. You ride the stock until it peaks and sell everything at once to make a huge profit.

Answer 4

Trading is not the same as investing. It seems you may know that already.

When I was a day trader, I kept my eye on Investor's Business Daily, CNBC and other sources.

Keep in mind that Day Traders are more likely to follow technical analysis.

This means that they are more concerned with averages and points of resistance (high or low) then they are the specifics of the company.

Murphy on CNBC is a great teacher of this. Watch him whenever you can and look for any books or other media by him.

However, use your common sense as well...and think small.

A $10 gain in a $100 stock is a 10% gain.

A $2 gain in a $10 dollar stock is a 20% gain.

Day trade does not mean you HAVE to trade everything every day.

Here are three examples of good trades I made.

1. Some bad news came out about Circus Circus, and the stock dropped from $39 to (I think) $33. It was early in the day, and experience told me that there is almost always a bounce back from the initial drop based on bad news. So, I put in a buy for 1000 shares at market. My price point turned out to be $33 1/2. Not wanting to be too greedy, I placed a sell order for when the stock reached $36.00. At close that day, the rebound had taken the price per share back to just over $36.00. I took my $2,500.00 and ran.

2. Greyhound was going through hard times, and the stock had dropped into the $6.00 range. When some more bad news dropped it to about $2.50, I knew I had to buy. Greyhound is the ONLY national busline, and I knew that it would have to bounce back. I bought at $3.00 and sold at $4.50...a 50% gain over a week or so.

3. The Mississippi river was experiencing 100 year flood levels. All of the news reports showed thousands upon thousands of homes ruined by the water. I checked out the price of Republic Gypsum, knowing that there would be a great upsurge in demand for drywall after the water levels fell.

Republic Gypsum is what is known as a cyclical stock, and it was trading at the bottom of its cycle, just above $8.00, with a history of moving within the range of $13.00. I bought at $8.25 and sold at $12.00...a profit of almost 50% in less than six months.

As you can see, each of these trades had different characteristics.

Being a good day trader is like being a good chess player on Star Trek (those multi-dimensional boards?)

Beware of linear thinking, and always remember that no trade and no profit are like a "push" in Blackjack:

You didn't lose, so you must have won.

GET, RN
Registered Nurse

Answer 5

Any One Can Buy & Sell Stocks--------------That Is The Easy Part.Knowing What You Are Doing Is The Hard Part.
I Have Worked The Market On Line For 7 Years .
I Am A Licensed Broker ( Private ) .
First I Will Warn You-----------If You Are Weak Minded,Gutless,
Easily Swayed,Question Your First Instinks----Well Then You Are Just What The Stock Market Sharks Are Looking For.
A Mark--Easy Lunch--Easy Money--------------------------------
They Will Chew You Up & Spit You Out With Out So Much As A Thought Because That Is There Job!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

If You Are Tough As Nails--UnSwayed--Wise-- Extremly Patient--And Believe In Your Self Then Maby You Will Be One Of The Successful Few .

The Market Is The Toughest Street You Could Possibly Walk Down Alone IN The Middle Of The Night---Alone!!!!!!!!!!!!!!!!

There Are Thousands Of People Waiting To Get There Hands On A Person Like You And Take Them For A Hard Ride.
Quite Honestly --Unless You Get Verry Lucky---It Will Take You Alot More Time Learing How To Sucessfuly Trade With Out Loseing Your Shirt Than You Will Spend Aquireing A 4 Year Degree ( That Is If You Use All The Free Help That Is Out There ). I Will Leave You With A Couple Of Thoughts-----

Stick With What You Know Is True ( Emphisis On What You Know Is True )!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Example = Coffee,Gold,Coke,Pepsi,Ect.
Don't Get Caught Up In The Speculation Game.
Buy At A Considerable Discounted Price.
Never Sell !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Good Luck With Your Future11

Answer 6

Trading stocks isn't a method that should be considered to pay for college expenses. There is a fair amount of risk with anyone stock from any one company. If you need money right away, I'd suggest working for a company part time that offers tuition reimbursement, try UPS or Target. They do this for part timers, although I think with Target you have to be a level 2 employee...not exactly sure what this means. If that's not an option, then you should choose the community college route to get your general education courses out of the way....junior colleges are the best bang for your buck education anywhere in the world.

Good Luck!

Answer 7

I can write you several books on how, when,where what, etc. on the various securities markets. Your question indicates you do indeed need to learn. Learn this FIRST: DO NOT expect to make consistent profits in the markets. I can happen, but I don't know anyone (in the thirty years I have been in the business) to do this. The markets are no place to earn a living, unless you are on my side of the desk. If you have sufficient funds to invest and the time for them to gain some value, you also have the funds needed for your full education costs.

Do get educated, do get involved when the timing is right(now is not that time). Find a part time job for steady income while going to school. UPS is a great part time employer. They pay exceptional wages for basically manual labor. But other work is out there too.

I wish you the best of fortunes. I do accept emails, and I no longer sell anything, so drop an email if I can be of assistance.

Answer 8

Refocus on the terminology. "Trading" gives the impression you are playing poker and buying and selling based on timing. This is a very risky proposition.
You should understand that people who make money in the stock market do a lot of work to analyze companies, the management, the industry, the competitors, suppliers to and buyers of the company in question, etc.
From the analysis and experience they determine which companies are more likely to succeed and then invest a lot (money and time) in those companies.
Start with understanding the basics of equity and the market. Then go on to understanding who else is buying/selling stocks and the ideas of the business cycle...

Answer 9

Might want to read A Random Walk Down Wall Street, first. I don't think anyone would advise you to trade stocks unless you knew what you were doing... not that there is much to know, but a little knowledge and understanding will help you avoid making stupid mistakes, which is key.

To actually trade, check out on online brokerage such as etrade.com.

Answer 10

Most stock exchange sites should have tutorials on stock trading. A good one to try is:

http://www.asx.com.au/investor/first_time/index.htm

Most people may tell you that stocks are a gamble, this is not, strictly speaking, true, as most stocks will double in value in ten years (more or less). the lesson here is that stocks are an excellent long term investment, and probably not going to earn you money to cover your tuition.