HOW TO TRADE STOCKS ONLINE

2009-05-26T20:16:00.000-07:00

Welcome to the world of online stock trading. You need to realise that your visiting this blog is not by accident. As a matter of Fact your life is guaranteed to change only if you can act on what i am going to reveal to you now! So please spare me a few minutes and read this life changing article.

Are you wondering how an ordinary article can change your life? Well the fact remains that "Information leads to transformation" and this is validated by the phrase that "the difference between the rich man and the poor man is information". This implies that there are some items of information that the rich men have access to that you don't have and that is what i am about to divulge to you now.

SO WHAT IS THIS INFORMATION ALL ABOUT?
In a nutshell, it is all about "Online Stock Trading" or better still "Global Stock Trading". It is a system of buying and selling of stocks that are listed on the platforms of NYSE (New York Stock Exchange), AMEX (American Stock Exchange), Nasdaq in India, OTC Bulletin Board, Pink Sheet, etc., through an online broker irrespective of your location provided you have access to the internet. This seems similar to our local stock trading, but there are fundamental differences!

SO HOW IS IT DIFFERENT FROM LOCAL STOCK TRADING?
• In the first place, in "Online Stock Trading", your transaction is executed instantly at the click of a mouse unlike local stock trading that is associated with delay. For instance i once called my broker to sell one of my local stocks when the price was #19. But due to the delay that is associated with selling local stocks, the stock wasn't sold because when he (my local stock broker) wanted to sell it, the price had already declined to #12 which is below the amount i bought it. But in "Online Stock Trading", your order is executed instantly of which if the scenerio above was in "Global Stock Trading", i would have escaped the world wide stock decline that started in March 2008. And like "Forex Trading", you can even set your "Take Profit" and "Stop Loss", and your order will execute even in your absence.
• Secondly unlike local stock trading where you have to wait for at least three months before you can receive your certificate and then sell, in "Online Stock Trading", you can buy a stock today and sell it tomorrow when the price appreciates.
• Thirdly, "Online Stock Trading" is very more volatile than local stock trading. "Nano Stocks" and "Penny Stocks" in "Global Stock Trading" are capable of appreciating by 1000% within seven days. For example on 26/09/2006, "U.S Sustainable Energy Corp." started trading at $0.0004. If you invested $50 in USSE (that is the symbol for "U.S Sustainable Energy Corp.) on that day, you would have purchased 125000 units of the stock. On 27/10/2006, that is one month later, USSE closed trading at $0.72. Your $50 investment would worth $90,000 which is 179,000% return for just a month! Is it difficult to believe? Well that is a fact of which you can find out yourself.
• Finally,every transaction is done online and all the indicators both technical and fundamental that will be used in picking attractive stocks are all available online, you have access to your investment and therefore monitor it. Pleas be informed that you don't invest and go to bed; you must be checking your investment regularly. However doing so does not require any technical expertise as any one can do it provided you can handle the mouse.
From the analysis above, you can now see that "Online Stock Trading" is different from "Local Stock Trading", as matter of fact this is an "Improved Version of Local Stock Trading!" Now the question you should be asking is this:

HOW DO I START ONLINE STOCK TRADING?

2009-05-24T05:16:00.001-07:00

Having known what global stock trading is all about, now we can continue with the practical aspect of it which is how to start making money from online stock trading. But before that, let us consider what things are required to start trading global stocks online:

• A computer with internet connection or you can browse from a cyber café.
• A minimum of $100
• And the knowledge that is contained in this blog which is free.

They are only all you need to start global stock trading online. Now that you have known what are required to trade global stocks online, we can now continue with the practical aspect of it.

The first step is to open an account with online stock broker. There are many of them such as www.tdameritrade.com, www.zecco.com, www.e-trade.com, www.pectstocks.com, etc. But before signing up any stock broker, please consider the followings:

• Commission Plan: Before registering with a broker it is important you consider their commission plans, whether it is on the basis of per share or per trade or both. In per share basis, you are charged a percentage or fixed amount for every unit of stock of you buy. If for instance a broker charges a commission of $0.01 per share and you buy 300 units, then the commission charged will be 0.01x300=$3. In per trade basis on the other hand, a flat rate is charged for every trade you place irrespective of the quantity (unit). If for instance a broker charges flat rate of $10 per trade, and you buy 500 units in one trade, then the commission charged will be $10 flat. Hence, choosing your commission plan depend on the types of stocks you will be trading on-whether nano stocks, penny stocks, or blue chips, etc. Nano stocks are stocks that are less than $1, Penny stocks are stocks that are below $5 but not below $1 while blue chips are those stocks that are over $5.
• Margin size:
• Minimum Account Funding: Another factor to be considered before choosing a broker is the minimum account funding. Brokers differ with regards to minimum account funding, hence it is pertinent to confirm that the minimum account funding of a broker is affordable to you before signing up with them. Some brokers allow a minimum of $1000, some $500, while others $100.
• Means of Funding and Withdrawing: This is worth considering because some of the means of payments are restricted to some areas. For instance a broker whose only means of funding and withdrawing is paypal is indirectly asking Nigerians and other paypal banned countries not to sign up with them. Therefore before opening an account with any broker make sure that the means of payment is accessible and convenient to you. Example of means funding and withdrawing are wire transfer, paypal, cheque, credit cards, etc.
• Trading Tools: THis is another means of evaluating a broker. A good broker ought to provide its clients with trading tools. Trading tools such as fundamental analysis tools, technical analysis tools, charting tools, monitoring tools, screeners, etc., are indispensable for a trader.
• License: Before choosing a broker make sure that the broker is belong to a body that regulate the market. Fortunately, the recommended brokers above are reliable and licensed.

THINGS TO CONSIDER BEFORE BUYING A STOCK

1. The 52 weeks high and the 52 weeks low: The current price must be at least 50% far from the 52 weeks high and close to the 52 weeks low.
2. The reason why the stock is at the current price: As a wise investor, it is pertinent that you find out why the stock you want to buy is at the current price. Knowing this will help to determine whether the stock is being moved by fundamentals or by politics
3. The last day it was traded: The price of stock could be attracted but have not been traded for some times, therefore it is important that you confirm that the stock is being traded actively. If it has not been traded for some times try and find out the reason for that but it is saver for you not to even buy such a stock
4. The number of deals: It is also important to consider the number of deals that take place in every trading day. A stock with a high of number of deals is an indication that the stock is active and can be sold easily and vice versa
5. The volume traded: Knowing this will help you in determining the confidence that people have on that stock. A stock with high traded volume is an indication that people have confidence on that stock and vice versa
6. The value of the volume traded: This is worth considering because a stock could have a high traded volume without a high value. For instance a stock with a current price of $0.005 could have a volume of 1million units but with a value of $5000. So always make sure that you consider this before buying a stock because a stock with a high value of volume traded is an indication that the company has big capital base and cannot just run into liquidation
7. The trend of the price movement: This will help you to predict where the price will be going. You can do this by going through the historical charts.
8. Technical Suspension: A stock that is on technical suspension is attractive because the price is expected to go up immediately the technical suspension is lifted
9. Earnings Reports: A stock with a positive earning reports is very attractive while the one with a negative earning is a no go area.
10. Price Earning Ratio:
11. Price of their competitors
12. if the company is partnering with a bigger company
13. Patent laws
14. Contract awards
15. mergers and acquisition

These are some of the things you need to consider before buying a stock and you can access them at:
1. finance.google.com
2. microcapmarkets.com

With finance.google.com, you can get some of the information above about a stock. For instance, the 52wk high and low, the current price, the company news including earning reports, earning per share, P/E ratio, volume, the historical price movement, etc can be derived from there.

Also with microcapmarkets.com, information on mergers and acquisition, patent awards, partnerships, earnings, dividends, etc can be known.

ONLINE STOCK TRADING DEMYSTIFIED

HOW TO TRADE STOCKS ONLINE