A Brief History of Stock Trade
In the United States the history of stock trading goes back more than 200 years. During the civil war, the colonial government decided to finance its war efforts by selling bonds and government notes, with a promise to pay back with some profit at a later date.
Around the same period private banks saw the huge money raising potential and started selling their company shares and stocks as an investment. However, the first company to issue stocks and bonds was the Dutch East India Company, which in 1602 issued its first shares on the Amsterdam Stock exchange.
Around the same period private banks saw the huge money raising potential and started selling their company shares and stocks as an investment. However, the first company to issue stocks and bonds was the Dutch East India Company, which in 1602 issued its first shares on the Amsterdam Stock exchange.
What is day trading?
We all know what day trading is, but just in case we don't, a day trade can be defined as the purchase of a product during the course of a trading day and selling that product by the end of that trading day making a profit or a loss.
People who participate in this trade are known as day traders. Different types of financial instrument can be bought and sold within the course of a trading day, but the popular ones include currencies, stocks, stock options, futures contracts, interest rate futures, commodity futures etc.
Who can participate in day trading?
Individuals or institutions can participate in day trading. Basically, anybody can. You can trade from the comfort of your home to your busy office desk at work. Some have different fancy names like:
- Home traders- Casual traders
- Investors
- Speculators
- Equity investment employees for example in a bank
- Fund managers for example in a hedge fund etc
Contents At A Glance
- What is day trading?
- Who can participate in day trading?
- What is a stock?
- Where are stocks traded?
- Day Trading Books
- Tools for day trading
- Executing day trades
- Technical Analysis of stock
- Technical Analysis software
- What are penny stocks?
- What you must do before any investment
- Can you make money using The Day Trading Robot?
- Is the Day Trading Robot A Scam?
What is a stock?
A stock is also known as a share, and it represents the amount of ownership you have in a company. For example when you buy 20 shares of Microsoft then you have a 20 share ownership. And this means that you will receive part of the company's profits or be
Owning a stock of a company means you have a fractional ownership of the company.Different types of stock
Preferred stock:-
these are stocks negotiated between an investor and a company. Owners of preferred stocks do not have a voting right in the company. However, they are paid a dividend before common stock holders and can lay claim to the assets of the company in the case of bankruptcy. Remember, that the company has the right to buy back the stock from you and could stop paying dividends.
Common stock:-
these are stocks purchased by the general public. Owners of common stocks do not participate in the day to day running of the company, but they have voting rights and can influence the corporation's objectives and policies. As the company grows and earns profits, the value of your stock rises, and naturally, when the company does poorly and losses money or goes into bankruptcy, the value of your stock falls.
Where are stocks traded?
Stocks are traded in the stock market. A stock market is a public or private market where the shares or stocks, and other derivatives of a company are bought and sold at an agreed price.
Stock exchange -
This is the most important part of a stock market and it is a corporation of mutual organizations that provide trading facilities for stock brokers and traders to trade stocks and securities.
To trade in stocks and other securities you need a stock broker. A stock broker acts as the middleman between you and the stock market. He or she executes the action you want, buy or sell, on your behalf and gets a commission from you.
Today, many people like to be directly involved in managing their stocks and they do that through an online brokerage firm. If you are new to investing, having the ability to actually speak with a broker can be quite beneficial. If you are not stock market savvy, online trading may be a dangerous thing for you. You can see your portfolio evaporate in a single trade. Endeavour to learn as much as you can about trading stocks before you start trading online. If your online broker has a simulator, make sure you get enough practice before you do the live trades with real money.
This is the most important part of a stock market and it is a corporation of mutual organizations that provide trading facilities for stock brokers and traders to trade stocks and securities.
To trade in stocks and other securities you need a stock broker. A stock broker acts as the middleman between you and the stock market. He or she executes the action you want, buy or sell, on your behalf and gets a commission from you.
Today, many people like to be directly involved in managing their stocks and they do that through an online brokerage firm. If you are new to investing, having the ability to actually speak with a broker can be quite beneficial. If you are not stock market savvy, online trading may be a dangerous thing for you. You can see your portfolio evaporate in a single trade. Endeavour to learn as much as you can about trading stocks before you start trading online. If your online broker has a simulator, make sure you get enough practice before you do the live trades with real money.
Day Trading Books
A selection of really good day trading books from Amazon
Tools for day trading
Like every serious worker, you must have adequate and reliable tools to be in business. If you're reading this article online chances are, that you already have most of the tools you need, but let me list them out:
- A quiet room: Could be your bedroom, study, private library room. Anywhere you will not be distracted by activities around.
- A computer: a laptop or desk top running windows XP or better. Get a high resolution screen. Minimum requirements include
i. 19-inch LCD monitor. The bigger the better
ii. 512 MB RAM more is better
iii. Pentium D 2.6GHz or higher
- Internet access: High speed broad band with unlimited traffic and connection time
- Telephone: Your cell phone and a back up land line. Your cell phone must have full internet connectivity to act as a backup internet connection.
- A Brokerage account: InteractiveBrokers will do just nicely.
- Charting software: Several come to mind,
QuoteTracker with IQFeed . Amibroker and TradeStation .
- A computer: a laptop or desk top running windows XP or better. Get a high resolution screen. Minimum requirements include
i. 19-inch LCD monitor. The bigger the better
ii. 512 MB RAM more is better
iii. Pentium D 2.6GHz or higher
- Internet access: High speed broad band with unlimited traffic and connection time
- Telephone: Your cell phone and a back up land line. Your cell phone must have full internet connectivity to act as a backup internet connection.
- A Brokerage account: InteractiveBrokers will do just nicely.
- Charting software: Several come to mind,
QuoteTracker with IQFeed . Amibroker and TradeStation .
Executing day trades
Day traders buy and sell stock very rapidly within the course of the day with the hope that their stocks will continue to rise or fall in value for the seconds or minute they own it for them to make a profit.
It is an extremely stressful job and not for the faint of heart. Some day traders' trade on the margin and before you execute margin trades it is advisable to understand the ins and outs of margin trading
Margin trading simply means borrowing money from your broker to buy stocks. This allows you to buy more stock than you have the funds for. And when things go right, you make money without putting up your own funds. Make sure you understand the rules of the game, otherwise it could get really ugly if things go wrong.
Margin trading simply means borrowing money from your broker to buy stocks. This allows you to buy more stock than you have the funds for. And when things go right, you make money without putting up your own funds. Make sure you understand the rules of the game, otherwise it could get really ugly if things go wrong.
Technical Analysis of stock
There are basically two methods to analyze a stock before you make the decision to purchase or not.
1. Fundamental analysis -
This involves looking at the company as a whole and trying to determine its value. For example looking at its financial report, the people that mange the company, the products or services it provides, its competitors etc and try to figure if it would be a wise investment down the road in terms of growth and viability.
2. Technical Analysis -
This however is a different animal. It does not care about the company's financial report, who runs it, what it is producing or whether it has any competitors. It does not care about the value of the company or if its future is bright in the long term, all it analyzes is the company's price movement in the market.
Technical analysis tries to determine the direction or trend the price of the share will assume in the very near future by monitoring the demand and supply of the stock in the market.
To be successful in day trading, you need to rapidly analyze stocks and there are various software's in the market that can do that.
Technical analysis of stocks is not limited to day traders alone. It is done by option traders, mutual fund managers and anybody that wants an edge in executing trades. Simply put it helps traders decide where to put their money to make a profit.
This involves looking at the company as a whole and trying to determine its value. For example looking at its financial report, the people that mange the company, the products or services it provides, its competitors etc and try to figure if it would be a wise investment down the road in terms of growth and viability.
2. Technical Analysis -
This however is a different animal. It does not care about the company's financial report, who runs it, what it is producing or whether it has any competitors. It does not care about the value of the company or if its future is bright in the long term, all it analyzes is the company's price movement in the market.
Technical analysis tries to determine the direction or trend the price of the share will assume in the very near future by monitoring the demand and supply of the stock in the market.
To be successful in day trading, you need to rapidly analyze stocks and there are various software's in the market that can do that.
Technical analysis of stocks is not limited to day traders alone. It is done by option traders, mutual fund managers and anybody that wants an edge in executing trades. Simply put it helps traders decide where to put their money to make a profit.
A Technical Analysis DEMO
using the day trading robot
Technical Analysis software
The most popular software in the market today for technical analysis is Jason Kelly's "The Day Trading Robot."
The day trading robot specializes in penny stocks and before I go into what the secret of its success is; let us look at penny stocks first.
What are penny stocks?
Penny stocks are common stocks that sell for less than $5 and are traded over the counter (OTC). Traders could easily make a lot of profit with penny stocks. Because the stocks are low priced, with a reasonable investment you can buy up quite a lot of sto
Penny stocks are sold as a list, usually generated by software. If you get a good penny stock list at the right time, you could make some profit. In the case of the day trader robot, it generates its own stock list which it sends to its clients with the instruction to buy these penny stocks.
With any stock, no matter how low the price is or whatever issues it is having, when a significant number of people are buying the stock at the same time, it naturally shots up in price. People who bought into the stock at the low price will now sell at that high price making a tidy profit.
Promoters of this software claim that their robot is so sophisticated that it can adapt and improve based on experience, on the way it picks stocks. They are so confident that it works that they offer a risk free eight week trial.
With any stock, no matter how low the price is or whatever issues it is having, when a significant number of people are buying the stock at the same time, it naturally shots up in price. People who bought into the stock at the low price will now sell at that high price making a tidy profit.
Promoters of this software claim that their robot is so sophisticated that it can adapt and improve based on experience, on the way it picks stocks. They are so confident that it works that they offer a risk free eight week trial.
What you must do before any investment
- Never trade with borrowed money.
- Trade with only funds you can afford to lose.
- If your emotional stress threshold is low, do not day trade.
- Develop a trading strategy and stick to it no matter what.
When trading in stocks always remember that nobody is a winner all the time, you win some, you lose some. Have the discipline to stick to your strategy. Cut your losses on time and take your profits when you have them. That's the main difference between a successful trader and an unsuccessful day trader. You trade to make a profit. When you do make a profit, take your profits and do it all over again.
- Trade with only funds you can afford to lose.
- If your emotional stress threshold is low, do not day trade.
- Develop a trading strategy and stick to it no matter what.
When trading in stocks always remember that nobody is a winner all the time, you win some, you lose some. Have the discipline to stick to your strategy. Cut your losses on time and take your profits when you have them. That's the main difference between a successful trader and an unsuccessful day trader. You trade to make a profit. When you do make a profit, take your profits and do it all over again.
Can you make money using The Day Trading Robot?
The answer is straight forward. As a principled trader, you can only lose what you can afford to lose. If you're not losing money, then you're on track to making a profit. For the day trading robot in particular, You have eight weeks to try it out at no cost to you, if you make money it works, if you lose money, move on.
A day trading robot Evangelist
A tribute to Jason Kelly's Robot
Is the Day Trading Robot A Scam?
The process described in The Day Trading Robot Sales letter is Logically Sound and Technically Feasible.
Try It Risk Free for 8 weeks
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by ken_bruce
Hi. This is Ken here. I just wanted to share with you some information on the fundamentals of day trading. I have been trading for more than 20 years,... more »
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