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So I've done a little bit of preliminary research but have a few questions.
I won't be doing day trading, but I also don't want to buy and hold everything long term. Maybe some trades every week or two or a couple months, depending on how the stocks are doing. I was wondering if anyone had any recommendations on who to use. Generally, what are the fees like? Is 9 dollars for every trade reasonable given how often I would be trading? My bank roll will be low, I only plan on putting in $1,000 right now and buying companies that are lower price per share (dollars, not pennies), so I imagine this will play a part into things. (Fees from trades will be higher % to possible earnings due to low amounts of shares). I noticed some promotions going on from various sites, which I might take advantage of. I will probably stick to a bigger name (Ameritrade, ScottTrade, etc), but from searching CD noticed there's some sites that are $5 per trade, which might make more sense?
Any good resources to read up on the lingo? From some reading on here, you need XXX amount invested in order to be a day trader? If that is correct, what defines a day trader? I will check out INVESTOPEDIA later on, but was wondering if anyone has any other good sources (besides just googling as I've been doing). I prefer reading over Podcasts, but if anyone recommends any podcasts for BEGINNERS that would be great. Right now, I'm more concerned over the concept of stocks rather than advice on who to invest in.
I was wondering what the best way to search for possible companies to invest is. I've been looking at Yahoo Finance to get a feel, but had a hard time searching. For example, I want to selective search for certain parameters on companies based on INDUSTRY, Price Per Share, and then maybe some additional parameters such as profit, etc. Any recommendations on a site for this?
Also, how easy is it to change companies after? For example, could I swap from Ameritrade to ScottTrade down the road? My thoughts are once I get more familiar and have experience under my belt, I may be making trades more often than not.
I imagine you guys answer these questions a lot, and I have done some CD searches, but the results were a bit older and not quite as self-specific as I'd like. Thanks.
Dont trade with just $1000, sounds like you are looking for big swing trades, but dollar stocks dont swing up that much unless over longer time than a week or two.
I use scottrade but i buy and hold so the fees dont mean much, and i move $10,000s at a time when i am rebalancing so the $7 fees arent as much proportionally to $1000. On just a thousand, a $5 fee to buy and sell is 1% of your profits without even counting for taxes. Nit saying i like the fees, but i like a real brick store near me than online brokers with lower fees
Most stock screeners lets you find what you want based on your parameters. Googles was easy to use if you want to play with one
I know that I am in the minority on this and will probably catch heck for it, but here it goes. I say if you can truly stand to lose some or all of the $1000 without any real impact to your life, then go for it. You probably won't get rich, but you will learn a lot.
There are many stocks of companies that trade between $5 and $10 that you could buy to start. So find one that you like and buy it and see what happens. You have to start somewhere and actually doing it is the best experience.
As to figuring out what stock to pick, everyone has a different way to go about it.
What I do for my trading account, most people would recoil in horror at the thought of doing. I look every morning as soon as the market is open in Yahoo Stock Center to see which stocks are down the largest %. Then I look to see why they are down. If I think that the downdraft is overdone regarding the news, I buy that stock.
I'm looking to get out as soon as possible with a profit. Sometimes it is within hours, sometimes within days and with one Chinese hotel stock, it was months (but I finally made a really nice profit on that one.)
I do what I do because I feel that program trading and human general panic on the downside can sometimes make a nice opportunity. But you will need to come up with whatever procedure you want to use.
As far as which broker to use, probably must of them are going to be around the same for online commissions. You can compare them and pick one that suits you for the minimum balance required and the trade commissions. The Scottrade $7 per trade seems pretty good.
It doesn't sound like you need to be concerned with being a daytrader at this point.
The concept of stocks is a bit scary. You are buying it with the hope that someone else will sometime later pay you more for it. To me, it is sort of like buying a baseball card. If you have 100 shares of XYZ Company (and it doesn't pay a dividend) the only actual value is that you own a minuscule part of the company. But the 100 shares are actually of no practical use to you (can't eat them or drive them to work or they don't keep the rain off of you). You need to find someone to buy the baseball card/stock from you for more than you paid for it. If you can't then you lose money (see Dutch Tulip Mania).
Good Luck with whatever you decide to do. I am going to put on my helmet and flak jacket and get ready for incoming.
Are there different rules/minimums/fees to day trading? I read on here in another topic that the money is tied up for 3 days... or is that something different?
Are there different rules/minimums/fees to day trading? I read on here in another topic that the money is tied up for 3 days... or is that something different?
T+3 is the settlement date, But you can Sell a Stock, and buy another in that timeframe, as long as you don't sell 2nd stock before the 1st stock settlement date. Doing that would cause a "good faith violation", and they would put you on a cash only basis for 90 days. (You can trade only after stocks have settled)
What I do for my trading account, most people would recoil in horror at the thought of doing. I look every morning as soon as the market is open in Yahoo Stock Center to see which stocks are down the largest %. Then I look to see why they are down. If I think that the downdraft is overdone regarding the news, I buy that stock.
the problem is that with how fast news spread, by the time you hear about it, the market has already corrected for the news...
but whatever works for you, it's your money
I like options on the stocks I plan to buy anyways, if I get it cheaper great, if i have to buy options at market value, well I would have bought them anyways... so I didn't lose anything
the baseball cards example, stocks are more like baseball tickets , when team does well, people pay more for tickets, if not then no one wants to go to the game and you are left with ticket. And if you buy enough tickets, you can kind of influence what the team does since you own a % of their money
the problem is that with how fast news spread, by the time you hear about it, the market has already corrected for the news...
but whatever works for you, it's your money
I like options on the stocks I plan to buy anyways, if I get it cheaper great, if i have to buy options at market value, well I would have bought them anyways... so I didn't lose anything
the baseball cards example, stocks are more like baseball tickets , when team does well, people pay more for tickets, if not then no one wants to go to the game and you are left with ticket. And if you buy enough tickets, you can kind of influence what the team does since you own a % of their money
My feelings are that the market really is inefficient at times. The combination of headline news, program trading and the human panic when a stock starts a quick drop feed on each other and can lead to some opportunities. It seems sometimes that initially, often people only look at the headline and don't read the whole news story. Sometimes a stock deserves to get hammered and sometimes it doesn't.
My first thoughts on this came about on 9/11 when the twin towers came down and the market was closed for several days. When it reopened, airline stocks got clobbered, as if no one would ever fly again, which didn't seem logical to me. So I borrowed money, loaded up on airline stocks and a couple of months later sold at a very nice profit.
I realize what I do isn't for everyone, but as long as I can make $ with it, I'm happy.
My feelings are that the market really is inefficient at times. The combination of headline news, program trading and the human panic when a stock starts a quick drop feed on each other and can lead to some opportunities. It seems sometimes that initially, often people only look at the headline and don't read the whole news story. Sometimes a stock deserves to get hammered and sometimes it doesn't.
My first thoughts on this came about on 9/11 when the twin towers came down and the market was closed for several days. When it reopened, airline stocks got clobbered, as if no one would ever fly again, which didn't seem logical to me. So I borrowed money, loaded up on airline stocks and a couple of months later sold at a very nice profit.
I realize what I do isn't for everyone, but as long as I can make $ with it, I'm happy.
People often try to "solve" the mystery of markets with Math. In my opinion markets are more a study of Psychology; fear and greed.
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