Short Daytrading FAQ

[GunshySlycat1]

I found it to be quite informative for any newbie interested in it...

Frequently Asked Questions

How much money do I need to start trading?

Depending on the amount your broker charges you for commission, you can start trading with an amount as low as $2,000. Remember that starting out with low trading capital may put you at disadvantage because you will only be able to trade in small share lot sizes.

I live in Europe, will your trading approach work here?

Although our customer base is 85% North American a great number of people from countries such as United Kingdom, Germany, Holland, Spain, Italy, Singapore, Egypt, Australia, New Zealand ... have been able to successfuly implement our strategies. Concepts and techniques that are explained in the course work from anywhere in the world. The course has been designed to be useful in every country.

What does the "Online Trading for Financial Freedom" course include?

The "Online Trading for Financial Freedom"™ covers all aspects of day trading as well as short-term swing trading, together with proven and easy to implement trading strategies.

What kind of Internet connection do I need?

The kind of Internet connection that you should use depends greatly upon your trading style. Active day trading requires high bandwidth, high performance and reliable Internet connection. Although it is possible to successfully day trade using regular phone line connection, it is not recommended. Dial-up connections should be primarily used for swing/position trading. Two reasonably priced Internet connection alternatives are Cable Internet service and DSL Internet Service.

Does the course cover both day trading and short-term swing trading?

Yes it does. There are two separate proven strategies covered in the course. One is designed specifically for active day traders and the other one is tailored to those who don't have time to trade during market hours and who are planning to trade a few times a week.

How do I choose the right online broker?

The "Online Trading for Financial Freedom"™ contains all the information you need in order to choose a reliable broker that will meet all your trading needs.

What about the price of the course?

Priced at $47 "Online Trading for Financial Freedom"™ is simply the best investment an aspiring trader can make.
Does the course cover S&P 500 and Nasdaq-100 e-mini trading?
"Online Trading for Financial Freedom"™ is primarily a stock trading course, however if you are interested in e-mini and stock index trading we would recommend that you visit our e-mini trading site at www.eminitradingcourse.com.

Does the course cover Forex trading?

If you are interested in forex (currency) trading we would recommend that you visit our forex trading site at www.forextradingtips.com.

Can I use the course at stock markets other than Nasdaq and NYSE?

The trading approach taught in the course can be used at any stock market. However, if you are planning to day trade, Nasdaq is highly recommended due to it's high volatility and great number of trading opportunities. On the other hand if you are planning to swing trade, you can trade Nasdaq, NYSE or any other liquid market in the world.

Do I need to have any specific academic background in order to be successful?

Not at all. Successful active traders and daytraders come from many different professions. Very often, people who are very successful at school or at their businesses wrongly believe that their success will be automatically translated at stock trading. It is usually not the case. Active trading has its own learning pace and our course will gradually prepare you to enter this exciting field.

How much money can I make?

How much money can you make at active stock trading depends on the size of your initial capital, the amount of work you are willing to put in, and your personal trading style, meaning how much risk you are willing to take.

 

[Mirage]

Some great information there!

One thing I would DEFINITELY urge against when just starting out is buying stock on Margin.

Margin is where your brokerage lets you spend DOUBLE or in some cases QUADRUPLE the amount you actually have. This is great for making a lot more money faster, because you get to keep all the profit on the total increase. Once you sell, you give the borrowed money back, and you just made all the increase on your investment, PLUS the margin.

Problem though. If a stock goes down, you lose money faster as well. I bought some stocks on a big margin when just starting and ended up watching the stock drop. That tought me a valuable lesson. Margin makes your risk grow, and also makes it much harder to stick through a small drop in stock price. Where you maybe would have stayed in if you were down $500, you would probably bail if you bought on margin and were down $2000.

 

[Roland_Jenkins]

Nothing like a good ol margin call to ruin your day.

 

[Mirage]

It didn't turn into a margin call because I got out, but it sure would have that's for sure.. Actually it went down about 25% more after I got out, so I guess you could say I salvaged the best that I could. It was an unstable stock though. Lesson learned. Don't jump on the quick movers. Research instead, and get in before a stock jumps.

 

[Roland_Jenkins]

Here's something that might help somebody . . then again might not but shouldn't do harm.

We have an account with Americatrade which has all the bells and whistles but charges $10.95 per trade. We also have an account with freetrade which charges $5.00 per trade. We make around 200 trades per month (far less here lately)
You can save yourself a muchabunny in commissions

 

[Mirage]

Ameritrade is merging with TD Waterhouse in 2006. I think it's worth the extra money for all the bells and whistles though. You might save money in commissions with a cheaper one, but I prefer having everything I need in front of me, and an 800 number to call if I have an emergency.

 

[IslandGuy]

I've decided to get into some day trading. I'm just really starting to dabble in stock, now that I have a little extra money to do something with, and have friends who made a killing day trading when it was such hot news about 5 or so years ago.

Is it still a good place to put some money into? I've got the time to keep on top of what's happening on a minute-by-minute basis and already know a fair amount about the process ... just wondering if recent investors on the forum still think it's a good use of time ... in other words, can you still get some decent return on your investment if you play your cards right (and of course luck is with you, as always seems to be the case too )?

 

[Mirage]

Well the big thing is making sure you know what you are doing before you do it. Research the company, research the company, and did I mention research the company? I made some great money daytrading, but I have also lost great money too. I was stupid when I started out, like many people.

Listen to Money talk shows and watch TV shows about money. It will help you get a feel for it, and it will also keep you updated on current picks that different people are talking about.

 

[stockbroker]

If you want to daytrade I suggest the forex markets. Forex is open 24 hours a day so you can trade when you want. Forex trends much better than stocks do due to the higher volume in forex, 1.9 trillion a day.

 

[IslandGuy]

Hi stockbroker,

I kind of asked this on another thread, but I'll repeat it here since it applies too. I've looked into the ForEx option, but it looks to me as if it requires pretty substantial amounts of money for your foreign currency exhange trades. Is that the case or can smaller players also make some money there?

I'm kind of on the fence about whether to used an established internet trading house for day trading or to work with one of the smaller firms. It seems that I read somewhere that the big established firms not only charge more per trade, but also sometimes route your trade through another broker or firm, which not only will delay the trade (which might work to your advantage if you're lucky but takes the timing of the decision out of your hands somewhat) but also add extra charges to the transaction.

However, if you hook up with one of the companies offering direct access to a trader on the floor on whatever exchange you're trading on, your out-of-pocket expenses are less. Of course, in both cases, you do certainly need to carefully pick your stocks through research, etc., but I don't know if I like the idea of possible delays in the deal if it's routed to another broker by the established online trading houses.

What happens if the stock falls while the deal is going through all these different people? Am I protected at the price I decided to sell at or do I have to live with the price at the end of the time period (even if it's just a few hours) that it takes the online trading house to process my day trade? I know this may seem like a dumb question, but I'm still new to the process and could really use some advice based on experience. Thanks.