Trading Stock For Smarties and Not Dummies – Stock Trading is Really Not As Hard As You Think

I’m calling this article trading stock for smarties, not dummies because I want to illustrate to you the stock trading does not have to be as difficult as you might think.

In fact, it can actually be quite simple but, of course, you must follow a few basic rules.

If you’ve never traded stock before or have traded unsuccessfully you have to realize that it’s time for you to learn stock trading. Whether you’re interested in online stock day trading training or you want to trade longer-term, there are tons of resources available online and offline to help you gain the knowledge you need.

Before we get into that let’s chat a little bit about what stock trading is. Trading and investing are terms that are often used interchangeably. Investing is longer-term in nature. Trading stock is typically shorter term in nature and seeks to take advantage of smaller market movements within the larger trends.

Trading stock, means that you are taking a more active role than if you are investing in stock. Let’s look at an example of a very simple stock trade.

Buy 100 Shares Of XYZ Company at Monday’s Open

Sell 100 Shares Of XYZ Company at Friday’s Close

Please keep in mind that this is just a simplified example and not a suggestion of a trade for any security. The above example is of a very simple trade that lasted for one week. Here’s an example of stock day trading using the same fictitious company is above.

Buy 100 Shares Of XYZ company at Monday’s open

Sell 100 Shares Of XYZ Company at Monday’s close

As you can see in both examples we open the trade with a buy order and close the trade with a sell order. In both cases we were “bullish” and chose to “go long” the stock. Our second example was a stock day trade because we opened and closed out our position all within the same trading day. Some stock day traders place a much greater frequency of trades during the day.

You can also see that in both examples we specified the quantity to be traded and also both examples we closed our trades using that exact same quantity. It’s always important to keep this in mind and make sure you are completely out of a trade when you want to be. What I mean by that is that when your trading method requires your position to be closed make sure that you close the trade using the same quantity of stock as you opened the trade with…That way you will not have any unwanted open positions that may potentially move against you.

Something else that’s important for you to keep in mind is that different types of stock trading will require different amounts of capital. For example, opening a standard stock brokerage account can require as little as $500-$1000 to get you started. If, however you find that you will frequently day trade than your minimum may go up if you’re classified as a pattern daytrader. A pattern daytrader places four or more day trades in a rolling five-trading-day period, stock brokerages will then require that you maintain a minimum balance of $25,000 in your account and this may vary upward depending upon the online stock broker that you are using.

So you can see trading stocks need not be mystical or difficult as long as you keep the “trading stock for smarties” attitude in mind and continue to learn while you earn while keeping things as simple and uncomplicated as possible.

Day Trading Stocks – Stay Away From New and Unfamiliar Stocks

Day trading is like a battle. Every day you will have to battle the market and make your living. Are you ready for such a living? If you like thrill, excitement and despair all together daily everyday than day trading stocks can be a best thing for you. When you day trade stocks, you make profit from the volatility in the daily stock prices that you choose to trade any day. Entering the market at the right time and exiting at the best time is an art that many day traders can’t master, so give up early. Those day traders who eventually master the art of right entry and the exit at the best possible time eventually make a fortune day trading stocks. Don’t try to pick stocks for day trading in a hurry. Many day traders make the mistake of choosing wrong stocks to day trade with no monitoring of the market moving news. What a day trader needs is a lot of focus and concentration!

First step first. Most new day traders don’t have a solid trading system. Most don’t understand that first you develop your trading system and after that you select the stocks as it is all about working with the right stocks.

When it comes to the right choice of stocks, most new day traders have a weak and shaky idea of what stocks will be best for day trading. Most bad trades are due to beginners who are trying out unfamiliar stocks. If you are accustomed and used to the rhythm and swings of a stock and you have traded that stock with success than you should pick stocks that are similar.

Now most new day traders make the mistake of trading a stock that they had discovered a night before! They lose money. Don’t trade a stock without first researching that stock for days and weeks. If you want to trade a new stock, first try to trade it with only 100 shares. After you have become familiar with its behavior you can start trading it more shares.

Now when selecting a stock for day trading you need to keep an eye on the news headline to make sure that your stock is not making any news headlines. Do not trade a stock that is in the current headlines. Go through different financial papers like the Wall Street Journal, Financial Times and watch CNBC and Bloomberg or even Google the name of that stock to see if it is making or is about to make any major headline. Your motto,”The less news, the better.”

It is critical for you to be patient with unfamiliar and new stocks. You should treat all new stocks as your first date. Someone totally new that requires exploration! Most often, the new stock that you find may not be a good stock for day trading. So, initially you should drastically reduce your exposure by trading only 100 shares and not more. Stock picking is the area where most new traders make blunders. Pick your stock carefully.

But my friends, this is not the time for day trading stocks. This is the time for day trading currencies. Trust me; forex day trading is going to make many millionaires in this decade. Forex day trading is much simpler that stock day trading.

Thousands a Day – Day Trading Stock

Day trading stock, at this level of profitability, is obviously unique.

Unlike other individual financial instruments traded, there are thousands of stocks to choose from, any one of which can provide day trading opportunities (otherwise known as big money wins) – any trading day, at any time of the trading day.

This makes stock day trading exciting, and for those who know how, extremely rewarding. For those who master the new stock day trading game with a coach in a winner’s stock trading room, the opportunities for learning, not just stock trading, and wealth building are unlimited.

What is the big payoff that everyone seeks?

To become a successful day trader, with profitable business performance, where they can make thousands a day, any trading day.

What’s required to generate this kind of money in the stock trading business?

Of all the success factors, it comes down to three key elements:

  • First, you must stop trading on your own and start trading with a world-class stock trading coach (like a world-class tennis player learning and performing with a coach to get to and stay at the top of the game)
  • Second, you need to be playing (trading) a winner’s game (system) that your coach recommends, not an old-school game, but a stock trading game big money winners play
  • Third, you need to gain the confidence, competence, and performance results consistent with those of a stock trading winner, again, facilitated with your own personal coach at your side.

Here’s a look at one aspect of stock day trading, from a winner’s perspective.

While day trading, it’s the job of the winning day trader to find stock trading setups – stocks that present opportunities to make substantial money – what we refer to as stocks in a “tension” state.

A stock in a tension state is simply a stock with an intraday price movement substantially away from its price balance price or the price at yesterday’s close, technically speaking, when you view stock trading charts.

Viewing a stock in a tension state would be much like viewing a pendulum with the ball pulled far away from neutral enough that, when released, it’s movement tends to accelerate toward its neutral position and beyond.

Stocks, like the pendulum ball, tend to seek a balanced state as well and like the ball, they return to balance and beyond, and then fluctuate above and/or below a neutral price as they eventually return to a state of neutrality, balance, or non-tension state – above, below, or close to the point of beginning, price wise.

This is the price action winning stock traders live for and thrive on, day by trading day.

This new-school trading makes winners feel both fulfilled and alive. Let’s take a look.

The winner’s focus is to trade this action to win (not the money involved) one or more trades during the trading day – that can generate $500 to $2,000 and more per trade, depending on lot size (the number of stock shares traded). This form of trading to win, that is, absent the focus on the money while trading, is not to be confused with gambling which is what losers love to do at Las Vegas and while day trading stock or any other financial instruments.

Trading on your own, without a coach, using any of the hundreds of old-school, gambler’s stock trading systems, lacking stock day trading confidence, competence, and a history of success while day trading is precisely why we say that 98% of all traders are losers – not profitable and otherwise dissatisfied traders.

Thus, only 2% of traders worldwide fall into that category of day trader – winners, consistently profitable winners.

Winners own the game – the rules, the software (with algorithms reflective of losing trader knowledge and trade execution patterns), when they make markets and stock prices move the most.

We designed our game to ride the coat tails of the 2% (who are intent on “killing” the crowd, the 98%), for our fair share of the action.

So, there are three games being played in the stock market, options, commodity, Forex, or any other markets: the winner’s game, the loser’s game, and our game. (We only trade stocks.)

Day trading stock this way, we find, is a far more interesting and relatively stress free approach to the day trading losers are accustomed to experiencing.

Stock day trading involves the performance of an individual company or companies, many times with familiar products and services exchanged locally and globally, in many instances involving companies managed by recognized leaders in their field.

Both technical and fundamental data influence stock investors, swing traders, and day traders execution decisions.

Each stock has both a technical (long and short-term price action history – charts) and a fundamental (financial performance – balance sheet, profit and loss statements, and earnings histories). This opportunity to trade the price action on any of thousands of stocks, any trading day, and time of the trading day, makes trading stocks far more interesting, and frequently more challenging than other form of day trading.

So, what we do as stock day traders is far more interesting, exciting, and very financially rewarding.

Our system is also quite simple as we only focus on only 20% of what losers watch, trade a fraction of the time and thus experience a fraction of the trading stress, and as such, we have the energy to trade well when opportunities present themselves.

The game has changed, so have we, and so can you – should you qualify.