There are multitudes of places for
investors to place their money, whether it
be in the stock market, the foreign exchange
market, mutual funds, real estate,
and so on.
The trick is finding the right investment
vehicle that best fits your needs,
investment capital, and risk tolerance.
This is done by doing as much research as
possible and learning as much as you can
about your market choice.
These days it seems that everybody is
hawking the latest success formula which
guarantees amazing returns. The truth
is that many of these products are complete
B.S. and will only help you lose money.
Again the best thing to do is educate your
self on the topics so that when you do
choose to follow someone's recommendations
you won't be doing it blindly.
Further the more you know the less you
have to spend. There are stock trading
seminars selling for up to $40k per session
offering the same info that can be learned
for a fraction of that price. There is
no reason to be paying that much money for
courses when it can be better spent
Trading online has reached an
unprecedented level of ease and with it has
presented its own new opportunities and
complications. With these new online
trading platforms trades can be made in a
matter of seconds and if something doesn't
go your way reloading your account is a one
Same as with online gambling the easier
and the less real it seams the more likely
that you can get in over your head and
forget that you're dealing with your own
real money. This is why you should
develop a systematic and disciplined
approach to online trading.
You want to choose an online broker that has
proven it self with customer satisfaction
and maintains low trading fees. The
good news is that the competing online
brokers like Ameritrade, Charles Schwab,
E-Trade, and others have driven price per
trade to record lows, with an average of
$5-$10 per trade. Depending on your
volume you can even find places that offer
trades for under $3.
Setting up your account is the easy part,
the difficult part is developing your
trading style and learning how to maintain a
level head. You also need to figure
out your style of trading, will you invest
for the long run by buying and holding, day
trade for quicker profits, or somewhere in
As far as your online stock trading
education is concerned at the bare minimum
you should learn how to analyze stock
charts, understand company announcements,
read profit and loss statements, and spot
additional financial indicators. No
matter what you read or hear these abilities
take time and dedication to develop and
won't be mastered overnight.
The other element to online stock trading
that newcomers have to watch out for is the
limitless freedom that they have.
Unlike the old days of trading through a
human broker online no one is there to
comment on your decisions. This means
you need to develop your own plan that must
include exit plans.
Evidence has shown that beginner traders
make common mistakes of holding stocks too
long both when they are rising and falling.
They either hang on praying for a rebound or
incorrectly hang on in an effort to squeeze
the most profit at peak points. Thus a
correctly developed exit plan is a must for
Online Stock Trading does provide new
comers amazing opportunities to profit from
the market but it needs to be approached
with great prudence.
Options Trading - is a form of trading in
which a buyer obtains a "contract" that
gives them a choice to buy or sell shares in
a particular company, at an agreed price, on
or before a set date.
The reason why this form of trading is
growing in popularity is because Options
only cost a fraction of what it would cost
to buy the underlying stock itself and a
small move in the price of the underlying
stock, creates a much larger move in the
price of the option by 10 times to sometimes
There are two types of options, CALLS and
PUTS. Call options give you the right
to BUY shares in the underlying stock.
PUT options give you the right to SELL
shares in the underlying stock. CALL
options increase in value when the
underlying stock goes up and PUT options
increase in value when the underlying stock
Ideally what you want to do is buy CALL
Options when you think a stock is about to
go UP in price and buy PUT options if we
think the stock is about to go DOWN in
price. If you're right and the stock
moves in your predicted direction you will
As hard as it may seem to believe Options
provide you with the opportunity to make
money regardless of what direction the
market is moving. Thus, by trading the
options instead of the stock it is possible
to make far greater returns and at the same
time risk only a fraction of your capital.
Futures Trading - has a reputation for
being one of the most riskiest forms of
trading and usually reserved only for the
experienced traders. However with
proper education this market can be
With Futures or Commodities trading you
do not actually own anything what you are
doing is speculating on the future direction
of the price of a given commodity. You are
basically wagering that the price will
either go up (if you are a buyer), or it
will go down (if you are a seller).
There are three type of traders involved in
the Futures market, Hedgers, Speculators,
and Floor Traders. The majority of
those involved in this market are
speculators, which is similar to standard
stock trading in the sense that you're
trying to make a profit from price
fluctuations of the underlying commodity.
When you speculate in a futures trade,
there is always someone who is taking the
opposite position, or betting against you.
It's important to learn as much as you can
about commodities and how to safely trade
Forex Trading - takes place in the
foreign currency exchange trading markets.
The international exchange of currency in
the Forex market is the largest cash value
trade market in the world. The sums of money
traded are astounding and involve everyone
including: world banks, credit card
companies, International Corporations,
Governments, currency speculators,
individual brokers, and financial giants.
However the benefit of an online Forex
Currency Trading market is that people can
invest small amounts of money and quickly
learn from their profits or losses. They
are also just clicks away from a plethora
of research material on Forex Currency
Trading market trends.
The currencies of the world are on a
floating exchange rate, and they are
always traded in pairs EUR/USD, USD/JPY,
USD/CHF, etc. The majority of all daily
transactions involve trading of the major
The FOREX market is active 24 hours a day
and dealers at major institutions are
working 24/7 in three different shifts. The
currency market is the largest, oldest, and
most liquid financial market in the world
with unbelievable opportunities for
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