The world of day trading can be exciting. Day traders are unlike many other investors because they only hold their securities—as you would expect from the name—for a day.
Whether you are interested in long stocks, spreads, or even naked options, there are several requirements that are important for you to be aware of before you get started. Knowing these requirements will help you make the right day trading decisions for your strategy.
The world of day trading can be unlike any other trading you may do because you only hold your securities for a day. If you think day trading may be for you, it’s important to understand the process so you'll be prepared if you decide to place this type of trade.
Have you ever wondered about what factors affect a stock's price? Stock prices are determined in the marketplace, where seller supply meets buyer demand. But unfortunately, there is no clean equation that tells us exactly how a stock price will behave. That said, we do know a few things about the forces that move a stock up or down.
There are many adages in the trading industry. A few of them are: “Buy low; Sell high”; “Nobody ever went broke ringing the cash register”; and “Bears and Bulls make money, but Pigs get slaughtered.” Interestingly, there is a motif underlying all of these sayings, and it has to do with managing risk.
Selecting stocks for investing and trading should not be a guessing game in today's market. Join us as we review the basics of technical analysis and other stock selection techniques you should know before buying a stock.
Successful trading starts well before you click "Buy". In this 3-minute video, Rick Swope of E*TRADE tells you exactly what you need to know before you enter your first trade. Stepping onto the trading floor is like going in the lion's den; this video will help you avoid being one of the sheep.
Fundamental analysis is the cornerstone of investing. The health of a company and its stock are important factors to consider when trading.
EPS, or earnings-per-share, helps you understand the profitability of each company. Learn how to use EPS in just one minute.
In this video, we'll answer the question, “What is fundamental analysis?” Learn how this process can help you evaluate the economic health and financial performance of the companies in which you may want to buy or sell stock.
Will XYZ stock go up or down? Some traders try to answer this question by studying the basic characteristics of XYZ’s business. These characteristics may include sales, earnings, debt, and other financial aspects of the business. This method of analyzing a stock is known as fundamental analysis.
Most technical analysis is performed by observing and interpreting charts. A chart is a historical record of stock price movements plotted over a time period, like one day, one year, one decade, or even longer.
One of the assumptions of technical analysis is that history repeats in the stock market. One example of this is recurring patterns in historical stock prices. These price patterns are essentially shapes that sometimes appear on stock charts.
Among all the aspects of technical analysis, perhaps the most important and actionable concepts are support and resistance. Many other aspects of technical analysis, such as price patterns, are based on the key concepts of support and resistance.
One of the three assumptions of technical analysis is that stock prices tend to move in trends. Another way to think about this assumption is by borrowing from the world of physics and Sir Isaac Newton’s laws of motion. In particular, Newton’s law of motion states that an object in motion tends to stay in motion unless acted upon by an opposing force.
You may find a cash account beneficial for your investing needs because you can use it to buy stocks, bonds, or even mutual funds and these securities are owned by you.
When using cash accounts, there are rules and requirements you should be aware of. One rule is that customer purchases must be fully paid for on or before the settlement date. Two others include cash substitution violations and freeride violations.