By Steve B Wise
No discussion about day trade margin would be complete without taking the time to quickly define margin as it applies to trading accounts - be it stock, treasuries, or leverage forex accounts. To those new to trading with a leverage forex account or other amplified trading account: trading with leverage is extremely risky and can provide very high returns if executed well. Two things to consider before beginning are having enough capital to satisfy your broker's account requirements, and how to setup your account to avoid a call on the account or worse: a default situation on a trade - resulting in liquidation of the collateral assets of the trader.
Day trade margin really is too broad a term - as there are several layers of account protection for both the trader and the broker. The broker establishes the rules for the day trade margin account and the trader funds it with cash, securities and or other collateral to ensure the ultimate liquidity of the trader's positions should things go horribly wrong on his or her trades.
Before we go too much further we need to define some terms related to day trade margin. Each of the following types of margin rules must be followed in order to maintain good account status. Failure to do so may result in liquidation of assets (an outcome to be avoided at all costs). A few definitions:
Minimum: Refers to the amount of capital or collateral a trader must have placed with his or her broker prior to trading. Rules state it must be at least the lesser of $2000 or the cost of the trade.
Initial: This varies based on the type of security traded, but basically is a percentage of the purchase price of the assets bought. Maximum for stocks is 50%(2:1 leverage), bonds range from 25%-50%, and currency can be as little as 0.25% (yes... 400:1 leverage).
Maintenance: The amount of equity below which a trader must not allow his account to fall. Falling below this level results in a call on the account - which could be cause for asset liquidation - a devastating blow to an account.
The best bang for the buck on a day trade margin account is by trading forex.
Wednesday, September 2, 2009
Tuesday, August 25, 2009
Learning to Day Trade - Don't Make the Same Mistakes That Others Do
By John Templeton
I understand the idea of learning how to day trade the forex market may scare off a lot of people. I think most new traders are really afraid to make the same mistakes that a lot of veteran traders make. Yet, they still are fascinated with the idea of making money from the comfort of their own home.
But they think that only the real "experts" can make money day trading the forex market. It's not meant for the average Joe and Jane.
This is just simply not the case. There is no age, education, or intellectual limit that has to be met to learn how to successfully day trade the forex market. You'd be stunned to know that there are many successful day traders who never even completed high school. So, relax and stop thinking that you need a Masters degree from an Ivy League college to be able to do this.
Day trading really boils down to having a strong grasp of technical analysis. There is no way to get around this. It's a prerequisite of day trading. Now, according to what you may have heard, technical analysis does not mean putting a stochastic indicator on your chart, and buying when it's below 20 and selling when it's above 80. I am afraid you are going to have to dig a little deeper than that.
Stochastic or any other lagging indicator isn't going to get it done. Indicators like this are the exact opposite of "technical analysis".
I understand the idea of learning how to day trade the forex market may scare off a lot of people. I think most new traders are really afraid to make the same mistakes that a lot of veteran traders make. Yet, they still are fascinated with the idea of making money from the comfort of their own home.
But they think that only the real "experts" can make money day trading the forex market. It's not meant for the average Joe and Jane.
This is just simply not the case. There is no age, education, or intellectual limit that has to be met to learn how to successfully day trade the forex market. You'd be stunned to know that there are many successful day traders who never even completed high school. So, relax and stop thinking that you need a Masters degree from an Ivy League college to be able to do this.
Day trading really boils down to having a strong grasp of technical analysis. There is no way to get around this. It's a prerequisite of day trading. Now, according to what you may have heard, technical analysis does not mean putting a stochastic indicator on your chart, and buying when it's below 20 and selling when it's above 80. I am afraid you are going to have to dig a little deeper than that.
Stochastic or any other lagging indicator isn't going to get it done. Indicators like this are the exact opposite of "technical analysis".
Monday, August 10, 2009
The Big Bad D - Day Trade
By John H. Anderson
The day trade that exists in the market is the one thing that most traders should have avoided and must avoid at all costs. I know I sound like a tired old man when it comes to this, but I really do not see the advantage of trading in the day trade market. I have received countless emails asking me why I am so against the day trade market and this is because it does not make any financial sense.
You need the stamina of a financial horse to be able to get into the game on a daily basis and make sure that you get the pips necessary to make your day at the market profitable. But the thing is, not everyone can do this, and in my books, 99% of the traders in the world cannot do this. Those who are doing this, and those who I know personally have plethora of computing power, systems up the wazoo and enough white hair to make a wheat field.
You have to know the market so well, your technical analysis must be so spot on, that you cannot almost go wrong in your trading. And these people make mistakes all the time, although they can keep it down to a minimal 2 - 4 a week. Can you do this? I would tell you now. No. And I am not saying that there is probably people out there that can day trade if they wanted to, but if they are those type of people, they should be joining a bank right now and make some serious money as an advice trader.
The other set of people that actually go about in the day trade are massive companies that have access to billions of dollars, and because of this, they are able to make their day on the market profitable. They also have an army of market analysts and traders to help to make positions and win trades. The ratio of the people that have actually succeeded as beginners on the day trading market is, in my memory and experience, is about less than 1%. So, if you are new in the Forex market, trading stocks and futures, all you need to do is to do everything but day trade.
The good thing is that most people out there realise the power of the market already, and they do not need to go to super advanced methods of trading like this. Look at the market and see it for yourself. Look at the day trade statistics, you can see that there is really a question of one sided profit taking in a market that is designed to buy and sell and keep itself profitable. So, when you trade, trade smart. That is the advice that I give most people all over the world when people asking me about trading and the various trading platforms that are out there. So, good luck in your trading and remember, always trade with patience and some knowledge.
The day trade that exists in the market is the one thing that most traders should have avoided and must avoid at all costs. I know I sound like a tired old man when it comes to this, but I really do not see the advantage of trading in the day trade market. I have received countless emails asking me why I am so against the day trade market and this is because it does not make any financial sense.
You need the stamina of a financial horse to be able to get into the game on a daily basis and make sure that you get the pips necessary to make your day at the market profitable. But the thing is, not everyone can do this, and in my books, 99% of the traders in the world cannot do this. Those who are doing this, and those who I know personally have plethora of computing power, systems up the wazoo and enough white hair to make a wheat field.
You have to know the market so well, your technical analysis must be so spot on, that you cannot almost go wrong in your trading. And these people make mistakes all the time, although they can keep it down to a minimal 2 - 4 a week. Can you do this? I would tell you now. No. And I am not saying that there is probably people out there that can day trade if they wanted to, but if they are those type of people, they should be joining a bank right now and make some serious money as an advice trader.
The other set of people that actually go about in the day trade are massive companies that have access to billions of dollars, and because of this, they are able to make their day on the market profitable. They also have an army of market analysts and traders to help to make positions and win trades. The ratio of the people that have actually succeeded as beginners on the day trading market is, in my memory and experience, is about less than 1%. So, if you are new in the Forex market, trading stocks and futures, all you need to do is to do everything but day trade.
The good thing is that most people out there realise the power of the market already, and they do not need to go to super advanced methods of trading like this. Look at the market and see it for yourself. Look at the day trade statistics, you can see that there is really a question of one sided profit taking in a market that is designed to buy and sell and keep itself profitable. So, when you trade, trade smart. That is the advice that I give most people all over the world when people asking me about trading and the various trading platforms that are out there. So, good luck in your trading and remember, always trade with patience and some knowledge.
Monday, August 3, 2009
Time to De-Consider the Day Trade
By John H. Anderson
This is really a fact that I have been stressing for a long time now. Day trade and the trading that comes with it is something that should be avoided at all costs and I am not kidding when I say that there are more failures that I can count in my years of experience in trading than there are people who have actually won out. Of course, there are those who will boo me from the stands and roll out the charts and profits by financial companies who specialise in the day trade, but for the matter of the fact, these are massive companies who have large access to resources and they also are not showing you their books.
So, do you have millions of dollars at your beck and call? Do you have a whole host of staff working day and night looking at the market so hard their eyes might be bleeding? No. Day trading is tough, it really is. I know because I have actually tried it and I tried to for 3 years. It is a dog eat dog world out and you must consider that the very reason you are in the market is to make sure that its liquidity is there and that buyers will be there most of the time. Basically then, the whole reason that you are there is so that you can give other people money.
Yes, I made money on the day trade, but when you compare with the money that can be made in other trades which are not so stressful, it does not add up. And i did not win all the time. In fact, I lost a lot of the times, and had to relearn my trading techniques because the game is really something unique. They take the weight off their feet in front of computer screens and search for a stock that is moreover moving up or down in price.
They feel like they need to ride the impetus of the stock and get out of the stock way before a negative price change occurs. They don't know for sure how the stock will move about, but they're on tenterhooks that it'll shift in a single course, either up or down in worth. And this is the life of the day trader, constantly on the edge of their seats and sweating buckets. In any case, you should know that true day traders don't own any stocks during the night because of the tremendous danger that prices will modify fundamentally from one day to the next, leading to great losses.
You must gaze at the market incessantly throughout the day at your processor. It's tremendously easier said than done and demands huge attentiveness to look at dozens of ticker quotation marks and cost fluctuations to mark market trends. You'll also have far above the ground payments, paying your firms a huge quantity for their services, for tuition and central processing units. This is why you need to de consider the Day trade.
This is really a fact that I have been stressing for a long time now. Day trade and the trading that comes with it is something that should be avoided at all costs and I am not kidding when I say that there are more failures that I can count in my years of experience in trading than there are people who have actually won out. Of course, there are those who will boo me from the stands and roll out the charts and profits by financial companies who specialise in the day trade, but for the matter of the fact, these are massive companies who have large access to resources and they also are not showing you their books.
So, do you have millions of dollars at your beck and call? Do you have a whole host of staff working day and night looking at the market so hard their eyes might be bleeding? No. Day trading is tough, it really is. I know because I have actually tried it and I tried to for 3 years. It is a dog eat dog world out and you must consider that the very reason you are in the market is to make sure that its liquidity is there and that buyers will be there most of the time. Basically then, the whole reason that you are there is so that you can give other people money.
Yes, I made money on the day trade, but when you compare with the money that can be made in other trades which are not so stressful, it does not add up. And i did not win all the time. In fact, I lost a lot of the times, and had to relearn my trading techniques because the game is really something unique. They take the weight off their feet in front of computer screens and search for a stock that is moreover moving up or down in price.
They feel like they need to ride the impetus of the stock and get out of the stock way before a negative price change occurs. They don't know for sure how the stock will move about, but they're on tenterhooks that it'll shift in a single course, either up or down in worth. And this is the life of the day trader, constantly on the edge of their seats and sweating buckets. In any case, you should know that true day traders don't own any stocks during the night because of the tremendous danger that prices will modify fundamentally from one day to the next, leading to great losses.
You must gaze at the market incessantly throughout the day at your processor. It's tremendously easier said than done and demands huge attentiveness to look at dozens of ticker quotation marks and cost fluctuations to mark market trends. You'll also have far above the ground payments, paying your firms a huge quantity for their services, for tuition and central processing units. This is why you need to de consider the Day trade.
Sunday, June 28, 2009
How to Day Trade For Living - 5 Quick Tips
By Peter Skotnicky
The real meaning of day trading comprises mainly of buying and selling of financial equipment on one day duration of trade. Unlike the long-term type of investment, day trading offers almost limitless opportunities for investors and promises immediate results, that is, of either profit or loss. In addition, this is again that kind of business wherein fortunes are made or dreams are shattered on a daily basis. So with that, it is very important for investors like you to have what it takes to succeed in this kind of trading, and enjoy great benefits it offers.
Given the moniker as "adrenaline junkies", and better suited for it for good measure, investors in day trading have found the necessity of mastering two or more of the strategies when it comes to dealing the business in the stock market. As implied above, day trading has its good share of advantages and downsides. And the amount of success, or bereft of it, will be determined also by the amount of effort you exert in preparing yourself by learning the proper techniques and applying the right strategies during a day trade, which can help you in making calculated steps in all your investments in the stock market. Yet again, it should be said that there have been many people who have made a good living in day trading, and even earning millions of dollars out of this kind of trade.
That said, this article provides you now the 5 invaluable quick tips on how to day trade for a living, which can certainly serve you as an excellent guide in getting the best return in your investments. The following are:
1. Trend Trading
It incorporates the idea of supporting the stock, commodities, or options that are on the rise by buying them, or selling those that are on the decline in the market. Day traders would make the trade by following the trend of the day, and would eventually exit the trading platform when the trend changes course. This technique is said to have developed out of common sense among investors and work effective to some investors.
2. Contrarian Trading
As the term suggests, this second tip is the exact opposite of Trend Trading. The investors use this strategy by buying financial equipment that are on the decline, and selling those that are on the rise. This technique is all about good timing, anticipating the reverse of trend in the stock market.
3. Channel or Range Trading
Traders use this strategy by buying stock that are at their low prices and short selling stock at their high prices. This move will allow some balance in the stock market by supporting financial equipment that is falling.
4. Scalping
Scalping has been referred to before as spread trading. This strategy involves taking advantage of some price gaps that have resulted from bid-ask situation, exploiting profit opportunities while minimizing the risk of loss. The main idea of scalping is to take advantage of some imbalance in the market and make good investments out of it.
5. Trading Rumors or News Playing
This is the most common strategy used by many investors. Day traders have been using this technique as basis of their investment decisions in day trading. It suggests the idea of playing with available leads that are currently happening in the stock market, and making decisions based on some good trading rumors or on bad trading rumors.
Finally, like any business endeavors, the present risks in day trading can be aplenty. But how one deals with the risks can make the big difference of either great rewards or enormous losses. Furthermore, you need to have a good plan on when to make your entry trade or exit trade, and a good strategy or strategies before entering any trade. Those aforementioned quick tips and techniques have been developed to help you make the most out of day trading. Moreover, the other key to ensure your success in this field is the due-diligence that is required from all of us in the business.
Tackle the issues surround day trading by letting a professional software find the next big penny stocks for you.
The real meaning of day trading comprises mainly of buying and selling of financial equipment on one day duration of trade. Unlike the long-term type of investment, day trading offers almost limitless opportunities for investors and promises immediate results, that is, of either profit or loss. In addition, this is again that kind of business wherein fortunes are made or dreams are shattered on a daily basis. So with that, it is very important for investors like you to have what it takes to succeed in this kind of trading, and enjoy great benefits it offers.
Given the moniker as "adrenaline junkies", and better suited for it for good measure, investors in day trading have found the necessity of mastering two or more of the strategies when it comes to dealing the business in the stock market. As implied above, day trading has its good share of advantages and downsides. And the amount of success, or bereft of it, will be determined also by the amount of effort you exert in preparing yourself by learning the proper techniques and applying the right strategies during a day trade, which can help you in making calculated steps in all your investments in the stock market. Yet again, it should be said that there have been many people who have made a good living in day trading, and even earning millions of dollars out of this kind of trade.
That said, this article provides you now the 5 invaluable quick tips on how to day trade for a living, which can certainly serve you as an excellent guide in getting the best return in your investments. The following are:
1. Trend Trading
It incorporates the idea of supporting the stock, commodities, or options that are on the rise by buying them, or selling those that are on the decline in the market. Day traders would make the trade by following the trend of the day, and would eventually exit the trading platform when the trend changes course. This technique is said to have developed out of common sense among investors and work effective to some investors.
2. Contrarian Trading
As the term suggests, this second tip is the exact opposite of Trend Trading. The investors use this strategy by buying financial equipment that are on the decline, and selling those that are on the rise. This technique is all about good timing, anticipating the reverse of trend in the stock market.
3. Channel or Range Trading
Traders use this strategy by buying stock that are at their low prices and short selling stock at their high prices. This move will allow some balance in the stock market by supporting financial equipment that is falling.
4. Scalping
Scalping has been referred to before as spread trading. This strategy involves taking advantage of some price gaps that have resulted from bid-ask situation, exploiting profit opportunities while minimizing the risk of loss. The main idea of scalping is to take advantage of some imbalance in the market and make good investments out of it.
5. Trading Rumors or News Playing
This is the most common strategy used by many investors. Day traders have been using this technique as basis of their investment decisions in day trading. It suggests the idea of playing with available leads that are currently happening in the stock market, and making decisions based on some good trading rumors or on bad trading rumors.
Finally, like any business endeavors, the present risks in day trading can be aplenty. But how one deals with the risks can make the big difference of either great rewards or enormous losses. Furthermore, you need to have a good plan on when to make your entry trade or exit trade, and a good strategy or strategies before entering any trade. Those aforementioned quick tips and techniques have been developed to help you make the most out of day trading. Moreover, the other key to ensure your success in this field is the due-diligence that is required from all of us in the business.
Tackle the issues surround day trading by letting a professional software find the next big penny stocks for you.
Wednesday, June 17, 2009
How to Find the Best Day Trading System to Make You Money in the Day Trade Market
By Jonathan Langley
Day trade systems have been generating winning picks for a number of inexperienced traders for some time now. How it works and what it is basically is a program which uses algorithms which look at successful trends of the distant and recent past, and specifically the factors which lead to those trends to form. These algorithms then apply this information to current, real time market data to look for similarities to further investigate, and eventually once it's found what it deems as being a profitable trade, it notifies you accordingly so that you can in turn trade accordingly.
Given that this technology has made a great deal of money for traders of all different walks, of course a number of knock off scam products were created in an effort of making a buck off of the genuine product's success. As such, it's difficult to separate the good from the bad or even know what to look for, so here are a couple of important things to look for in finding the best day trading system.
A money back guarantee is a great way to separate the good from the scams and find the best day trading system in many cases as it's almost becoming a standard that reputable products/publishers can make this offer and guarantee to stand behind their product this way. This also of course gives you the opportunity to test a program first hand to gauge its effectiveness.
Many publishers encourage this even, and you don't even have to risk any money to tell if these picks are any good as you can simply follow along the picks which the system generates and you can see how they perform and base your ultimate decision on that.
Another thing to look for in the best day trading system is to make sure that it primarily deals in penny stocks. This is because these are typically lower risk investments but still carry a great deal of profit potential as it's not uncommon for a penny stock to quickly double in value quickly in short bursts, enabling you to make quick gains here or there, that is if you have the best day trading system at your hands.
Day trade systems have been generating winning picks for a number of inexperienced traders for some time now. How it works and what it is basically is a program which uses algorithms which look at successful trends of the distant and recent past, and specifically the factors which lead to those trends to form. These algorithms then apply this information to current, real time market data to look for similarities to further investigate, and eventually once it's found what it deems as being a profitable trade, it notifies you accordingly so that you can in turn trade accordingly.
Given that this technology has made a great deal of money for traders of all different walks, of course a number of knock off scam products were created in an effort of making a buck off of the genuine product's success. As such, it's difficult to separate the good from the bad or even know what to look for, so here are a couple of important things to look for in finding the best day trading system.
A money back guarantee is a great way to separate the good from the scams and find the best day trading system in many cases as it's almost becoming a standard that reputable products/publishers can make this offer and guarantee to stand behind their product this way. This also of course gives you the opportunity to test a program first hand to gauge its effectiveness.
Many publishers encourage this even, and you don't even have to risk any money to tell if these picks are any good as you can simply follow along the picks which the system generates and you can see how they perform and base your ultimate decision on that.
Another thing to look for in the best day trading system is to make sure that it primarily deals in penny stocks. This is because these are typically lower risk investments but still carry a great deal of profit potential as it's not uncommon for a penny stock to quickly double in value quickly in short bursts, enabling you to make quick gains here or there, that is if you have the best day trading system at your hands.
Friday, May 8, 2009
Learn to Day Trade
By Anthony Crognale
A lot of people are going to be needing financial freedom in the coming months of this fiscal year due to all the problems that the United States of America's economy is currently experiencing. This should never deteriorate you from beginning a life in the art of investing. There are many techniques that you can use for investing but I'm here to tell you about a very exciting one that is for fast paced individuals who have a desire to keep up with the news in the world and make money on a daily basis.
Let me start off by explaining what day trading is. Day Trading is the art of investing in a company that has huge potentioal for great short term returns. Let's say I buy 3 shares in a penny stock. Any penny stock will do for my example. What I'm going to do is pick a penny stock that has potentially from something like recent mention in the news as a product was approved by a group like the FDA. I'll sit back and wait for the share prices to raise as soon as I buy my 3 shares.
I now wait for anywhere between a few hours or a few days, but as soon as I see the stock start to falter, I see the words SELL written on every object around me. For a typical penny stock using the day trading technique, lets say it'll start off at $0.31 a share. Through the "4 hours" that we held on to this stock, it rose to $0.51 a share. We have made $0.60 in profits. Of course that's not that much, but when you are buying thousands of shares in the penny stock area, you get much more large results.
There are many more techniques that you can use to learn for investing, so I'd recommend going to a local bookstore and buying some quality investment books.
A lot of people are going to be needing financial freedom in the coming months of this fiscal year due to all the problems that the United States of America's economy is currently experiencing. This should never deteriorate you from beginning a life in the art of investing. There are many techniques that you can use for investing but I'm here to tell you about a very exciting one that is for fast paced individuals who have a desire to keep up with the news in the world and make money on a daily basis.
Let me start off by explaining what day trading is. Day Trading is the art of investing in a company that has huge potentioal for great short term returns. Let's say I buy 3 shares in a penny stock. Any penny stock will do for my example. What I'm going to do is pick a penny stock that has potentially from something like recent mention in the news as a product was approved by a group like the FDA. I'll sit back and wait for the share prices to raise as soon as I buy my 3 shares.
I now wait for anywhere between a few hours or a few days, but as soon as I see the stock start to falter, I see the words SELL written on every object around me. For a typical penny stock using the day trading technique, lets say it'll start off at $0.31 a share. Through the "4 hours" that we held on to this stock, it rose to $0.51 a share. We have made $0.60 in profits. Of course that's not that much, but when you are buying thousands of shares in the penny stock area, you get much more large results.
There are many more techniques that you can use to learn for investing, so I'd recommend going to a local bookstore and buying some quality investment books.
Wednesday, May 6, 2009
Online Stock Trading - Advantages and Risks
By Micheal James
Online stock trading is a common phenomenon for big institutions, who have been involved in it through online network of Reuter's "Instinet" and a system called "Posit" since the 1960s. However, it has become the "trend of the day" for all only since the late 1990s. Any why not; online trading has several advantages for investors:
• Investors do not have to bargain with customers, suppliers, or salespeople as a businessman.
• They do not have to travel on work.
• They can plan their work or time to be devoted on stock trading and plan vacations accordingly.
• The most important one, investors can live in any part of the world and can trade in the opposite part of the world through the click of a mouse.
• Also, this does not require one to be in front of a computer all day! It has to be according to when the stock market opens and closes.
• The investments made are based on independent research of the investors and there is no dependence on the advice of a broker; this is especially advantageous for an experienced investor.
With more and more investors opting for online trading brokerage firms are also trying to provide them with greater facilities. Generally, an investor can open an account with US $5000 with any firm and trade in stock. A check book or an ATM card can be used to make payments for trading. Online stock trading has reduced the operational costs of these firms as they do not have to house an "army of brokers" for stock trading. Hence, they provide the following advantages:
• "Seamless Transactions" -- By integrating accounts, there is no possible wastage of time between placing of orders and their execution.
• Manipulation Prevention - Almost all firms send an e-mail confirmation to the account holder as soon as an order is executed.
• Safety and Security - They try to provide a secure network for transaction, such as the 128-bit encryption technology.
An investor can follow some simple tricks and tips for a safe and secure online stock trading:
• An investor should do technical analysis through good charting software to forecast the financial price movements based on the past. Good research is the key to a good investment.
• One should also do a fundamental analysis of the companies to invest in. The track record of the company can say volumes about the potential of a stock in the market.
• An investor should read the agreement with brokerage firm carefully as to how it defines the risks of hacking and who bears it. Investors involved in online trading should use only personal computers, install an OS (windows 2000 or XP) free from a "Keylogger" used for hacking, use firewall like "Zone Alarm Pro" to detect any suspicious software, and have the antivirus software updated as measures against hacking.
• Also, one should ignore emails recommending any stock (such as stock with low market capitalization), which can start with the words "highly confidential information."
Online stock trading is a common phenomenon for big institutions, who have been involved in it through online network of Reuter's "Instinet" and a system called "Posit" since the 1960s. However, it has become the "trend of the day" for all only since the late 1990s. Any why not; online trading has several advantages for investors:
• Investors do not have to bargain with customers, suppliers, or salespeople as a businessman.
• They do not have to travel on work.
• They can plan their work or time to be devoted on stock trading and plan vacations accordingly.
• The most important one, investors can live in any part of the world and can trade in the opposite part of the world through the click of a mouse.
• Also, this does not require one to be in front of a computer all day! It has to be according to when the stock market opens and closes.
• The investments made are based on independent research of the investors and there is no dependence on the advice of a broker; this is especially advantageous for an experienced investor.
With more and more investors opting for online trading brokerage firms are also trying to provide them with greater facilities. Generally, an investor can open an account with US $5000 with any firm and trade in stock. A check book or an ATM card can be used to make payments for trading. Online stock trading has reduced the operational costs of these firms as they do not have to house an "army of brokers" for stock trading. Hence, they provide the following advantages:
• "Seamless Transactions" -- By integrating accounts, there is no possible wastage of time between placing of orders and their execution.
• Manipulation Prevention - Almost all firms send an e-mail confirmation to the account holder as soon as an order is executed.
• Safety and Security - They try to provide a secure network for transaction, such as the 128-bit encryption technology.
An investor can follow some simple tricks and tips for a safe and secure online stock trading:
• An investor should do technical analysis through good charting software to forecast the financial price movements based on the past. Good research is the key to a good investment.
• One should also do a fundamental analysis of the companies to invest in. The track record of the company can say volumes about the potential of a stock in the market.
• An investor should read the agreement with brokerage firm carefully as to how it defines the risks of hacking and who bears it. Investors involved in online trading should use only personal computers, install an OS (windows 2000 or XP) free from a "Keylogger" used for hacking, use firewall like "Zone Alarm Pro" to detect any suspicious software, and have the antivirus software updated as measures against hacking.
• Also, one should ignore emails recommending any stock (such as stock with low market capitalization), which can start with the words "highly confidential information."
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