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Online Stock Trading for n00bs

Discussion in 'Economics and Financials' started by SICK, Aug 26, 2011.

  1. SICK

    SICK Lounge Moderator

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    Hey, anyone on here day-trade? or have experience with the stock market? I want to invest and try to get involved more and more to eventually make a decent income off of trading.

    What are some tips? What online service do you use? (I just signed up at Scottrade, but dont have the 500 initial deposit right now)

    Anything you'd tell a friend trying to dabble in stocks to help them out? Thanks!
     
  2. byroan

    byroan Giggity Staff Member Administrator Luxury Box

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    Buy low and sell high. :lol:
     
  3. SICK

    SICK Lounge Moderator

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    Bingo! Im thinking of buying some shares in bank of america. less than 8 bucks a share? seriously? no way they fail....if they do, this country is doomed.
     
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  4. byroan

    byroan Giggity Staff Member Administrator Luxury Box

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    I've been thinking the same thing about BAC. I played around with some penny stocks and made a little bit of money, they're a huge gamble though. A lot of those companies put out fake PR's.

    I've done better with sports betting.
     
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  5. alen1

    alen1 New Member

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    Not sure I would do that. They are a flat-line and have been for about three years from what I gathered. Kind of like Microsoft IIRC.

    Check out Google.com/finance and marketwatch.com for quotes. Just type in the name and you'll see the stock symbol appear on a drop down menu. Click it and you'll get information. Marketwatch.com is nice because it gives you a year to three years to five years of stock.
     
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  6. padre31

    padre31 Premium Member Luxury Box

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    There was another thread about this sick and the book "Day Traders Survival Guide" can be found on amazon for cheap, it gives a really good primer on what that is all about, the mechanics of the smaller investor dealing in stocks is not like "so I buy this stock today, and tomorrow it goes up, so I roll it over and then by company Z tomorrow".

    As for tips, since Duke Power was bought out, hmm, try Yum Brands.
     
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  7. Paul 13

    Paul 13 Chaotic Neutral & Unstable Genius Staff Member

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    Keep in mind, the lower the stock price, typically the greater the risk. If you think the market is going to go down, try SDS. If you actually think it's going up, try SSO. That's all for now.... :shifty:
     
  8. maynard

    maynard Who, whom?

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    my advice is dont lol. the deck is really stacked against the regular day trader. high frequency trading can push you right out when you dont have a lot of cash to absorb losses. the market is insane right now. my advice is to save some money and spread it out over some ETFs

    of course, some people can make money and pick stocks but its not easy, even if you know the fundamentals and can do some technical analysis.

    the forex market can be fun though
     
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  9. maynard

    maynard Who, whom?

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    oh one more thing. if bernanke announces QE3, it would be a good time to buy into some broad stuff. the market has gone up with each QE. your risk would be a lot less than it is now i would think
     
  10. maynard

    maynard Who, whom?

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    christ. no QE3... DJIA down around 400 for the day. its ridiculous
     
  11. unluckyluciano

    unluckyluciano For My Hero JetsSuck

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    boa just got downgraded. Might want to sell your stock lol
     
  12. unluckyluciano

    unluckyluciano For My Hero JetsSuck

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    I would also wait a bit before I buy stock. Greece is killing the market atm.
     
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  13. maynard

    maynard Who, whom?

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    Sure would be nicee if this were 1993. The average guy could do very well for years. We are just in a bad cycle and little stability.

    Sent from my DROID2 using Tapatalk
     
  14. texasPHINSfan

    texasPHINSfan New Member

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    I'm going to bring this back because A) I want to talk about stocks, and B) I just did a BAC trade and made good $$

    I bought BAC back in late December IIRC around $5/share and rode it up to $8/share and sold it about two weeks ago. I would never want to own BAC on fundamentals, but on technicals - watching the chart - I saw an opportunity and jumped on it.

    For trading, two GREAT sites I use for analysis is www.stockcharts.com and www.finviz.com. Both have excellent visualization tools to help you make educated decisions.

    some things I look at when buying a stock:

    1) RSI - the relative strength index. Usually anything under 30 is a "buy" signal, anything over 70 is a "sell" signal (unless the company is poorly run).

    2) Insider trading - I'm watching how the insiders are trading the stock. Finviz shows you this - whether they are buying up the stock or unloading it. This can be a good tell because if the board members are dumping the stock, they may not have faith in the near-term future of the company or earnings reports. Conversely if the board members are buying up the stock left and right, that could tell you positive things for the future of that company. This doesn't always hold true, but it is another good "tell"

    3) Don't forget your technicals! For those that don't know, technicals are the chart & patterns. Fundamentals are the income statement, balance sheet, etc. It's not that fundamentals aren't important -just that most day trading is driven by chartists; you can almost always follow technical formations to fruition in the market. Fundamentals are still important - I look at fundamentals secondary to technicals.

    4) watch that P/E ratio. P/E is price divided by earnings. You don't want to own something that is trading at too high a number versus earnings. Personally I'm wary of any stock with a P/E over 25, and if the P/E is under 15 my ears will perk up. I believe the overall S&P has a P/E of around 15. People often call stocks "cheap" if they're trading under $10/share. That's misleading. A "cheap" stock is a stock with a low P/E, not a stock with a low share price. AAPL - trading at $543/share right now, has a P/E of only 15 - a "fairly" valued company... maybe even considered "cheap" despite being $543/share. Compare that to Verizon, which is trading at $38/share right now, cheaper than Apple. BUT, the P/E of Verizon is 45 - wayyyy overvalued. That means people are essentially paying $45 for every $1 of earnings that Verizon has. Yikes.

    5) buy on gap downs. Bigger companies that have gap-downs off poor earnings reports are ripe for picking up and riding the rebound wave. This isn't always true - the company still has to have a positive outlook. RIMM is an example of a company that has had gap downs and I still wouldn't buy. I'm not confident in that leadership team and that company is looking dead in the water. You can look up gap downs on finviz or stockcharts.com

    6) Dividend payers can't cook the books. Want to avoid Enron and MF GLobal situations? Companies that pay a dividend have to have cash on hand, and cannot cook numbers as easily. While I don't only buy dividend paying stocks, it's a safer place to start for the novice investor or someone who is concerned with capital preservation.
     
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  15. unluckyluciano

    unluckyluciano For My Hero JetsSuck

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    for noobs cash on hand is liquidity.
    What site do you use? How much did you have to have on hand to trade? I'm looking for a good site where I don't have to have X amount of cash on hand to start trading.
     
  16. texasPHINSfan

    texasPHINSfan New Member

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    I'm an actual broker so I can do it at work through our internal system. Unfortunately I don't know much about the online wirehouses - but they have minimums for a reason.

    If you can't scrap together the minimums, I wouldn't recommend investing it - and I'm not trying to be rude here. Save that money first, then after you've built up a nice savings cushion, THEN invest with additional monies later. Savings > investing :up:
     
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  17. Boik14

    Boik14 Admin Club Member Retired Administrator

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    1. When youre dealing with investments, you treat it the same was gambling in Vegas (albeit with better odds): You only gamble what you can afford to lose. If you cant afford to lose it, wait until you can. Otherwise when it happens, and it happens to everyone at some point, youre going to be pounding a table screaming FML.

    2. Many sites or their 800 numbers will give you x amount of free uncommissioned trades when you first sign up. Look for those first.

    3. Everyones investment patterns differ. Personally, at this point the market has such volatility that I dont believe much in long term investments. Everything I do is short term. Long term used to be viewed as a 2-5 year investment. Long term to me nowadays is 2-5 months. I do mostly trading in volatile stocks such as oil, tech and futures (gold, silver). Your risk is greater but so is your potential upside if you look at them right. P/E is a great start as is dividend paying. I like to chart a stock for a month on a spreadsheet before I invest and get all the news in. If I miss a spike, fine because it could just as easily been a dip...which leads to my next point.

    4. Dont be jealous the guy next to you won. That is treat it like Vegas again. If you see the guy at the craps table winning we all have an urge to go right over, plop down a chunk of cash, and get our cut. Well it doesnt work that way. take a more practical approach. The guy next to you won who was a step quicker. Thats good for him and sucks for us, live to fight another day. Dont just rush in, just cause.

    Hope that helps
     
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  18. texasPHINSfan

    texasPHINSfan New Member

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    wise words.

    In other news, I shouldn't have sold BAC. I assumed it had topped out and would correct a bit, but it kept going up. Now it's almost $10/share.

    I'm happy with Apple though. That stock is a virtual freight train.
     
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  19. MikeHoncho

    MikeHoncho -=| Censored |=- Club Member

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    When in doubt, just buy it.
     
  20. Boik14

    Boik14 Admin Club Member Retired Administrator

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    Amazingly effective way to lose money.
     
  21. texasPHINSfan

    texasPHINSfan New Member

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    Apple starting to roll over. If I'm a day trader I'm selling here (well, two days ago actually). Long-haulers don't need to worry.
     

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