I don't understand stock trading?

I don't understand day trading!!! I have researched like crazy, watched endless videos, played virtual games, watched the stock market from afar and I don't understand ANYTHING! Nobody can explain it to me, what is it? How does it work? How do you get started? How do you trade? How to you analysis the technicalities? Help please!!!! and don't answer "Don't do it then", I just need to know!!

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  • 8 years ago
    Favorite Answer

    To be a trader you must first learn how to invest. You must know the products and the markets in which they trade, how security transactions are cleared and more importantly you must know the rules that govern those products and markets. So you must know what you’re doing, why you’re doing it, and how to do it. You should start by reading “Investing for Dummies” by Eric Tyson.

    Here’s a list of books you should consider, at least read half of them

    Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea

    How to Trade in Stocks, Jesse Livermore

    Millionaire Traders, Lein & Schlosberg

    One Up on Wall Street by Peter Lynch

    Reminiscences of a Stock Operator, Edwin Lefevre

    The Disciplined Trader, Mark Douglas

    Trader Vic-Methods of a Wall Street Master, Victor Sperandeo

    Trader Vic II-Principles of Professional Speculation, Victor Sperandeo

    Trading for a Living, by Alexander Elder

    Trading in the Zone, Mark Douglas

    And when you think you want to trade, try some paper trading to test your skills without spending you money http://simulatorinvestopedia.com/ http://www.moneyworks4me.com/

    and/or http://www.tradingsimulation.com/

    Before you enter your first order you need to address four major policies and have very strong discipline to follow them

    1 - You need a written sound trading/investment plan with rules that will not only help you but more importantly protect you, mostly from yourself. Always use stops either to protect you on the down side or to lock in profits on the up side. Never trade on emotions, when emotions get involved walk away. Don’t try to out-smart the market, you’ll loose but if you always take what the market is willing to give you, you’ll be successful. Other words, you don’t trade against the trend since the market is always right. And NEVER trade on emotions, once you let emotions in your trades you will loose

    2 - A written money management program is essential. Remember never invest 100% of your capital into any one security and never have 100% of your capital invested. Never go into a trade without knowing when and where you are going to get out of it. Never let a loss on a trade get greater than 8%-10%, always take you loss and walk away - don't loose more than you need to and don't be afraid to take the loss. Remember you never can get hurt taking a profit. Never average down, but you can average up.

    3 - You must have sufficient trading/investment capital. Use your own money, there’s no need to go into debt so that you can trade and/or invest. Margin can be used but only with restraints, never let the account wall below 45% equity. Unless you fully understand margins you should not use it.

    4 – A full and complete understanding of the rules & regulations of the industry. If your going to play in the game be sure you know the rules of the game and always follow them.

    Unless you are willing to study and follow the above you will never make it as a trader. You're not going to get your answers here on YA. To be successful as a trader it takes work and constant study of the markets and the products traded in those markets, there is no easy way.

    Source(s): from the street
  • Anonymous
    4 years ago

    1

    Source(s): Make Money Investing in Stocks http://teres.info/TheTradingCode
  • Irv S
    Lv 7
    8 years ago

    Trading itself is simple:

    You put money in a brokerage account, and you instruct the broker by phone,

    EMail, etc. what to buy with it, and when to sell what you've bought.

    You pay commissions on the 'trades' and sometimes a fixed periodic account fee

    for the service. You can even sign up for some of them on line.

    They will explain further, and probably even offer the 'service' of advising you on

    where to put your money. Basically you pay them to take risks with your money

    where you pay them fees whether you win or lose.

    As to the rest " analysis the technicalities?" - means you have some idea that

    the market can be expected to behave rationally. FORGET THAT.

    You try to catch which direction they are running in, join them early,

    and get out quick when they start to change directions.

    You want advice? DO get into the market, (The dollar can only lose 'value' as

    they continue to print more and more money.

    Don't speculate. Invest in stock of known companies with good products that pay

    dividends, and not too much in any one of them.

    Coke, General Mills, Weyerhauser, Johnson & Johnson, Ford, .......

    Funds etc. - If you don't understand it, you don't want it.

    Always know what 'management costs' you pay to hold the thing.

    most of the time it's not worth it.

    Watch what you own.

    You can get free stat.s, prices, and latest news /rumors brokers opinions, on anything in the

    Yahoo, Google, or AOL 'finance sections'.

  • 8 years ago

    If you ignore the answer from A Nobody, you'll never make it in day trading. He's given you the tools you need to get started.

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  • 8 years ago

    In day trading, you need none of those. All that requires is understand the real time market momentum. Catch the split second opportunity to make money. Technical analysis is out of the window before your opportunity would have been long gone before you finish your analysis.

  • 8 years ago

    go to investopedia.com and read up on stocks. it'll take too long to answer all your questions here. all of the basics are there.

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