I have some newbie questions

[3006]

Hi folks-

I'm completely new to the world of stocks and trading, and I have some very basic questions (they may seem like dumb questions, but I have to start somewhere!).

Let's say I want to get started in day trading, now besides all the knowing what/when to buy/sell, what do I do to actually buy/sell stocks?
Step 1, I sit down at my computer...
Step 2, then what??? I would think I need to transfer money from my bank account to somewhere where I can choose the stocks I want to buy? Is that correct? What's that called?
A 'broker'? My vague understanding is that it is what one usually goes through to buy/sell stocks?

I'm guessing that step 2 would generally involve opening an account on a website?? If that's correct, what are some examples of such websites?


I'm not actually planning on starting trading right away, just want to understand the basics right now.

Thanks in advance, I have a lot to learn!

 

[sun_wants]

Hi folks-

I'm completely new to the world of stocks and trading, and I have some very basic questions (they may seem like dumb questions, but I have to start somewhere!).

Let's say I want to get started in day trading, now besides all the knowing what/when to buy/sell, what do I do to actually buy/sell stocks?
Step 1, I sit down at my computer...
Step 2, then what??? I would think I need to transfer money from my bank account to somewhere where I can choose the stocks I want to buy? Is that correct? What's that called?
A 'broker'? My vague understanding is that it is what one usually goes through to buy/sell stocks?

I'm guessing that step 2 would generally involve opening an account on a website?? If that's correct, what are some examples of such websites?


I'm not actually planning on starting trading right away, just want to understand the basics right now.

Thanks in advance, I have a lot to learn!

Hi

Ok first decision you need to make before you can decide where to open an account is what vehicle your going to trade through..?

Its maybe even worth registering with a dummy trading account first to get used to the market so that you don't actually risk any capital. Very important point when you first begin.

Options open to you are standard share dealing,CFD's, Spreadbetting, Futures..?? I would recommend doing some research on those different options first and then you can find the best broker for the type of trading your looking to do.

Very simply - CFDs, Spreadbetting and Futures are all leveraged products which means you have a higher risk per trade but stand to make a greater gain.

Sun_wants

 

[3006]

Ok first decision you need to make before you can decide where to open an account is what vehicle your going to trade through..?

I'm not familiar with what you mean by 'vehicle'?


Another question I have, is what is a "trading platform"?

Opening a dummy trading account does sound like a good idea, are there any that can be recommended?

 

[3006]

I heard on the radio mention of a website called investingboomer, is that a platform, vehicle, broker??

 

[tomorton]

3006 -
Why must you start with day-trading? Why not develop your techniques and most importantly your psychological approach with a more extended time-frame before quickening the pace?
Ease of access to the markets is not ease of access to profits.

 

[Rhody Trader]

...,CFD's, Spreadbetting..

Being from the States, that stuff is out. We can't do that sort of thing over in these parts. Best just to stick with the simple stuff.

 

[Rhody Trader]

I'm not familiar with what you mean by 'vehicle'?


Another question I have, is what is a "trading platform"?

Opening a dummy trading account does sound like a good idea, are there any that can be recommended?

A vehicle is also known as an instrument. It's the specific type of thing you trade - common stock for example.

A trading platform is the software/website provided by the broker or your choice through which you enter trades and manage your account.

 

[rathcoole_exile]

3006, decide what you want to trade -
-individual stocks, of which there are thousands, ranging from IBM and Microsoft down to itty-bitty companies you've never heard of from Nowheresville, Arkansas.
- how about an index ? in simplistic terms, that's the sum of a whole group of stocks. So even though some companies may be rising in price, some falling, the index which generally be doing it's own thing as a result of the overall movement of it's components
- how about Forex ? Basically pairing up 2 currencies, say the U$D and the British Pound and selling or buying one currency against the other ?
- how about Commodities - oil, gold, wheat ?

What floats your boat ?

 

[barjon]

3006

have you looked at this http://www.trade2win.com/boards/first-steps/8332-t2w-first-steps-guide.html

cheers

jon

 

[sun_wants]

Interms of a dummy account try the following link

Capital Spreads Online Financial SpreadBetting - Spread Betting Commodities, Forex, Indices

By vehicle all I mean is which route/type of trading instrument are you going to use to access the market.

As an absolute begginer a standard Share dealing account will be the least risky option.

 

[kwilo]

Are there any ratings in this forum of the usefulness of the products sold in the onsite store to newbies in learning to trade?

 

[diagram-p]

It might be advisable to get a general understanding of what the market actually is before looking at the instruments traded on each one. For example what is a stock, bond, commodity and currency pair before more complex derivatives like options and futures.

Let's say a company wanted to raise £1M to grow it's business. The company has two main methods of doing this

1. To float the company on the stock exchange like the NYSE or LSE and sell shares in the company on these markets (these are your stocks)
2. To borrow the money at a certain interest rate from an investment bank (debt) the bank will then securitise this debt by stripping it into bonds and selling those bonds (mini debts) in the market.
3. Commodities are the raw materials that producers and manufacturers use to produce goods i.e oranges, soybeans, coffee, corn, oil etc
4. Foreign Exchange is trading is the buying and selling of currencies (like a huge bureua de change)

Each of these instruments trades on different exchanges and has differing levels of complexities. Given that the foreign exchange market is 24 hour, the commodities trade via a futures contract and the bonds may require an understanding of the credit/rates world it may be more advisable to start with stocks.

Then before jumping into opening an account it may be worth learning about the stock market, the psychology of trading, and money management.

 

[theroguetrader]

It might be advisable to get a general understanding of what the market actually is before looking at the instruments traded on each one. For example what is a stock, bond, commodity and currency pair before more complex derivatives like options and futures.

Let's say a company wanted to raise £1M to grow it's business. The company has two main methods of doing this

1. To float the company on the stock exchange like the NYSE or LSE and sell shares in the company on these markets (these are your stocks)
2. To borrow the money at a certain interest rate from an investment bank (debt) the bank will then securitise this debt by stripping it into bonds and selling those bonds (mini debts) in the market.
3. Commodities are the raw materials that producers and manufacturers use to produce goods i.e oranges, soybeans, coffee, corn, oil etc
4. Foreign Exchange is trading is the buying and selling of currencies (like a huge bureua de change)

Each of these instruments trades on different exchanges and has differing levels of complexities. Given that the foreign exchange market is 24 hour, the commodities trade via a futures contract and the bonds may require an understanding of the credit/rates world it may be more advisable to start with stocks.

Then before jumping into opening an account it may be worth learning about the stock market, the psychology of trading, and money management.

1) Basics of Dow Theory
2) Basics of Candlestick charting


If your spread betting, the complexity of derivatives (data in its individual contract spec) - whether theyre universals/index futures, currency forwards, commodity futures etc etc is pretty irrelevant, as theyre not exchange traded..
Spread betting will give you the opportunity of trading " fractions " of 1contract - which is no bad thing when your starting off -
If you steam into the futures market without a plan - you WILL get fried - and then youll either - get dissolutioned about it all and leave it be, OR through in experience try to " get back " at the market and end up in a DEEPER hole...... !!


take your time,enjoy the experience ...!!

 

[diagram-p]

1) Basics of Dow Theory
2) Basics of Candlestick charting


If your spread betting, the complexity of derivatives (data in its individual contract spec) - whether theyre universals/index futures, currency forwards, commodity futures etc etc is pretty irrelevant, as theyre not exchange traded..
Spread betting will give you the opportunity of trading " fractions " of 1contract - which is no bad thing when your starting off -
If you steam into the futures market without a plan - you WILL get fried - and then youll either - get dissolutioned about it all and leave it be, OR through in experience try to " get back " at the market and end up in a DEEPER hole...... !!


take your time,enjoy the experience ...!!

Does that mean you advocate spreadbetting before actually placing trades?