Wednesday, November 25, 2009

How to Move From Virtual To Real Stock Trading

Many people like to practice stock trading using paper money or virtual money first. That is a fun way to learn how the market works without losing your shirt. After becoming comfortable with virtual trading, you may be ready to trade in real life with real money. It is a scary concept, but it can be a rewarding one if done properly.

What You Will Need

What you will need to do first is find a good online stock brokerage. There are many of them out there, with a variety of features, benefits, and requirements for joining. It would be wise to comparison shop before choosing one. One of the best ways to do that is to ask friends and family if they use any and how they like them. Some of the important things to look for are:
- Commissions charged per trade ($5 to $25 is common)
- Monthly or annual fees (no fees is common)
- Services provided for free (real-time streaming charts are nice to have)
- Local branch offices available (nice to have but not necessary)
- Minimum cash required
- Age restrictions

Applying for a brokerage account is a lot like applying for a bank account. They are going to ask you many questions about yourself, your employment, and your trading history. Once approved, you will be able to transfer money into your account and begin trading shortly after that.

Virtual versus Real Trading

The biggest difference you will probably experience with real-life trading is the emotional factor. When you put hard-earned cash on the line, you will start to watch those prices and charts like a hawk. And when prices start to drop, you may feel the urge to panic and sell everything, whether it is a good idea or not. That is the emotion of fear, and it causes many, many investors to lose a lot of money, especially beginners. You cannot practice getting over this fear factor with fake money, so it is best to start with a small amount of real money, say five hundred dollars, and be prepared to lose a good chunk of it for the purposes of education. That should limit the emotional impact on your trading decisions.

Another good piece of advice is to follow the saying, "Plan Your Trade and Trade Your Plan." This means that before you place your buy order, you need to decide when or where you are going to sell. That includes how much profit you want to get out of the trade and also when to get out if the price drops a certain percentage. It may help to write the plan down on paper or use automatic limit or stop orders to execute your plan for you. Having a solid plan in place before trading should help limit the emotional impact on your decisions. Just tell yourself to wait and stick with the plan.

Nicholas Swezey is the creator of fantasy trading on his site,
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How To Setup An Online Stock Trading Account

The advent of the internet gave greater opportunity for stock trading. Traders could trade stock at their PCs in their own home and trade stock globally all through the day and night. Traders from rural areas can not only trade stock online but get real time news and stock quotes instantly on the internet. Comparing online discount brokers is helpful and suggested.

The first step before setting up a stock trading account is to get all the equipment required for effective stock trading. A good computer and large size monitor or three monitors will do the job for a beginner. Good trading software will help easy trading once the account is set up. A high speed internet broadband connection is required to get instant stock quotes, to communicate instantly with the stockbroker and to make quick decisions based on the inflow of stock information. A good UPS will ensure constant power supply.

The second step is to find a reliable trading platform. Online reviews, articles in the newspaper, the past experience of friends and relatives and the Better Business Bureau are good resources to find the background of broker firms. The Federal Trade Commission has a list of violations by broker firms on their website. FINRA the Financial Industry Regulatory Authority has a Broker Check tool on their website to help potential traders evaluate brokers.Before setting up the account the trader should test the support provided, and the customer service of the broker by asking questions to the broker. The trader should check if the portfolio of the broker has all the trade groups that the trader is interested in. Statements and transactions should be instantly viewed online to help traders mitigate losses if any. Many brokers have demo trade facilities. Traders can check them out before signing up to see if the trading style is suitable to their unique needs. Traders must shop among brokers to find the most affordable broker who offers a spectrum of facilities and tools for easy trading. Brokers should also help traders by doing the required research about the stock, arrange bank deposits and withdrawals and give advice on tax implications to traders.Once a good trading platform and broker is chosen, traders can sign up. A form will be presented on the website. Traders will need to enter their personal details like their name, address and telephone number.

Generally potential traders need to be adults. If children are attempting to trade, the parent or guardian should act as custodian. The potential trader will need a bank account where profits can be deposited or payments for stock purchases can be withdrawn. A minimum balance may be stipulated by the broker.For security purposes a password and a password question will be required. In these days when there is an imminent danger of an identity thief misusing the identity of the trader, maximum safety is required. The broker's website may require entry of a security code before traders log in on the website.Setting up an online trading account is simple and user friendly. Signing up with the right broker is the hard part.

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Online Stock Trading

Ask the wealthiest of Americans what their secrets are to financial success, and they will most likely say that one of them is stock trading.

The 1980’s were particularly helpful to big-time stock investors – those who could afford to invest thousands upon thousands of dollars were able to double, even triple their incomes. Luckily, for the smaller investor, this is not the case anymore – the stock market has become more open to even to those with limited funds. Almost all companies now offer 401k accounts that enable all employees own a portion of the company. And thanks to the Internet, the market is even more open now. Online stock trading is enabling millions of Americans to make money in the stock market, even with minimal investments, without leaving their homes or offices.

Beginnings of Online Stock Trading

The 1990s saw the start of online stock trading when day traders ran up Internet stocks. These people made online trading so popular that nowadays, virtually anyone can trade stocks online.

Getting Started

To get started, you need to choose an online stock trading company, pay the membership fee (which can range from about $5 to about $20), and set up an account either for IRAs, money market funds, mutual funds, or trading of regular stocks.
Once you have set up an account, you can begin trading and managing your funds. Most online stock trading companies provide you with tools so that you can access the market in real time, quickly examine trends, and trade instantaneously.

Succeeding in Online Trading

Remember to regularly view your portfolio online. You have to make full use of the online trading company’s research facilities in order to maintain and grow your investments. Download the relevant financial reports that come for free with your membership. It is also wise to study the histories and performance evaluations of all stocks you want to trade.

Online Stock Trading provides detailed information on Online Stock Trading, Online Stock Trading Companies, Free Online Stock Trading, Online Stock Trading Games and more. Online Stock Trading is affiliated with Futures Trading Online Analysis.

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