| This is what you need to know to start trading | | | | can profit from a falling stock price by selling the |
| stocks. Fast becoming a lucrative pursuit amongst | | | | stock first, then buying it back later. To do this, |
| those wishing to find another source of income, | | | | simply open up a sell stock quote ticket in your |
| trading stocks online is here to stay for good. Follow | | | | brokers platform and enter in the stock code and |
| these 3 easy steps and you could be placing your | | | | quantity of shares you wish to short sell. Learning |
| first stock trade within 1 week from now! | | | | how to short sell stocks is a powerful technique that |
| 1) Open a trading account with a reputable online | | | | allows you to profit in bear markets and when the |
| broker. | | | | market is going down. |
| Several well-known and trusted brokers are; | | | | The stock market is an auction based process, very |
| Interactive Brokers | | | | similar to that of Ebay, where buyers and sellers |
| TD Ameritrade | | | | meet and trade at an agreed price, if a item is in high |
| Scottrade | | | | demand bidders will increase their bids in order to |
| Charles Schawb | | | | secure stock, and sellers will raise their offers to sell |
| Etrade | | | | their stock for more money, and vice versa, when |
| Options Express | | | | demand dries up or supply increases sellers will lower |
| IG Markets | | | | their offers to attract bidders. This is how stocks |
| All the above brokers offer trading accounts to | | | | move up and down, when there is more buyers than |
| anyone in the world, and in most cases require only | | | | sellers the stock moves up, when there is more |
| $2,000 USD or equivalent to open an account. You | | | | sellers than buyers the stock moves down. Every |
| can trades stocks all around the world, and these | | | | time you purchase a stock, someone else has sold it |
| brokers offer some of the most competitive | | | | to you and vice versa when your short sell a stock. |
| commissions when it comes to start trading stocks. | | | | Now you know the basics of trading stocks, you |
| Keeping your trading costs low is critical to your | | | | need to form a trading system that outlines exactly |
| success as a trader. | | | | how you buy and sell stocks according to a defined |
| Opening a trade account is very easy, usually | | | | and proven strategy, read step 3 for instructions. |
| completed in 15 minutes using the broker online | | | | 3) Use a proven stock trading system. |
| application form, you will be notified within several | | | | You can't just buy stocks that you read in the |
| days of your account activation and funding details. | | | | newspaper and expect to make money, the market |
| You then log on to your bank account and transfer | | | | is very sophisticated and requires a little more work |
| funds to your trading account, this is similar to | | | | to extract consistent profits. A stock trading system |
| transferring to any other financial account. Once your | | | | tells you exactly what stocks and when to buy or |
| account is activated and funded (usually within a 1 | | | | sell them, this removes the biggest hurdle to |
| week time frame) you can log onto your brokers | | | | successful trading, emotions, no longer do you have |
| trading platform and begin trading. Read step 2 to | | | | to rely on your gut feel to making trading decisions, a |
| learn how stock trading works. | | | | proven trading system will do it for you. |
| 2) Understand how buying and selling stocks is done. | | | | The most used stock trading system by professional |
| Purchasing a stock is more easy than you think, for | | | | traders is pair trading. Pair trading is buying one stock |
| example if you wish to buy 100 shares of Microsoft, | | | | and at the same time short selling another similar |
| you would bring up a stock quote of Microsoft using | | | | stock. Stocks prices of similar companies are very |
| ticker MSFT in your brokers online trading platform, | | | | correlated and is something anyone can take |
| from there you would change the quantity on the | | | | advantage of. For example stocks Mastercard (MA) |
| buy ticket to 100 and click confirm or transmit order. | | | | and Visa (V) are both credit card companies, so their |
| Then you will see in your portfolio window that you | | | | businesses are affected by the same |
| hold 100 shares of MSFT. The cost of this purchase | | | | macro-economic and industry conditions and hence |
| will be 100 multiplied the last traded price on MSFT, | | | | their stock prices move in a very similar fashion. |
| for example if it was trading at $25 per share, your | | | | Where the trading opportunity arises is when one |
| cost for buying 100 shares would be $2,500 + | | | | stock moves down and another stock moves up, for |
| brokerage. | | | | example, if MA moved down 3 days in a row, whilst |
| If you wish to then sell the stock, you will see your | | | | V moved up 3 days in a row, you could buy ''go long'' |
| holding of that stock in your portfolio window, you | | | | MA and at the same time sell ''go short'' V and profit |
| then click on the stock and click on close position or | | | | from the relationship between the two correlated |
| sell stock. Entering a sell order symmetrical to your | | | | stocks moving back to normal. This trading strategy |
| buy order will also close your open position. | | | | also has the benefit of insulating your trading account |
| Every stock has a 3 or 4 letter stock code, stocks | | | | from large moves in the general market, as your |
| that trade on the NYSE have 3 letter codes, for | | | | portfolio is what's known as ''market neutral'' an equal |
| example Pepsi is PEP, MacDonald is MCD, and Nokia is | | | | amount of dollar exposure on both longs and shorts. |
| NOK, stocks that trade on the NASDAQ which are | | | | Pair trading is the most used trading strategy at |
| typically technology companies have 4 letter stock | | | | hedge funds. |
| codes, for example Google is GOOG, Yahoo is YHOO | | | | To find good stock pairs to trade and be alerted to |
| and Amazon is AMZN. Use Yahoo Finance website to | | | | potential trading opportunities, you need trading |
| search for stock codes for your favorite stocks | | | | software to help you do this. Every professional |
| around the world. | | | | trader in the world uses specialist pair trading |
| You will also hear terms like going ''long'' or going | | | | software to find the best trades. Having software |
| ''short''. To go ''long'' means to buy a stock, that is, | | | | makes it easy, as you will be emailed or alerted to |
| your betting on a rise in the stock price, to go ''short'' | | | | buy or sell certain stocks and then told when to exit |
| means you are short selling a stock, many new | | | | the trade. |
| traders don't know you can do this, however you | | | | |