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Why Beginners to Online Stock Trading Should Use Dummy Accounts

There are both advantages and disadvantages to using dummy accounts for online stock trading, however for newcomers the advantages far out weigh any drawbacks.

What is a Dummy Account?
A dummy account is an account on an online share trading platform that functions in exactly the same way as a regular account – except that the money traded is not real money, it is virtual money! This means that it is not possible to lose any money when you are trading on these accounts, of course it’s not possible to make any money either, but at the beginning it is important not minimise your losses.

Why Use a Dummy Account
Using a dummy account can help you become familiar with the trading environment – the terms used, the way the market moves, the share trading platform interface and the actual nuts-and-bolts processes involved. It really is a crucial tool for learning the ropes, because if go into the real market unprepared you will be naive and open yourself up to losses, potentially large losses.

Just become familiar with the terminology will help you immensely when it comes to understanding what is happening around you, participating in and learning from specialist websites and forums and completing verbal trades. It will also help you understand the full functionality of the platform you are using and use the software to its full potential.

Experience the Different Markets
There are many different markets that you can trade in – equities, forex, futures, commodities, etc – and most experts recommend that you choose one to start with and master that before moving on to another. Using a dummy account it is possible, indeed preferable to experiement on all the different markets, evaluate their suitability for what you want to achieve and then decide from expereince which one you wish to get started on.

Stocks and Shares for Beginners
It is apparent then that using a dummy account is a vital step on the learning ladder for newcomers who want to be able to trade shares online, however it is important to understand one thing. Using a dummy account is not necessarily an indication of real world results. Just because you may do well on a day’s trading, do not think that you are suddenly an expert trader, similarly a large loss on a dummy account is no indication that the same will occur when using real money.

Dummy accounts are simply there to help you learn the process of trading, not to develop strategy!

Do’s and Don’ts for Beginners Buying and Selling Shares

Do use Limit Orders
- Limit orders are used to limit your exposure to losses and essentially work by imposing an order to sell once a share falls below a certain level. For example, if you buy shares at ?1 and impose a limit order of 10%, if that share price begins to fall then once it falls 10% all your shares in that stock will be sold. Now, although you have taken a 10% loss, it is likely that you would have taken an even bigger loss if you had waited to sell.
This kind of limit order is a recommended policy to cap potential losses.

Don’t engage in short selling.
- short selling is a kind of miorror image, or reverse, of regular trading. In this scenario you are betting on the share price falling, ratehr than rising. thsi works as follows; you purchase the right to sell the shares at a particular price (the current price) 1-3 days in the future. When that day arrives you must buy the shares to complete the transaction. So, for example, on day one the price is ?1 a share and you purchase the right to sell these shares for that price 24 hours later. Now overnight that share drops in value 25%, so now you hold teh right to sell shares for ?1, but when you go ahead and buy the shares teh next day, because the price has fallen you only pay 75p hence making 25p per share.

However, if the shares increase in value you are left with a loss as teh price yuou must buy at will exceed the price you can sell them at. Short selling requires a deep knowledge of the market and can expose you to heavy losses

Margin Trades

Similarly Margin Trades should be avoided at all costs too. Here, once again you are not buying an asset, but gambling on the movement of shares and as such potential losses are open-ended. this is a very risky startegy and should be avoided as a matter of policy.

To hear more on these subjects from our expert – a former City of London trader – type your email address into the box below and receive the first of a regular series of mp3 interviews in your mailbox immediately.

Why Beginners Must Use A Dummy Account To Learn Stock Trading is a post from: Online Stock Trading

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Is it Time to Buy Stocks?

Everybody wants to know if it is time to buy stocks and financial advisors, brokers and analyst are quick to say Yes because stock prices are cheap. If you are one of those investors asking if it is a good idea to buy stocks right now, then please take into consideration the following points before investing any money:

1. – The stock price is not a reason to buy. Most people see a share price going from to and they jump in thinking that it is cheap and it is going back to . Stock prices don’t have an obligation to repeat themselves. Most of the times, when you see a price going lower it is because of a reason; it could be related to the company, its industry, or the World economy. Before jumping into that stock make sure you understand the reason for its current price and also have a good reason or argument of why it should go back up. Always remember that a stock does not mean the stock is cheap, it could go to zero.

2. – There is no direct relationship between time and stock profits. Investors and analyst believe that you should buy stocks and whatever happens with the price of the stock does not matter because you as an investors are “for the long run”. The Buy and Hold technique does not guarantee a better return on your investments, and even can become a very risky proposition. First of all, if you want to really be successful with a “buy and hold” strategy you really need to make some market timing. If you follow investor’s psychology, you will realize that small investors are usually the last one to buy into a bull market and also the last ones to sell into a bear market. This means that usually small investors will tend to buy stocks at higher prices only to see them turn into a loss during down markets. Also, it is safe to assume that if you are one of those investors that put money into a 401K or stock mutual fund every month, then the longer the markets go higher, the more money you are going to be willing to put into those type of products every month. So if you really want to be successful on a Buy and Hold strategy, you need to buy stocks during down markets when everybody else is selling. In order to do that, you need to accept the risks involved in playing against the crowd.

As mentioned before, stock prices don’t have an obligation to go higher over time, and eventually the market goes South and people start to see their investment going lower and lower everyday. If you are one of those investors that purchased shares years ago thinking on keeping them for the “long term” you might see your portfolio down 40% or more and worst of all you have a very good chance that you own stocks that will probably never recover. Think about Yahoo trading over 0 during 1999, or GM trading at . Those stocks will probably never recover to those prices; there is more probability for those companies to disappear.

Buy and Hold is not the answer because it leaves out the most important part of the investment process, selling the stock. You will never make money on stocks if you don’t sell them. It is so absurd, that people sometimes prefer to get a loan from their bank using their stocks as collateral instead of just selling their shares. I know what you thinking, what about taxes? You tell me what is best for you: paying taxes on your gains, or risking all your net worth to a down market only in order to avoid paying taxes?

So, if you want to know if it is a good time to buy stocks, my advise to you is to look for companies in well establish industries, and start investing little by little over time, but always have in mind an exit plan in order to take your profits. Look for the best-positioned companies in industries that will perform during the next administration and stay away from broken industries such as automobiles and airlines.

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Stock Market In 2009 – Buying Stocks For Best Returns

Year 2009 started with all the gloom for Indian stock market & across the globe. Retail investors looking for good returns from stock buying are searching for good to buy stocks in 2009 which could fetch returns more than other investment instruments. Here is the series of articles published earlier about best stocks to buy and investing in 2009 – 2010.

Best Stocks For 2009 – Top Stocks To Buy Now
As uncertainties prevail and a revival expected only post second quarter of 2009, looking at current stock market situation it will pay to focus on buying stocks of large cap companies with a proven track record, high earnings visibility, low leverage, good book value and low debt. It is highly advisable to buy stocks with strong promoter holdings looking at recent Satyam fiasco.

Best 20 Stocks To Buy In 2009 – Buying Stocks Long Term Investing
Business Today magazine had recently published list of top 20 stocks to buy or watch out for in 2009. One may treat these as buy stocks advice, strictly for long term investment. Mentioned here are best stocks that are strong to survive the slowdown in 2009. Buying stocks which could emerge as best performing stocks to buy out of this gloom would help you in strengthening your portfolio in long term duration. They are very cheap stocks in terms of value stock investing for long term valuations. The list is in alphebetical order.

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stockmarketinvestingtoday.com As a companion to my buying stocks series at Stock Market Investing Today, I did some videos to walk you through a case study of how to make money in stocks. Here are links to the remaining videos: Buy Stocks www.youtube.com Buy Stock www.youtube.com How To Buy Stocks www.youtube.com

www.FreeInvestingLessons.com Beginner investing lessons and tips showing you how to buy stock. http – Over 30 FREE Stock Investing Videos!
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Buying stocks and investing with stock picking service

Buying stocks could be an extremely profitable investment option if done with the assistance of various authorized online companies offering professional stock picking service. The inexperienced stock market investors find the stock picking software really handy in analyzing the recent market trend and assessing the potential of particular stock.

Finding the Best Stock Picking Software

Locating the best stock picking service online is quite a tricky job. There are numerous companies available on net who claim to offer the best services for investors. As you decide to invest in stock market you must find out the authoritative websites providing most effective stock picking software. The online investment service helps you to understand your specific investment needs and, thereby, makes it easier for you to choose the best stock analysis tools.

The Stock Picking Software Must Support Various Info

If you want to see yourself as an unbeaten stock trader in order to make your investment most rewarding you need to grab all information regarding the market. Stock market is one of the most vulnerable areas for investors and to deal with the improbabilities of this trade you must be backed up by great volume of latest info on the stocks and their performances. Only the best stock picking software can support such massive volume of data you require for achieving your financial goal.

Look For Free Demo of the Software

Whether you are looking for the best text mining software or the most productive stock picking software online you must take time for market survey and you should study the stocks well. As you shop around online always look for companies offering free demo of the financial analysis tools in order to know its functionalities and judge its competence. You must understand the know-how of the software you are purchasing so that you can use them well for earning great profit from your investments.

Better Know Your Stocks Before Buying

Before staking your hard earned money for purchasing stocks you should always analyze the future opportunities of such investment. Professional financial analysis tools are quite helpful for understanding the leaning of any particular stock which is really vital for making a right move in the volatile market.

Right Way of Buying Stocks

For any inexperienced stock market investor it is very crucial to have sound knowledge on the stocks they are buying. Once they decide to purchase particular stocks they must know the most authentic way of buying the stocks. Choose the right stock analysis software which would be most suitable for your stock investment. Be prudent in selecting your stock picking software to buy stocks which will get you highest revenue.

Move Confidently With Best Stock Picking Software

Investors need proper planning and valuable investment tips from experienced traders. The online stock trading education enables the new traders to make right moves confidently. With the help of the online stock picking software programs investors can identify the most prospective stocks and can as well perceive the future of their investment.

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Buying Stocks. But Where?

Silly question you may say! Of course you buy stocks via your broker or online using your brokerage account.

But …

It’s not necessarily that easy if you want to buy foreign stocks which you shouldn’t really underestimate nor neglect. There’s a whole batch of foreign stocks out there that make great investments but that are not available in your country, or only with difficulty.

And that’s the reason for this article. Several of my subscribers emailed me saying that they were interested in a stock but couldn’t purchase it in their country. Now why is that?

If you want to buy Microsoft or Wall Mart stocks for instance, you will not experience any problems at most stock exchanges let alone the USA. These two stocks alone already have a trading volume of over 10 million + every day on Wall Street. Even the regional stock exchanges like Chicago or San Francisco etc. have a high trading volume with Microsoft and Wall Mart. Buying and selling takes place within seconds.

But although most foreign stocks are also found on the trading floors of New York and other international exchanges, there are exceptions. Like the Canadian company Loblaw for example. You won’t see Loblaw stocks anywhere in Frankfurt, which is the largest stock exchange in Germany. There’s only a bit of volume at the regional stock exchange in Berlin. On average about 17 stocks per day. And that’s nothing!

The same is true for other big exchanges too! You will not find every single stock in New York, London, Frankfurt, Sydney or Hong Kong. It simply has to do with supply and demand. If there’s hardly any demand for a stock in XYZ country – for whatever reason – you won’t have the necessary supply. So either the stock is not available in your country at all, or only at very low volumes.

The difficulty with very low trading volumes is, that if you don’t only want to buy say 10 or 20 stocks, but maybe 500 or even 1000, this volume will be difficult to get and may take several hours or even days.

What can also happen then is, that your order will automatically be split up into several orders until the entire volume ordered is purchased. This is what happened to one of my orders a few years ago. And every order is charged with a commission. Considering the extra charges for each order at your local stock exchange, it might even be cheaper if you buy the stocks at a foreign stock exchange where volume is much higher.

And that’s exactly what you also do if you find a good stock that you are eager to get hold of, but can’t buy it in your country at all! You buy your stocks at a foreign exchange which in most cases will be the country of the stocks origin. This will also involve higher charges because you gonna have to do this via 2 brokers.

So let’s take the Canadian Loblaw again. If I would like to buy this stock, I’m gonna have to see my broker here in Germany who will then buy the stocks at the stock exchange in Toronto which will involve several extra commissions and charges. Because not only my broker will charge a commission but the broker in Canada too. So I’ll end up paying 2 brokers who are involved in my transaction.

So that’s simply how it works. My broker will contact a broker in Canada who will then make the purchase for me. And apart from extra charges involved it will also take longer before the transaction goes through.

But these extra commissions shouldn’t be overrated. If you find a great and solid stock that you really want, then go for it and because if you’re an investor and not a trader, you are probably contemplating a long-term investment anyway. And in the long run, commissions and other charges are negligible anyway.

At the end of the day it’s only important which stocks you buy and not the place where you buy them!

Yours in Successful Trading

Ricky Schmidt

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Buy stock options by visiting a stock brokerage or bank, identifying a specific option, asking about the price of the option and making a buying decision accordingly. Trade stock options privately by researching different possibilities with advice from a financial analyst in this free video on stock options. Expert: Roger Groh Bio: Roger Groh is the founder of Groh Asset Management. Filmmaker: Bing Hu

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