Stock Market For Beginners » Stock Market Trading System

Stock trading Strategies – Listen to the experts and devise your own strategy

admin — Fri, 09 Oct 2009 09:53:33 +0000

Let us begin with the basics and define what a strategy is? A strategy is a blueprint to achieve your ultimate goal. That said it is the blueprint which is a must if you want to money in the stock market.

That in turn means that you need to define your goals when you are investing in the stock market. That goal in most cases can be defined in percentage terms or in pure money terms. It is better to define the length of time in which you want to achieve the goal.

Second point is the timeframe – Timeframe is everything in the stock market. Some people only want to day trade and some want to go in longer term. If you want money in the long term then the stock trading strategies will be different than what you will get when you only want to day trade.

If your timeframe is only for a day that will mean that you are interested is day trading. Now day trading is a concept in which you basically start with cash at the start of the trading day and end with cash. The basic premise is that you buy in large quantities and make huge money with small price movements.

Day Trading Strategies for beginners

A day trader is looking at entry point and an exit point for the stock during the day. The tools used to arrive at the entry point can be several but the must among them are the

Technical analysis – Candlestick Charts

Level II Quotes

Reliable news source

Some of the strategies in the day trading arena are

Scalping strategy

Fading Strategy

Momentum stock picking

Note: In this also you will need to be very adept at picking the correct stocks. You will have start with small volumes and see if your picks are making money. Once you know how to spot the trend then you will start making money.

The next trading strategy which is in demand nowadays is the Trend trading or as is called Momentum stock trading. In this the aim is to pick the stocks which are moving in a particular trend and then exit the stocks which are no longer moving. This stock trading stragey is based on particular sectors research and put forward by analysts. This is a good way to make money only if you know when to exit the stock. You can hold the stock for up to six months in this month .

Trading based on the news – Day traders use this lot and that means that you buy the stock base on the news regarding that company. In this after hours trading or the pre-market trading plays a major role.

Dividend stocks – A lot of people want to have some income alongside their regular income so they only buy stocks which have good dividend payouts

Picking up penny stocks – A lot of people trade only penny stocks. These are stocks which are less than $5.00. These stocks are very risky to trade so beware.

Elliot Wave principle trading – In this the trends and reversals are used as away to enter and exit the stocks.

ETF trading – This is done by the traders who do not want to invest in stocks but they want to invest in the sectors. The ETF funds generally are geared towards sectors or countries or particular commodities.

Enough of those short term investing strategies let us talk about long term investing strategies

This trading strategy is known as buy and hold strategy. In this you do the fundamental analysis of the stock and then just keep on evaluating the company and will exit the company only if you see that company now is not worth investing.

Effectively you are placing the confidence in the management of the company that it will do well and in turn will have the share price in a general upward trend. That said you need to monitor the entire variable for the fundamental analysis that is the company, the industry sector as well as the overall economy.

In the regular word of stock picking for long term there are two strategies and these are known as

Top Down Strategy – You invest in a sector and drill down to pick good stocks in the sector

Bottom Up Sector – In this you only invest in stocks with sound management and they are generally leaders in their sector.

Blue Chip Strategy – This is known as the strategy which I personally brand it as the 30 stocks strategies wherein you only focus on those are the components of the Dow. This works well in most cases unless you get into a situation where your investments go bad like with many people who had Citibank in their portfolio. Well you can also invest in a lot of blue chips apart from the Dow

Then last but not the least is the one which is my personal favorite and I take a stab at it every now and then to make good money and that is the special situations strategy. I keep my eyes open for any stocks in controversy or for that in any sort of negative sentiment and then go for the stock. The major thing to note is that here you will have to pick the stocks that have negative sentiments however they are still having good fundamentals. In short you are playing solely based on the sentiments prevailing in the market.

Types of stock market trading system software and the investing philosophy – Should you buy it?

admin — Fri, 25 Sep 2009 01:52:37 +0000

The stock market is one such thing where nothing is constant and it churns out of volumes of data everyday. As a stock market for beginners advice I would advice that you read before you buy as there are several things that you should understand before you can even think of a stock market trading system.

So what is the stock market trading system software?

These are set of specialized tools that have been developed by various companies to help you make that important decision when to buy or when to sell. Let us face it that no one can time the market perfectly and hence the only way we can do this is to make sure that you at least we make the buying decision at a time when the market can give good profit and also make a sell decisions when it seems that you will not be making a bad judgment call.

That said the mentally you would apply a screening criteria as to which stock would you buy and hence you need to know all about the fundamental analysis as well as the technical analysis. Now this is good is you are trying to make a trade once in a while just to learn the basic but gradually as and when you start getting into the habit of trading and think that you can make huge reams of money from the stock market then you will need specialized advice. Also you will need help to track stocks, apply the stock screening criteria and also make sure that you can easily chart the various technical analysis stock patterns to help you take advantage of the technical way of trading.

Method into the madness of stock picking

Some of the trading systems are merely theoretical trading systems as they try to put some basic method into the way you pick stocks. These eBooks or the video course or even the basic excel sheet type systems will help you screen a large number of stocks and the cut down that number into an investible number of stocks. That said this is something that you should definitely consider as then you will have some consistency to pick stocks and will not be swayed by the next hot tip.

The prime examples of this are the Dr. Stephen Cooper’s Trading System or the day trading courses or the swing trading courses.

The next set is the stock trading software that are based on the real time monitoring of the stock market prices. These are specialized piece of software that comes in the form of the downloadable software which will need to be installed on your PC.

These will send you alerts and prices based on the parameters that you set. A lot of these software’s tell you the stocks and the stop loss type things to apply. These will not tell you as to how did they arrive at that particular stock. Some will throw at you the list of stocks that can be easily tracked by you. These software’s need the stock market data to be available to them and hence thy generally are generally are connected to the real time market data.

Prime examples in this type are XLQPLUS, Wave 59, StockPicker-RT

There are the true stock market trading systems that relieve you of all the hassles and they just simply screen the stocks and then based on the outcome of the screen parameters and the technical analysis enter in the orders. That is why for these you need to have the online accounts with an online broker. Now this software are generally used by the advanced investors or the so called seasoned investors plus these software’s generally have the capability of doing trades in stocks, options, Forex and futures.

Please note that all these stock market trading software or the trading system for the stock market are nothing but aids to help you and in the end you will need them plus you will need all the news and the stock market trends to capture the stock market and make money off it.

Select the best Stock Trading System – The Basics

admin — Fri, 25 Sep 2009 01:48:14 +0000

Stock trading for beginners usually works out in two or three ways. You will usually open an account with the online discount broker to start the trading. How will you find out the good stocks is an issue.

In most cases you will go with the technical analysis as well as you will go for the fundamental analysis. In a lot of cases you will rely on the tips that are dished out by the stock analysts on various websites and then based on that you will start making purchases. Each day you will open up the stocks market website to see the stock prices and then you will either buy or sell.

In your mind you will generally have criteria by which you will go buy the stocks. You will also look at the portfolio that you have to make sure that you are making sure that you stop your losses at the right time. Also you will look at your finances and then make sure that you are running a lot of risk of losing your money.

In simple words the stock trading systems will automate all this and will make sure that everything is automated. That will mean that each step beginning from the process of making a picking an industry, applying the stock selection criteria as well as the keying in of the order is done by the automated stock trading system.

Types of Stock trading systems

Some of the stock trading systems are based on the technical analysis and they follow the indicators which are the Moving Averages, Stochastic, Oscillators, Relative Strength, and Bollinger Bands. Imagine that you have to learn all about the technical analysis and then also do the same stuff again and again for each stock. I am sure the efficiency of your stock picking will be very bad. That is where the stock trading systems have the technical analysis already built in.

Though automated in placing orders also effectively they are tolls to aid you in faster decision making decisions but help in you making money as well as limit your risks.

Other Alternatives

You can enroll yourself in expensive course about day trading as well as in the investing strategies but these at best can get you knowledgeable but cannot have you be the best stock trader

Beware Of Scams

There are tons of scams that are out there involving the stock trading systems where the claims were made about the efficiency ad the stock picking ability but it was not the case to be. So make sure that stock trading systems that you are looking at are not pure money making schemes by the unscrupulous people.