Learn To Trade Stocks On ETrade: Know What You Are Doing & Make Money On The Stock Market

My wife told me this was much longer than a blog should be. I apologize for the length, however after reading several times, I added information. I do not feel there is anything that could be left out.

Buying and selling stocks can look very confusing when you first enter a website. I prefer Etrade myself as I had a Scottrade account and I did not like there format. https://us.etrade.com Scottrade ran my credit just before I applied for the loan on my current house. I did not remember reading anything about permission for that, which tells me they hide disclaimers in jumbled words, Therefore, you do not have my business. Anyway, I also use fidelity for my Roth IRA, and have purchased individual shares through that as well. A Roth IRA can be opened through Etrade as well, however I prefer Fidelity's setup over the others. They also have numerous, excellent mutual funds that are no load. Something to consider if you go that route. (Some funds have loads, known as front end loads, and back end loads. This is a fee when you open or close the mutual fund. They can be very high and take a large chunk out of your investment before you even get started. I encountered one that had a 5% front end load. The maximum you can contribute to a Roth is $5000. If you pay a 5% front end load, you automatically lose $250. Let's say you gain 10% over a year and want to buy another fund that you think will take off. Now you have the back end load. With the gain you had you will pay another $261.25. for a grand total of $511.25. This puts you negative the amount of your original investment, even though you had a ten percent gain. That does not include management fee's that also come with this. I am sure you see what I am saying.) It is simply a matter of preference. https://www.fidelity.com/ I always go back to Etrade to research stocks and mutual funds. Their tools for research, in my opinion are superior to the other platforms that I have used. Etrade's tools are so simple my wife can use it. Ha ha. (Etrade please email me, and I will tell you where to send the check for the advertisement)

The first thing you will do is sign up for an account. This can look confusing as well, since there are different types. For basic service all you will need is the brokerage account. You will see settings for margin accounts and some others that are not needed for regular buying and selling. If you don't understand something, they provide "help" tabs on just about every word. Next you will need to fund your Etrade brokerage account. You can mail them a check, go to a branch and deposit, or link your bank to them. I have my bank linked to them as this is the most convenient method for me. The only downside to this is, they will take up to fifteen days to clear the first time. This will give you time to become familiar with the site.

Enter the ticker symbol you want in quotes box. You will be taken to the next page to see all the stocks information, as well as buy and sell buttons. Click on the buy button. The first tab will say "order type". All you need to worry about is Buy or Sell. The "sell short", and "buy to cover" is for shorting stocks, and you do not need to attempt this if you are a beginner. Shorting shares is a good way to lose all your money quickly if you don't know what you are doing. Next you will enter the quantity of shares you want to purchase. They charge a commission per order, not per share, but make sure you are positive about the number of shares you want. When you buy your first shares you are automatically negative due to the commission price. You will see red on the dollar amount for your shares. Over buying and over selling can be another quick way to lose money. If you buy shares, and change your mind, and sell two days later, then buy something else, you will continue to lose money on commission cost. Make sure your purchase is what you want. There is nothing wrong with waiting. Do not feel that if you don't buy immediately you will miss your chance. I have thought that on several occasions, only to watch the market, and my stock plummet. There will be another day, and another stock. You may miss your chance with one, but there will always be others on the brink of explosion.

Next, click on price type. This is where most people get confused. All you need if you are a beginner is; Market or Limit order. I do not recommend market orders. If you have made the initiative to get this far, you will be better off without market orders, as this is just a way to get riped off. I will still explain it as some people prefer this method. When using Market orders you are buying at the markets price, at that time, however, brokers mark this up and you pay more for the share than it is worth. I was buying Apple (AAPL) through my Blackberry at $187 a share. My limit orders were not working for an unknown reason. I went ahead and placed a market order to get the shares quick. The price was marked up to $194 per share. I paid $7.00 extra, per share in commission to some broker. It takes a long time to catch up from that. Now you can see why I use limit orders. That does not happen all the time, but that is just a good example of what can happen. When using your limit order, insert the top price you are willing to pay per share. The system will not buy over that price. If I am buying a share that is currently $15.55, I will place my limit order at $15.75. This allows for some fluctuation in the price, while protecting me from overpaying. When I'm selling shares I do this in reverse. If the stock is at $15.55 per share, I place my sell price at $15.45. That is the lowest price that I am willing to sell at. This also protects you from losing a profit. If this were placed as a market order, it could sell for $15.00 or worse, whatever the market is going for at that time. Please understand that sometimes the market order can work in your favor too. I have found that market orders are not worth the risk. Using this method will give you much better results. One more example. Let's use the $15.55 again. If you set your buy price at $15.75, this does not mean that your stocks will be bought at $15.75. They will be purchased at any price between the actual cost, and the limit you set. The price could drop to $15.43 while you were placing your order. Now you bought at a better price than you thought.

Your next step will be choosing the "Term". For beginners, you want to choose "good for the day". This buys your shares during regular market hours. I will not go through the other options because they are for more advanced buyers. I will write another blog for advanced buying. Press the preview button and make sure your order is correct. There are no do-overs in the world of trading. If you want to buy a $15.55 share, and you hit the wrong key and buy at $55.55, you are stuck with it. Someone will sell to you at that price. Any doubt you have, click the "change order" button. and verify your information you provided. When certain your order is correct click on "place order". You can then go to "view orders". If you need to change any information you have added, click, "change order", before the system has made the purchase. You do not have much time if you placed a legitimate order.

When buying stocks you should be certain that what you are getting is a solid company. I will not make any stock recommendation, however there are different ways to trade. If you are looking for long term you will want to choose a company such as PG Proctor & Gamble. Please note; I am not saying to buy them, this is just a example. They have been around for a long time and pay a good dividend. A dividend is a percentage of a share, that companies pay shareholders every quarter. Some companies pay very high dividends, however this does not mean they are reliable. When you come across this use caution, and research them. Keep in mind that anyone can have a website and look as if they are a strong business. Always check several different resources, and reputable news publications to examine the company. Read about the sector your potential company is in to find out how it is performing. You don't want to buy into a sector that's going downhill or starting to slow.

The Dow Jones is made up of the top 30 companies in the US stock market. These are usually a safer bet, although nothing is ever safe. Alcoa is a DOW stock that has struggled since the recession, and has many attributes that influence it's share price. The S&P 500 and NASDAQ are among the most popular, however they are not all quality companies. Research everything you like, and never go on tips. Websites that offer tips are shorting shares that you and others are buying. They will also buy shares before you. This can be noticed on charts. I have looked at shares that websites pump up, and noticed that two days before they started sending emails, there were large share purchases. They buy cheap, get you and others to buy and drive up the price. They sell at the stocks peak and short it at the same time. Everyone starts to sell over time and the price drops. The website will cover their shorts. They win twice and you lose. This is done with penny stocks mostly. Just stay away from penny shares. Cheap does not equal good.

You can find vast amounts of information on the web for free. There are sites everywhere that require a subscription. I would not recommend signing up for anything until you feel your way around. I signed up for a service, and found another one that was better on the same day. For beginners, a great place to start is Investopedia. http://www.investopedia.com/ They have archived resources that cover anything you ever wanted to know for free. Investopedia also provides a stock simulator that you can use to buy and sell shares. http://simulator.investopedia.com/ This is a great way to learn without losing money. I was up $75,000 on a trade that I was not willing to make on my real portfolio. I wanted to cry. They also provide a trading dictionary. This helps to look up terminology that you don't comprehend.
Another way of investing is to buy short term. Short term can be a day or nine months. I have been lucky to buy and sell in the same day and make a profit. However, on several occasions, if I would have held the shares for more days, my profits would have accelerated well past what I sold at. I have also watched them decline just after selling. You never know where a trade will go. I would stay away from day trading as most of these people finish even to negative. If you are up on a trade 15% percent after 6 months, and you don't see the stock moving further, sell and take your profits. You need to set stop for your losses as well. I generally sell if I am down 10% on a trade. I don't do this with long term investing, just short term trades. Setting a stop can be done by either, watching your shares daily, or setting a "stop" within your account. To do this, start like you are selling your shares. Substitute sell for "Stop Loss %". Choose the percent you are comfortable with. Something to remember, if you lose 50%, you need a 100% increase to get back to even. There are some situations where I will hold beyond a 10% decline, however this depends on many different factors.

These are guidelines for basic buying and selling. I personally enjoy stocks. For me, trading is a hobby, and my future retirement. I have made large gains, and taken large losses. It is easy to get discouraged and want to quit, however I find it very rewarding when I win. I continue to learn each day from mistakes and successes. I have quit trading several times, but I always go back , usually within the same day. I find trading a personal challenge, me against everyone. No one is on your side in the world of trading. Nobody cares about your money as much as you do.

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