Your Questions About Paper Trading Online

John asks…

Online Stock Market? Where and How to Trade Online? (Canada)?

I am in Canada. I would like to know if you have heard or have tried any websites to trade stocks online. How does it work, what websites could I possibly go to to trade, how much money should be enough for a starter point. Please give me all the information you possibly can.
Thank you!

John answers:

Paper trade to start. Google “free paper trading” its the same as trading except its fake money.

I’d suggest learning with fake money before blowing your own capital.

Once you’ve done that, you can trade using anything. I use RBC Direct Investing, only because its linked to my bank account and i work for RBC so i get discounted commissions. But you can use e-trade or questtrade or even scott trade its upto you. Each has their benefits, and comission prices per trade.

Paul asks…

anyone use AVA FX to make trading online?

i started to use it with the demo and i think it could be nice to open a real account…but i want to hear from those one who just tryed to use it… there are strategies ? something to read about it? is it easy to earn money on it?

John answers:

95% of new FX traders fail at trading FX in less than a year. Many lose close to their entire account.

All FX brokers to one degree or another make it look like lots of people are doing this & making money (the truth is… They make money by constantly bringing in new traders, to replace those that have blown up their accounts).

Paper trading does not reflect what will happen with real trading (to many reasons to explain here).

It takes, on average 3-5 years to become profitable in any type of day or swing trading (including FX).

AVA’s spreads are much bigger than many of their competitors. This means they’re very expensive.

You will never make money in any type of trading by trying to duplicate other traders “systems”.

You’ll have to start reading (and re-reading) books on trading, including these topics;
Technical Analysis
Trading Money Management
Trading Psychology (your and the market)

I love to trade. It’s the hardest “job” I’ve ever done. The hours are grueling. The only way you’ll put in the time needed is… If it becomes a passion.

If trading (any type of trading) was easy…. All your neighbors would be doing this.

Read a half dozen books before doing this.

BTW: I’m a stock trader. I do well at stock trading. I’ve tried two times to enter the FX market with no luck. The skills are the same…. Trading FX is much harder than stocks.

Ken asks…

Where to trade stock online?

I’m quite new to trading stocks. I get the gist of it, anyway. I recently came across some extra money and was considering playing the field a bit. I’m very inexperienced with this type of stuff, but I can learn quickly. I just need a good place to buy and sell stocks online. I can’t seem to find a good site. I need one that has little to no fees for using it. And easy to understand. I’m not particularly interested in trading penny stocks. But if you know a good penny stock site, I will give it a try. Thank you all, in advance. 🙂

John answers:

All major brokerage firms and mutual fund companies provide their clients with on-line services, including trading platforms, latest market & financial news and research.

Customer need to select the site that is best for them. Traders have requirements in a site, while investors have other requirements. Please remember, the cheapest is not always the best.
Cheap is not a good criteria for selecting a brokerage firm, you should be looking at the firm’s trading platform, their services and the type of business they are doing. If you want cheap, go to Sharebuilder but if you want good you go elsewhere

Although most sites are geared to general securities and commodities, however customers may have special needs for the types of products they trade, and the markets in which they trade. .

It seems that the most popular firms for on-line investing/trading all of which provide excellent platforms and services are; Scottrade; Chas.Schwab; TDAmeritrade; Fidelity; E-Trade, T.Rowe Price and Thinkorswim

BUT-
Before you spend $0.01 on any investment, you must know what you’re doing, why you’re doing it and how to do it. Before you invest in any security, the first investment you should make is in yourself, and the best investment you can make is by educating yourself.

Begin your education by learning why you should invest and the importance of being able to make your own decisions or how the pro’s make theirs. Start your education by reading “Investing or Dummies” by Eric Tyson.
To continue your education select some of the following
Beating the Street by Peter Lynch
Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea
From Riches to Rags, by I.C. Freeley
How to Make Money in Stocks” by William O’Neil
24 Essential Lessons for Investment Success by William O’Neil
The Intelligent Investor, by Benjamin Graham
Common Stocks, Uncommon Profits, by Philip A. Fisher
One Up on Wall Street by Peter Lynch
Stocks for the Long Run, by Jeremy Siegel
The Interpretation of Financial Statements by Benjamin Graham
The Lazy Person’s Guide to Investing by Paul B. Farrell
Uncover the Secret Hiding Places of Stock Market Profits by Joel Greenblatt.
What Works on Wall Street by James O’Shaunessey
You Can Be a Stock Market Genius by Joel Greenblatt
Your Money and Your Brain by Jason Zweig

Websites that can provide instructions and help with procedures and terminology are Investopedia – http://www.investopedia.com/ http://www.investorshub.com/ and 1 Source for Stocks – http://www.1source4stocks.com/info/stock-analyst-opinion.asp or Smart Money
http://www.smartmoney.com/
Visit some of the more professional websites like Zacks Research – http://www.zacks.com/ Schaeffer’s http://www.schaeffersresearch.com/ Investors Business Daily – http://www.investors.com/default.htm?fromad=1
Some of these web sites will have advertisers who are worth looking into also. And remember, if they offer free information, get it.

And when you think you want to invest/trade, try some paper trading to test your skills without spending you money http://simulatorinvestopedia.com/ http://www.moneyworks4me.com/
and/or http://www.tradingsimulation.com/

You at least have made the right decision to start investing, this is the first big step and it won’t be your last. Keep taking those steps forward and along the way never take the advice from people that are not in the market or try to tell you not to invest.

Good luck on your journey, study hard and you’ll invest well.

Lizzie asks…

shares trading?

What are the best counters to trade

John answers:

I see you are interested in investing in the stock markets and think that you can start successfully by asking questions like this online. Just think, if winning in the stock market is as simple as posting questions like this, why are so many people still poor?

There are quite a number of things you need to learn before you can even start thinking of the stock markets …

1. You need to understand how the stock market works and what it is exactly about.

2. You need to know what are the different styles of trading in stocks and shares.

3. You need to read about why so many people lose their shirts in the stock markets so that you can avoid their mistakes and also decide if this is a risk you want to take.

For all these issues and more, you can read about them from some of the articles that I wrote at http://www.mastersoequity.com/articles.htm

After you are adequately armed with the basic concepts and ideas, you need to know how to find profitable stocks to trade or invest in. You can do that the easy way by subscribing to stock pick services (example http://www.stockpickmaster.com ) or you can learn to use charting tools and softwares to find stocks with parameters that you can pre-define. (example http://worden.mastersoequity.com/)…

Remember, the slogan “Just Do It”, Just won’t do for the stock markets. If profiting in the stock markets is as simple as buying a single stock , then why are so many people still poor?

After you have all the above mentioned knowledge, you need to ask the following golden questions before you can decide whether a stock is worth buying or not :

1. Why are you of the opinion that this stock will rise?

2. Is your opinion valid in the first place?

3. When are you expecting it to rise? Can you hold on for that period of time or longer?

4. What is your expected entry price? After what price would your expected profit margin be too thin to enter upon?

5. Where is your expected stop loss point? What is your stop loss point based on? Where will you tell yourself that it is time to take a loss and get out?

6. Where is your expected profit taking point? What is your profit taking point based on?

7. Does the way you are buying the stock allow you to hold on until your expected profit taking point?

8. How much of your money should you dedicate to this one trade?

9. What is the level of primary, secondary and idiosyncratic risk you are undertaking when deciding how much of your fund to use?

10. What is your cashflow need? Does your cashflow needs allow you to hold the full lifetime of the stock?

After you are able to answer all these questions confidently, THEN you are ready to… PAPER TRADE your stock strategy. Yes, even at this point, you are NOT READY to trade for real. You should trade on PAPER for at least 6 months and become consistently successful BEFORE you take your stock strategy into real life.

Then.. You are ready to start… But there is still no guarantee of success as paper trading is very different from real trading. You will need another maybe 1 year or 2 trading very little money and be consistently successful BEFORE you are ready to increase your stakes.

So, as you can see, success in the stock markets is not easy at all the the less knowledge you have, the more risk you undertake. I lost hundreds of thousands in the stock markets before I become successful.

Take heed and good luck.

All in all, investment and trading is a lifelong education and non stop learning. No one is ever done learning and catching up with changes in the markets.

If you care to read about how I went from completely broke to retired millionaire trading stocks and options by 28 years old, you can go to http://www.mastersoequity.com/

Hope these information helps.

Http://www.optiontradingpedia.com/

http://www.mastersoequity.com/

.

Chris asks…

Stocks and Share Trading online?

what is the best website to use if i want to get into day trading stocks and shares

John answers:

Whenever someone posts a question like this I like to give them background info about the stock market and how it works so here is the how I explain it to them: Joe’s Tires produces hundreds of tire out of his small shop in Texas. Recently he has been getting too many orders to fill and doesn’t have the money to hire staff and raw material. He believes that if he can get money from investors he can hire the staff and get the materials he needs to fill all his orders and even go national selling tires. His company goes public and he sits on the executive level of the company. Now, once the company starts turning in a profit, he decides when and how much of a divided his shareholders get.

I would head on over to your local Scottrade and tell them you are interested in investing. The minimum you need to open an account with them is $500 and they are very helpful with training. They actually want to help you understand how to invest so you can place smarter trades. Why? Because when you do well, you place more trades and they make $7 on each trade you place. So basically your success is their success.

Or you could start by “paper trading” so when you enter the real market you at least have some experience. Note: when paper trading be as realistically as you would in the actual market.

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