Your Questions About Paper Trading Stocks

Donald asks…

stock trading in indian market?

i wanna know where i can open a paper trade account online to practice stock trading in indian market. please give me the links or website details.
thank you

John answers:

Moneybhai.com online trading game

Mandy asks…

What are the pros and cons of online stock trading?

The paper I am doing it for gave me a website to go to, but it’s not working anymore, so does anyone have any opinions on the pros and cons of trading your stock online?

John answers:

If you are in the ‘developed’ world (UK, Europe, USA) then there is no other way to effectively deal stocks ..

Paper Share Certificates no longer exist and (your Teacher should know this) ALL trading is done ‘on-line’ ..

Some ‘traditional’ traders still like to ring up their ‘broker’, however, unless you are blind (and thus unable to use a PC) or a millionaire (and don’t have the time) it’s totally pointless, since all your ‘broker’ is going to do is log on and perform the exact same trade you could have done yourself (expect he will charge you a higher rate of commission than you get by doing your own typing) …

George asks…

stock trading question?

(ive been paper trading) I’m so confused about the whole margin thing and $5 rule thing and trade+3days thing….I posted a question on here before but then I forgot to mention some things. I am planning on using scottrade. I only trade a certain way. I will only have $2,00 to start out with to open up a margin account. Most of the stocks I buy are priced under $5, I buy in the late afternoon and sell the next morning, and I only want a margain accout for bridging/padding the trade plus 3 days rule….most of the stocks that i can manage to make money on are mostly priced under $5…I want to trade 5 days a week…with $2,000 in a margin account…can I do this? Again I only want the margin account for “padding”…but the stocks are priced under $5….

John answers:

Yes, you can do this as you’re holding the positions overnight.

Even a “regular” margin account will insulate you from the trade+3day situation. The fact that the stocks are under $5, or anything else that influences their marginability, should make no difference as long as you don’t purchase more than your account value’s worth of the shares.

(FYI, “intraday” would be if you bought and sold the shares the same day. If you did that “four or more times in any five consecutive business day period”, then they would require that you have $25000 in the account; but since you’re holding overnight, this is irrelevant.)

Thomas asks…

How can one search for stocks by sector?

I’m trading only paper as of now, but is there a way (perhaps via a brokerage– which I presently do not have) to find a comprehensive list of stocks by their respective sector?

John answers:

Http://stockcharts.com/charts/carpet.html

http://stockcharts.com/charts/performance/SPSectors.html
The chart shows each sector in relation to the S&P 500

Lizzie asks…

Want to start investing in stocks, where to start?

I am doing some “paper” investing and starting to read some books, what are some good online companies to trade stock with that have no commission or high fees for buying or selling? I would be a light investor, under 150$ to start. Any suggestions on companies?

John answers:

If you’re a rookie in investing or stocks, go to

www.finance.yahoo.com.

Open up a portfolio without using real money. You can give yourself as much or as little money to try out the market. The stocks you want to focus on is consumer staples, consumer discretionary, and healthcare. These are DEFENSIVE stocks that will survive through good and bad times. Most of my positions are in these stocks. Some names include 3M, Procter & Gamble, Kimberly Clark, Exxon Mobil, Walmart, Costco. Everybody’s got to eat and wipe their butts regardless of the state of economy. Many of these companies survived through the Great Depression.

That’s the benefits. You can sleep at night knowing your money is doing well. There are NO guarantees that you won’t lose money. It’s just that these stocks are the best. They pay good dividends too.

Then once you’re comfortable and test the waters of the market, you can finally put some real money in. Go to Scottrade.com. They’re excellent for beginners.

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