I am currently a university student interested in low-risk, low-reward stock options. I am not planning on investing more than a few hundred dollars at most. I merely want to "learn the ropes" if you will.

With this being said, I have no prior education in stock trading and have no idea where to start. I know there are plenty of online services out there, but I don’t know which one to pick.

Where should I start with Stock Trading?

Start by learning how to protect your capital, without which you won’t last long as a trader. Check out Stock First Traider they take you from basic to competent in easy stages.

  Anything can happen in the stock market in the short term. Expect both increases and declines.

  A market correction is a reversal of the prevailing price movement trend for a security. A “correction” is most often used to describe a decline after a period of rising prices.  A market crash is commonly defined as a 20% decline in a single day or over several days. On October 19th 1987-referred to as “Black Monday”-the DJIA plummeted 22.6% in a single session. On 10/10/08, the DJIA closed at 8451.19-around a 22% cumulative loss over 7 trading days. Market crashes do not necessarily lead to bear markets. On 10/13/2008, the DJIA closed at 9387.61–the 936.42 point increase equated to an 11% single-day gain. Up to that point, it was the largest single-day gain in the history of the American stock market since the 1930′s. On 10/15/2008, the DJIA closed at 8577.91. On 10/16/2008, the DJIA closed at 8979.26. “Testing the bottom” is a term meaning the market fluctuates up and down until a low point is reached.

   A bear market is a period of decline in multiple broad market indexes such as the Dow Jones Industrial Average (DJIA) and the Standard & Poor’s 500 Index (S&P 500) over several months-at least a two-month period.

  Someone once said there are three phases to a bear market: 

First phase-a few people see that things are getting worse.

Second phase-most people see that things are getting worse.

Third phase-everyone is convinced that things can only get worse.

The third phase is when consumer confidence is at its lowest.

When consumer confidence is at its lowest, it is typically a good time to purchase securities.

   In good markets and bad markets, well-balanced diversified portfolios invested for the long-term are the key to financial success.

  Over a long period of time, the DJIA trends upward.

  The Standard & Poor’s (S&P Index) odds of increasing over any 1-year period are only 7 to 3. The S&P odds of increasing over any 5-year period are 9 to 1. Stock market investment risks diminish over any 5-year period. Money not needed within 5-years might be considered for stock market investments.

  Anything can happen in the short-term; however, over time the market has always rewarded long-term investors.

  Be a long-term investor!

   “For everything there is a season, and a time for every matter under heaven: … a time to break down, and a time to build up …”-Ecclesiastes 3:1-3 (RSV).

   Making Money Work: A Christian Guide For Personal Finance (http://www.makingmoneywork.us/) strives to provide the absolute finest in Christian personal finance education.

Bill G. Page

If I want to become an investor as defined in the cashflow quadrant by Robert Kiyosaki, then I will need to learn from professional investors. Thus, I had signed up for a few seminars to learn. After attending a few seminars on option trading, Stock Trading and future trading, I realized that professional traders always have a trading system. And they always follow their trading systems. On top of that, I have learned that as a beginner, I should start off with paper trading.

What is the obvious difference between paper trading and live trading?

In paper trading, no money is involved. Transaction is done based on imaginary money. This means that I can afford to make mistakes in my trading practice using the trading system since no money is involved.

Some brokerage companies do provide an account that allows both paper trading and live trading. The advantage of such account is that it allows a realistic simulation of the live stock market. The share prices of all stocks are real but the transactions are false.

For example, I can setup my account with an imaginary amount of $10,000. Then, I will practice on how to filter and select the appropriate stock to invest based on the trading system. Next, I will decide at what price to buy the stock. Let say I intend to invest in a stock that is currently trading at $13 in the stock market. I will need to key in the buy order and wait for the share price to hit $12. If the share price hit $12, then my account will record that I have ‘bought’ the share.

Next I have to decide when to sell my shares based on the trading system. Let say I decide to sell at $15. I will key in my sell order and wait for the stock to really reach the price $15 in the live stock market before my sell order is considered to be successful.

After a period of practice, I will be able to learn from my mistakes and improve on my trading skills. Learning from mistakes is the key to success based on my understanding of the Rich Dad’s series by Robert Kiyosaki. After 3 to 6 months of practice, I will be able to make consistent profits. Then it is time for me to enter the real market.

This brings me the second main difference between paper trading and live trading, which is emotions. When I trade with real money, there is fear of losing money if the share price goes down. As a result, I will be reluctant to sell my shares if I am losing money. I may keep on holding to the shares even though the trading system tells me to sell. The share price may goes down further. In the end, I will end up losing more money.

When the share price goes up, greed will arise in me. Thus, I will end up not selling even though the trading system tells me to do so. The share price may reverse and goes down. Instead of making money, I will end up losing money. Poor management of emotions is the key to fail at stock investment.

The third main difference between papers trading and live trading is the risk of addiction. I realize that when I am trading real money in the live market, I always want to keep track of the share price. After keying the buy order, I will have the desire to keep checking every other minute whether I have successful bought the shares. If my buy order is successful executed, I will have the desire to keep checking whether the share price have gone up. If the share price goes up, I will feel excited and happy. If the share price goes down, I will feel depressed and sad. This is like an alcoholic addict who drinks to feel high. However, the next day, he will get hang over.

The next difference between papers trading and live trading is that it allow me to gain real experience. Real life experience is the critical component of success as learned from the Rich Dad’s series. I can learn all the theories about investment. I may even ‘paper trade’ investment. But if I do take actions to do the real things, I will never master the investment skills.

My purpose to share about paper trading and live trading is mainly to highlight that proper management of emotions is the key to success. If I can manage my fear and greed in investment, I will be in a better shape to win at investment. This is because I will be able to think better in a calm state.

* DISCLAIMER *
The author only provides the material and information as a layperson’s views about an important subject. The materials and information are from sources believed to be reliable and from his own personal experience, but he neither implies nor intends any guarantee of accuracy.

All the materials, information and procedure in this book are only the author’s personal opinion. You must consult your own professional advisor and other reputable sources on any matter that concerns you or others.

The author, publishers and distributors are not competent and do not profess to give legal, accounting, medical or any other type of professional advice. The reader must always seek those services from competent professionals who can review your own particular circumstances.

The author, publisher and distributors particularly disclaim any liability, loss, or risk taken by individuals who directly or indirectly act on the information contained herein. All readers must accept full responsibility for their use of this material.

Max Ng
http://www.articlesbase.com/finance-articles/difference-between-paper-trading-and-live-trading-104004.html

So ive been playing around with a stock market simulator, it updates in realtime so its just Stock Trading with fake money. Anyways, overthe last few days ive made very large sums of money by one strategy. Lets say there is a stock holding at around $1.50 each. I wait untill it is $1.49 and then buy huge amounts of that stock. Then after a minute or two the stock ussually goes back up to $1.50, i then sell all my stocks and wait for it drop back to 1.49, and repeat.
1. Does this break any laws?
2. Is there a name for this strategy?
3. can i use it on etrade?
Im confused on why it wouldnt work in the stock market if it works in the simulator? The simulator updates with the stock market, just fake money

1. You’re breaking no laws. If your brokerage account is less than $25,000 you will have to be aware of the "pattern day trader" rule. If it’s over 25K…. there’s no problem.

2. Scalping

3. You can use E*Trade (why you’d use a mediocre broker would be my question to you).

Added info;
Paper trading is never indicative of what results you’ll have with real money. (yes…. that’s never).

You need to learn the basics of trading. There’s no chance (not a little chance… no chance) that your "system" will work. You need to read some books before you do this. It takes the average successful day trader 3-5 years to be successful. 95%+ of the people that try day trading fail in a matter of months.

Why;
They didn’t take the time to learn.
They didn’t understand the need for liquidity (volume) or understand the bid and ask process.
They didn’t understand that penny stocks is the last place an amateur should try.

Additional Details;
Liquidity. The "simulator" will buy or sell even if there’s no one to buy or sell at that price at that moment. The simulator will sell or buy at the "market" price… but the real "market" price will be where there’s a true counter party to fill the order. No simulator can duplicate what actual human beings do at any given moment.

A simulator will take your order for 20,000 shares… even if the stock only trades 5,000 shares in a month. Your order for 20,000 will not make the price rise in Paper Trading…. it very well could in the real world. this is the absolute basics of trading (trading 101)………….. Your question suggests that you don’t understand why a stock price may rise or fall…. that’s "trading 101".

I could go on…. but you really need to read some books to understand the basics.
At the very least…. doesn’t this seem so simple that anyone else could have figured this out? No one does what you suggest (at least the way you suggest doing it)…. because it can’t work.

BY.-  http://www.MomentumStockTrading.com

Beginner traders often fantasize or wonder about how some people are able to achieve tremendous profits by trading stocks just a few hours on a daily or weekly basis.

So going farther than the hype & the bells and whistles that a lot of the called “trading gurus” like to invoke, the real “secrets” of the stock market game are enclosed within the trading set ups and market signals you rely on to decide how to CHOOSE stocks, as well as WHEN to BUY & when to SELL them, or even when to SHORT SELL those that are poised for a profitable fall.

So the clearer your set ups are, the faster you can spot a potentially profitable trading scenario and ACT ON IT reducing your risk.

Complicated technical systems and information overload can make you slow and confuse you right from the start, making you loose money instead of making your profits grow.

In essence, You can be sure that the trading method you employ to approach the stock market and pick stocks can make a big difference in your results as a trader. In order to succeed you will need to FOCUS on a set of simple trading strategies that you can implement without hesitation.

Fortunately some sites on the web do offer more effective and updated day trading methodologies. One of those sites that can show you how to take advantage of certain stocks on positive and negative momentum as well is http://www.MomentumStockTrading.com

They focus on momentum Stock Trading strategies, that are practical and easier to apply than many other technical systems out there.

Stock trading doesn’t have to be complicated as many people perceive. But you do need to follow a well organized set of rules and tactics, that once you master them, you can aspire to replicate profitable trades with consistency.

Day Trading System
http://www.articlesbase.com/newsletters-articles/how-to-invest-online-gt-stock-investment-tips-for-beginners-731329.html