needing information about the stock market and daily trading.?
lately I have had an interest in investing into the stock market after a friend explained to me something about setting up an account with a broker that would buy and sell for you at a given dollar amounts.
what was explained to me was if I were to invest and buy 100 shares from a company at say 12.00 per share, then sell when the shares rise to 13.00. then when they drop, buy into the same company again using all the money from the shares sold. it was explained to me that I could do this several times in one day having a broker watching the stocks in real time. if those 100 shares were to sell and buy once a day for a full month, the profit could be close to $3000 minus the broker and trading fees. I’m not sure how all this works, nor how to avoid having to pay taxes for each time they are sold. my friend thought is was something like keeping the money and stocks in a liquid form! to where I would only have to pay taxes on the money when I withdrew some of all from the broker.
Can anyone shed some light on this and if it’s a good idea as an income boost. also who would be a recommended broker! I do have an account with etrade but not sure they can do something like this.
Doing what you say will of course make money. The trick is to know when to buy at the low and when to sell at the high. Not too many people can do this successfully and regularly, not even the professionals and "experts".
Isn’t that what everyone wants to do?
Actually, it would be very difficult to do what you say, because of Day trader rules, and Margin rules, and the 3 day settlement rules. Just go look them up to see what I mean.
As as added fact, the commissions each trade would take away a fair % of your gain. And don’t forget that the commissions apply even if you lose on a trade, thereby exacerbating your losses.
Filed under: Stock Trading Information
Like this post? Subscribe to my RSS feed and get loads more!
Doing what you say will of course make money. The trick is to know when to buy at the low and when to sell at the high. Not too many people can do this successfully and regularly, not even the professionals and "experts".
Isn’t that what everyone wants to do?
Actually, it would be very difficult to do what you say, because of Day trader rules, and Margin rules, and the 3 day settlement rules. Just go look them up to see what I mean.
As as added fact, the commissions each trade would take away a fair % of your gain. And don’t forget that the commissions apply even if you lose on a trade, thereby exacerbating your losses.
References :
LOL!
Why stocks? On your friends analysis you could buy and sell anything at a profit!
You seem to be missing, or deliberately avoiding, that is, as they say in the small print, the value of shares can go down as well as go up.
As a complete novice how do you think you would fare? Do you think you would buy low and sell high and make a profit or do you think it may be a possibility that you would buy high and sell low and make a loss?
By all means learn about investing but don’t listen to some idiot who tells you it is easy.
References :
http://www.shareworld.co.uk
You can buy and sell by setting limit orders.. You could set a limit order to BUY at $12 & once that order executes, you could then turn around and set a limit order to SELL at $13. However if you do more than three day trades (buying and selling the same security in the same day) in a 5 trading days you will be labeled a pattern day trader. The broker will want you to then put up $25,000 in the brokerage account. If you are going to start out with a lot less than $25,000 make sure to watch the day trades. You can open accounts with multiple brokers and trade up to 3 day trades with each broker, but having a lot of different brokers can make things harder to keep track of.
The best advise would be to start off paper trading or using a virtual account to get familiar with trading for a little while. Once your paper account or virtual account is making money, you should compare brokers and find the one that is right for you depending on their trading tools, commissions, opening balance requirements, etc. and start out with a small amount, and as you make money gradually add more. I would not recommend putting all of your money in one stock as it is better to diversify with at least a couple of different stocks. Also, from experience I would not reinvest all of your profits as you could lose on the next trade. It is always best to take a percentage of your profits out of your account.
References :
http://www.stockbrokercommissions.com