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Old 20-08-2011, 03:06 PM   #1
Sixteen
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Join Date: Aug 2011
Location: Nigeria
Posts: 54
Default Online Stock Market Investment.

Stock invest:
The technological advancements in online
trading over the last decade have made
investing online the norm for many traders.
One of the reasons for this is that the cost
of online investing is far lower today than
when the only choice to invest was with
traditional full-service brokers. For smaller
investors, online investing through
platforms such as TradeKing's, provides an
opportunity to access the markets with
very affordable transaction costs and
commissions. There are also benefits for
larger and more experienced investors,
including the flexibility of investing online,
as well as the speed of order confirmation
and trade execution.
Depending on the investor's market
forecast and company outlook, there are
different online stock investing strategies
that he or she can use. These
online trading
strategies usually depend on the duration
of the investment that the individual
investor thinks is best. Risk management is
also an important factor for determining
which style to use.
Trading over the Internet allows not only
allows for investment in stocks, but also
investment in derivatives such as options.
While stocks represent tangible assets,
options are more abstract. Call and put
options derive their values not only from
the underlying stock but also from the
duration of the contract and other market
conditions. Multiple options can be
combined to create intermediate to
advanced option strategies. Multiple leg
options strategies involve
additional risks
and multiple commissions, and may result
in complex tax treatments. Please consult a
tax professional prior to implementing
these strategies.
As an investor matures and gains more
knowledge about investing online, it is
common to combine option strategies with
different stock trading strategies. Therefore
it is optimal to select an online broker that
offers access to both styles of investing,
even if the investor is just at the beginning
stages of learning about the market. One
such stock and options broker that excels
with a dual-purpose platform as well as low
transaction costs is TradeKing.
Different Trading Strategies for Online
Investing with Stocks
To learn to trade successfully when
investing online, it is helpful to have
knowledge of different trading methods
and styles so that the investor has the
flexibility to adapt to changing market
conditions.
Buy and Hold Investing - A Bullish
Strategy
The most basic investment strategy when
investing online is buy and hold investing.
Investors buy stocks with a long-term
bullish view of the company. The strategy is
to realize gains on the stock price well in
excess of transaction costs. In addition,
often times stocks are chosen that pay
quarterly dividends. This added income
bolsters the overall return of the stock
investment. The holding period for this type
of investment strategy is usually six to
twelve months, but is commonly longer
than one year. Since the investor typically
has time on his side due to the longer time
frame, he may be more willing to accept an
adverse move in the stock than someone
with a shorter time frame.
Position Trading - A Shorter-Term
Strategy Used by Bullish Investors
The next investment strategy for online
stock investing is called position trading.
This is a slightly more active trading style
than buy and hold investing, with a similar
bullish company forecast. The typical time
frame of this type of online investing is as
brief as two weeks but as long as six
months. The intention is to participate in
the mid-term upward trend of a company
but retain the flexibility to exit the position
if the stock falls below a stop loss threshold
set by the online investor. This downside
limit would be slightly stricter than a risk
limit used by a buy and hold stock investor.
Swing Trading - A Short-Term Strategy for
Bulls
A more active investment strategy for
investing with stocks online is commonly
known as swing trading. The investor's
trading plan is to capture small movements
in the stock while also reducing risk.
Investing online through
swing trading
strategies involves holding a position for as
little as two days, or as long as two weeks.
If the trader thinks the stock price will
increase in the short term, the trader will
determine potential profits to be gained, as
well as how much risk is involved in each
trade. If these calculations are in line with
her investment and risk management
objectives, a bullish trader will buy shares
of the company. To better manage this kind
of trading plan, Advanced Orders may be
used to set profit targets and stop losses
simultaneously. TradeKing offers a full suite
of these sophisticated orders to help
investors manage their capital and time
wisely. Swing Trading involves specific risks
and commission costs different and higher
than the typical investment strategies.
Swing Trading - A Short-Term Strategy for
Bears
If the swing trader is bearish, he may
decide to short sell the stock with the hope
of buying the shares back in the future for
a lower price. If successful, he will net the
difference from the two trades and make a
profit. If he is not, the trade will result in a
loss. Swing trading with a bearish
perspective utilizes the same methods a
bullish swing trader would use. This
includes establishing profit targets, risk
limits, and evaluating the merits of each
stock trading opportunity. Advanced Orders
like One Cancels Other and One Triggers
Other are powerful tools to enhance this
trading plan.
Day Trading and Scalping - Adaptable for
Bullish and Bearish Strategies
The most active investment strategies for
stock investing online is when the trader
seeks to earn money as a result of the
change in a stock's price over the course of
the day or a matter of hours. These trades
may be initialed with a long purchase or a
short sale, and therefore can be used by
investors with either a bullish or bearish
forecast. Because the trader is trying to
successfully capture only a sliver of a
stock's movement, one may logically
conclude that this method of online
investing offers the most opportunity.
However there are significant risks. Due to
the frequency of trading, this style lends
itself to accumulating and incurring the
highest amount of transaction costs.
Commissions can quickly erode the small
gains of a profitable day trade. Therefore it
is paramount that an investor chooses an
online broker that is highly competitive on
price, such as TradeKing. Because
day
trading and scalping are the most active
styles, they also have the smallest margin of
error among all the practices described
here. Therefore solid risk management will
play a prominent role in determining
success with this method.
As you can see, there are many ways to
invest online with stocks, from buy and
hold investing, to day trading. Regardless of
the style of trading you employ, it is
imperative that you have a complete
understanding of these opportunities as
well as their risks. Each investor needs to
evaluate for themselves what is the best
online stock trading strategy before
committing capital and resources. Key
features for many trading plans include low
transaction costs and Advanced Orders.
These items alone do not guarantee
success. Open a an account at TradeKing to
get started now.
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Old 21-08-2011, 05:12 AM   #2
jambutty
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Quote:
Originally Posted by Sixteen
Stock invest:
The technological advancements in online
trading over the last............................................................................................................................Open a an account at TradeKing to
get started now.
Your post is in breach of forum rule 7.

7) Please DO NOT plagiarise (copy and paste) other posts.

You have copied your post from:
http://www.tradeking.com/PublicView...dingStocks.tmpl

You are permanently banned.
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