4 Tips To Becoming A Successful Day Trader By: Abhishek Agarwal

A 'day trader' refers to the risky buying or selling of financial instruments. Financial instruments include cash and other financial derivatives. Financial instruments are only available in the circle of financial market that is often used for trading.

Many business people take notes using a third party that is often backed up by credit parties e.g. banks. The result of this action is that the security is now a transferable interest and is representation of financial value.

Security can be categorized into two main categories: either bearers and registered security or debt and equity security. Usage of these securities is different for both the issuer and the holder. Security characteristics have been greatly expanding with passing time mainly. The reason can be defined in relation with capital raisings.Usually a Certificate is used for representing security. Included in this certificate is mutual funding, corporate stocks or bonds, stock options, investment instruments, units of limited partnership etc.

Defining stock, using financial term, is the raised capital of corporation that is distributed and issued using shares. Shareholder is not limited to one type of person. It can be anyone including a person in possession of shares, a company or a corporation having a fraction of stock. Aggregation of shares that are issued by a corporation heavily depends on market capitalization.

Each individual should be familiar with the basic techniques of stock market in order to become a successful stock day trader. Given below are important characteristics you must be familiar with to achieve success.

1. You should be familiar with liquidity. Liquidity is the existence of sellers and buyers in large amount over specific stocks that permits a fellow trader to quickly gain a position or willingly exits the stock. Liquidity is based on many important factors such as number of market makers, number of shares, volumes and ownership breadth. Liquidity requires fast execution from a trader within predictable price range. In addition, you should keep an eye out for high-liquidity. High-liquidity gives an additional advantage of reducing the popularity of a bid-ask for a certain stock which results in reduced execution of the cost for a day trader.

2. One of the factors on which liquidity depends is volume. A good trading day is one in which at least 500,000 shares are traded. This high volumes result in buying or selling of stock in large quantities without affecting the stock prices.

3. Volatility is predicted price range of stock of a specified time period. A $2 up and down in stock prices is a good choice while very little change should not be appreciated.

4. The ability to obtain information by understanding current pattern in market flow, also known as market depth, is transparency. Systems such as NYSE or NASDAQ II are used for this purpose. NASDAQ II obtains information from highest prices asked and lowest bid made while NYSE obtains information using highest bids made and lowest asked prices.In United Kingdom, a stock is used in a different financial meaning that is bond. Bond is widely used in security markets. Despite this, shares are the same if they are used in specified corporation issued stock.

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What Do You Need For Online Trading By: John Porter

You will need knowledge of the stock market. That is fundamental. But beyond that you will need a few other things too. Those are what we will discuss here.

You will need a 3-in-1 online trading account for you to make investment through the internet. So what is a 3-in-1 online trading account? Or, to put it differently, what are these three accounts? Number one, a bank account which allows you to transact online. Number two, a de-mat account, a place where your electronic shares will be deposited and number three, a trading account that will allow you to carry out transaction online.

Trading online necessarily requires you to have the best computer. have a wide screen monitor. This helps you to see the maximum amount of data at one point of time. Or you will need to minimize and maximize the windows. Next we come to the processor. A decent level processor should be good enough. Anything upwards of 2 GHz will work. What you will need is speed and that will be provided by the RAM you have. Nothing less than 1 GB will do. Ideally it should be 2 GB or more. The hard disk should also have plenty of space. Go for at least 100 GB of HDD space.

To place your orders and get instant processing you will have to have a broadband connection or you just wouldn't be able to get the rates you are looking for. With so much traffic these days, a dial-up connection just wouldn't work.

The hardware and the net connection will be put to full use with the back-up of a great software platform. These platforms not only provide you with live data regarding the stock market, but also organize your data so that it is easier for you to find them quickly and understand them better.

Finally, you got to have the passion for trading. Many get lured into trading online because of the promise of ease and comfort that online trading comes with. But to be really successful in trading, be it online or off line, you have to have that passion in you. You got to follow the market trends every day with a lot of interest. You need to study your stocks regularly. Basically you have to be clued in. and that is when you will truly enjoy online trading.

You have tried it and tested it and you are happy to go live with it. Now is the time to write out your trading plan.
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Stock Market Fundamentals By: John Porter

As so many people opt for online trading one wonders what are the reasons for so many people going for something new leaving the traditional method. A little investigation throws up quite a few reasons.

First of all it is convenient and easy. You don't have to leave your room. Who could have imagined a few years before to trade on stocks while lying on his bed with his laptop in front of him? But this is how easy online trading has become. And who wouldn't want that extra bit of comfort. With online trading you can trade at whatever time you feel. Yes, you can trade beyond actual trading hours of the market. So now you can come back from you regular work, take a shower, have your dinner, spend time with your family and before you go to bed spend an hour looking at your investments.

But whatever the comfort may be and however convenient it is to carry out trade online, you still will require to know the fundamentals of the stock market. We discuss a few here.Growth Buying Stocks are shares or stocks of companies which are making healthy profits over the recent few years. Since the companies are generating more revenue and are growing at a rapid rate, there stocks are on high demand. This pushes up the price because investors think even a high price is okay cause the stocks will keep on rising. Though that might be true for the recent future, there is a time when the prices will stop to rise or may even start to decline. To predict that time is what separates a good investor from an ordinary one.

Unloved Stocks are shares of companies that have not been doing well in the recent past, and hence investors are not to keen. When there is a lack of interest, the price per share drops and many investors believe that this is the right time to invest on them when you buy the shares for less, wait for the company to recover and regain its feet and then sell them at a high profit when the price begins to climb as the company generates higher revenue.Then you will also need to learn about the small-cap, mid-cap and large-cap shares. And then there are the micro-cap shares which are mostly involved in the various share market scams.

However, the fact that fundamental analysis shows that a stock is undervalued does not guarantee that it will trade at its intrinsic value any time soon. Things are not so simple. In reality, real share price behavior relentlessly calls into question almost every stock holding, and even the most independently minded investor can start doubting the merits of fundamental analysis. There is no magic formula for figuring out intrinsic value.When the stock market is booming, it is easy for investors to fool themselves into thinking they have a knack for picking winners. But when the market falls and the outlook is uncertain, investors cannot rely on luck. They actually need to know what they're doing.

That said, there is much that the investor can do to learn about fundamentals. Investors who roll up their sleeves and tackle the terminology, tools and techniques of fundamental analysis will enjoy greater confidence in using financial information and, at the same time, will probably become better stock pickers. At the very least, investors will have a better idea of what is meant when someone recommends a stock on strong fundamentals.

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