Getting Started with Stocks

[Do Or Die 10]

Hi

 

As mentioned in my introductory post, I am very much a stocks person. TL has rich material on almost everything, but I see little activity in these sections. I will share a few things in this thread which beginners will find useful. The experienced stocks/futures traders will also see my perspective on why I prefer stocks over other trading instruments.

 

DD

[Do Or Die 10]

1. Each stock has its own characteristics

 

And not just each stock, each stock group has its own characteristics. The SnP has its own as a market index. Gradually you start picking them. This gives you edge against randomness, and a base for defining a set of strategies.

 

2. Regime shifts

 

Stocks show regime shifts remarkably clear. There will be phases when you will make money in every trade, and there will be phases you won’t get a clue about what’s happening. The phases usually occur when there is a fundamental shift in underlying.

 

3. Diversification

 

Diversification isn’t simply buying uncorrelated instruments. For professional traders, a much better form of diversification is trading uncorrelated strategies. This is easier done in stocks than futures.

 

4. Gaps and Pre-market trading

 

Gap trading in stocks is still one of the easiest plays for a beginner. There are many types of gap patterns to play and thousands of stocks to choose from. You can choose stock screeners such as Trade-Ideas and get started.

 

5. Event- based Trading

 

5 years back things were very easy for scalpers and daytraders (the time I started trading). You could make money just by trading on news only- using a premium news service, of course. Even these days, trading around news events in stocks is easier than in futures. Option spread strategies can be used to their full potential around such events.

6. Trading as well as Investing

 

Once you start trading profitably in stocks, chances are high that every couple of years you will pick 5-10 great investment stocks. This comes automatically as insight after day to day trading for a long time. Having your investment portfolio is a great way to park your investments.

 

DD

Edited June 10, 2011 by Do Or Die

[Do Or Die 10]

1. It is purely Technical

 

If you read my say on regime shifts, you will appreciate that it is good to know what is happening in the underlying.

 

2. Stocks Trading is for newbees only

 

I know several millionaire traders in stocks, and have personally met few.

 

3. Stocks Trading is for wimps

 

LOL, I’ve heard that from futures traders. Again, it’s all about the money you’re making

 

4. Stocks trading is difficult because stocks are highly manipulated

 

Bears are manipulative to bulls and vice-versa. Suppose two playful brothers have to divide a cake between them; isn’t that one of them will try to get a bigger piece? You just have to turn things in your advantage and avoid ranting.

 

DD

[Do Or Die 10]

OK guys... sorry about the brevity and your questions are most welcome. And please don't mind if I'm slow in responding (habitual laziness).

 

DD

[Do Or Die 10]

One of the best websites for stock traders: FINVIZ.com - Stock Screener

 

Stock Screeners is one of the most important tools. Check the free ones before you go for a paid subscription:

Stock Screener - Overview

Google Finance: Find top stocks with our stock screener

Stock Screener - Yahoo! Finance

Stock Scan: Predefined Scans - Charting Tools - StockCharts.com

Stock Screener Control Panel | Phil's Stock Market Blog

Zignals; free stock screener and fundamental trading strategies

Free Stock Screener - Stock Market Screener - Technical Stock Screener - MarketWatch

 

DD

[reset.no.regret 10]

4. Gaps and Pre-market trading

 

Gap trading in stocks is still one of the easiest plays for a beginner. There are many types of gap patterns to play and thousands of stocks to choose from. You can choose stock screeners such as Trade-Ideas and get started.

DD

 

Can you tell me more about these gap patterns or point me somewhere? I've stayed away from gaps, but I'd like to be able to add them to my strategies. thx

[Do Or Die 10]

Hi,

 

For analyzing any gap there are two main things to look for:

1. Prevailing trend/momentum when the gap occurs

2. The price shock that the gap delivers

 

For gaps people usually look for white space between two bars. I'm referring to all gaps- those which occur when Open is significantly different than previous Close. For example a full green candle for today -> next day the stock opens near the base of candle.

 

For open range trades... this can be very useful. I'll write more and take a example on Monday. In the meanwhile comments can keep me motivated

 

:missy:

DD

[reset.no.regret 10]

Thanks. I think an example would help me understand. I understand gaps and some of the things that can cause them, but not how to trade them. Because of that, if I see a stock that is gappy I move on. Its actually one of my written trading rules. But only because I don't know how to handle them.

[Do Or Die 10]

Sorry for this delayed reply- if anyone was kept waiting.

 

Open range trading is done on shorter time frames: 1-5 minutes charts. For prevailing trend we can check 60 minute charts and for important support/resistance levels, the EOD chart.

 

See the chart of BBY today. I've attached today's & daily chart.

 

Prevailing trend/momentum:

• The stock has risen sharply in past week from it's 52 week low.
  
• The trend is strongly up.
  
• It has significant resistance at 32
  

Price Shock:

• Opens gap up by more than 4%... almost 1 ATR
  
• Opens above the resistance where on can expect large number of sell orders
  
• Breaks down on the lower side
  

 

I can't be more clear at this point. Mention any open-range(OBR) strategy and we can check details on how these gaps increase the odds. Such strategies are hard to execute profitably in futures.

 

Will look forward for comments and more examples to discuss.

 

:missy:

DD

[Do Or Die 10]

Charting Software & Websites (Free)

 

Stock Charting Software | Technical Analysis

FreeStockCharts.com - Web's Best Streaming Realtime Stock Charts - Free

1. Fibotrader
   
2. FCharts
   
3. Getcharting MI
   
4. QuoteTracker
   
5. WinTrend
   
6. ModulusFE Modulus StockChartX
   

 

What website should I used for the RSI? Are there any other better chart websites like freestockcharts?

[umfan92 10]

Thank you for all the options. I don't want to sound rude or unappreciative, but I really didn't find any that would work for me. I went through each individual one and either it didn't work, or it wasn't easy to use. I actually really like using the freestockcharts.com website. It's a shame that the RSI values are incorrect. I wish there was one similar to that one that had all correct values.

[Do Or Die 10]

They'll probably fix it soon. There are still more sites like http://stockcharts.com/charts/

 

You seem to be serious about trading. If you want to spend daily even 30 minutes you can't get away with a software. Of course configuring and learning to use one will take time, but it is indispensable.

 

Ninjatrade is still free I guess. Learning to manage data in it will take time, but its VERY powerful NinjaTrader stock, futures and forex charting software and online trading platform.

 

Contact me through PM for some other options.

[umfan92 10]

Sorry for this delayed reply- if anyone was kept waiting.

 

Open range trading is done on shorter time frames: 1-5 minutes charts. For prevailing trend we can check 60 minute charts and for important support/resistance levels, the EOD chart.

 

See the chart of BBY today. I've attached today's & daily chart.

 

Prevailing trend/momentum:

• The stock has risen sharply in past week from it's 52 week low.
  
• The trend is strongly up.
  
• It has significant resistance at 32
  

Price Shock:

• Opens gap up by more than 4%... almost 1 ATR
  
• Opens above the resistance where on can expect large number of sell orders
  
• Breaks down on the lower side
  

 

I can't be more clear at this point. Mention any open-range(OBR) strategy and we can check details on how these gaps increase the odds. Such strategies are hard to execute profitably in futures.

 

Will look forward for comments and more examples to discuss.

 

:missy:

DD

 

I am pretty interested in that gap strategy, but how can it be used? How would I look at a stock and buy or sell basing my entire strategy on gaps. I now understand what you mean by gaps, but how can you predict them, or what do you do when you see them? You mentioned that one could expect many selling orders at that point on BBY, so are you saying it would be good to short at that point? I'm a beginner so I don't think I'll be shorting anything for a while since there is a lot of risk, but what about using gaps to determine buying?

[Do Or Die 10]

I'm currently posting EOD charts, once done, will come back to your questions... intraday trading is a totally different ball game and the answers require starting from basics.

[bonchi07 10]

1. It is purely Technical

 

If you read my say on regime shifts, you will appreciate that it is good to know what is happening in the underlying.

 

2. Stocks Trading is for newbees only

 

I know several millionaire traders in stocks, and have personally met few.

 

3. Stocks Trading is for wimps

 

LOL, I’ve heard that from futures traders. Again, it’s all about the money you’re making

 

4. Stocks trading is difficult because stocks are highly manipulated

 

Bears are manipulative to bulls and vice-versa. Suppose two playful brothers have to divide a cake between them; isn’t that one of them will try to get a bigger piece? You just have to turn things in your advantage and avoid ranting.

 

DD

 

Thanks for all this backup information. I also trade stocks and it is always challenging and ever changing. Besides, controlling your emotions and having a discipline is one of the most important things...regardless of what you trade. :missy:

[Do Or Die 10]

Stocks Trading Simulators

 

WallStreet Survivor Stock game, stock market game, paper trading and online trading at Wall Street Survivor, a Stock Trak Partner

TradingSim http://www.tradingsim.com/

ChartGame Chartgame.com - The time-lapse stock trading game

TurTrades TurTrades (Test your trades)

 

Premium:

 

TT Trainer/

http://www.cyborgtrading.com/solutions/simulation

[trading4u 10]

As the Trading stocks on-line could be a remunerative area to enter, however, it always come with the big risk. If you will not be prepared than you may finish losing a lot more than what you have negotiated for. In this article there is Tips for Online Stock Trading which could help you to gain more profits than you are earning.

 

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These are basic fundamental Tips for Online Stock Trading, still very lively things that anybody who desires to appoint in the stock trading business should identify. Since investing on your own information & skills in selling is the most imperative thing that any person should regard as in organize to succeed in this extremely dangerous trading platform. Just adopt explained Tips for Online Stock Trading and definitely, you would obtain a major distinction in your performance.

[vs777 10]

Hi do or die

 

i also prefer stock over other investments because it gives high return when market is in your favor.

 

Thanks to provide this such good information