The stock market is an incredibly complex web where everything affects everything else. Often times one small action or piece of news can spark a massive ripple effect through the entire market. With the global economy so intertwined its getting even more complex and unless you understand stock trading basics y simply won’t succeed.

The Concept Of Value
When it comes to stock trading basics it does not get more basic than understanding the concept of value. This is the fundamental law of the markets and every day this drives every trade on every exchange. Any stock represents a value – something that we trade and in exchange for money we buy a commodity which is nothing more than a “virtual” share in a company or underlaying asset.

The weird thing about value is that its not the actual value we buy on the stock market. Instead it’s the PERCEIVED value of the particular stock. Perceived value is a very hard concept to grasp but once you do it can help you immensely. When something is perceived as valuable we are willing to pay more for it than when its perceived to be less valuable. If I wanted to sell a gold coin to you for $10 you’d probably be more inclined to buy it than if I were to sell you a coin made of nickel.

The entire stock market moves around this one fundamental principle. Stocks lose and gain value based solely on perceived value. One of the stock trading basics you have to get is to understand value and only trade based on value. When you start seeing the relationship between value and what affects it you can start making much more intelligent choices when you trade. Can you see how certain events can affect the perceived value of a company?

The reason why so many novice traders fail to make profitable trades is simply because they don’t have the stock trading basics. Its as simple (and as hard) as understanding what makes the markets move and to buy value. Making money on the stock market boils down to buying something with a low perceived value, and then selling it when the perceived value goes up and vice versa. Understand that and you will be ahead of 80% of the newbie traders who are locked into learning software and looking for the next hot tip that’s going to make them rich.

The first and most important thing to look for in any stock trading course is the person (s) presenting the course. Are they REAL traders who are actively trading or are they just out to make money from teaching others to trade?

Obviously there are many different levels of training and you also need to look at that aspect. Is it a stock trading course for a beginner or is it advanced and only useful for experienced traders? I’ve been through a lot of trading courses and to be honest most of them were NOT worth the money. However, I did learn something from every one of them.

Stock trading courses vary greatly in price and quality. I thought it would probably most useful to you if I tell you about 3 different “levels” of courses. Pick whatever suits your budget but don’t restrict yourself to these either.

1. Books
The cheapest stock trading courses are probably books. The problem is that there are thousands of them and most often we can get lost in a book. There are some amazing books available and for $20 you can learn from some of the best traders in the world. With books however, you need to be very focused since most people never even read past the first chapter of a book. I would recommend Bonnie Turner’s books. They tend to move a bit fast, but are very thorough and is great for beginner and intermediate traders.

2. Online Courses
The next level of stock trading courses are online courses. There are many of them and the obvious problem these days is that every second “trader” is trying to sell a course. The fantastic benefit of online courses is that you can get a very thorough education and with interactive technology you can shorten the learning curve significantly. Without a doubt, the best course is Anthony Green’s online trading course. With manuals, videos and even email access to answer your most pressing questions its well worth the investment – especially being able to see a professional trader in action and to learn first hand from someone who is actively trading for a living. He lays out a very easy to follow step-by-step program, but you will need at least $1,000 to trade with.

3. Seminars
The top level stock trading courses are seminars. They are usually 2 or 3 day long courses that are held in groups of 50 to 300 and can cost as much as $10,000 per person. The real power of these seminars is that you immerse yourself in it for a couple of days and being there WITH other traders and being able to ask questions and learn first hand is priceless. The best trading seminar I ever attended was Wealth Mastery – which is Tony Robbins’ brainchild and presented by Chuck Mellon who is widely regarded as one of the top traders in the world.

Hopefully this quick overview of stock trading courses will get you started on the right path. This is one thing you don’t want to “figure out” yourself – you will lose a lot of money before you come to your senses. If you’re just dabbling with the idea, buy yourself a good book. If you want to actively start trading, enroll in an online course. If you already have some experience, go to a live seminar.

Unless you are a professional level 1 trader there is no need to get into $10,000 software. Its simply not necessary. You can make a lot of money trading with NO tools – but then again stock trading tools can make your life a lot easier. Lets quickly look at 3 awesome tools that you need to start using immediately.

1. StockCharts.com
This is by far one of my favorite stock trading tools and its free. Here you can get great looking graphs of any stock on virtually every major exchange at the push of a button. It gives you a lot of control over the graphs and whether you like simple line diagrams or candlesticks you can do it. It also allows you to overlay moving averages and numerous other trend lines. There’s a wealth of information on this site and should be one of your top stock trading tools for technical trading.

2. Yahoo Finance
For me Yahoo Finance is to fundamental analysis as StockCharts is to technical analysis. Yahoo Finance has become the foremost source of news for anything financial and they now provide news feeds to most major websites all over the internet. Knowing what’s happening to which company is vital when trading online and if its happening you will find it here. You can also do extensive research on virtually any company you can think of with in-depth reports and countless experts writing for them.

3. Stock Screeners
If you are just staring out, then having a good stock screener can be the best investment you make. Although there are quite a few “free” ones you will find that somewhere down the line you end up paying for it anyway. I found that StockAssault 2.0 is the easiest and probably the cheapest. What it does is to show you pre-screened stocks that meet certain criteria. This save you from the minefield of sifting through thousands of stocks. Not only does these stock trading tools improve your chances of making winning trades but it will help you learn much faster.

Although stock trading tools are great, its important to always keep in mind that they are ONLY tools to HELP you. In the end you and only you can make the decisions. Get all the help you can and use all the tools you find useful, but never let anyone or any software out there make your decisions for you. After all, its YOUR money!

Traditional stock brokers performed exactly the same service that online brokers now perform. The main difference is just that the online process is fully automated and there are no “real person” who actually fulfills the buy and sell orders – it’s all done via computers that are directly linked up the trading houses and stock exchanges.

Back in the day with traditional stock brokers it was a very different story. If you wanted to buy a stock you would have to phone up your stock broker and tell what you want to buy or sell. He or she would then phone the trading house (on the floor) who would actually buy or sell the stocks. This process was not only slow but very expensive – hence trading was reserved to those who had the money to trade stocks.

As computers and the internet advanced, brokers started implementing trading platforms that allowed them to execute your trades instantaneously and as this became more sophisticated eventually public online brokers started springing up. Not only can you now trade without a physical broker, but you can do it at a fraction of the cost.

An online stock broker is nothing but a piece of computer software that buys and sells your stocks for you in exchange for a fee. The fees varies from broker to broker and is anything between $5 and $15 per trade.
Some of the big name online stock brokers are eTrade.com (the best in my opinion), Ameritrade and Scottrade. Each one has something unique to offer and you need to do a bit of research to see which one will suit you best. Generally speaking, those with bigger accou8nts get more privileges although even the most basic accounts still give you all the benefits to be a successful online trader.

Some things you need to look into a bit more before you make your decision are the following:

- The minimum amount you need to open your trading account and what do you need to maintain your account.

- Price. How much do they charge per trade and what account level do you need to qualify for that rate.

- Trading software. Do they offer you any trading software and if they do what account level do you need to maintain to get the software for free.

- Margin accounts. Do they offer margin and how much. Also check the fine print on the requirements and conditions of trading on margin.

- Options trading. Do they allow you to trade options and what are their requirements.

- Insurance and security. This is not really a big concern with large companies but smaller online brokers can fold and along with it your trading account will disappear.

- Speed of execution. How fast do they execute trades and what guarantees do they offer in terms of quoted prices.

- If you are in a foreign country, do they allow you to open an account and what exchanges will you have access to. Also, carefully check the required paperwork as this can be a cumbersome process.

Trading Volume
One of the most important indicators to look at is the volume of a stock. Volume is an indication of how active a stock is. It is also an indication of how much money is flowing in and out of that particular stock. We ALWAYS want to FOLLOW the money. Volume is a great indication of the flow of money. Low volume stocks are “dead” and although they may be safe they won’t make us money.

Buy On Weakness, Sell On Strength
One of the very first things I learned when I started online trading, but I must admit that it took me years to fully understand that this is the crux of it all. When you buy on weakness you buy a bargain. When you sell on strength you make a profit. Simple as that. Buying on weakness means that you are buying something that is undervalued. It’s like buying a $100 bill for $50. As soon as you start chasing stocks and holding on too long you start breaking this fundamental rule.

Moving Averages
My favorite tool for analyzing any stock. In fact, I love it so much it’s almost the first thing I look at. Moving averages is in my opinion one o the most accurate ways to see which direction a stock is moving. This is one of my best stock trading tips I can give you. Look at the moving averages and look at the crossovers – this is when buy and sell signals usually appear.

Check The News
As a predominantly technical trader, I was slow at catching on to this since I hate fundamental analysis. However, this is a simple and quick way to spot changes in a particular stock price. Just take a couple of minutes to do a search in Yahoo Finance or in your eTrade console for the latest financial news about that stock. Doing a quick search in that sector is also a good idea and be on the lookout for anything that can significantly affect the market perception.

Let The Winners Run, Cut Your Losers Short
It almost sounds ridiculous but how often do we hold on to stocks that we “fall in love with” HOPING that it will make a comeback and run the way we hoped it would? It’s simple, if a stock is not doing what you planned for it, cut it off. On the other hand, if a stock starts running you should let it go and throw your full weight behind it.

Plan Your Trades, Trade Your Plan
It’s vital to have a very clear plan on every single trade you make. You must have a definite entry price, a definite exit point and you must have stop losses in place. Trading with a plan is not just about giving yourself some rules, but it’s about discipline and being a good money manger. Thinking that you can go with the flow and play it as it comes is just plain stupid and a recipe for disaster.

I hope these few stock trading tips will help you out. They are really that important and something that I believe will help you a lot.

More than anything, the financial meltdown that started in 2008 underlined the importance of being a smart investor. Investing in good, solid and reputable companies was the determining factor for those investors that survived the onslaught of the market meltdown.

Off course an investment is never a “sure thing” and there is always risk involved, but by being smart and investing in companies with good financial health you can greatly reduce your risk. This is a mistake that most technical traders and especially day traders make almost every day. Yes, sure day trading plays by a different set of rules, but by being a little bit more diligent can help you be much smarter with your money.

Legendary investor, Warren Buffet is a genius at picking stocks. His entire philosophy is based on finding great companies that are undervalued. Instead of just looking at the stock, he looks at the entire company to see if it’s worth his money.

Looking at stocks from a value perspective puts an entire different spin on it. Companies that are valuable are good investments. Simple as that. Most often their charts will reflect this, but doing some more research into the fundamentals of a company can help you make better decisions when buying and selling stocks.

Online brokers are great for this type of research. eTrade for instance gives you a great “snapshot” of a stock by giving you all the technical data as well at the fundamentals, news and even opinions of a particular stock. You don’t even have to go and do lengthy research. All it takes is to read a bit more and off course, learn more about what makes a particular stock a good investment.

When the world markets crumble, the companies that remain standing aren’t necessarily the ones that look good on paper or that have a nice looking chart. It’s the ones that add value in a market place.

There are many theories and methods to access a company’s fundamentals. Learning them is vital in ensuring your long term success as a stock market investor. Not only will it make you a more sophisticated trader, but it will help you to make good long term investments that even the best day traders must diversify into.

If you are a new investor, then you have to know the rules of the game. You have to be able to understand the charts, recognize the trends and read information available online. There is a lot of profit in selling stocks online that is why you have to have an effective investment strategy that would help you pick the right investments.

Considering the risks involved in investing on stocks trading, you need these great tips to start making those good stock picks that will boost your financial portfolio. Here are some of them:

1.Know who to trust. There are lots of online advices you can get out there, but picking the right person who know exactly what to do can be a tricky business. You would want to look for a stock broker who has the reputation for being an industry expert as well as a reliable partner in keeping tabs with your investments.

This person should know the market climate like the back of his hand to advice you when to invest and when to wait. He must also know where you should invest your money in. This person must be available for direct communication through several means. It would also help if there are other people who could testify to this person’s performance just to be on the safe side.

2.Trading is an ongoing process. It helps to keep yourself reminded of this statement because you need to constantly be on the look out for what happens in the market. You need to stay online and watch out for the rise and fall of the prices and the interest rates.

Aside from relying on an industry expert, you also need to watch the market yourself for really good stock picks to invest on. Remember that two heads are better than one, and if you can help your broker in the decision making process, then the more effective you will be as a trader.

3.Know what to look for. You will only know what real good stock picks are available if you are knowledgeable in online stock trading. You must read a lot of financial journals in order to know what exactly you are looking for. There are lots of great tips online that could help you weed out the good investments from the bad ones. So always be on the look-out for these great tips.

Just remember to get all the information you can get before making a decision. A sound decision is usually a guided one. If you really want to be successful in this activity, you will need to get all the resources and the information you can get to choose the best investment.

Here are some potential risks involved in online stock trading:

Risk # 1 – Stock Market Volatility

This is probably the most recognized and most feared risk of all stock trading ventures. Volatility strikes like a big wave sweeping away all the necessary precautions you took as you trade stock online. Volatility means there is a fluctuation in stock prices caused by the performance of the global economy. It is especially difficult to predict how the market would fare if you’re not constantly aware of how the market is running.

Risk # 2 – Market corrections

This is inherent in the stock market. Investors lose about 10 to 20 percent of the market value of their stocks once bear markets wreaks havoc to numerous stocks investors. This is one of the higher risks you will encounter in internet stock trading.

Risk # 3 – Fluctuating interest rates

Prices fall due to an increase on the interest rates. This is a considerable loss for investors who have bought their stocks at much higher rates. This happens when people invest on fixed income securities like high yielding bonds as the interest rates go high. A wide spread of shares get sold and as a result, the stocks falls considerably low.

Risk # 4 – Fluctuating value of currency

Foreign securities are often affected when the currency grows stronger. People lose money as the value of the currency changes. On the other hand, the stock investors earn some extra whenever the rates of local currency fall. This happens because there is an increase on the returns of their investments. However, if you hold your funds on shorter terms, constant fluctuations will result to more losses than gains.

Investor should be wise as they get into trading. They need to diversify on their investments and learn not to put all eggs in just one basket. They also need to learn to be patient and invest on longer terms if they want greater returns. People who invest on shorter terms usually suffer the most because of the risks mentioned above.

If you wish to be successful with online stock trading, you need to step up your game and strategize. Usually, your brokers will help you do just that. However, you cannot just rely your fate on a single person. You need to know these risks, and you must plan to have a safety net if you plan on turning this into a career. Be sure you know how to play with your investments and keep yourself updates with the current trends of the market to avoid big losses.

Tip # 1 – You need a computer and some basic internet knowledge.

Trading is not just done the usual way anymore, wherein you had to go to an actual physical building or look through a bunch of newspapers to keep up with the trends of the stock market. Now, you could easily do your trading online with the use of your computer. So you have to have some basic knowledge at least on computers and using the internet to get you started in online trading.

Internet stock trading has never been more efficient, faster and easier than doing transactions over the phone. Now, you can keep yourself updated almost every second of everyday and you can trade faster and see the results of what you have done just by transacting through your computer. You can now do business straight from your own home.
Of course you will definitely need an efficient computer system as well as a good internet connection. If you have these, then you’re all set and ready to trade.

Tip # 2 – Choose a broker you can trust.

There are forums and sites you can check out when you’re about to choose your very own broker. Read reviews on line about stock traders who have enough experience in trading stocks online. Try to avoid those brokers who may claim to provide services without commission. Usually these brokers do not offer enough support and genuine customer service as you start trading. You also need to choose a broker whom you could communicate in many different ways like through email or by phone. Try to get referrals from friends and family who have done stock trading online and get their recommendations on the best stock broker that could help you boost your financial portfolio.

Tip # 3 – Continuously educate yourself

There are a lot of facts online about internet stock trading. It is up to you to go ahead and read them. The best tip you could follow when trading online is to do your best to keep yourself posted about the latest trends in the stock market. Read journals, newspapers and talk to people who are also into stock trading to keep you well-informed. The most successful stock traders are usually the most educated ones. They know what drives the market and what to do next if the prices of stocks rise of fail. Educating yourself continuously will also guide you in your decision making as you become more serious with online trading.