How to Trade Stocks: the Bare Essentials

Everyone wishes they had a better understanding of the stock market. It can seem very confusing and overwhelming to a beginner, especially considering the fluctuation of the market over the last couple of years. Here are some general tips to get you through your first investments.

Have a balanced portfolio - Invest in companies that will offset each other, or more clearly, when one company intends to profit, its counterpart may have to take loss. This is the safe bet because hopefully the profitable company (the increase in stock price) will be a greater difference in price.

Consider the fees - Although you may think you only need the money you plan on investing to actually invest in stocks, almost all brokerages are there to make the transaction for you. And of course, they are in business to do this. You may think "How can I trade without a broker" but without a license, forget this idea. Anyways, these brokers can help you manage your portfolio, giving you the freedom to explore your companies. So when considering fees, think about how much the fee is per trade, and how many shares can you trade for this fee. Some brokers offer very low commission fees for unlimited shares. This is ideal. See this chart for a comparison of rates from different brokers


Respect your risk level - The general consensus is that the bigger the risk, the greater the reward....And this is TRUE...Both ways! If a stock has the potential of increasing substantially, there is also a lot of potential that it will crash and burn. These stocks are typically very volatile and can cause you to lose your money quick if you are not careful. Remember the balanced portfolio? Well this is true for riskiness as well. Buy some riskier yet exciting stocks, while incorporating some safe & slow purchases.


Test your skills - Since most likely you are a beginner, you may never feel comfortable using you own personal hard working money to possibly throw away with the click of a button. That is why there are virtual platforms. Test your skill, knowledge, and luck and buy and sell stocks all day long, while never losing a penny. You will never gain a penny either...unfortunately. But remember, when you practice, you make perfect. Try out your skills and knowledge with this virtual platform.

Tips

• Always do your research first. Only 1 in a million have a gut feeling that is right every time. 

Warnings

• Choose wisely when deciding who to use as a broker some are out to help, others are there to scam you.

 source : wikihow

How to Trade Futures

The more you know about futures and commodities trading, the better you can determine if opening an account is right for you.
The materials below will provide an introduction to the major concepts, terminology, and mindsets critical to futures trading.
We have found the following concepts to be very important. Take a moment to familiarize yourself with this list before reading the more in-depth booklets below.

Steps

1. Use risk control. Poor money management and too many correlated trades lead to bad results. 
2. Make rational bets.
3. Risk 1-5% of your portfolio on a single trade.
4. Don't wish. Don't hope. Diagnose the trading process.
5. Decide on an exit point before you put on a trade.
6. Cut losses. Ride winners. Close positions you are uncomfortable with.
7. Stick to your own style.
8. Don't over-trade.
9. Use stops.
10. Discipline. Imagination with discipline.
11. Keep the money you make. It's hard to make it.
12. Keep a log of what you do. Observe and think about how you can improve.
13. Expect the unexpected. Expect the extreme. Don't be too tied to history.
14. Use different strategies to avoid having all your orders going in at one point.
15. Don't average losses.
16. Decrease your trading volume when you trade poorly.
17. Increase your trading volume when you trade well.
18. Play defense, not offense.
19. Honor your risk point.
20. Don't get emotionally involved with your positions.

Tips

• Now that you have explored these basic futures trading strategies, take the time to read through the following booklets from very reliable sources.
  

How to Look up Foreign Exchange Quote Information

If you are looking for foreign exchange quote information, you can find it in a variety of ways. For example, you can look up free articles at networks that offer free articles for your use. You can also find this information at professional Forex websites. The foreign exchange market is one of the hottest forms of trading today, and all the information you can gather regarding how to trade on the Forex market the better off you are.

Read daily news and reports and consult Forex trading professionals. Brokers also are very useful when you are looking for the most up to date information regarding currency prices. When you analyze the Forex market you will notice that there are a variety of pieces of information that help you determine how much you should invest, and what the expected return on your investment shall be. Projecting the nature of the stock in which you will invest is sometimes challenging, but it can be done, and is a necessary aspect of becoming a successful Forex trader. 

Understand the factors that can affect a foreign exchange quote. These include the overall economic state of the country represented by the currency you choose to buy, sell, or trade. Not only that, but demand of that particular currency has partially to do with it, as well as rising interest rates, and the rising costs of living in a particular location. The success of a company and the revenue that a company generates also plays a factor in determining the value of a stock.

Do your homework and stay aware of current foreign market trends. Also, they plan well and they know when to buy and when not to buy. Also, they know when to sell, and when to close the deal. If you would like to participate in the Forex trading market you may want to find foreign exchange quote listings on the Internet presented by companies, organizations, and exchanges that you trust.

Know what you're looking at. Part of the information that you see on the Internet that is appropriate for those who want to find good foreign exchange quote information is charts, graphs, articles, and live television coverage. These cover the exchanges itself, and give you updates on the current buying and selling prices of foreign currency. You can also find records of the highest and lowest bid on a particular currency, and the net profit or lost of that given currency in a day's time. All this information plus other Forex trading information can help you make an educated decision.

source : wikihow

Fluctuations in exchange rates

A market based exchange rate will change whenever the values of either of the two component currencies change. A currency will tend to become more valuable whenever demand for it is greater than the available supply. It will become less valuable whenever demand is less than available supply (this does not mean people no longer want money, it just means they prefer holding their wealth in some other form, possibly another currency).

Increased demand for a currency is due to either an increased transaction demand for money, or an increased speculative demand for money. The transaction demand for money is highly correlated to the country's level of business activity, gross domestic product (GDP), and employment levels. The more people there are unemployed, the less the public as a whole will spend on goods and services. Central banks typically have little difficulty adjusting the available money supply to accommodate changes in the demand for money due to business transactions.

The speculative demand for money is much harder for a central bank to accommodate but they try to do this by adjusting interest rates. An investor may choose to buy a currency if the return (that is the interest rate) is high enough. The higher a country's interest rates, the greater the demand for that currency. It has been argued that currency speculation can undermine real economic growth, in particular since large currency speculators may deliberately create downward pressure on a currency in order to force that central bank to sell their currency to keep it stable (once this happens, the speculator can buy the currency back from the bank at a lower price, close out their position, and thereby take a profit).

source : wikipedia