Easy Steps To Successful Stock Market Trading!
by Ian Harvey
The following steps will get you ready to start trading stock and options in a short period of time, smoothly and easily. The first two steps are the most important ones that you need to undertake before you can start trading. The third step is optional, but recommended, and the fourth step is done for you by Stock Options Made Easy (SOME) if you become a member.
1. Decide if you will be trading as an individual or a company
Also check if you are able to trade with an off-shore company and off-shore bank account (this is advantageous in certain tax situations).
If you are a non-resident U.S. citizen off-shore companies and bank accounts are extremely helpful.
More information and resources to help you consider these choices can be obtained by request through the contact form on this site.
2. Open a Trading Account
The most important thing you need to do to start trading is to set up an on-line trading account. It is quite simple to organize and the companies provide step-by-step instructions. It may take a little time though, so get started now.
There are various considerations in choosing your trading account.
The first factor in determining the type of account to open is how much money you have to invest.
Trading of stock only, requires very little start-up money. You can do this with just $200. This type of account will not enable you to follow my recommendations though- most of my trading is in options.
A basic options account needs a minimum start-up of $2 000.
This account will enable you to trade in options; however it doesn’t allow you to trade as often as you may wish. I frequently buy and sell options on the same day. A regular options account allows you to trade, buy, and sell within the same day, 3 times a week. To have the flexibility to follow most of my recommendations, you would need to set up three or more on-line options trading accounts (each through a separate company).
The best choice if you have sufficient capital is to set up a day-trading account.
This type of account allows you to trade, buy, and sell as often as you wish. The start-up investment for a day-trading account is $25 000. If you have sufficient funds to start with this kind of account I would recommend it. Otherwise, consider opening three or four regular options trading accounts (investment of $6 000 to $8 000 to start).
One more choice you may be offered is whether or not to open a
A margin account does have some advantages. When you sell a stock or option, the money is available instantly, which means that you can buy again. A regular account takes some time to clear the funds from a sale. A margin account also means that you can borrow money to trade, as well as using your own capital. It acts like an overdraft facility, giving you access to extra funds. Keep in mind though, that if you are using borrowed money, you will be charged a fee.
The main disadvantage of a margin account is the time that it takes to be approved. Consider getting started with a regular options trading account so you can start trading. You can then apply for the approval of a margin account.
A regular account means that you are trading with your own money and this is quicker to set up.
Another thing you need to do is to choose a broker.
I have used the following on-line trading brokers quite successfully-they have been quick and efficient in most cases.
Interactive Brokers www.interactivebrokers.com
If you are going to open only one account, my first preference is Interactive Brokers. They are not only cheaper than the others, but they also offer up to the minute options information.
There are many on-line brokers available and the important thing to remember is that all charge different fees for the same service...makes a difference to your profit margin when you start trading.
3. Invest in a Real-Time Streaming Program
This step is optional, but I would recommend that you consider using a real-time streaming information program. This provides up to the minute prices and information on stocks and options. It is very helpful in knowing exactly when you want to buy and sell.
Although your on-line trading company will give you figures, these figure are twenty minutes delayed. Twenty minutes can make a big difference!
The company I use is QUODD Financial Information Services www.quodd.com
The information provided is both broad and detailed. As well as quotes on stock and option prices, they have company information and news, and much more.
The price per month is quite reasonable for the service provided. The company is efficient, well organized and up-to-date.
4. Understand the Importance of Using Good Research Companies
To get top quality research information is a research project in itself. There are many research groups in the market place but it has taken me many years to find which ones can deliver the information that can make a successful trade.
To save you the time and effort of finding research companies, this service is provided by SOME if you become a member.
Once your trading account is open and you have membership with SOME, you will get your first recommendations, and you will be ready to start trading!
I use two companies that have consistently provided good information and recommendations. With these two companies, and my own research and expertise, the recommendations provided to members of SOME produce a high percentage return on investment.
”Success is simple. Do what's right, the right way, at the right time.” Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.
”Success is simple. Do what's right, the right way, at the right time.”
Option Tip for your Success!
Options traders are not successful because they win.