HOW TO START MAKING SERIOUS MONEY IN THE STOCK MARKET AND FOREX! (FOR NEW INTERMEDIATE INVESTORS)
|
THE ARTICLE -
There are many places to get started when it comes to investing. There are plenty of Robo advisors and brokers using fancy words like “margin account”, “commission”, “long”, “short”, “put”, “futures” & “options” & if you're new to investing or trading you may have no idea what these terms mean. If I were new to trading I would never use a Robo advisor that charges commission fees. A Robo advisor is an automated advisor that you don't tangibly have to go to. Robinhood or Webull are examples of free Robo advisors. Places like Edward Jones and Charles Schwab are not Robo-advisors because they have many locations. The reason I recommend using a free Robo advisor is that most people who want to start trading and investing are new & Robinhood has a simple platform. Most no commission Robo advisors don't try to hustle you and force a margin account down your throat. A margin account is trading off of borrowed money. Brokerage accounts that have high commission will say “you must have a $2,000 minimum” and with that $2,000 minimum, they will implicate margin. The good thing with margin is that you are controlling more money than you have in your account. Let's say for example you must hold at least 2% of your position in cash while trading a stock. 2% of $100,000 is $2,000. You are essentially moving $100,000 with a margin account that requires you to hold 2% of your position size. |
|
If you wanted to trade shares of a company worth $10 and you have $2,000 in your account, let's say your broker requires a 2% margin threshold you could then buy 10,000 shares of a stock worth $10 collectively being valued at $100,000 for only $2,000. Because 2% of $100,000 is $2,000 and that is your margin requirement. This is very high leverage (margin) that certain brokers try to attack you with. The upside of margin is if you have $2,000 and you are trading with the buying power of $100,000 and you purchase as many shares as possible worth $10 you have 10,000 shares. If the price of that share goes up to $1 you make $1 * 10,000 which is $10,000. Trust me it's much harder to do than you think. However more than likely if the share price goes down and you no longer meet the margin requirement which is you must have 2% of your position size of $100,000 then you get what's called a margin call. A margin call is when a broker closes out all of our positions and those losing position you are in is what you keep. So if you have $2,000 and your $2,000 goes down to $1,700 you now just lost $300 because you had to keep your position at $2,000 or higher to utilize the margin. That's why I recommend if you are a new trader (short term investor) don't be so eager to use margin try to find free or cheap Robo advisors. Keep it very simple stick to longing (buying) or shorting (selling) securities. No need to dabble into futures or options just yet! Give it some time, get your feet wet. Below you will find basic trading vocabulary And here is a resource that will make you a stronger trader.
MAIN IDEA & TERMS -
Long - Buy
Short- Sell
Rally- Raise in price.
Dovish- When a central bank lowers interest rates
RBA -Reserve Bank Australia
the fed -United States Federal Reserve
ECB- European Central Bank
EU European Union
Jerome Powell -chairman of the United States Federal Reserve
Forex- Foreign Exchange Market
NYSE- New York Stock Exchange
Margin- borrowed money
Margin Call - when your broker wants his borrowed money back
ASK
The lowest price a seller is willing to accept when selling a security.
BEAR
An investor who believes the market as a whole or a particular stock will decline. A bear is the opposite of a Bull.
BULL
An investor who believes the market as a whole or a particular stock will rise. A bull is the opposite of a Bear.
BLUE CHIP
A company that has a history of solid earnings, regular and increasing dividends, and an impeccable balance sheet.
MUTUAL FUND
An investment company that combines the money from a large group of investors to buy stocks and other investments.
SECURITIES
Includes stocks, bonds, and bank deposits.
Bellow you will see EA BUILDER; one of the best Auto Traders around for your busy lifestyle. The experts at EA BUILDER are industry leaders amongst Robo-advisors. At a very low price.
THE VIDEO -