Stock Trading Account

You can trade in stocks only through the stock brokers. You can open an account only if you are a US citizen, or, a resident alien. In both cases you need to provide your valid social security number. You must have become a major, at least 18 years old in your state of residence before you can apply for opening a trading account.

Usually there are four main types of stock trading accounts. They are individual accounts, joint accounts, IRAs ---Individual Retirement accounts, and Education Savings accounts. You have to select one of these accounts according to your personal needs and circumstances. You must be ready to deposit a minimum of $ 2,500 irrespective of the account you open. You can fund your account via free electronic transfer directly from your current bank account. You can also pay by check or wire transfer.

The individual investment account can be opened in the name of one person. Joint account can be opened for two people. It is also mandatory that both the persons should have reached the age of majority in their state of residence.

The third type of stock trading account is IRA or individual retirement account. It is a personal retirement savings account. It offers tax advantages to investors. You can deposit a part of your earnings into a tax-deferred brokerage account. Your contributions are also tax-deductible.

Individual retirement account-IRA-- is of three types.

The first type is traditional IRA. In this account, you can defer the payment of taxes on your earnings until you start taking the money out. The money that you put in is tax deductible in the year you put it in. The investors who are up to the age of 50, or under by the end of the year, can currently contribute up to $ 5000 every year, but those who are up to the age of 70 can contribute $ 4,000.

The benefit of investing under the traditional IRA is that you do not have to pay any taxes on what you earn till the time you start withdrawing the money. This process is known as tax deferment. This account makes sense because by the time you retire, you may be in a lower tax bracket. In that case, you will have to pay less in taxes on earnings from your IRA account.

The second type of retirement category account is Roth IRA. This account is similar to the traditional IRA except that you pay taxes on the money you put in while you can withdraw money without paying any tax. Those who are up to the age of 50 can currently contribute up to $5,000 every year and those who are up to the age of 70 can contribute up to $4,000. You should opt for a Roth IRA if you think you will be in a higher tax bracket when you retire. If you invest under a Roth IRA, your investments can grow tax-free. You can withdraw money after a period of 5 years from the date of opening your account without paying any tax with the proviso that you have turned 59. The withdrawal can also be tax-free if it is used for a first time home purchase up to a limit of $10,000. You will, however, have to pay 10% penalty if you withdraw early.

The third type of account in retirement category is Rollover IRA. A Rollover IRA is a holding account. If you transfer funds or stock from a retirement plan such as a 401(k) or 403(b), the money or stock can be allowed to stay in the Rollover account for a period of 60 days. Thereafter you will have to place the funds into another retirement plan. You can control your account during these 60 days. It must be noted that you cannot avail of this facility more than once a year

The fourth type of account is Education Savings Account or ESA. This account can be opened as a trust to pay educational expenses of the designated minor beneficiary and no contributions can be made after the beneficiary has reached the age of 18. The total contributions cannot exceed $2,000.

Stock Trading Tips

Making a profit in today’s money market economy requires cautious calculation, knowledge of the financial environment, and a little luck. Even if you don’t believe in the latter, online stock trading is a huge investment opportunity for many, and a daring endeavor for day traders. Before choosing a particular online stockbroker, it’s imperative to consider these key points.

• Investment Options-Go with a site that provides multiple stock options, mutual funds, CDs, IRA rollovers and things of that nature. TD Ameritrade is a great source for stocks, bonds and all things finance.

• Trading Platform-Consider the usability and intuitiveness of the online stock trading platform you’re signing up with. For example, Schwab Active Trader utilizes StreetSmart Pro® and gives traders streaming market data in a simple, yet sophisticated custom display view.

• Investment Outlooks-To trade successfully, you need continuously updated, extensive real-time stock charts and quotes. Zecco lets you customize ‘Watch Lists’ and even has their own ‘Gainers,’ ‘Losers,’ and ‘Most Active’s’ to help you out.

• Ease of Use-Online stock trading isn’t for the faint at heart, but doesn’t require expert knowledge to acquire an understanding of it. Sharebuilder, for instance, targets both novice and professional traders with their user-friendly site and minimal investment requirements.

While the market incessantly fluctuates, and one good day on Wall Street could turn into an investor’s nightmare the next, trading online greatly assists those building their portfolios. TD Ameritrade offers extended hours trading for those working a longer day, and online stock trading services such as eTrade provide real-time streaming stock quotes. You may just become a Dow Jones junkie while having fun in the process.

Tips For Becoming A Skilled Trader

Despite the dire caveats by the Securities and Exchange Commission cautioning investors against the controversial yet potentially lucrative world of day trading, people attempt to try and attain day trading skills, and a day trading stock tip is literally worth it's weight in either gold, or dross! Below is some information on learning trading techniques, the risk involved, and tips for becoming a proficient trader.

Just what is day trading and how do individuals acquire day trading skill? Day trading is the system of rapidly buying and selling stock throughout the day in order profit from the marginal fluctuations in the market for that specific day. In the ideal world, day trading strategies permit investors to secure profits from the tiny increases in the market.

Day traders watch a specific set of indicators when determining whether a stock is suited for day trading. First, the stock should have high liquidity. This means that the stock in question has a large number of buyers and sellers. The liquidity allows day traders to rapidly acquire and then sell stock. Liquidity is determined by the volume of transactions on the market, the number of outstanding shares, the total number of shareholders and the number of market makers. Almost all stocks on the NYSE and NASDAQ have a high degree of liquidity.

A day trader also watches volume individually, in addition to using it as criteria for liquidity. To be eligible for day trading, a stock needs to trade at least 500,000 shares each day. Stocks with 500,000 trades a day or more enable the day trader to acquire or sell a large amount of stock without greatly altering the price of the stock. Volatility is another factor in evaluating a stock for day trading. The word refers to the actual or expected price movement of the stock. This movement is up or down over a period of time. Day traders study the pattern and volatility of stocks over an individual day. Stocks that change price many times over one trading day are ideal candidates for day trading. A fluctuation of at least $2.00 per day is recommended.

Finally, a day trader evaluates the price transparency of stock. This term refers to the ability to gather information on the order flow of a stock. Also called market depth, price transparency helps the day trader calculate just how much money there is to be made on a certain stock. The NASDAQ II quote system offers data on all bids. Day traders who are able to access the NASDAQ level II quote screens can evaluate the performance of a stock and watch its swing in price.

While these trading practices are entirely legal and entirely ethical, they are highly risky. Day traders generally buy on borrowed money with the hope that they will realize higher profits through their acquisitions and sales. People who are determined to be "pattern day traders" by the NASDAQ and NYSE must have at least $25,000 in their accounts and can only trade in margin accounts. Margin accounts are brokerage accounts in which the broker lends the investor cash to purchase securities. If the value of the stock drops a great deal, the investor is required to deposit more cash to cover the margin or sell the stock. The SEC warns against day trading and acting on a day trading stock tip, and has taken many steps to inform people of the corresponding risks.

The first few months, a huge majority of day traders suffer tremendous financial losses and only a few make it through to become profit-making day traders. For this reason, day traders should only invest funds that they can afford to lose. They should never invest money set aside for necessities like living expenses or second mortgages.

Keep in mind that day traders do not own stocks for longer than a few minutes at most. Stocks are never kept overnight because of extreme dangers of prices changing to the detriment of the trader. Day traders do not invest, instead, they speculate on the movement in price of a stock throughout the day.

There are lots of websites whose sole purpose is to profit off those who are trying to find a day trading stock tip. These websites assure rapid results and offer hot tips to their members for a fee. The sources are most often paid to make these recommendations and are best avoided. Seek the advice of a proven professional, and take plenty of time to learn trading strategies for longer term success. Remember, there is no free money, and day trading skill is often paid for with enormous stress and cataclysmic losses.

Forex Trading Made Simple

Forex trading may seem rather daunting at first. So much to learn, and possibly a big risk if you have not learned enough! Not anymore!

There are a few good 'Forex Trading Systems' out there, where you invest an initial amount of money, and the system does the rest for you. The most recent product to market makes things even easier. As long as you have an internet connection, and a computer you can leave on nearly 24/7, you can benefit from the software. It allows you to set the trading system on autopilot, making the decisions for you, and this latest system makes some good decisions. On average, 90% of attempted trades are won, that means for every 5 trades, 4.8 of them are profitable.

The trading system works by making its decisions based upon future forecasts, from data gathered within the last 4 years on the trading of USD/JPY (United States Dollars/Japanese Yen). During testing, a $50,000 account was upped to an incredible $430,000 in 4 years. That is $107,500 every year from doing basically nothing but installing the software.

The average recorded number of consecutive wins on this account was 19. So that is 19 trades in a row, all of which were won. And the highest number of consecutive trades reached an astonishing 53.

This particular Forex trading system offers a 60 day or 8 week money back guarantee on the product, meaning if your not happy with the system or find it too mind boggling, you can get a refund no questions asked! If you think logically, the product is worth $250, which you could easily make back in the first 2 weeks depending your initial investment!