Online stock trading can be the most profitable or most `cash sucking` form of investing you can ever get involved in. It all depends on how experienced you are, and how you approach it.
After all, there`s the...
...absolutely positively essential `US$15K US$20K starting capital`; the `US$97 per month membership site fees`; the `US$997 holy grail trading system`; the `must attend` `US$3,447 two-day trading seminar`; the `US$150 per month live stock price feed subscription`; the `exclusive limited edition US$40 per month `insider tips` newsletter`; the `US$77 per month ultra-fantastic charting service with the bonus 3,000 previously unknown technical indicators tossed in`...etc...etc...etc...blah, blah, blah.
...Isn`t there?
Sadly, far too many first-time traders get sucked in by all the hyped up tips for online stock trading spun by money-grabbing internet marketers masquerading as expert online stock traders. These greed merchants cunningly relieve the unwitting newbies of every cent they own... and then justify it by saying that it`s a `small price to pay for the knowledge that`ll make them rich!`
If you`re a first-time online stock trader and you want to avoid falling into the same trap as so many before you, then this article on `tips for online stock trading` is written for you. Please read on...
Here are three tips for online stock trading that`ll save you over US$1,500 a year!
1) Find an online stock broker who doesn`t require a minimum deposit. If you`re a beginner at online stock trading, or you`re on a tight budget, there`s no need to set up a brokerage account with `thousands of dollars` in starting capital.
Personally, I opened my first online stock trading account with just a hundred dollars! I decided that `if I got it wrong a few times...too bad. It was my learning curve and the downside risk was no more than the cost of a good night out!`
I choose Sharebuilder (http://www.sharebuilder.com) for my online stock trading debut. Unlike most other trading firms, these folk allow you to nominate a DOLLAR AMOUNT as opposed to a SHARE AMOUNT when placing your order. For example, I opted to invest US$100 in high technology stock, Imation Corporation (Stock Symbol = IMC). I paid $37 a share and ended up with 2.594 shares (i.e. $37 x 2.594 = $96 + $4 brokerage = $100). The stock climbed to over US$51 a share before easing back to the low $40`s. I took my profits at $49 a share and banked a 27% gain!
2) DON`T PAY for online stock trading information when you can get it for FREE. Why pay hundreds of dollars a year for so-called hot stock information when you can get it for free from either MSN.com or Big Charts.com? These two sites have so much online stock trading info and advice crammed into them you could spend a lifetime just reading it all!
For MSN.com, go to: http://moneycentral.msn.com/investor/home.asp and you`ll discover more tips for online stock trading than you`ll know what to do with! There are more than one hundred links per page covering every conceivable aspect of online stock trading. Market reports, IPO`s, currency exchange rates, portfolio tracking facilities, EFT`s, brokers, research tools, stock ratings, quotes, charts, company earnings, open streaming stock ticker, SEC filings, earnings estimates, analysts ratings, expert stock picks... the list is endless.
For BigCharts.com, go to: http://bigcharts.marketwatch.com and you`ll find a whole new bunch of tips for online stock trading. While the site itself is not as large as MSN.com, the depth of free technical analysis and charting tools is, in my opinion, superior. The many articles and stock reports hosted on this site are also of a higher calibre. However BOTH these sites are invaluable sources of trading information and considering they provide free access to all the data you`ll ever need, bookmark them NOW!!!
3) Profit from `back door` companies. Instead of buying highly priced shares in mainstream companies whenever such companies announce a pending `major product roll-out`, why not do what the real professional traders do...`look for other, much lower priced stocks (such as raw component manufacturers and / or suppliers to the main company) which stand to benefit just as greatly from the impending product launch. Make a shortlist of these peripheral companies, and then buy shares in the one/s that offer the greatest potential leverage to the upside.
An example of this could be finding a small but publicly listed manufacturer that supplies components to a gaming console giant like Nintendo. While Nintendo doesn`t offer much leverage at almost US$180 per share, the small peripheral supplier might be trading for just a few pennies on the OTC or NASDAQ. If the launch of Nintendo`s `Wii` later this year goes as well as some analysts expect it to, the associated OTC and NASDAQ stocks could literally `go through the roof!`
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