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Stock Trading Basics - Mike Swanson (10/04/09)

Submitted by Mike Swanson on Sun, 2009-10-04 09:34.

It is true that stock trading is one of the most lucrative methods of earning money when using technical analysis. It does not require a large investment to begin trading in stocks besides it allows immediate liquidation.

The terminology is the place to start for beginners. The market language fits the manner of marketing used, so the word trading actually means buying and selling. So you will buy and sell stocks and you can do this two ways. Electronic or computer trading and off the exchange floor. It's best to focus on the 50 hottest stocks. The NASDAQ uses the computer network and the NYSE uses the exchange floor.

How does stock trading work electronically? The NASDAQ has an electronic/computer network which matches up buyers with sellers. Today these vast computerized networks handle mutual funds, stocks, pension funds, etc. This is the preferred method of stock trading. It not only allows the investors to keep abreast of their investment but engage in online investment too. This method has not eliminated the need for a broker, as individuals do not have an access to NASDAQ.

The NYSE works with brokers. You need to hire a broker to buy you shares of a company. The broker will send your order to the exchange floor clerk. The clerk declares a Brokers trade is on the floor. The brokers willing to sell get together to sell the shares.

Brokers work together and become familiar with the others stocks. When your broker agrees with a price, you will be contacted by the brokerage house for your answer to take the offer or not.

Once the transaction is complete, you will receive confirmation through the mail. The basics of stock trading is looking at blocks of stock and trading them according to details and methods used by brokers. If you want to be an investor think dividends and concentrate on the 100 highest dividend yielding stocks.

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Hello. My name is Mike Swanson. I’m the best-selling author of the book Strategic Stock Trading. In a former life I used to run a hedge fund from 2003 to 2006 that generated a return of over 78% during that time frame. In fact it was ranked in the top 35 out of 5,000 hedge funds in 2005.

After I retired from the hedge fund world I setup this website and blog. If you sign up for my free weekly email list below I’ll send you an update on average about once a week on my views of the current stock market trends and share with you actionable investment ideas.

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This is reality.

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