A Girl’s Guide to Online Stock Trading 1
Lesson One: Getting Started – a step-by-step guide to buying and selling stocks online.
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Hello Ladies, my name is Mary and I’m here to show you how to make money in the stock market. Believe it or not, you can realistically make $50 to $750 (or more) a day trading stocks online. I’ll take you step by step so you can begin making money now.
First, you’ll need to open an online trading account. There are several online brokers, so just choose one and sign up. Personally, I like etrade.com and sharebuilder.com. They offer great flexibility and stock trades are less than $10 each.
Once you’ve set up your online account, you’ll need to fund it. A good starting point is $1000. If you can’t afford that much, try $500. Anything less will make it difficult to buy large quantities of stock. Side Note Lesson: The more shares you have of one stock, the more money you can make.
Now that you have your online trading account set-up and funded, you’ll need to check the market. If the DOW, NASDAQ, and S&P are all up, then you might want to sit out and just observe. Rally days are good, but only when you have money in the market. Rally days are days you want to sell, not when you want to buy. If you really want to get a good idea of how the stock market works, take a week or two and just watch. Check the DOW, NASDAQ, and S&P every few hours. When the market is doing down, it’s called a pull-back. Perhaps it’s on some economic news that’s unfavorable, or investors are taking profits from large gains the prior day. Either way, pull-backs can be good. These are the days you want to buy. Rally days, as explained above, are days when people are buying. A rally could be based on some excellent economic data or something different all together.
So let’s review the first three steps. First, set up your online trading account. Second, fund your account. Third, observe the market for a week or two and get a good idea of how it moves up and down on a daily basis.
* Please note, you do not have to watch the market for a few weeks. It’s just suggestion for you to get an understanding of how it fluctuates. You can start buying stocks once your online trading account is funded.
Now that you’ve got a good idea of how the market works, let’s start making money. Your best bet is to find stocks that are less than $3 a share and fluctuate between .15 cents to .30 cents a day. Here are a few I like, Pier One Imports (Stock Symbol: PIR), Reddy Ice (Stock Symbol: FRZ), and Jones Soda Company (Stock Symbol: JSDA). Your online broker has tools where you can look up stocks. Again, try to find stocks that are less than $3 a share and are somewhat volatile day to day.
Now that you’ve chosen a stock, let’s buy it. I will buy 500 shares of Pier One Imports. Today, it’s trading at $2 a share. The total cost for the trade is as follows: Buy 500 shares @ $2 share = $1,000 + $9.95/trade = $1,009.95 total. When you place your order, place a “LIMIT” order. “LIMIT” order let you choose the price where you want to buy or sell. This gives you complete control over the market. “MARKET” orders, let the market dictate the price where you buy or sell. I love “LIMIT” orders, they are your friend.
Now that you’ve placed your order, wait a day. The next day, place a “LIMIT” sell order for your 500 shares of Pier One Imports at $2.50: Sell 500 shares @ $2.50 share = $1,250 – $9.95/trade = $1,240.05. Here’s what happened. You bought 500 shares of PIR for $1,009.95, then sold 500 share of PIR at $1,240.05 = $230.10 profit in one day. This is a hypothetical scenario, but one that you could do realistically two or three times a week.
To recap lesson one: Set up your online trading account, fund your account, observe the market, place “LIMIT” buy order, place “LIMIT” sell order, and make profit. The best of luck.