Egg 2 -Walking in the Coop
You have to crawl and walk before you can run !
Check the Eye-On-U section for other websites which have more detailed and valuable information on stock trading using candlesticks as there is much to learn and you may be confused at first with all of the terminology, trading indicators, techniques, candlesticks and patterns.
Learn what the Candlestick means - a see-saw between the buyers and sellers. Keep your trading method as simple as you can. Keep reading Hawk's articles, visit other websites and practice, practice, practice! If you become confused, have a couple of boiled eggs. (Did I really say that?) lol
To trade stocks, understand that every stock has an Opening price at the beginning of the day and a Closing Price at the end of the day. During the trading hours 9:30 am to 5:00 pm Eastern time the price of a stock will fluctuate up or down. How much fluctuation depends upon the traders.
There is a Bid price and a Sell Price. For example, if you have $1,000 to invest, let's say you would like to buy 100 shares at a price of $5.00 each. You place an order with your Broker to Buy 100 at $5.00. The order goes to your broker who places the order with whatever stock exchange trades that particular stock. In this case the stock name is a company who uses a stock symbol of ABC. Therefore, you have just placed an order to Buy 100 Shares of ABC at a price of $5.00
There are several Stock Exchanges (Canadian, New York, Nasdaq, etc...) and what do you know, there is someone out in the world who will Sell you 100 shares of stock ABC for $5.00 each! The whole transaction to buy and sell may only have taken a few seconds in the modern computer world we live in today.
Assume your Broker (where your trading account is located) being a 401k Account or brokerage firm, charges you $10 to place a trade. So you think "I now own 100 shares of ABC" Correct ! And, I only have $510 invested ! Wrong ! What do you mean Wrong?
I mean the transactions actual cost is $520+. Plus? How can this be? Think! You only Bought the stock and were charged a Buying Fee of $10. To make Profit, you must also SELL the stock which will incur an additional $10 fee for a total of $20 in fees. (Except for Tastyworks.com - a New 2017 Broker)
Why the Plus? Because if you held the stock for say 5 years, your broker fee may have gone up from $10 to say $12. So now your total in fees is $10 + $12 = $22? This can add up over 1,000 transactions, thereby reducing your profits.
Do you see my main point? Not, that your fees may go up, rather, there is a lot to consider. The stock market changes, economies change. Making a daily routine of practicing will keep you at the forefront and what does that do for you? It helps in minimizing errors and maximizing Profits!
It's not about buying or selling stock...it's about Making Money!
Practice, may not make you perfect, but makes you a better trader!
A trading plan must have a charting program for selecting a group of stocks to watch for buying and selling, so there is another learning curve of choosing a charting program that works for you and you are comfortable with. Having more than one charting program is OK but Focus on one for now and grow into other charting programs later.
If you have no idea of which charting program to choose, and if you already have a 401k, you might start with your 401k website or contact person in your company to see if there is already one available? And, don't forget, you want to control All of your finances, not just the buying and selling of stock!
If no charting program is available from your company, there are several excellent programs available such as:
FreeStockCharts.com (from Worden.com)
and TradeStation.com, to name a few.
For Paid Charting packages TC2000 from Worden.com is Hawk's favorite. Spend some time evaluating and choosing which is best for YOU. Spending some practice time here will benefit you in the future as this will become a big part of how you will be scanning and choosing stocks for trading purposes. Take your time. Go slowly, remember the rule K.I.S.S. (Keep It Simple Stupid). Or, P.E.C.K as chickens call it.
Each brokerage is unique in their Fee structure for transaction trading and accounts, and may have Free charting programs as well. This will involve more additional time to research and compare which fits best for Your Needs.
A brokerage account may require a minimum or substantial initial deposit depending upon the brokerage. Be sure to also check the fee schedule as Fees are expenses, and you want to maximize profits and minimize expenses. A search on your Internet Browser should produce many results. The brokers mentioned on this page are ones Hawk has researched or used over the years. The broker you choose is more of a personal preference choice. I would recommend researching a dozen or so, then narrowing down to your top three choices, and then start your pecking process.
Isn't this Fun !