Options Trading Tutorial

I want to learn how to day trade stocks and options. What is the best way to start learning?

Public Comments

1. This is a good time to start think about doing that. The market is in a free fall now, but it's ALWAYS in a free fall in an Election year. There are a number of good books on day trading... you have to BUY them... you aren't going to get THAT information on the internet for free. You have at least 6 months before the market hits bottom, so you have time to study the market and start playing it on paper... but NOTHING will take the place of having $100,000 of your own money riding on the next mouse click. I use ScotTrade... they are very reliable, have good software and even local brokers so you have real people for support if you need it. Start by subscribing to the Wall St. Journal and go from there.
2. Great, start learning the basics of fundamentals and technical analysis so you will be more informed in your investments. Until then you can find all the basic info you need to learn on websites for free. This site should give you a good start. http://finance.yahoo.com/education If your current/future employer offers an employee 401k plan. Invest up to the matching % of your employers contribution. If plan offers an election to invest in a money market fund you may want to invest in it until you learn more. Next invest in a Roth IRA up to the max allowed(yearly). If you then have more money to invest, go back to your 401k plan and invest the max allowed(yearly). So after you do all the above and want to invest more you should be able to decide how. Only invest money that you can afford to lose. Making some quick money is nice but if you lose it, it gets right ugly. You may also think about ETF's instead of mutual funds, stocks. and options. http://finance.yahoo.com/etf Try what you learn on demo sites. They can be a very fun but educational way to learn from mistakes. If you pick 75% right with play money then you might be ready to start slowly investing. http://simulator.investopedia.com/ http://simulator.zacks.com/ http://www.fxcm.com/open-free-100k.jsp http://www.alpari-idc.com/en/metatrader4... Or just google for more. I use Lightning Strikes Trading System for trading in any time frame and it works on forex, stocks, bonds, etf's, mutual funds, etc... They have 3 free training sessions a week and you don't have to buy the software to join in the live chat and text. You can even watch some recorded past live sessions. Here are some past charts that I used. http://f1.grp.yahoofs.com/v1/MB16R0zjjaZ... http://f1.grp.yahoofs.com/v1/MB16RxjOUQt... There are 7 indicators (2 short, 2 medium, and 3 long term) and if volume is reported another one is added (on balance volume). Plus whatever time-frame is used the 2 green horizontal lines are the support and resistance for that time frame. So when indicators are all touching the bottom price is at or very, very near support. At top is at or very, very near resistance. Which helps my entry/exits and risk/reward ratio. http://f1.grp.yahoofs.com/v1/MB16R9Wv-wt... http://f1.grp.yahoofs.com/v1/MB16R9wSKdV... http://f1.grp.yahoofs.com/v1/QCt6R2fYIj6... http://f1.grp.yahoofs.com/v1/QCt6R3R0VQe... If you can not view charts above I can email them. Here are my favorite sites. http://stockcharts.com/ Has basically all you need from fundamental to technical terms. Plus stock screens, charts, public chart lists, and much more useful info. https://www.fidelity.com/ Has good learning resources. http://moneycentral.msn.com/home.asp In addition to yahoo finance. http://www.reuters.com/ For news and more. http://www.marketwatch.com/default.aspx For news and more. http://www.valueprime.com/index.php For rating stock risk/reward ratio and reports. http://www.barchart.com/ For investing in more than stocks. http://www.investopedia.com/ For more great learning tools. http://www.lightninglive.com/ For best software timing your entry/exits any time frame for day traders and long term investors. Others worth exploring. http://www.equis.com/ http://www.stockta.com/ http://www.secform4.com/ Best Wishes, Burt Whitley
3. Do you have at least $25,000.00 USD? You cannot daytrade with less money by Law.
4. First, learn about the 50% retracement rule. This is the single most reliable and simple rule for a beginning trader. You may ignore every other "technical" or chart indicator when you are first starting out. You may learn about this by googling for it, or by finding a book. Second, learn what to expect and what not to expect from the "advice" that you will find in your search to learn how the stock or commodities markets work. This "advice" will come in the form of fundamental analysis, news, websites, technical analysis, stock brokers, investment advisors. The best way to learn which things to pay attention to and which to ignore, is to read the book "WAll Street: The Other LAs Vegas." It might sound like a cheesy title, but it's a good book written by a dancer who started trading in stocks, and learned what to trust and what not to trust. He learned the hard way. Once he figured it out, he turned some 50 thousand dollars into two million. Third, you will need to develop a trading plan. This will be primarily based on your 50% retracement. rule. To this you will add a method to control your losses. For beginning traders, the easiest way to do this is to learn how to use "stop losses." So you will enter trades with the rule, you will let your profits run, and you will limit your losses. Next, you will open an online account with a stock, currency or futures brokerage. It doesn't matter which. Day trading is all the same. If you want to trade stocks, trade stocks. If you want to do currencies or futures, do those. The differences between them are as follows: Stocks usually require several thousand dollars to trade. They tend to charge higher commissions and fees. With stock accounts you can usually buy a "little" more than how much cash you have. It's called "margin." You can open up a currencies account with *very* little money. Like, $250. Currencies are highly "leveraged" trading. Meaning a little goes a long ways. It's good and bad. A futures account is for trading commodity futures, stuff like oil, sugar, coffee. Again, highly leveraged. You need a minimum of 10,000 to open up this one. If you live in the US, here are the things to look for when you shop for a brokerage: - If you're going to trade STOCKS, look for a brokerage that is a member of the FINRA and SIPC. This means the company is "regulated" and you won't have to worry about them stealing your money. - If you're going to trade CURRENCIES or FUTURES, make sure the company is a member of the National Futures Association (NFA). Next, open up your account. If you open a currency or futures account, the cool thing is, you can "practice" trade with their demo accounts for as long as you need. This is very useful. I recommend doing it. Finally, once you get used to trading, start learning about additional methods of risk control. Such things as option spreads are very useful.