All Entries in the "Learn to Trade" Category
Simple Moving Average
Simple Moving Average
A simple moving average is formulated by adding up the last X number of market days’ closing prices and dividing that total by X.
For example, if you wanted to calculate a stock XYZ’s 3 day simple moving average. You would add up 3 day’s closing prices. Let’s say XYZ’s closed at, 10, 11 [...]
Introduction to Moving Averages
Introduction to Moving Averages
What is a moving average, you ask? Well, instead of looking at a jagged chart moving up and down you could choose to smooth out its price movements with a moving average. Therefore, a moving average is derived from the price of a stock over X number of market days.
Moving Average
Moving averages [...]
Market Makers
Market Makers
A market maker is a broker or a dealer firm that agrees to hold a given number of shares in a particular stock thereby allowing for trading to occur. Market makers compete with each other for sales of a stock to the customer. They do this by quoting sell (ask) prices for a guarenteed [...]
Level II Quotes demystified
Okay, so what is level II you ask? Level II’s provide the stock trader with a lot of very useful information about the stock’s current trading. It shows at a glance all of the open orders for buys (the bid column on the left, in the level II screenshot below) and open order for sells [...]
How to read stock quotes
I was recently ask by someone about were to get see the prices of the various stocks out there. I find places like Yahoo finance and Bloomberg great places to start for someone new to learning about the markets. Below I have explained some of the jargon that goes on when looking up quotes on [...]
Stock Order Types
Recently I have been posting articles about some basic topics regarding trading. Since there seems to be a positive response I will try to post something weekly to help resolve some of the most common questions that come up when trading.
Stock Market Order Types
When trading stocks it is best to know all of the options [...]
Basics on Buying Stocks
Buying Stocks
You should now have the basic concept of the stock market, the exchanges that exists within it and just what it means to buy and sell a stock. Now you are probably wondering what it takes to get setup and get started buying and selling stocks yourself. Well, I am glad you asked!
Choosing a [...]
Major US Stock Exchanges
Most of the stock securities are traded on what are called stock exchanges. Stock exchanges are where stock traders come together to decide on the price of a stock security. If you have ever watched the opening bell being rung at the NYSE you have witnessed the opening of the day’s trading on an exchange [...]
What is the Stock Market?
What is the Stock Market?
The short and sweet answer is, a way to own part of a company that you do not manage or even work for. Therefore gaining the ability to earn from a company’s success.
Companies are either privately held or publicly held. When you hear of a company “going public” they are preparing [...]
Trading Collars
Collar
A collar is an interesting strategy that is often employed by major investment banks and corporate executives. This position is made by selling a call option at one strike price and using the proceeds to purchase a put option at a lower price. The cost to the investor to make this trade, therefore, is essentially [...]
4 Basic Option Trading Strategies
In Options 101 I covered option basics and its now time to review the 4 basic option trading strategies that form the underlying foundation for all advanced techniques. In future posts, I will cover each of these strategies in detail.
4 Basic Option Trading Strategies
1. Long Call (buy a call option) – Unlimited Reward & [...]
