Stock Trading Just like buying a car or house, there is a tug of war between buyers and sellers of stocks. The difference between what someone is willing to pay and the price at which someone is willing to sell is the bidask spread, or the spread, as it is commonly called. Although ignored by some traders, the “spread” can provide clues about what might happen in the immediate future.
What can you learn from four successful, self-directed, off-floor traders? Active Trader e-Newsletter selected independent traders, who employ distinct trading strategies: position, intraday, swing, and day trading. Then Mike Sincere, author of five books on trading, including Understanding Options (2006) Did you know you can use options to make money every month or every quarter? And you can use options as insurance, for example, to protect your stock portfolio. And if, on occasion, you wanted to speculate, you could leverage your money to double or triple your profits. It will cost you a lot less than if you bought stocks. And finally, if you like to short stocks, it can be safer to use option strategies than to use the stock market.
A list of highly respected titles that one author believes should reside on the bookshelf of today’s informed active traderTrading books have flooded the marketplace during the past 15 years, as new technology has made online securities trading a widespread enterprise for many individuals. Investors routinely trade directly from their homes, workplaces and even on the move with the latest wireless handset capabilities. Amid this burgeoning era of online securities trading, demand for information and education has exploded, a likely result of the growing recognition among novice and emerging traders that securing profits in ever-changing markets can require considerable due diligence. That’s why Fidelity Active Trader eNews asked author and trader Michael Sincere to compile a list of “must-have” trading books. To produce his list of recommendations, Sincere spoke with several trading professionals.
Many novice and emerging stock traders charge full throttle into the markets with high profit expectations, but find out fairly quickly that making money consistently isn’t as easy as they expected. For some, this realization can be quite discouraging, particularly because there are few pursuits that fuel human emotion as significantly as trading. The prospects of making money often lure people into the trading arena, but the reality of losing money can be a quick deterrent.