However, TOS is for free once you have an account with Ameritrade and funded it with a few dollars, and most other charting platforms charge quite a few dollars per month).įor IB, you will need a minimum deposit of 10.000$ unless you are aged below 25, in which case you would need 3.000$.
What I do is that I use ThinkOrSwim for charting and Interactive Brokers for entering my orders (their proprietary software is horrible, but platforms like Sierra Chart or TC2000 can connect to their API, if you don’t want to open an account with Ameritrade just to use TOS. If they are free, as for example is the case with ThinkOrSwim by Ameritrade, the commissions of the brokerage are not very enticing. Trading softwares usually come at a cost and are not free, like MT4. Unlike Forex, the stock market is highly regulated and there are really only a handful brokers worth looking at. So the usual option is, as in Forex, to use a broker. I think the guy on the other end of the line didn’t even know what “stoploss” meant. And I would have to call them whenever I wanted to get out. I just recently found out that my bank had this service where I could call them and tell them that I’d like to invest x amount of my bank account into a certain stock on the Frankfurt Stock Exchange.
Now that we have a broad overview of what the stock market is, how the heck can we trade it? Indices move according to the stocks they contain (and their weighting schemes), give an overview of the “health” of the markets they represent and can be traded directly as Futures or ETFs, as well. Additionally to individual stocks, there are tons of indices like the S&P500, the Dow Jones, DAX, Nikkei and so on, which represent a basket of stocks.
The prices of stocks are, as any other goods on open markets in the world, driven by supply and demand and as such are of course prone to fluctuation, speculation (and manipulation). Whenever we engage in trading activity on a stock market, we buy “second hand” stocks from already existing shareholders, not from the listed companies directly. As soon as a company does an IPO (Initial Public Offering), the shares issued by the company go out onto the stock market and into the hands of the new shareholders. There are different kinds of stocks but the ones everyone is talking about and trading are the common stocks, so we will focus on those for now. Hence the term “hostile acquisition” where a company buys up all shares of another company. The more shares you own, the more power your vote has. Stocks are given out by companies in order for them to raise money to grow the company, invest into new projects, and so on. Also, you can sell your shares, of course, to turn a profit if they rose since the time you acquired them. What our 1% share ownership grants us, however, is the right to vote for important company decisions (board of directors!) at shareholder meetings, get free drinks and food, and receive dividends (=profits) if the company decides to give them out. Apple has its own assets, and those are separated from the property of the shareholders. If we own 1% of all issued APPLE INC shares (AAPL), we do not own 1% of Apple. Important here is that we only own the shares, not the company. By buying a number of those shares, we can “own” a proxy-piece of that corporation. It can be quite a daunting task to find the right stock to trade, but more about that later.įirst things first – what is a stock? Stocks are shares issued by corporations. In stocks, well there are 50.000+ of them globally, all of them being traded in different stock exchanges all around the world (plus OTC). In Forex, we are used to around 50 instruments give or take. Trading stocks is also expensive – and it can be quite overwhelming, especially for newbies to the market or people that come from Forex, for example. I know most people here are Forex of Futures traders, so let’s start with the basics. After creating a functioning trading routine that grants me funky profits without too much of an effort – compared to daytrading, anyway -, I thought it’s time to share the love. The more I got into it, the more I loved it (as is the case with pretty much everything). So, some months ago, I started to get into trading Stocks on a longer-term basis (Daily charts and higher). In an everlasting effort to make my life even more awesome (and easier) and because I can never stop learning, I dabble in pretty much everything that trading has to offer.