I’m a University student and I’ve always been fascinated by the stock market…I’d like to get involved somehow but I don’t know where to begin.
Now, I’m not simply talking buying some stock and thats that, I’m talking buying and selling stock, like those guys do on the trading floor. Or even daytrading. How does that work?? I always see footage of guys sitting at banks of computers…is there a building or something I go to to do this?? I’ve heard of penny stocks…can I buy a bunch of these just for “experimental” purposes?
To actually buy on the trading floor, you need to be a specialist in that stock. You need a lot of money in hand to get to be a specialist, and it’s impossible for someone coming in off the street to have the slightest chance without years of preparation.
You could also buy a seat on the exchange, giving you the right to place orders with the specialist without going through a broker, but that’s very very expensive and is usually only for brokerage firms (which is how they trade in the first place).
Daytrading puts you on a computer buying selling stocks all day. It’s extremely difficulty to make a profit, and your chance of losing your shirt, pants, and underwear is very great. Primarily, it’s trying to make a profit on the small swings of stock during the day. In a bear market like this one, a novice is going to lose everything and more. It takes a hell of a lot of knowledge to make money day trading, even in a bull market.
As far as penny stocks are concerned, stay away. There are restrictions on a novice investor buying penny stocks and your broker will do his damndest to keep you from doing it. There’s a reason why these stocks are so cheap – the companies behind them stink – and even if they go up a point or two, you may not be able to find a buyer until after they drop back down. Not to mention that many of them are easily manipulated by “pump and dump” schemes. These are illegal, but the fact that the SEC may have put the people in jail eventually does nothing to return your money.
Your best strategy on getting involved is to find broker, discuss what you interests are, and start out with a few solid stocks. As you become more comfortable with investing, you can then think of more risky options.
Last time I was here, I was playing their stockmarket game. Basically, they allot $100,000 of ply money and you can trade just like the real thing. They will update your stocks like the real thing and you can access some of their market analysis and information or get them on your own thru Bloomberg.com or somewhere else. Its a great learning experience without any real risk.
I don’t believe day traders use the Internet, but rather subscribe to things like Quotron, which gives an instant look at the stock market. It’s pricey.
Etrade is an online broker, but do not try to day trade using them. It’d be like betting on a ballgame when everyone else already knows the outcome. If they do have a stock market game, that would be a great place to start, with no risk.
Dude, head over to the investing section of your local Barnes and Noble. You’ll find a wealth of information on all of these questions. Eventually, you’ll grow out of this stage and realize that alot of this information is bunk, but you’ve got to start somewhere.