Presents Trade School Market Basics, Brokers and Order Types
With Bill Corcoran I am not a registered broker-dealer or investment adviser. I will mention that I consider certain securities or positions to be good candidates for the types of strategies we are discussing or illustrating. Because I consider the securities or positions appropriate to the discussion or for illustration purposes does not mean that I am telling you to trade the strategies or securities. Keep in mind that we are not providing you with recommendations or personalized advice about your trading activities. The information we are providing is not tailored to any particular individual. Any mention of a particular security is not a recommendation to buy, sell, or hold that or any other security or a suggestion that it is suitable for any specific person. Keep in mind that all trading involves a risk of loss, and this will always be the situation, regardless of whether we are discussing strategies that are intended to limit risk.
I am not subject to trading restrictions. Myself and other instructors could have a position in a security or initiate a position in a security at any time. STOCK MARKET BASICS TRADE SCHOOL Stock Market Education
• TRADE SCHOOL Stock Market Education Course is a 12 hour online education course.
•Class will start at 7PM and run to 9 PM CST every Wednesday for 6 weeks.
• I have been a trader since 2006 and a stock market instructor since 2008, I am here to support and teach you.
• My team is also here to assist you, feel free to ask questions.
• This is similar to a college course, be prepared to get involved and have fun!
23 WHAT TO BRING WITH YOU
• Experience is not necessary, interest and enthusiasm is!
• Bring a notepad and a pen or pencil for taking notes.
• I encourage you may bring a child with you, it might just change their life.
• Ask questions, show us your desire to learn! WHAT TO EXPECT
• I will start out teaching the basics, at a slow pace.
• As you grasp the basics, we will move on.
• I will teach with the “building block” concept.
• Once you have been taught the basics, you will be introduced to trading and investing strategies.
• You will learn what it takes to place and manage a trade in the stock market. WHAT YOU’LL LEARN
Week 1: Stock Market Basics, Brokerages and Order Types
Week 2: Fundamental Analysis of Stocks, Basic Chart Reading
Week 3: Channel Surfing for Profit, Managing Risk
Week 4: Technical Indicators, Trading Timeframes
Week 5: Low Cost Leverage with Options
Week 6: Buying Stocks at a Discount and Renting Out Stocks
Bonus: The Winning Mindset Frequently Asked Questions
Q. What if I cannot attend any of the scheduled workshops?
A. Please make every effort to attend the FREE live classes. There will be an opportunity to access the recordings once the 6 week live class is complete. Frequently Asked Questions
Q. Will the instructor be demonstrating trades during the event?
A. Yes. I will frequently illustrate trade setups, including previous trades, both those that were profitable and those that were not profitable. SUCCESS KEYS!
• Trading is like any other venture, it will require effort, time and money to succeed. • How you think will have a huge impact on how successful you are, or aren’t. • The biggest obstacle you will have to overcome may be….you!
• If you want to be a successful person, you need to think like one and act like one.
• There are a few things you can do to prepare you mind for the event. 23 Read This Book!
• If you have ever wondered how wealthy people got that way, read the book!
• If you need to change your mindset so you can change your lifestyle, read it!
• If you are committed to your success, READ IT!
• If you want to make the most of your education with us READ THIS BOOK! 23 STOCK MARKET BASICS
History:
•U.S. Stock Market has been in existence since 1792.
•1867 first stock ticker
•Major market panics in 1907, 1914, 1929, 1973, 1987, 2001, 2008, 2010
•Major Bull Markets in 1920s, 1949 (longest bull market in history), 1982, 1994, 2004, 2009 STOCK MARKET BASICS S&P 1980 - 2021 STOCK MARKET BASICS
What is a “Stock”: • A security that represents ownership. • A claim on part of a companies earnings and assets. • Bought and sold in individual “shares”. • “Shareholders” are part owners in the company. • How big an owner you are is determined by the percentage of shares owned of the total shares. • For Example owning 100 shares of the total 1000 shares available would make you a 10% owner of the company. STOCK MARKET BASICS
Purpose of the Stock Market: • Most important source of funding for companies. • Highly liquid access for investors. • Allows investors to buy a portion or “share” of a company. • Creates an “auction” for those shares. • Performance of the stock market can affect overall economic performance and vice versa. STOCK MARKET BASICS
Individual Stocks
• Broken down into broad “Sectors” • Further broken down into “Sub-Sectors” – Companies that do substantially the same type of business STOCK MARKET BASICS STOCK MARKET BASICS
The Stock Market Sectors STOCK MARKET BASICS
Index • A list of actively traded stocks whose progress is measured together and typically reported in a weighted number. – Dow Jones Industrial Average – NASDAQ Composite – S&P 500 – Russell 2000 • You can’t “buy” an Index STOCK MARKET BASICS
S&P 500, NASDAQ 100, RUSSELL 2000, DOW JONES STOCK MARKET BASICS
Exchange Traded Fund • DIA mimics the DJIA • QQQ mimics the NASDAQ • SPY mimics the S&P 500 • IWM Mimics the Russell 2000 • Other ETF’s allow you to trade with exposure to commodity, bond and FOREX markets using ETF shares that can be bought or sold on the stock market STOCK MARKET BASICS
S&P 500 compared to SPY STOCK MARKET BASICS
S&P 500 “The Market” STOCK MARKET BASICS
The “Exchange” • Where stocks are bought and sold • Includes the NYSE, NASDAQ and Over the Counter (OTCBB) • The NASDAQ is fully electronic floor • The NYSE is a hybrid and has live human “Market Makers” available to manage order flow. STOCK MARKET BASICS
The Market Maker • You BUY from the Market Maker • You SELL to the Market Maker • The Market Maker is obligated to take your trade at the market value during market hours. STOCK MARKET BASICS
“Bid” “Ask”
3.27 x 3.30 “SELL” “BUY” STOCK MARKET VOCABULARY
BULLISH – When a stock or the market in general is moving up it is said to be bullish
BEARISH – When a stock or the market in general is moving down it is said to be bearish.
OPEN A TRADE – Entering into a position in a particular stock or option
CLOSE A TRADE – Exiting out of a position in a particular stock or option
FILLED – The order to buy or sell a position has been completed.
EXECUTED - The completion of a buy or sell order
LONG –You are long in a position when you own a stock or option
SHORT - Borrowing shares of stock from a broker-dealer and selling them on the open market is a short position in the stock BROKERS AND ORDERS TRADE SCHOOL Stock Market Education Module 4 Brokers and Order Types Review
• What is an “Online Broker”?
• How do I find a good one?
• How much will it cost to trade?
• What is “margin” and should I use it?
• What is a “market order”?
• What is a “limit order”?
• What is a “stop”?
23 Online Brokers CONNECT TO THE MARKET
• The vast majority of retail trading is done online. • An online broker hold your money in a brokerage account. • They give you access to market data in the form of charts, quotes, news and other data. • They offer a platform to execute orders to buy and sell stocks, options, and futures. ONLINE BROKERS • Trade Station
• Tasty Works
• TD Ameritrade
• Robin Hood
• WeBull COSTS
• Brokers may charge a “commission” for each trade you “execute”. • An online broker may charge you fees for access to data. • A broker will charge you interest on money you borrow (margin) and it varies, a lot. • They will pay you interest on money that is maintained in your account. HIDDEN COSTS
• Many brokers offer “commission free” trading • Be aware that there is a “cost” to this. • These brokers will route your orders to a specific trading exchange or market maker in exchange for payment. • This “payment for order flow” may mean that you are not getting the best available price and your orders may not fill as quickly. Margin
• Margin allows you to borrow money from the broker to buy stock.
• The stock is held as collateral.
•A typical margin account allows for 2:1 leverage.
• While this dramatically increases leverage, it also creates significant risk. MARGIN
You have a $10,000 trading account
You want to buy 2000 shares of a $9 stock
You buy $9,000 worth of stock and….
Your broker loans you $9,000 to buy another 1000 shares IT IS A LOAN!
• The broker will hold the stock as collateral.
• If the stock price drops, you lose money.
• The broker can require you to deposit more money to protect the “loan”. (margin call)
• You will pay interest on the loan. HOW DO I FIND A GOOD BROKER?
• Should have a solid online platform.
• Allow you to trade stocks and options.
• Reasonable fees and commissions.
• Direct access brokers have the fastest executions.
• High quality data, charts and technical indicators. BROKERS Trade Station
• $0 stock,
• Options .60/contract
• Excellent charting tools
• Excellent trade execution
• Min deposit of $5,000 with referral
• Great choice for serious traders Interactive Brokers
• $.005 per share of stock
• $.70/ option contract
• Good charting tools
• Excellent trade execution
• Min deposit of $10,000
• Great choice for professional traders TD Ameritrade
• $0 Commissions stock,
• $.65/ option contract
• Good charting tools
• Good trade execution
• Great choice for serious traders TastyWorks
• $0 Commissions stock,
• $1 option contract, $10 max, no closing fees
• Decent charting tools
• Good trade execution based on Payment for Order Flow
• Good choice for starting to intermediate traders WeBull
• $0 Commissions stock,
• $0 option contract
• Mediocre charting tools
• Trade execution based on Payment for Order Flow
• Good choice for starting traders Robin Hood
• $0 Commissions stock,
• $0 option contract
• Mediocre charting tools
• Trade execution based on Payment for Order Flow
• Good choice for starting traders if you have charting software Other Brokers
• There are other brokers that can be researched
• Charting and research tools are critical
• Price isn’t everything
• Check online reviews and do your research. ORDER TYPES MY PRICE OR YOURS
• MARKET Order • Can be to “buy” or “sell”
• Is an agreement to take the current “market” price • Can be used in fast moving markets
• The “market” price can change quickly and dramatically (gap) MY PRICE OR YOURS
• LIMIT order • Can be to “buy” or “sell”
• Is a limit on the price offer • This price, or better.
• Can be used to “negotiate” with the Market Maker
• Some brokers may not have limit orders available Sell “limit” at $85
Buy at $82.50 STOP IT!
• Stop order • Can be to “buy” or “sell” • Is used to “EXIT” or close
• Is usually used as a loss limit • Is our first “risk management” tool Sell “limit” at $85
Sell “Stop” at $82 ON THE TRAIL
• TRAILING STOP • “Follows” the stock price by a preset number or percent. • Avoids missing out on profit in a “whipsaw”
• Can be too sensitive and exit good trades prematurely. Sell “Stop” at $82
Order Cancels Order TIE IT TOGETHER
• OCO • One order cancels the Other • Avoids an open order that may hurt you later
• Can be used to “Set it and Forget it” Sell “limit” at $85
Sell “Stop” at $82
Order Cancels Order ORDER ENTRY ORDER ENTRY JOIN ME NEXT WEEK!
Next week I will show you:
• How to evaluate a company like a pro. • Identifying potential investment candidates. • What a stock chart looks like. • How to interpret price activity. • Chart patterns that give you the advantage. I am not a registered broker-dealer or investment adviser. I will mention that I consider certain securities or positions to be good candidates for the types of strategies we are discussing or illustrating. Because I consider the securities or positions appropriate to the discussion or for illustration purposes does not mean that I am telling you to trade the strategies or securities. Keep in mind that we are not providing you with recommendations or personalized advice about your trading activities. The information we are providing is not tailored to any particular individual. Any mention of a particular security is not a recommendation to buy, sell, or hold that or any other security or a suggestion that it is suitable for any specific person. Keep in mind that all trading involves a risk of loss, and this will always be the situation, regardless of whether we are discussing strategies that are intended to limit risk.
I am not subject to trading restrictions. Myself and other instructors could have a position in a security or initiate a position in a security at any time.