Advanced Stock Market Trading - Level 1_12. Trading Preparation _ Sectors

Lesson 12: Trading Preparation & Sectors

Trading Preparation:

There really is no true preparation for the trading room. It’s like the “Big Show”
once you get called up. Either you are ready, or you are not. Either you have
practiced enough, or you haven’t. So, the key here is to have some practice
under your belt prior to entering the trading room and know what you are
doing. Once you have trade enough by yourself and you’ve come to that point
in your career that you decide to try a trading room either at home or out in
the real world, there are a few helpful tips to keep in mind though.
- Entering the Trading Room – There are many trading rooms to choose

from, private sectors, banking sectors, on-line sectors, and “The Show”
The New York Stock Exchange itself. Whatever sector you choose, let’s
say on-line trading, that’s where many day traders start, some key advice
and reality checks should be put in place if you're going to make it in a
trading room.

✓ Leave emotions at the door. Trading stocks is not a place for
emotions. Control those emotions when live trade making.

✓ If you have past training baggage, don’t bring it into the trading
room.

✓ If you trade Monday – Friday, join a trading room or become part of
a trading room that is open Monday- Friday; from opening bell to
closing bell.

✓ If seeking a trading room on your own, look for one that offers you a
free trial membership at least for a week.

✓ Never spend more than $100 a month for a membership without
some ending date.

✓ If you are seeking to develop a trading strategy within a trading
room, accept the necessary time it takes to study the strategy,
absorb the manual, watch the videos and WRITE your own trading
plan.

✓ Concentrate on the method. Live it. Breath it. Watch the mentor’s
method and learn to respond to your system versus purely clicking
when the mentor clicks.

✓ You will lose money in the market. Don’t blame it on the market.

Don’t blame it on the room. Don’t blame the mentor/organizer of the
room. You pushed the button.

✓ You will make money in the market. Don’t blame it on the room.

Don’t blame the mentor/organizer of the room. You pushed the
button.
✓ You will find that you are not compatible with every room and vice
versa. You need to be capable of walking away and finding a room
that does work for you.

- Screen for stocks –CNBC, Top 20 List, Briefing.com,
Choosing the right stocks to invest in isn’t easy when there are literally
thousands of companies and huge chunks of data to try to get through is
impossible. It’s difficult to separate out the helpful information from
insignificant information. Therefore, stock screeners have been developed.
Stock screeners help traders focus on which stocks meet their standards
and meet the qualifications of their strategies.

Stock screeners are useful filters that give you a more specific look at the
companies you are investing in by first looking at their financial criterial.

Some helpful sites to turn to when first selecting stocks are CNBC, Top 20
List, and Briefing.com

- Check for market data releases
The best way to stay on top of the ever-changing stock market is to watch
the news for important events and releases that will affect the market. Any
major world catastrophe, even weather events can drastically affect the
way stocks fluctuate. One particular web-site that keeps an up to date
watch on the economic calendar is the Forex Economic Calendar.
https://www.dailyfx.com/calendar

- Determining quantities for trading or investment
Determining how much stock you want to trade or invest in depends on
many variables.
✓ How much capital is allocated to each trade?
✓ How much risk are you willing to risk?
✓ How volatile is the stock?
✓ What is the calculating margin?

Preparing for your day:

Your first day as a trader is going to be a nervous one, so go ahead and
prepare for the butterflies. If you didn’t have them, I’d be worried. Review what
you’ve learned and know. Once you’ve pushed the button, you’re going to win
or lose; the end. But to help you win set in place your strategy, and what you
have learned.
- Doing your homework

By now, you should have chosen 5-10 stocks that you are watching and
ready with at least some of them to take that first jump and risk with. Let’s
Look over some material with you and your chosen stocks.

- Using Analyst’s Reports
Wall Street hires an army of stock analysts who spend every day analyzing
companies, distributing earnings advice and providing "Buy" and "Sell"
recommendations on those companies.

If you want to be like them, you can review analysts’ reports all day at their
websites. However, if this is your long game, your goal should be to
become your own analysis.
An analyst's aim is to investigate in the financial affairs of the companies
on their list. To cross-check the facts, analysts also delve into the dealings
of a company's suppliers, customers and competitors.
Before making any investments, you should do your own research. It is
always better to research several stocks in the same industry so that you
have a comparative analysis.

- Managing your watch list
Keep two separate lists. Have a Close to Buying List and have a Radar
List which is a list that has stocks that might have interesting products,
potential earnings, but they’re not quite in the close to buying list.
Set a Maximum number of stocks your able to maintain in each list. You
may be able to watch 10 in the close to buying and 20 in the radar but
remember your trying to manage your lists. You can’t add one without
getting rid of one, so set reasonable, livable numbers.
Regularly Manage and update your lists

- Assets that are in the news
Always pay attention to the financial news. The Dow Jones will announce
any asset management or breaking financial new that you need to be
made aware. Your best line of offence in trading is a good line of offence.
Knowing things ahead of time, before they happen, staying informed.

- Mergers and Acquisitions
When two companies join each other, or one buys out another, it means a
huge economical shift in the financial world and in the stock world. Having
this kind of knowledge and buying the right stocks at the right time would
make people very rich. That’s why insider trading gets out of control
because information gets leaked prior to knowledge becoming public.
However, if you are a perceptive individual and pick up on a link between
the two companies where no one else did, you could be a wealthy
individual.

- Intraday Search for Assets
Intraday values update every 15 seconds and closely approximate the net
asset value of the shares of the stock. By watching values, you can
determine if this is a stock you want to add to one of your watch lists.

- Stock Scanners and Screening
If you choose to be a stay at home day-trader, or if you even join a trading
room, download a free version or invest in a stock screener for help
evaluating your stocks.

Using user-defined metrics, your stock screen will filter stocks for you to
help you choose which ones fit your profile.

ETFs: General info about ETFs – introduced in 1993; very liquid, diversify risk
- A stock ETF, or exchange-traded fund, is a holding that tracks an
individual collection of equities, It trades the same as a normal stock would
on the exchange, but contrasting a mutual fund, prices change throughout
the day rather than at market close. 

- Indices by geography
First of all, Indices is the plural for index. Index Trading is trading a
portfolio of stocks that represent a specific market. There are several
companies that watch the countries International Business which makes
up the majority of our geography indices. If people are going to buy and
sell in and out of other countries, they need to have all the information
from reports and analysis to make that decision and only geographical
indices with show that.

- Indices by sector
The Market Sector Indices page of the Nasdaq report summarizes the
performance of certain stocks that are grouped together by a common
market sector.

- Indices by market capitalization
There are 60 major stock exchanges that make up most of the world’s
wealth. These 60 companies when measured is called the market
capitalization, which is measured and followed through these indices.

- XLE – Energy
https://us.spdrs.com/etf/energy-select-sector-spdr-fund-XLE

Reviewing its 10 year Performance growth

- Major ETFs: SPY, QQQ, DIA, XLE, EWJ, IWM, EFA
Several traders like to start off trading with ETFs. They are good starter
trades.