So the first step in this process is just learning some trading basics. Obviously if you are already familiar with these beginner terms feel free to skip to the next section. This will just be a brief run through of some terminology and overall trading know how. Obviously, everything here can be seen on investopedia.com or a quick google search for more in depth analysis. But I just wanted to make sure I covered this for people just dipping their toes in the pool for the first time with absolutely zero knowledge . I do this because Robin Hood (trading platform ) has brought widely spread day trading to just about everyone and people are trying their hand at something without much foundation, which is part of the reason I am making this trading guide.
So first you need to familiarize with the following: Stocks/Bonds/Futures/Commodities/Option Definitions
Stocks- buying a stock gives you ownership of the underlying company
Futures- give you ownership of a product that must be delivered at a certain expiration
Bonds- mostly known with Treasury Bills provide a fixed rate of return on your capital based on interest rates
Commodities- physical products like gold, silver, and energy products
Options- the right to buy or sell in the future, providing 100 shares ownership for less capital
Basic Trading Hours and when to get Started
Day Trading : 9:30 am to 4:30 pm EST - market open and close
I recommend at least doing an hour research before and after the market close
Pre-Market: Futures market before open - requires special access
After- Market: After close trading- requires special access ( when most earnings are posted)
Buy/Selling and Bid/Ask
Buying a stock gives you ownership of the stock and makes you “long” that equity and you pay upfront
Selling a stock gives you cash for that stock and a makes you “short” that equity
Bid/Ask is the current price to either buy or sell stock, Bid being buy-Ask being Sell
There is usually a spread between these two that market makers make
U.S Indexes - conglomeration of certain companies that gives a waited average to value this indexes that you can buy
Major ones in the US: Dow, Nasdaq, S&P 500
Investing in these has on average beat normal market returns of those investing
Common Terminology
Long- having ownership of a stock, when it goes up you make money
Short- having sold the stock, will have to buy back in the future, when equity goes down you make money
Options- the right to buy/sell in the future
Call- long a stock, right to buy in the future
Put- short a stock, right to sell in the future
Ticker - the Symbol to look up an equity on the stock exchange ie. APPL is Apple’s ticker
Stock Exchange- the market where products are bought and sold
Day Trader- someone who usually has short term positions in the market
Short term position- usually a few minutes, days or weeks on an specific position
Long term- usually 6 months to over a year on a specific position
View- your market outlook on current conditions and insight on why a certain trade works
Earnings- calls that companies report where they stay their current profitability
Obviously there are much more, but for the purpose of this trading guide these are a good starting base. Any terms I introduce in the future not in here I will outline and define . As per all my posts, any questions , thoughts, or feedback (hopefully positive) you may have; I am happy to reply to and entertain. I am here to guide you and I will try to be as accessible as possible. At the very least, I can point you to a certain section, blog, or video that might be the best source to answer a question I have already gone over.