I will term this post as Trading Anatomy.
For starters, trading needs time or possibly years to make it but I will just show a simple setup how trading is being done the way I understand based from my own education.
Remember trading is solely based from your own way and there are may ways (thousands of them) to make a trade.
The important is how to make a trade profitably, anyway you want it...anyway you do it as long as you make money, that's all you cares.
It's simple but it's not easy!
Will show an etf instrument, the DIA, it's the etf for the Dow Jones that comprises the 30 main companies of the US (these are the big companies that moves the US economy like the GE, 3M, HP, MSFT and all those well known companies).
For starters, etf's are sure way to trade as compared with the individual stocks because etf's are group of companies stocks relative to their company structure.
But before you can trade of course you have to open an account but before you have to open an account you need time to study the market.
It's like going to a school or a college to get a degree but will skip that portion.
What we are after for is the setup in trading, how to make a trade.
So in this chart I am showing, the market opens daily 9:30 am. Eastern Time (New York, I live in the East Coast that's why I have to wake up early, 6:30 am. PT.)
They call it the "short trade" if the market is going down, and the "long trade" if the market is going up.
In this chart we are going to short the market because it is going down (by just looking at it).
For a start, sell (short, top arrow) 10 shares at 127.25 (we'll cover the buy/sell stop from next post).
And exit the trade (buy back (cover), bottom arrow) at 126.50.
The difference of $0.75 cents per share, that's a profit of $7.50 for 10 shares (if you trade 100 shares that's $75.00 in just a few minutes/hours, how about 500 shares?) Enough to trade than to work per hour isn't it?
This is a short trade, we borrow from the broker to sell it to the unsuspecting trader (who doesn't know what he is doing, we tricked him), we call it sell high, sell lower, the difference is ours. See how these traders/investors make money from the public, that's why lots of people are mad with the Wall Streeters, their secret are now being exposed? That's not our business, ours is to make money anyway.
It's simple to trade but it's not easy, need years to learn or master it.
Easier said than done, but it's not impossible to do it. It's just a matter of persistence and having a goal.
