The Insiders Guide to Trading the World Stock Markets. A. Willis


The stock market is no longer a members only field game of stockbrokers
playing the market. Like so many other industries, the Internet has changed the
market and the way we do business. With the click of a button, the average
individual now has access to the same information and facts that only stockbrokers were privy to a few years ago. Gone are the days when market
traders and specialists had the advantage of profiting from the ignorant public.
With today’s technology, you have the same opportunities as the professionals at your fingertips. The difference, of course, is knowledge and experience, both of which are within your grasp. High-speed access to information, providing real-time quotes and instant online trading has sprung day trading into a new profession of its own. People are realizing that they too can master the concept of day trading and compete professionally in a level-playing field.

Today the only obstacle in the path of a rookie is experience and that can
be obtained only through time and practice. Even though nothing can compete
with the reality of experience, a good education could help prepare you and that’s
the purpose of this book. The fact is there are many possible gains from the
market, but there are also just as many losses. The tips in this book are
designed to help you avoid the same mistakes that others have made when they
started out. Bear in mind that these tips will not guarantee you a winning trade
every time, but by following our advice, you will keep your losses to a minimum.

This book begins with a basic overview of the stock market and gradually
migrates toward the intermediate level of specific tips and profitable strategies for survival in the industry. Most of the informative advice, issues, and content
focuses on the interests of the online day trader. A glossary of stock market
terms are dedicated to its own section in the back as a reference to beginners
just starting out and for basic traders who wish to graduate to the intermediate
level. For further reference, a list is included for the Standard & Poor’s 100 Index
and the NASDAQ 100 Stock Index.

No matter how intelligent you are, day trading is a risk. Why? Because it
involves competition and emotion. That’s why so many people have historically
compared it to gambling. While trading is similar to gambling, it requires much
more than pure instinct and luck. Day trading requires knowledge of the industry,
diligence, the ability to absorb, decipher and react to the continuous tides of
information encumbered with the internal conflicts of emotional pride, fear,
despair, greed, and loss. If the prospects of winning are still a challenge and
appeal to you in spite of the risks, then by all means, read on. Begin the journey
of your day trading experience.

The term “day trader” gives the impression that all trades are opened and
closed within the same business day. While this may be the case for most of us,
there are some that could actually last longer than a day. Swing trading could
continue for several days, while core trading could last into weeks.
The two largest playing fields in the stock market are the New York Stock
Exchange (NYSE), and the National Association of Securities Dealers Automated Quotation System (NASDAQ). These two markets have very unique distinctions.

The NYSE is the largest U. S. stock market located on Wall Street in New York
City. The stocks traded at NYSE are generally referred to as listed securities,
representing established companies with very large capitalization and consistent earnings. In contrast the NASDAQ is the second largest stock market in the U. S. and projects a higher level of volatility since it hosts emerging companies with less stability and security. Additionally, the NASDAQ Europe is available for market trading in Europe.

The London Stock Exchange (LSE) is the leading stock market exchange
in the United Kingdom (UK), and considered the most international exchange
trading system in the world. It serves the role as the UK Listing Authority (UKLA)
to oversee the listing process, and ensure its rules are being met within the
market. Similar to the NYSE and NASDAQ indices, the LSE uses the FTSE 100
Index list. The LSE market is divided between the AIM market, which is
specifically tailored to meeting the needs of growing businesses worldwide, and
the techMARK market devised for the technological-based companies.

The NYSE is set up similar to an auction-oriented system, in which a specialist who is essentially an auctioneer represents the sale of a particular stock. Since all business conducted at the NYSE is open to full public view, the specialist opens the market by establishing two-way communication between buyers and sellers. Specialists may represent more than one stock, but only one specialist can represent the stock itself. Not only do the specialists oversee the stock exchanges, but they also have the ability to shift stock prices to better leverage liquidity. The idea is that all buyers are treated fairly and transactions are conducted smoothly in an environment where the investors concerns are top priority.

Stocks traded in the NYSE market are generally considered listed securities since they represent some of the larger, more established companies.Such businesses have huge capitalization and a long history of consistent earnings from year to year. Such security provides a market where prices are a little less volatile. Prices move at a more moderate pace and do not frequently shoot up and drop down at a moment’s notice, providing an easier means by which to anticipate and predict market movements. For this reason alone, day traders find it easier in knowing when to make their move in the NYSE market.

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