Posts filed under 'Stock Trading Essentials'
It’s Only “Monopoly Money”
Playing the stock market as a virtual trader can be fun. There’s no money at stake and one can gain experience in trading shares using actual prices under realistic market conditions. Virtual stock trading or “paper trading,” is done by the manipulation of imaginary money and investment positions that behave in a manner similar to the real markets. Before the widespread use of online trading for the general public, paper trading was considered too difficult by many new investors. With computers now doing most of the calculations, novice investors can practice making fortunes over and over again before making any financial commitment.
Stock, Options, Calls—Whatever You Choose
Virtual stock markets allow you to trade stocks, options, spreads, straddles and covered call trades. Investors with more experience use paper trading to test new and different investment strategies. For example, investors can create several different positions simultaneously to compare the performance and payoff characteristics between multiple strategies. Writing a covered call is technically the same as writing a naked put, but in practice there are subtle differences. With a paper trading account, an investor can set up a bull credit spread and a bull debit spread simultaneously and analyze the payoff for each position change as the market moves. Investors can “virtually” test advanced strategies such as leverage, short selling, forex and derivatives trading without the risk involved in real trading. Many virtual markets include stocks traded on NYSE, NASDAQ and AMEX and allow trading at any time, even when the real markets are closed. They also permit the purchase of unlimited shares of any stock at the Last Price, an action not allowed in real life where shares are limited and certain prices are not guaranteed.
Various companies and online trading simulation tools offer paper trading services, many are free, others charge. Some virtual stock markets offer research data such as integrated stock and option quote detail screens and quotes in real time. Traders can analyze their performance, have available live chats with people “in the know,” and be sent reminders on their stock positions.
Virtual Stock Games and Competitions
Virtual Stock market games and virtual stock competitions allow the trader to create public or private games with a pre-arranged cash balance or he can choose from thousands of available games. Stock market games are relied upon by investors of all levels including MBAs, financial professionals, investment clubs and college-students. Competitions can be weekly, monthly or quarterly and can start with as little as $10,000 and go as high as $500,000 per game.
August 13th, 2008
Investing in the stock market can be a very scary option for some. In fact until many get into the world of trading it is a heavy risk they are just not willing to undertake lightly. Companies have finally begun to understand the regular individual’s hesitation in getting into the market and therefore they have created stock market games that will simulate the real time stock market. Yalicoo is one of those companies offering virtual stock market trading to help the consumer learn how to trade in real time.
Yalicoo is offering more than just the virtual stock market. They are also offering an incentive of money to play when you earn a winning portfolio. In this article we will look at a few tips to help you in the online stock market game.
The stock market game as we mentioned is based on real time trading. Any stock you are interested in is going to be the real information those in the stock market are trading. One stock that has been a hit currently has been trains. While this is primarily in the US it doesn’t matter as you can trade on any stock exchange that you would like. Trains have been a huge success as fuel prices rise making it easier to send items via train rather than truck. We mention this stock to give you an idea of what real trading would be like. By looking up a symbol you will learn the news, what it is trading at, what the hi and lo has been for the day, and whether or not a stock is strong.
Currency is something else to be interested in even in the virtual stock market. Currency such as the GBP is strong when you compare it to the USD. In this case trading of currency is done in pairs. So if you buy the GBP you have that stock to trade if the dollar becomes stronger. By trading in a virtual world rather than live on the stock market game you can find out when to buy or sell.
There is also a potential to learn about options. Options are a safer way of trading with your money. You can option a stock without owning the stock outright. In other words you buy an option and then someone else buys that option from you. Options are pretty advanced trading techniques, but learning them in the safety of a virtual stock market will be safe and fun.
Once you learn how to trade you can decide to go live with real money or just continue to use the portfolio in the virtual stock market for the fun of the game.
July 6th, 2008
Online virtual stock trading can be very useful if you are not ready to take the risks of real stock market trading. Trading on the stock market can be a harrowing experience if you don’t know what you are doing. In fact, many individuals tend to choose stocks that they know like the company they work for or even something like Yahoo. However, they choose the companies based on the names and how well they know the company, not on the data that is really important.
With the beginners guide to online virtual stock trading, we are trying to point you in a better direction to win real money in competitions as well as learn how to play the stock market. In this stock market game you don’t have to worry about losing your shirt, house, and other possessions. The stock market game is going to teach you how to play in the big leagues with real trading. Yalicoo is a great site to start on in order to learn how to play online virtual stock trading.
The first thing you should know about the virtual stock market is that everything is live, just like it would be on the real stock market. The prices you are quoted with the game money are going to be the real prices for that day. This is what makes the stock trading competition so much fun.
Research is very important, whether you are playing a stock market competition at Yalicoo or spending your money for real on the market. You need to know what the company is trading at, the performance for the last year, and where the stock is sitting on the market. By reading the news, seeing graphs, and watching the stock for a few months you can understand what great stocks to buy in are and what stocks you need to stay away from. The beauty of the stock trading game with Yalicoo is that you are doing the buying without putting up any of your money. This helps you learn.
The next step to online virtual stock trading is choosing a few stocks to play with. Look at the information and then virtually buy the stock. You might just find the stock is a great one to purchase for real, or you might need to learn a few more lessons in how to pick a good stock.
Even in the virtual world you need to constantly listen to the news on the stocks you are buying. These stocks could split, lower, or increase on a whim, and following the news even after you bought the stock is imperative so you know when to sell and get out. Yalicoo can help you play the virtual stock market to learn from.
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Written by David Maxwell. David Maxwell is a professional day trader, trading coach and avid investor. He is also the Chief Financial Analyst at Yalicoo, a virtual stock trading competition website where the users get: real time quotes , are able to view all other competitors portfolios in real time and invest virtually at the same time as they Win real cash money.
For more info on stock market games visit http://www.yalicoo.com/
June 30th, 2008
You have probably heard of Warren Buffet, the great investor of all
times, right? Well, every investor wishes to be as successful as Buffet, who
manages to achieve more than 23% annual return on his investments for more than
40 years (yes, that’s amazing!).
However, choosing the right stocks for your stock trading portfolio is not that simple.
Knowing which stock to buy, how long to hold it, and when is the right time to
sell, is not an easy task. There are lots (and lots) of investing strategies and
trading methods and forms of analyzing the trend in the price of a stock. For
example, there is fundamental analysis, quantitative analysis and various
technical methods. Each strategy also has sub-categories in it; for example
value investing and growth investing are two sub-categories of fundamental
analysis. Therefore, success in the stock market requires plenty of study and
continuous practice.
Studying the stock market can be relatively easy. You have already demonstrated
your intention to do it by logging to Yalicoo. Just keep on reading. Inside our
growing educational section you’ll find plenty of information you need to know
about the stock market and the variety of trading strategies.
Practice is a different story; and could be much more complicated (but it offers
much more fun as you will soon find out).
Obviously, it is not a good idea to burn your savings for practicing different
investing techniques investing in a portfolio composed of real money. So, what
can you do? One way to do it is by using a virtual trading system to test
various strategies before putting them into action.
What is virtual trading
Virtual stock trading system, like the one Yalicoo is offering is very similar to the
trading system provided by your broker. You are provided an initial amount of
money for trading the stocks you like whenever you wish; you can manage your
stock portfolio in different ways in order to discover the optimal path adequate for
you. Everything is done virtually, thus you do not invest real money nor do you
assume any risk. In other words, you get the opportunity to participate in the
stock market without the need to open an account with a broker and putting your
savings in danger.
Does it sound too good to be true? Well, it is.
Other virtual stock trading systems on the web allow you to trade stocks using
only delayed quotes; it means that if you want to buy a stock, your order will
be executed according to an historical price or it will be executed 20 minute
after your order. Some of these systems do execute your orders in real market
prices; however, you can’t see the current price but only a delayed quote. These
limitations make it harder for you to view the real impact on your trading
methods. Well, Yalicoo’s system is a totally different story.
Yalicoo’s real time virtual trading
Yalicoo is the only virtual trading system currently allowing you to trade
stocks using real time stock quotes (and yes, you can actually see current prices of
stocks). It gives you the opportunity to buy or sell stocks from your portfolio
using limit or market orders which will be executed immediately. No delays at
all. Thus, Yalicoo’s platform simulates real world trading that you may find in
your broker’s software. This is a unique opportunity for you to test a variety
of trading strategies which you would like to try and march with your style of
investments, a system not offered by other virtual investment programs.
The variety of competitions that Yalicoo has to offer, from a
daily competition,
to a weekly, monthly and even quarterly competition, make it possible to test
almost all trading strategies that exist in the literature. In Yalicoo you can
be a day trader and pick stocks for the short run, or you can chose to be a
value investor just like Buffet; alternatively you may choose to become a
quantitative investor like Benjamin Graham, and build a strong portfolio for a
longer period.
But there is more …
In the past you could only test your strategies using delayed quotes. Being
aware of the weakness of using delayed quotes, we in Yalicoo assured that you
have real time stock quotes for better outcome. As you understand now this is a great
improvement, but it is not the whole story. Keep in mind that there are many
difference investment strategies it may require significant amount of time and
the use of many sources to understand and test them all. Using Yalicoo can help
you shorten this period significantly.
How do we achieve that? It is very simple. Keep on reading (we’re almost there).
Yalicoo is also a community of investors learning from each other. In Yalicoo
you can view portfolios of other investors and act immediately. This allows you
to verify or reject a specific strategy or a set of methods. Watching the
investing strategies of other investors will help you improve your trading
skills and become a more successful investor.
Last but not least, we almost forgot to mention one very important fact. The
investors with the best performing portfolios in each competition will win
thousands of dollars in cash prizes. Many other will win a free additional game.
Thus the question is- do you want to become a better investor and while learning
to do it win large prizes?
We have a feeling that indeed you do.
Join Yalicoo and start improving your
trading skills (and win cash prizes…) right now!
June 24th, 2008
While watching the news on TV or reading the newspaper one encounters phrases such as “the NASDAQ went up by 15 point” or “Google’s stocks fall 5% in the early trading session”. These statements are actually information about what is called the stock market.
Many people find the stock market a confusing place. Some believe that the stock market is like a casino. They think that investing is a form of gambling, and the investor more than likely end up losing money. These fears usually arise from testimonies of family members or friends who did not succeed and lost money following investing in stocks; while indeed people do lose money in the stock market, in many cases the investments were done without proper understanding of the stock market itself, without information about the company issuing the stock and without proper experience.
Other people view the stock market as an exclusive arena for professional investors or traders. Thus, they leave their financial decisions to professional traders.
Obviously, the stock market is a complex environment and investing can be complicated, but after knowing the facts and understanding the basic concepts of operation of the market, you will realize the benefits and importance of educated investing.
The purpose of the stock market
Giants businesses such as Star Bucks, Wal-Mart or McDonalds, which post profits of billions of dollars every year, were not always as big as they are today. Star Bucks started as a small store in Seattle, Wal-Mart began as a single store in Arkansas, and McDonalds was originally a restaurant in San Bernardino.
How did they do it? With vision, proper management and efficient operation these small start-ups have grown to become global market leaders. But there was another pre-requisite for growth- capital. And indeed, these companies have raised capital from investors by selling a share of their business in the stock market.
When a company is growing, it needs money to expand; modern buildings, more equipment, new employees, research and development, marketing, all these cost money.
Raising capital can be done in one of two ways: borrowing money from the bank or selling a part of the business to investors and using the money to fund growth.
Borrowing money from the bank is often very useful, but it is limited. Banks will not easily lend large amounts of money to small businesses and this loan obviously bears an interest. Therefore, many business owners choose the other option – selling a part of the business to the public. This is done by issuing stocks of the company to investors through the stock market.
In other words, the stock market is necessary for companies to raise capital from investors so that they can fuel growth.
Investors and the stock market
A company selling its shares needs to “go public” at the stock market, through places also known as Exchanges (like the NASDAQ). Each investor pays the company for the amount of stocks that she is interested in (and can afford) buying, and in return she gets a fractional ownership of the business.
If for example you bought 5% of a company’s stocks, you now own 5% of the business. If the company is profitable you are entitled to 5% of profit available for distribution to the owners, or- dividends.
The stocks of the company are now traded in one of the exchanges in the stock market, whether in the country where the company operates or in other stock markets over the world (such as London, Hong Kong, Tokyo, etc). Shareholders can offer new investors to buy their piece of the business by selling them part of their stocks. The negotiation between the two sides is carried out through computerized system activated by broker, who are individuals or firms that charge commissions for executing buy and sell orders requested by investors. If there is a match between the offer of the seller and the buyer, the order is executed. In this case, the seller gets the cash for the sell while the buyer receives the seller’s stocks. The buyer now owns a share of the company, equal to the percentage of stocks he has relative to the total number of shares the company has issued.
Summary and next steps
We have just reviewed the very basic operation of the stock market. Every day there is a large auction of stocks of many companies in the various exchanges around the globe. Your role as an investor is to identify the companies whose shares are sold at an attractive price, which means, at such a price that after you buy them their value will rise and you will be able to sell them at a profit.
This is not an easy task, but it is possible. In order to become a successful investor you have to acquire the education and practice. We at Yalicoo recommend that you keep reading about the way stocks are traded, how to choose the right ones and use how to use Yalicoo for practicing and improving your trading skills.
June 24th, 2008
When a company wishes to raise capital to expand its activities it may do so
in the form of issuing shares which the public may purchase. The purchaser has the option of holding the
stock for a long time or sell it when he/she feels the time is right (either at a profit or when
the price dropped to a level at which the investor does not wish to hold the stock anymore).
In order to sell the stock the seller has to find a buyer who is willing to buy the shares offered for sale. Where and how can the seller find these buyers?
The place where sellers and buyers perform these transactions is called the stock market or stock exchange.
A stock exchange is a place where equities (such as stocks, options, bonds and others) of public companies are traded. In the distance past the exchanges were large rooms where stock brokers used to shout the orders their customers have placed so that deals (buying or selling) could be carried out. Nowadays, the
exchanges can take place the same large rooms, which are now filled with computers connected to the internet. These computers receive the buying and selling orders, process them and execute them by matching the sell and buy orders.
The New York Stock Exchange (NYSE) is the largest exchange in the world (it has merged with the European Stock Exchange, Euronext, to form the first global stock exchange in the world).
Other famous stock exchanges are the National Association of Securities Dealers Automated Quotations system (NASDAQ), the Tokyo stock exchange (TSE), the London stock exchange (LSE) and the Hong Kong stock exchange (HKEX or SEHK).
The stock exchange makes stock trading (buying and selling) very convenient. You don’t
have to actually travel to New York in order to trade a stock traded on the NYSE; you can call a broker who will go to the exchange and buy or sell the stocks on your behalf. The broker does not have to actually go to the exchange himself- his representatives there and the computer will enable him to execute
your order on the “floor” of the stock exchange.
Today, most brokers are connected to a large number of exchanges around the
world through the internet or other fast communication networks. Thus, the price
of each stock is available globally instantaneously. Investors can therefore
watch the fluctuations in stock’s prices, fluctuations which are based on
financial news from the company, media reports, economic news and lots of other
factors, and decide on their trading actions. Sometimes the changes in stock
prices reflect investors’ expectations, thus understanding the forces affecting
the market becomes a more complex event
Moreover, investors can trade stocks anyplace on the globe regardless of where
they are located, and the trading can be executed almost instantly. By being
able to buy and sell stocks of companies which are headquartered in other
countries the holder of the stock has the ability to affect global economy more
than ever before.
June 23rd, 2008
