More About Stock Trading

What's the best way to profit in stocks? Not by calling your broker!

A stock will move up or down depending on news about its earnings, how its industry fares overall, and similar factors. A stock may move quickly in price or slowly depending on historical volatility. It may be perceived as an aggressive growth pick, an underpriced value opportunity or a conservative income producer if it pays dividends.

All these fundamentals have only relative interest, however, to the trader who is looking for opportunities in a fast moving market. This investor is likely to be more interested in technical analysis, which we teach exhaustively at Online Trading Academy. They'll want to know how its characteristics fit into their personal needs as traders. Often it doesn't matter so much what a particular stock is as how it performs in the abstract.

Looking at stock trading in this new way gives you many more chances to make money in the market. There's always a stock whose price is moving in a way that meets your trading needs—you just have to find it. You can choose to follow one specific stock—and buy and sell whenever its performance signals an opportunity according to your trading plan—or diversify as broad as you want to go.

But in order to gain maximum advantage in the stock market, you'll need to perfect one more skill—which we also teach at Online Trading Academy. And that is taking control of your own transactions as a true online trader.

What your broker isn't telling you can hurt your profits in the stock market... here's why:

The traditional way to buy stocks is to get a recommendation from your broker who will then act on it by placing an order. What you don't see is that your buy or sell order may have to stand in line behind much larger orders, or institutional orders, or simply orders from preferred clients. As a result, by the time your trade is actually executed it may be at a very different price.

At Online Trading Academy, we recommend that traders place their own orders directly, via the web. An immediate benefit to online stock trading is that you'll pay sharply reduced commissions—a savings that can add up fast for an active trader. You'll likely enjoy better and faster service by eliminating the middleman. And you'll be able to control your trades by setting markers to buy or sell automatically so you never risk overpaying or losing too much on a trade.

In most of our classes, you'll be making your own online trades before the conclusion of the course—live trades using our money, in which we pay the commissions and absorb any losses so you can practice without fear of making a costly mistake. We'll also introduce you to an even more efficient way to manage your trades: the Level II Data Stream developed by NASDAQ on a state-of-the-art electronic trading interface or trading platform.

Why Level II trading is the best way to make money in the market online:

Direct Access Trading (DAT) software gives you direct point-and-click access to the major electronic trading networks (ECNs)—ARCA, FLOW and BATS—that make up 80% of all NASDAQ ECN volume.

You'll be able to see each buy or sell order as it is entered with its strike price and quantity. Using your technical skills, you can then analyze support levels and make your move at the ideal time for your trading objectives. Execution is automatic—no waiting for a response from the “other side”. Delays are minimized during peak times because you are live in the market and accessing it through a private network. You can get in or out of a position within seconds, thus taking advantages of rapid changes in quotes as well as price imbalances.

Essentially, Level II trading gives you the same visibility into the market as a market maker on a large trading floor—and the same fast reaction time to maximize your gains or minimize losses. Compared to traditional trading, using stock trading software may seem like an unfair advantage—but it's there for the taking and we'll show you how!

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