Summary of David Borman's Day Trading 101

Everest Media

Description

Please note: This is a companion version & not the original book.
Sample Book Insights:
#1 The trading, day trading, and investing of financial products are terms that are used to describe the buying and selling of electronic financial products. Day traders and traders use computers to buy and sell in the financial markets.
#2 The markets are the group of financial trading people, products, and platforms. The market is the loose association of professional and personal traders and investors who carry out both short-term and long-term trades and investments in financial products such as stocks, foreign moneys, and commodities such as gold and oil.
#3 Market makers are traders who make money by buying and selling all available stock. They are the first to buy and sell all orders coming through the exchange floor, and they earn a commission on each trade.
#4 The world’s marketplaces help buyers and sellers determine the current price of what’s being traded. The prices are updated constantly, allowing traders to see what a trade is worth moment to moment. The difference between the buy and sell prices, called the bid/ask spread, is pocketed by the dealers and floor brokers as their profit for the service of being market makers.

Sujets

• Investing
• Personal Finance
• Investment
• Economics
• Business

Informations

• Publié par: Everest Media LLC
• Date de parution: 10 mai 2022
• Nombre de lectures: 0
• EAN13: 9798822503175
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

Insights on David Borman's Day Trading 101
Contents Insights from Chapter 1 Insights from Chapter 2 Insights from Chapter 3 Insights from Chapter 4 Insights from Chapter 5 Insights from Chapter 6 Insights from Chapter 7 Insights from Chapter 8 Insights from Chapter 9 Insights from Chapter 10 Insights from Chapter 11
Insights from Chapter 1

#1

The trading, day trading, and investing of financial products are terms that are used to describe the buying and selling of electronic financial products. Day traders and traders use computers to buy and sell in the financial markets.

#2

The markets are the group of financial trading people, products, and platforms. The market is the loose association of professional and personal traders and investors who carry out both short-term and long-term trades and investments in financial products such as stocks, foreign moneys, and commodities such as gold and oil.

#3

Market makers are traders who make money by buying and selling all available stock. They are the first to buy and sell all orders coming through the exchange floor, and they earn a commission on each trade.

#4

The world’s marketplaces help buyers and sellers determine the current price of what’s being traded. The prices are updated constantly, allowing traders to see what a trade is worth moment to moment. The difference between the buy and sell prices, called the bid/ask spread, is pocketed by the dealers and floor brokers as their profit for the service of being market makers.

#5

The secondary market is where stocks and bonds are traded after they have been issued. It is where day traders buy and sell stocks and bonds. The money paid for a trade is given to the previous owner of the stock, and the purchasing trader receives the stock.

#6

There are a few key players in the world of stocks, bonds, mutual funds, futures, and currency. The first is the investment banks, which are at the top of the food chain in the trading business. They will help place the initial run of stock that a company will offer to the public.

#7

The second group of players in the markets are hedge funds. These are privately owned trading houses that invest both their owner’s monies and their customer’s monies at highly leveraged amounts.

#8

Hedge funds are financial institutions that are less regulated than many other institutions. They are typically massive buyers and sellers in the financial world, and they use both equity and derivative positions to diversify their accounts.

#9

The major wealth management firms heavily recommend hedge funds as an investment. However, the best and highest performing trading strategies are unidirectional and nondiversified, long-only equities or equity futures.

#10

The third type of investor is professional trading houses, such as mutual funds and investment companies. These companies professionally manage pools of monies and buy stocks or bonds with great diversification.

#11

When you're day trading stock, you sign in to your trading platform and type in the symbol of the stock. The next step is to enter the number of shares, and then click the Buy Now button. Your trade is instantly entered. You now own ten shares of Apple.

#12

The trading platform will show your trade value moving from $1,005 to a higher figure as each share gains value. If the price of AAPL goes from $100 to $102. 50 within minutes, your AAPL trade will show a value of $1,025.

#13

Exchange-traded funds are a type of basket of multiple stocks that can be traded on the markets. They trade at a specific dollar amount, but they contain fractional shares of twenty to fifty different stocks, each valued at a fraction of their current trading list price.

#14

Leveraged ETFs are similar to regular ETFs, but they are designed to use margin and derivatives in such a way to increase the movement of the same base ETF by two or three times.

#15

A bear market is when the markets are falling, and a bull market is when the markets are going up. Bull ETFs are designed to make money when the market falls, while bear ETFs make money when the market rises. Bear ETFs are difficult to use, but they can be useful for day traders who want to make money when the market is falling.

#16

Futures are a type of derivative. They are agreements to buy or sell something at an agreed-upon price in the future. They are standardized contracts that can't be modified. Each futures contract has a buyer and a seller, and one of the parties involved in the trade is a hedger and one is a speculator.

#17

A hedger is someone who uses the physical product he's buying or selling. He uses the futures trading contract to lock in his price and minimize his losses when he eventually either buys or sells the commodity.

#18

Futures contracts offer a margin up to 50:1, which means for every one unit of collateral you put up, you can borrow fifty times as much. This means if you used full margin on your futures account, you could theoretically amplify the gains of the SP 500 Index by fifty times more, or 50 percent gains.

#19

The SP 500 Index is represented by futures contracts, which allow you to gain in the index's fluctuations but at a much more leveraged rate than you would be able to with an SP 500 Index ETF.

#20

In currency trading, or Forex trading, the trader chooses two currencies and determines which currency will increase in value against the other. If many people sell one currency and buy another, this will lower the price of the sold currency and raise the price of the bought currency.

#21

The margin is a loan from the brokerage house, and interest rates apply to the trader's margin, which is a cost of trading and can eat into the profitability of the trade.

#22

Investors usually have cash-only balances in their accounts. Many of these account holders have their retirement money invested in financial securities, either in their 401(k)s at work or in an IRA or Roth IRA at a brokerage firm.

#23

The investor’s philosophy is usually buy and hold, meaning that the investment will see higher returns if the stock, bond, or mutual fund is not traded but rather held for extended periods. The idea is that the markets go up steadily over time and there is no benefit to selling in short time frames.
Insights from Chapter 2

#1

You are a financial analyst, and you watch the markets. You notice that the European Central Bank is meeting on Wednesday, and you also notice that UBS is predicting a 0. 25 percent increase in interest rates across Europe.