How The Stock Exchange Works (For Dummies)

How The Stock Exchange Works (For Dummies)

What is the Stock Exchange and how does it work? The Stock Exchange is nothing more than a giant globally network tend to organize the market place where every day huge sums of money are moved back and forth. In total over sixty trillion (60,000,000,000,000) Euros a year are traded. More than the value of all goods and services of the entire world economy. However it's not apples or second hand toothbrushes that are traded on this marketplace. But predominantly securities. Securities are rights to assets, mostly in the form of shares. A share stands for a share in a company. But why are shares traded at all? Well, first and foremost the value of a share relates to the company behind it. If you think the value of a company in terms of a pizza. The bigger the overal size of the pizza, the bigger every piece is. If for example Facebook is able to greatly increase its profits with a new buisness model.

The size of the companies pizza will also increase, and as a result so will the value of its shares. This is of course great for the share holders. A share which perhaps used to be worth 38 euros could now be worth a whole 50 euros. When it's sold this represents a profit of twelve euro per share! But what does Facebook gain from this? The company can raise funds by selling the shares and invest or expand it's buisness. Facebook, for example, has earned sixteen billion dollars from it's listing on the Stock Exchange. The trading of shares though, is frequently a game of chance. No one can say which company will preform well and which will not. If a company has a good reputation, investors will back it.

A company with a poor reputation or poor performance will have difficulty selling its shares. Unlike a normal market in which goods can be touched and taken home on the Stock Exchange only virtual goods are available. They apear in the form of share prices and tables on monitors. Such shareprices can rise or fall within seconds. Shareholders therefore have to act quickly in order not to miss an opportunity. Even a simple rumor can result in the demand for a share falling fast regardless of the real value of the company. Of course the opposite is also possible. If a particularly large number of people buy weak shares. Because if they see for example great potential behind an idea. Their value will rise as a result. In particular young companies can benefit from this. Even though their sales might be falling, they can generate cash by placing their shares. In the best case scenario this will result in their idea being turned into reality.

In the worst case scenario, this will result in a speculative bubble with nothing more than hot air. And as the case with bubbles, at some point, they will burst. The value of Germany's biggest thirty companies is summarized in what is known as the DAX share index. The DAX shows how well or poorly these major companies and there by the economy as a whole are performing at the present time. Stock Exchange is in other countries also have there own indices. And all of these markets together create a globally networked marketplace. Subtitles by the Amara.org community .

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How to Buy Stocks Online (Step-by-Step) - live Guide

How to Buy Stocks Online (Step-by-Step) - live Guide

If you are looking for a step-by-step live walkthrough of how to buy a stock you found the right video now before we go to my actual desktop and you watch me buy a stock this is more so a part two of a two-part series that I've done and the quick kind of quiz and tests you can give yourself is when I say limit order market order stop limit stop market if you have no idea what I'm talking about when I say that then first go and watch the video that I've linked down below and this video will make a whole lot more sense because I am assuming that you know those terms so again if you don't know what I mean when I said those terms watch the video that I've linked down below and then come back to this one it'll make a whole lot more sense now if you do understand those terms then perfect you know the video here that I'm going to go over those assumptions that I've made will make total sense to you so with that being said let's go to my desktop before anything though I want to go over the basic math on well how to buy stocks how exactly does it all work and the great news is I'm probably going to insult your intelligence here I hopefully I am but let's go over a quick math problem here so apples cost $2 each Billy Bob has $10 in his pocket so the question how many apples can he buy again you're just there stick with me here so let's just go through the quick math well he's got $10 in his pocket and they cost $2 each so that means he can buy what five apples right now if you don't understand that math yeah just put a pause on the stock market and go back to like third grade or something not for you Billy Madison fans maybe you got to go I don't know but I'm assuming 99.9% of people understand the math there so when it comes to the stock market when it comes to calculating how many shares nothing fancy at all just instead of apples here replace that with let's just say X Y Z so ticker symbol X Y Z has shares and those shares cost $2 each you have $10 so how many shares can you buy well again instead of this being representing apples and now represents shares so 10 dollars divided by $2 per share equals 5 shares that you can buy so that is the math there are no fancy calculations there are no fancy calculators you know you don't need a financial advisor to figure out how many cheers you can buy all you need is how much money do I want to invest and then you need the other number how many what is the cost per share now maybe write anything well how do I figure out the cost per share well I'll show you how that all works here but again two big numbers how much money do you want to invest what does it cost per share so welcome inside of my online broker account my brokerage account maybe for a different terminology of broker broker brokerage online broker online brokerage all those things one of the same and you know this is what the inside of mine looks like and this is Merrill edge do Bank of America now first right off the bat by no means am i implying that this is the only broker available this is the broker you have to use nothing like that this is personal preference this is all up to you in fact I use them because when you keep certain to minimums in your banking accounts with Bank of America you get 30 free trades you know per month so whenever I'm doing stuff from my retirement if it's always Commission free for me because I keep those a minimum so to me that's what drew me in knows hey I'll take $0 Commission trades now if you don't meet the minimums you know then prices can vary but there's a lot of online brokerages out there so and if you're curious well which one's for me what should I be looking at I will put a link down to how to find an online broker down below this video - and you can kind of check that stuff out but you know again this is not like some sales pitch or anything for Merrill edge this is just who I personally use and the second part here is all brokerages are going to look different so when you sign up for one if it's not Merrill edge you know this screen the inside of your broker is going to look different now the overall dynamics the overall you know key components are the same right you're going to enter in certain amounts and numbers which you'll see and then you buy your stock but you know colors you know how things look you know you know to the human eye yeah those things are going to vary but at the core it's all the same so first up in anything is well we got to figure out what stock you want to buy right because if you don't know what stock you're going to buy then you're not going to know the price and or anything like that so what stock you want to buy and how much money do you want to invest into that stock that's the first question that you're gonna have to ask yourself again what stock how much money do I want to invest for me I've determined I've been watching this one for a while but I want to invest and put our o st so you can see with Merrill edge you know it auto populates and you know the name of the company right there so I'm going to click on that and after that loads you can see that we had this pop-up window right here that form and that's going to give us some very important information but before you get to any of that information the first thing is that well as I said I want to buy some shares so action what sort of action do I want to take well I want to buy so I want to buy our OST that's how that works now next part here's where the math comes in quantity how many shares do I want to buy and the cool thing here is they have a calculator so I'll just click on that and this is where we're going to go through it and the nice thing about this is it lets you know what the price is so right now with Merrill edge it tells you that the price per share is fifty eight point six four but actually let's not even use that because your broker may not have it so we'll just go to the old school school route here so looking here at the information we've got to look down here and see what the price actually is so the price right here you can see that's going to be that's going to be the price of the current shares right now right around fifty eight sixty two I say right around because prices are always fluctuating but that's going to be the number that we can use and what I always like to do is just go a little bit above there because like I said prices are fluctuating so you know give yourselves a little bit of leeway so what I'm going to do is let's just run the calculation on 5875 now how much cushion if you want to do 5865 that's up to you if you want to do fifty eight seventy that's up to you if you want to do 58 62 right on the dot that's fine but remember prices are always changing so you may not get fifty eight sixty two because who knows maybe written the new price right now is 58 65 for example and again if you watch that previous video that'll make you know more sense in terms of you know how the prices and such are changing but for me I want to do five hundred dollars so let's bring over this calculator and this is just simply what comes with Windows so you know nothing fancy here so like I said I have five hundred dollars in my pocket and apples cost fifty eight I'm going to use 75 now of course they're not apples they're shares but fifty eight seventy-five and that equals eight point five now if all you have is five hundred dollars then you always need to round down now you can't go and buy eight point five one chairs so but if all you have is literally five hundred dollars then you can't go and buy nine chairs you're going to have to round down to the nearest number and that is eight so you would have to get eight shares in this situation now I do have more than 500 dollars so I'm just going to go ahead and round that up and pick up nine chairs but again I want to reiterate that if all you literally have is $500 then you can't round that up to nine because well then you're not going to have enough money to make the purchase you would have to round down even if that says you know eight point nine nine nine you would sell up the round down to eight because well you don't have enough money for nine shares so just one thing to keep in mind but in my case since I do have more than $500 I just want to round that up and I'm going to buy nine chairs now order type and this is where definitely the previous order comes into play but I'm going to select limit again what does limit mean well hopefully you watch that other video so you know exactly what that is and like I said I want to put it in fifty now ideally I'm going to get a better pricing right now it's actually warning me the limit price is entered above you know what the current price is but that's fine what this I'm just saying I don't want to pay anything more than fifty 875 but ideally I'm going to get filled meaning I'm going to get more shares or I'm going to get my shares for less than fifty eight seventy five but I'm going to put that in there again if you want to do fifty eight seventy at that cushion or if you want to do 58 65 actually let's do 58 65 and we'll see if I can get any shares if for that price and then finally duration meaning how long do I want it to last well I can just let that order sit out there for a day or I can let that order sit out there for thirty days for this I'm just going to do a day next we're going to preview the order so you can see right here that the entire amount that I would be putting in would be five hundred twenty seven dollars and 85 cents as I already explained my Commission is zero because of you know the cool stuff that Bank of America offers but that is the current you know amount of money estimated I should say because you know that the share price is always changing but estimated going to be right around five hundred twenty eight dollars and you know that you can go through everything you know it's your account the action is to buy the company name and ticker symbol so you see all that stuff it's just letting me review it one final time and then you can hit submit so again it's just here is the screen it's acknowledging that the order did indeed happen it's given you know even the order number and all that stuff so it's just giving you a list of everything that happened now we don't know if I got any shares yet this is real time so I actually have no idea if I got any shares but so now I want to come down here and click view order status and let's see I bought a you know TJX before the video got ruined but our OST right here executed and it got executed at 58 dollars and 61 cents so I do now officially own nine shares of our OST at a price of 58 dollars and 61 cents then earlier you can see about looking at the timestamps about 20 minutes prior to this video here is this happened at 1225 I bought seven shares at a price of 70 48 of TJX so two different orders there but you know the one that you saw was our OST and that's it that's how you buy stock online step-by-step-by-step very straightforward very intuitive you know the drop down menu menus make it quite easy and you know worst case will clay what happens if I try to buy more stock you know than what I have money for well then your broker is just going to say it's going to correct you it's gonna say no you can't buy that much because you don't have you know the proper funds in your account so it's not the end of the world you're not going to get thrown in a jail if you actually try to buy more shares and what you can can pay for so you know worst case scenario it's just going to reject your order and then you might have to do a new calculation so it's not like every little thing is do or die or anything like that just take it one step at a time go through the directions and you know that is how you do it and the reverse opposite is true for one you'd sell when it comes to action you would just click the cell instead of buy and then everything else you know remains the same so any questions or comments or anything like that you can leave those down below but yeah that is how you buy a stock online with an online brokerage if you are interested in trading alongside me and other traders then I do offer a private trading community known as the inner circle so the two images that you see on the screen the one image if you click on it it will take you to the inner circle page and give you all the details about it the other is going to be a behind-the-scenes tour that I personally give so you can see exactly what you are going to get with the subscription so if that sounds like something that could add value to you as a trader then go ahead check it out and by all means let me know if you have any questions


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How to Buy Stocks

How to Buy Stocks

So you just heard about this stock market thing you want to buy some stocks but hey how do you even do that I see all these different order types what do they mean let's talk about it first thing before you can even do what I'm about to talk about in this video you need to take an initial step and that initial step is signing up for a brokerage and with the brokerage you want to do an online brokerage don't go to your community bank or something like that and then go through their brokerage because their fees are going to be crazy so online brokerage I'll put a link in the description below that I put together a guide on kind of how to select the proper brokerage for your situation we'll also flash up a link on the screen here so that'll be down in the description box below so that's step one first got to get aligned with an online brokerage after you get signed up maybe you are already signed up you're going to have a bunch of different choices for orders in terms of how to buy and how to sell so that's what I want to break down in this video so we're just going to take it one by one and hopefully you know when you get through it all you're going to understand what all those little drop-down options mean you know when you click that little arrow and you see a bunch of choices maybe there's just boxes you select or whatever but regardless hopefully you've seen all of these because they are very commonplace so just for argument's sake we're going to talk about a stock that is currently trading at $25 so $25 current price of stock we'll just call it ABC now the first type of order you may see is what we call a market order so what does market order mean if you select that option that means that I just want it and not only do I want ABC I wanted at any price it doesn't even matter to me I just want into the stock I want to own shares I want to buy it not in a few minutes right now so market is just saying I want it now and you're going to pray whatever price the market gives you so if this happens to fluctuate up - let's just say 2502 so if that price goes up 2502 for whatever reason no maybe like a split second before you click the Buy button and it goes up 2500 - it doesn't matter you're getting in at 25 Oh - if it goes and let's just say let's just it drops to 24 you know 97 right before you buy it doesn't matter you're getting in you want it now so it's going to give you whatever the market has the current price at so that is what a market order is next type of order a limit and all strategies are different but a limit is more times and not the order that you want to be using because market orders especially you know penny stocks or ill liquid markets I can get you in quite a bit of trouble but a limit but also at the same time market orders do have their place in the market so I don't want to say like this is you know like a black hole or anything I mean they have their time in place but a limit order is essentially saying I want it but so what is the but the but is saying you know I really do want that but I'm only willing to pay a certain price for it so again if the stock is trading at 25 you're like you know I do want in - ABC but I don't I don't want any at 25 you know I'm only willing to pay $you would select limit order and then when you select limit your brokers going to ask you okay well what is the but meaning what price are you willing to pay so in our example here you would put in a limit order for twenty four ninety all that means is you're not going to get any shares of this unless the price hits so if the price drops down and hits 2491 you didn't get any shares if the price goes up to twenty-five fifty you didn't get any shares you were only willing to pay twenty four ninety on the order that's what a limit order is the next type of order very very important type stoploss now the thing here is stop-loss only pertains to you if you've gotten in so either this or this order type has already taken place in order for a stop-loss order to be relevant to you and a stop-loss is saying I want out now the name the little deceiving because it implies that maybe you're you know stopping a loss but in other situations you know especially when you get more advanced trading a stop-loss can still take you out of a position but it's not really stopping a loss because you would already be making money so it's not like this pertains to only losing trades this is just the way again of saying I want out of the trade that could be a losing trade it could already be a profitable trade but you just want out now within this family there are two types and hopefully these both kind of sound familiar there is a market stop and there is a limit stop market is saying I want out now so it is just going to get you out of the trade whenever so let's say you get in right here at 25 and you're like you know what I only want to risk 10 cents so you could put in a market at 2490 and if the price goes down there and hits 2490 bam your broker is going to sell your shares and you're going to get out but market means no matter what so if the price really starts to go down fast maybe by the time all little computer algorithms do their thing that's the price is that 24 you know 85 well because you're doing a market meaning you want out now it's still going to just sell you and get you out at 24 85 sure you said but because it's a market that's not a guarantee the only guarantee is your broker will get you out of the position on the flip side the limit so we'll go with this 2490 you're saying I want out but I'm only willing to take a loss of up to 10 cents meaning if the price does one of these numbers we're just moving so fast that it just essentially goes down through your order which is possible depending on how fast things are moving that the way the market works but let's just say something - the price - starts to collapse like bad news or something comes out in the price just whoosh you know the toilet flush down it goes because a lot of other people going to try it 2490 you just may not have any shares there you may not be able to get out but the problem here is well you're only willing to sell for so when the price hits 24 85 you're not selling price hits 24 50 you're not selling price hits 24 you're not selling because you said well I'm only willing to sell for whereas the market sure it can cost you a little bit more because maybe you don't quite get out when you thought you do but at least you get out so again all orders have their time in place but I'm going to just kind of circle this one a limit stop-loss can be very very risky for the situation where if some sort of bad news comes out and if it skips over what what your limit order is you know who knows how low can get and your broker is just going to hang on to you of the shares because you told them well I'm only I only want to sell at so you know keep that order in mind it can be you know I'm not going to say to never ever ever use it but I'm really struggling right now off the top my head to think of an instance where that sort of you know stop-loss order maybe you know wise to use so these are going to be the three main ones you use now there's a whole other family of orders called conditional orders but that's more advanced maybe I'll come back and do another video on that sort of stuff but these are going to be the backbone of the orders you know if you ever watch any of my live trade videos I mean these are the orders that I'm using so it's not like because there's advanced orders that means you have to use them you know the planes plain and simple order such as you see right here are going to be more than enough and then final or finally I should say these aren't really ordered types I suppose in a sense they're but maybe you've seen GTC this just means good today will cancelled meaning your order is going to sit out there so if you put in an or a limit order here for it's going to sit there and sit there and next week it's going to still be sitting there three months from now it's still going to be sitting there opposed till this one I don't think there's a universal term for it but essentially applies you know it's good till the end of the day so we'll call it GTE good till end of day and this is one where hopefully that's pretty self-explanatory if by the end of the day the price let's just say goes to twenty five twenty five oh five twenty five oh two twenty four ninety seven so it's just fluctuating it never quite sit twenty four ninety by the end of the day well then this order is going to be cancelled and you don't have to worry about it so I see something like this is if you forget about the order then it's okay because it'll get cancelled at the end of hope you're not forgetting about orders but if you do it's going to cancel itself but this one here if you forget about it you know you may have a surprise if you don't come back and check your broker for you know another three weeks and you're like oh yeah I forgot about that order and it may be sitting out there who knows maybe it's been filled but that's going to be what GTC stands for good till cancelled opposed to the other type of orders words you know just good up until the end of the day so like I was saying these are the you know not advanced orders very basic but this is what I use all the time in my everyday trading this is what probably I was going to say 90% of people use but I guess I don't really know if that's a accurate fact or not but majority of people I just use the word majority majority of people do use these order types and they're really all that you need so limit market and then your stop-loss orders here now you get a grasp of these and how they work I just like to remember it you know as these you know market I want it now limit I want it but and then you know you combine these with the stop-loss which when you're talking about stop-loss is you just want out of the trade so hope you found this helpful obviously this is the design for more of the new people out there so if you are newer and this helped you out please click the like button if you're new to the channel then by all means subscribe a lot of other videos and such on the channel I released live trade videos chart analysis videos all sorts of stuff so definitely subscribe and check things out hope you found this helpful so get out there and happy trading you.

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7 Forex Trading Tips and Tricks (Become a Better Trader Overnight)

7 Forex Trading Tips and Tricks (Become a Better Trader Overnight)

Hey hey what's up my friend so in this article I want to share with you seven of my best trading tips right that will improve your trading results so keep watching okay so the first forex trading tip that I have for you is number one enter your treats near market structure so let me share with you how not to do it right so firstly right often traders will look at a chat right so let's say for example the rate 1 here is your stop loss the green one is your entry point and blue one is your so-called tick profit level so traders they would see this chat and they say oh man price is you know coming down lower and lower let me know hop on what before I know I miss the move so they go long in the green area right half their stop-loss at the red level no which is a distance away from the highs and then they target at the nearest swing low right that is a very common thing that you know traders would do but when you look at it from a risk to reward perspective right you can see there you're in fact risking this much you're risking this much to make this much right I would say risking up a dollar to make like 40 cents right so really right if you want to improve your risk to reward right you want to trade near market structure which is this example that I want to share with you this one over here is much better because if you look at it now right your stop loss level is at the same level your tick profit level is at the same level over here as well the only difference is now you're entering at a much favorable trade location you're entering a market structure in this case near resistance right you won't necessarily go short right because you might want to wait for a reversal candlestick pattern like a shooting star a bearish engulfing pattern before you kosher so perhaps the price may come up higher and then get smacked down lower and close lower so from here you can see that no from a risk to reward standpoint let's say you know it closes lower you enter somewhere here your stop-loss is still at this level all right let me just remove some line trail let's see what happens now is that you know you're not going to use a sell limit order you let the price go up and then come down and close the lower somewhere you so your entry now be somewhere here and your stop-loss is now here now this is your risk and your reward is now from your entry point to your target profit so now you can see that you are risking a dollar to maybe make a dollar fifty or even two dollars alright your risk to reward has been improved just because you are trading near market structures so that is what I mean by number one right you wanna trade near market structure to improve your risk to reward on your tree alright so that's the first tip I have for you the second tip is this right is that you wanna trade breakups with build up so what is built up right let me explain for those of you who have been following me for a while now you already a pro at this so a build up simply means write a tight consolidation where the range of the candles gets smaller and smaller so you can see that over here this blue box this is what we call a build-up over here this over here is a sign of strength cause if you think about this right price and resistance it usually would have selling pressure right traders looking to short resistance like for example in the previous example right I said that no traders might want to consider shorting a resistance in your market structure now what happens is if after you know ten candles 1520 candles the price is still hovering at resistance what does it tell you well it tells you that the selling pressure it's unable to push price lower that's because there are traders are willing to buy and this higher prices that is why the price can go down right so this is a sign of strength because you know the price is still hovering a resistance right buyers are willing to buy these higher prices willing to buy in front of resistance because they have the expectation that the price will break out all right so this is a sign of strength whenever you see the price make forming a build up okay a build up over here just prior to the breakout this is a sign of strength at a market is likely to break up higher another variation of this right is what we call higher loss into resistance this is a sign of strength as well notice you see higher lows higher lows higher lows higher lows into resistance the concept is somewhat similar to the build up but this time around is telling you that buyers are willing to buy at this higher prices that is why you see higher lows into resistance right so this is also another sign of strength right and this is the tip for you the fourth tip that I want to share with you is what I call the first pullback so often right the price it can break up and if it breaks down right you might have missed the move right if you didn't catch the break up but don't worry because more often than not right the price will give you a chance to re-enter to catch the trend so in this case you can use the first pullback technique that I'm about to share with you so you can see that over here the price it did break out okay so those of you who missed the move don't worry because over here the market offered you are an opportunity to get long right by forming somewhat of a a bull flag pattern so what it can do is to treat the first pullback the price does break above this swing high you can look to get long right and possibly have your stop-loss you know just a distance away from this low maybe somewhere over here right a buffer away from this swing low so this is what I mean by the first pullback so don't worry you know if you miss the breakout rates right there's always opportunity I mean there's a good chance that you can get opportunity to hop on bought and catch the train alright so that's the fourth tip for you the first pullback the fifth thing that I want to share with you is to set your stop loss right away from market structure because often what traders do is that say let's say the market is in a range okay they go long right price hits up higher they go long over here where do they put a stop loss they put a stop loss just below this level of support and what happens well the market could just as well to not come down lower trigger your stop-loss ending continue higher so this is why right you don't want to put your stop-loss just below support or just above resistance it's like asking the market you know come my stop-loss so I take my money it's free just stuff it down your truth you don't want that so what you want to do is to set your stop loss right a distance away from market structure so how do you do that very simple you can see over here at this example the market here is someone in a range all right traders can see that you know it uh it is at an area of support right price tested once twice thrice right then it you know four times okay so we can see that now this candle over here this low has pretty much taken out this lows over here this lows over here this loss and this loss over here so this one candle has pretty much wiped up all the stop-loss right the cluster of stop-loss below this area so this is why I say you know you wanna set your stop loss right a distance away from market structure how do you do this is very simple you firstly you can use just your eyeball just eyeball the chat and see okay let me just give it some distance from you know from here to here I'll set my stop-loss somewhere here right that's what you can do alternatively you can use an indicator like the average true range right what it does instead it measures the volatility of the market pull out this indicator you'll give you a value call it X right so what it pick is the value of x right you can click what is this low right and then minus it by X so if the the value lets is the market price level at support is hundred dollars and let's say X is ten dollars right you put your support at ninety bucks pretty simple right so that is how you actually protect yourself right from getting stopped hunted all right so this is the fifth tip that I want to share with you set your stops away from market structure the sixth tip that I wanna share with you is a entry technique right to profit from traders who long break up and then B go trap here's how it works so this is what I call the Falls break setup so you can see it over here area of resistance resistance market broke out of resistance on this candle you can imagine right it actually at one point in time this candle was looking bullish something like this okay sorry let me just redraw this looking bullish something like this the market has not closed yet any halfway right troll a day right the sellers to control push price lower and finally right it closed like this it closed like this so this is why you got this candle over here this can over here it's pretty much this can no over here so at one point in time I was actually looking very bullish my buyers are in control traders pile on the breakout let's go along rise going to the moon and then suddenly reverse and closed lower over here so you can see that the psychology of the markets now what's happened is that breakout traders who are long and now track right because they buy the breakout in a market does 180 degree reefer so they are now trapped and if you think about this right where did the breakout traders put your stop-loss chances are they put estamos maybe below this low here or even here for those of them who are really really conservative so what you can expect is that if the market right the price were to continue lower it's gonna hit this stop others these sell stop orders which is the stop-loss orders of the breakout traders and you would induce a further selling pressure so this is why you can expect the market to continue lower it's not guaranteed right but it's a good chance that you will continue nor after this a false brick price pattern so we can use this our false break right as an entry trigger to you know get on bought trends you know time your poo bags and stuff like that it's very useful and tree technique to use and that is a psychology behind the false brick setup and the last tip that I want to share with you is this right use limit order for a better reason to reward on your traits so let me share with you an example so you can see over here alright this is a chart of euro yen for our time frame how do I know that because it's it's over here okay so this is a very typical setup that traders would treat prices at a area of support right coming through an area of support right now this step you test at once twice you can pretty much muck up your your support level who's gonna be quite obvious and then this bullish reversal candle is so bullish right it's suddenly just the you know massive reversal and close near this highs over here so now if you follow the techniques I'll just share with you you do want to set your stop-loss just below the level of support right you want to set it some buffer way so let's say you put it somewhere here now if this is going to be your stop-loss let's call it s L and this is gonna be your entry you can see that your risk your potential risk on this tree is very large okay you can see that this is the distance of your stop-loss very very large right and if you don't want to trade it and I can understand it because you know if you have a larger stop-loss you have to reduce your position size to you know still have to have a proper risk management right you might not wanna take one to take the trade because the stop-loss is very large so what you can do is to use a limit order to have a title stop-loss and in turn right you can increase your position size on this trait so an example is let me just change this color let's say you decide to use a limb in order and you put it say a limit order somewhere here like you know a Fibonacci level like maybe justic from this swing low to swing high and you identify the 50% level mark just that is where you will enter the treat your new entry is now over here right let's see just is just one of the technique that you use now you what you'll notice that your stop-loss right this distance of it has been reduced right now is this is the distance of your stop-loss alright and from a risk to reward standpoint you have improved on it right instead of you know by near the high it's what you can do is use a limit order get a better price level thereby you know improving your risk to reward on the tree now the downside to this approach is that sometimes the market may not come to the level that you're looking at my especially if you set it at a very low level there's a low probability of it actually coming to that level and you may not get fill and you might miss the move so this is kind of like a balance between where you think the market could possibly go to right and then having a better risk to reward on the trade right and and pretty much you know trying to get overall better return on it right so if you ask me right where do you usually set a limit order a rough guideline is is this right if you want to put it near the market structure where the previous market structure is so in this case so you can see that over here this was the previous market structure this area of support there's a good chance the market could retest it you can set it at this level all right so this to be honest is obviously cherry-pick right so sometimes what you will see is that the this level of support may not be so low it may be somewhere over here let's say somewhere over here okay so I would pretty much put a buy limit order at this support level okay let's imagine it is now this black line has you know move up higher to somewhere this level right I would put a buy limit order at this support level or just before it right and see if I can get feel and get a better price point compared to buy near the highest all right so this is another tip right to you slim in order to improve your risk to reward on your traits okay so just a quick recap right number one you want to enter your treats near market structure because you know overall you get a better risk to reward right number one is because a stop loss is title and we never title stop-loss you can increase your position size and still risk the same 1% of a capital right compared to having a wider stop-loss right you have to decrease your position size to risk that same 1% of your capital number two you want to treat breakouts with built up number three higher lows into resistance is a sign of string number for the for the first pullback right it offers you a chance to catch the trend so often if the market does break up try sometimes it may not retest back previous resistance than support for example what you look for is a trend continuation trait like maybe you know a bullish flag pattern pattern right to create a breakout of the is to get a boat and catch the trend that's the first boob at number five you want to set your stop loss right away from market structure because as I've said earlier you said your stop-loss just below the low he's gonna get triggered very easily so give it some buffer you know can set it 180 are below the lows right for your stop-loss the false bricktini is a chance for you to actually profit from breakup treat traders right so if the price breaks above like sea resistance any reverse and closed lower you know that traders who longer breakouts and now trip and you can actually take advantage of it by going shot by going against yeah their treat direction right and lastly right you can use limit orders to improve your risk to reward on your trade okay so with that said if you've enjoyed right this this video and you want to learn more I would suggest you put onto my website over here trading with Rainer calm right over here I share pretty much trading strategies and techniques right to help you profit in the financial markets right and scroll down little I recommend downloading these two training guides one is called the ultimate trend-following guide right well share with you how you can actually write massive trends in the financial markets and the other one is more of a price action trading how to better time your entries and your exits okay so going to my website download these two books right click this blue button and I'll send it to your email address for free right and that's it right if you've enjoyed this video right leave a thumbs up button yeah right subscribe to my channel and if any questions for me let me know below and I'll do my best to help well that's it I'll talk to you soon

What is Margin Trading? | Fidelity

What is Margin Trading? | Fidelity

What is margin trading how does it work and what are some of the benefits and risks over the next few minutes? we'll take away some of the mystery of margin trading and help you decide whether it's a strategy that can help you achieve your investment goals Margin trading is a form of borrowing that lets you leverage securities you already own to purchase additional securities protect your account from overdraft or access a convenient line of credit Margin, trading is not designed for any specific type of customer it may be right for any investor looking for additional leverage in their investment Here's an example of how it works Assume you want to buy 1,000 shares of QRS stock at $10 per share but only have $5,000 in vegetable cash available with a margin account you can use your $5,000 in cash and borrow the other 5,000 on margin to make your purchase Without margin with what's called a cash account you would need the full ten thousand dollars in cash to make this stock purchase Now let's see how a margin loan could impact your investment return assume the QRS stock rises in value from $10,000 to $11,000 and you sell it you would pay back the $5,000 margin loan and realize a profit of $1,000 that's a 20% return on your $5,000 investment without a margin loan you would have invested $10,000 in cash and realized only a 10 percent return While leverage is a powerful tool when the price of the security moves in your favor It is also important to recognize the downside of the stock price false Let's look at the flip side of the same example assume the market value of the QRS stock you purchased with margin for $10,000 falls to $9,000 your equity, which is the value of your position minus the loan balance of $5,000 would fall to $4,000 that's a 20% loss from a 10 percent decrease in market value Just like any loan you will also incur interest charges that begin accruing on the date your trade settles The rate you pay depends on your outstanding margin balance known as the margin debit balance The rate is typically calculated using a tiered schedule meaning the higher your debit balance the lower the rate.

You are charged You should also know that margin loans have no set repayment schedule as long as you maintain the required level of equity in your account Let's shift focus to this equity requirement along with some other important requirements for margin accounts In order to buy securities on margin you must also deposit enough cash or eligible securities to meet the initial margin requirement for your purchase Typically this is fifty percent which is a requirement set by the Federal Reserve Board Once you've started buying stock on margin you're required to maintain a certain level of equity in your margin account This requirement varies based on the type of security for example a stock generally has a maintenance requirement of twenty five percent and is set by the New York Stock Exchange and FINRA a Brokerage firm may impose a higher requirement due to factors including But not limited to holding a significant portion of your account and a single security, which is known as a concentrated position The security you are investing in must be eligible for margin in the first place and not all securities are eligible for Example while most stocks and fixed income securities such as Treasuries are eligible CDs and money markets are not you can find out whether security is eligible as well as the specific margin requirements for each type of security at fidelity comm margin Now we'll put this information together and see how it all works Let's say you have $50,000 in cash and wish to purchase XYZ stock, which has a 50% initial margin requirement You can purchase up to $100,000 worth of that stock using your margin buying power after the $100,000 stock purchase is made and assuming the stock has a 30% margin requirement You would have what's called an initial house surplus more equity.

Than is required of $20,000 How surplus is affected at a rate of 70% So your position could sustain a loss in value of twenty eight? Thousand five hundred and seventy one dollars and forty three cents before going into what's referred to as a margin call a margin Call occurs when the margin equity falls below the required amount due to either changes in the market value or because you purchased additional Securities on margin this means you will need to increase the equity in your account by adding cash liquidating securities or through market appreciation if Your equity does not rise to the minimum required amount by the due date of the margin call the brokerage firm can sell Securities you own to increase the equity in your account you Will find more details on the different types of margin calls, and how each one should be handled at Fidelity comm margin as well Here's the bottom line Margin accounts provide a great opportunity for you to leverage your investments to help increase your return The information we covered will help you understand and weigh the benefits and risks of trading in a margin account Now that we've answered some of your questions visit the fidelity Learning Center to learn more