Stock Trading Online E*Trade

The choice to trade stocks online is made by many independent investors that no longer seek the help or advice of the traditional stock broker. Instead, these investors are opening online trading accounts with discount brokerage firms and take control of their stock trading. While the technological advances have created numerous online trading software of which many specializes in stock trading online, there is still a need from potential stock market investors for online trading education.

When an investor is trading stocks online, he makes choices based on his own research and there is no human broker on the other side to confirm his order. Consequently, it is extremely important that investors and online traders alike take a long breath before they press the buy or sell button on their online stock trading software. We have heard many stories in which investors have pressed the buy button instead of the sell on their online trading software by mistake.

There are definitely advantages to stock trading online, but the casual investor will have a learning curve if he wants to turn into an online trader. In addition, an online trader needs more than basic computer skills if he wants to excel in trading stocks online. In fact, some of the online stock trading software may be quite complicated if a trader only has basic knowledge of computer operation. However, it is a logical course of action to face the stock trading online beast rather than run away from it.

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The Advantages of Online Shares Trading.

Online brokerages make it easy to trade stocks.Prior to the spread of the Internet, individuals who wished to engage in stock trading would call a broker/remisier and make a stock order. The proliferation of online services opened a new world for investing and gave full control of the process to individuals themselves.

Online brokers do not require human interaction to process an order. This system has created many exciting advantages for those interested in trading stocks.

Quick Order Execution

In traditional brokerage firms, and before the spread of the Internet, a considerable delay would occur between your desire to buy or sell a stock and the actual moment the order was executed. Transactions would be called in to your broker.

Sometimes, additional calls were necessary until your order arrived on the floor of a financial exchange to be handled by a floor trader representing the broker.

By contrast, online brokers offer instantaneous execution. If you wish to buy a stock, it can be yours within seconds. There is no contact with humans, thus any delays caused by conflicting schedules or human error are removed from the environment.

Accessibility
Online brokerage accounts provide the ability to interact with your portfolio from anywhere in the world. All that is needed is an Internet connection. This mobility is a considerable advantage over calling a conventional brokerage to process an order. With an online broker, you can process orders quickly from anywhere. Many online brokers provide their services right over a mobile Internet device, such as a smart phone. This accessibility has revolutionized the trading industry.

Record Keeping
Online brokers keep a strict record of all transactions on an account. Clients may log in at any time and view their order history, overall profits and losses , percentage returns and any interest payments, debits or dividends that have affected the account. Additionally, many online brokers provide a full tax center online for clients to view their exposure to different trading and investing taxes that may affect them. This level of detail is not as easily available for traditional brokerage accounts. This makes online broker services particularly appealing to those who desire the most information on their accounts.

HOW ONLINE TRADING WORKS

Now, plenty of "common" people own stock. Online trading has given anyone who has a computer, enough money to open an account and a reasonably good financial history the ability to invest in the market. You don't have to have a personal broker or a disposable fortune to do it, and most analysts agree that average people trading stock is no longer a sign of impending doom.
­The market has become more accessible, but that doesn't mean you should take online trading lightly. We'll look at the different types of online trading accounts.

The Broker Dealer

One of the simplest ways to understand electronic trading is to imagine that you want to buy some stock/shares .

Before you can buy, however, you have to open a brokerage account. There are dozens of companies that allow you to do electronic trading, including E-Trade etc. These companies are called broker dealers, and they give you access to the stock exchanges (Bursa Malaysia).

Without a brokerage account, you can't trade stocks.
So, as the only entry points to the stock markets, remisier play a critical role in the process. As such, they're highly regulated by the SC in order to prevent fraud and mismanagement.

Here are some of the things that broker dealers do:

Make sure you're allowed to trade stocks when you sign up for an account. That is, they check to make sure you're old enough, you have money in your account and you understand the risks of stock trading. This is part of the regulatory nature of broker dealers./remisier.

Provide the servers that allow you do your web-based trading.
Provide the computers systems that keep track of all the accounts. Like a bank, the broker dealer /remisier knows how much money every account has. He also keeps track of all the stocks you own and may make loans by offering margin accounts.

Keep track of your trading to make sure you aren't doing anything illegal and aren't buying more stock than the balance of your account allows. They also make sure that appropriate tax records are kept.
Provide stock quotes. The broker dealer /remisier knows exactly how much stocks are buying and selling for with up-to-the-minute accuracy.

Interface with the different stock markets to make the actual trades.
The broker dealers provide a very useful simplification process for the stock exchanges: Since the dealer handles all the money, all the accounts and much of the regulatory and tax activities, the exchanges don't have to worry about any of these things. All the exchanges have to do is trade stocks, and they do so with complete assurance from the broker dealers that the traders are legitimate.

Making an E-trade

So let's make a trade. Since we're talking about electronic trading, the first step is to sit down at your keyboard and log in to your brokerage account. Once you log in, regardless of the broker dealer, you'll be able to do several things:

Look at your account to see how much money you have and how many shares of stock you have in your portfolio.

Pull up stock quotes to see the current buy and sell prices of any stock.
Enter an order to buy or sell a stock.
The systems that make this Web interface possible are Web servers very much like the servers for any Internet site. There may need to be hundreds of Web server machines -- a large broker dealer can have millions of customers. And the Web servers need to be operating with secure connections to protect privacy. But beyond that, the servers can be fairly ordinary.

So let's imagine you want to buy 100 shares of the ABC company. You check the price of that stock on the quote screen and see that it costs RM20.40 to buy it at this moment. You enter in an order to buy 100 shares at RM20.40 a share.
Your broker dealer will transmit your order to a stock exchange/Bursa Malaysia. If the ABC company trades on the Bursa Malaysia, the order goes there. Inside the BURSA MALAYSIA, there's a computer that's dedicated to handling all the orders coming from your broker dealer. (Since there are several hundred broker dealers dealing on the BURSA MALAYSIA, there are several hundred dedicated broker dealer machines.)

Having received your order from your broker dealer, the BURSA will try to match your buy order up with a sell order from someone else. If it can find a match, you'll have executed a stock trade. If not, your trade will sit on the exchange waiting for a matching order.

Now, the BURSA sends a message back to the broker dealer saying the trade is complete. He updates your account information, withdraws money from your account and changes your portfolio to reflect your new stock.

Online Trading.

Online Trading is an electronic client ordering system which allows you, as a client, to place orders electronically online via the Internet to company/broker.

It provides you with hassle-free and convenience in trading in shares listed on the Bursa Malaysia Berhad.

It also allows you to have 24 hours on-line available of research material and other relevant information pertaining to your investment decisions on your mobile PDA and personal computer.

Trade orders that you placed will be routed by your remisier or dealer’s representative to the exchange for trade execution.

In return you will receive confirmations of your trade orders which are automatically routed back to you.

Online trading is specially designed to make Internet stock trading an efficient, convenient, reliable and enjoyable experience for you.

Features and benefits include:

*Online real-time Bursa Malaysia quotes and indices
*Technical Charts
*Stock Scoreboard
*Trade Order Placement
*Trade Order Status Enquiry
*Intraday Stock Movement Tracker
*PDA and Mobile Trading
*Portfolio Management
*Equity Research
*Bernama News
*Bursa Malaysia News and Company Announcements
*Online Statement and Contract Note
*SMS Alert Order Confirmation
*eSettlement

For trading online, just sign-up form online and you will experience a new and convenient stock trading environment in the comfort of your home, office or any place of your choice at any time, all with just a press a button or click of the mouse on your mobile PDA or personal computer at your convenience.

How to Trade MALAYSIA Stocks Online ... Trade shares online ... Day trading

When it comes to stock market trading it PAYS to have more knowledge than the rest of the pack. Pure gold can be harvested in each profitable trade that you accomplish.

But when you don't know what you are doing stock trading can become a very difficult and life consuming business. You can lose a lot of money and time.

Valuable time of your life. Stock trading can resemble the closest thing to a get-poor-fast system when you don't implement a proven stock trade strategy.

Even when there are traders that can make more than RM5,000 on a single trade, it's not unusual for a novice stock trader to lose RM1,000 in less than 3 minutes from the comfort of his own home, or waste a lot of family time thinking about the stock he should trade for tomorrow "according to the charts and the stars" and other confusing technical analysis trading indicators.

As an online stock trader your homework is all about learning and testing different online trading strategies that can help you take advantage of stocks and at the same time protect your profits.

Just always keep in mind that a good stock trading strategy is simple and practical.

Complicated stock systems will always make you slow in your decision making process or confuse you right from the start.

There are some very good sites on the web where you can access practical stock trading strategies that are easy to implement.

They focus on momentum stock trading strategies that can help you identify and handle hot stocks while reducing your trading risk.

All in all, online stock trading is all about picking the best stock opportunities and following your buy and sell signals with ease and simplicity.

Once you learn to master your trading decisions, you can aspire to produce consistent profitable results.

Buy Penny Stocks.

You must have heard many stories on how people make money from these stocks. I buy penny stocks if I'd EXTRA money to 'play with'.

Because, you can gain as much as 300% return in ONE WEEK with penny stocks, but in the same time, you can be selling your own shirts.

The reason is Penny stocks are not that cheap.


When it comes to stock investment, the business valuation determines how much the stock worth, not its price tags alone, this called, calculate intrisic value.

The simplest and easiest valuation method would be looking at individual price earning to ratio (P/E). The higher the P/E ratio, the more ‘expensive’ a stock is.

Though P/E ratio is not that accurate, it very handy when it comes to stock’s valuation. You can simply spot which stocks are overvalued and which are not. From there, study if the undervalued stock is really ‘cheap’, or its price went down due to some other fundamental reasons.

However, the P/E ratios for penny stocks are normally much higher than the other stocks, blue chip stocks for example.

This happens as penny stocks have much less historical earnings but many investors are betting on the expectation of ‘greater’ future profits.

As you are aware by now, the higher the P/E ratio, the possibility for the price to increase further in months (or even years) to come is less.

Penny stocks are manipulative in nature

As the penny stocks are very cheap in price, stock investors and traders can easily manipulate their stocks by putting in large buy or sell orders.

This especially true if 50% or more shares of that particular stocks’ are floated in the stock market. After all, penny stocks have very low market capitalization.

Speculative investors and hedge fund managers are normally the major players for this kind of stocks.

They form a syndicate team and agreed themselves to buy bulk of the share to pump up the share price.

Then, they make a statement claiming this stock is the ‘hot penny stocks’ or ‘the next Microsoft’ through any business media.

How Stocks and the Stock Market Work.

­The stock market appears in the news every day.

You hear about it any time it reaches a new high or a new low, and you also hear about it daily in statements like "The index rose 2 percent today, with advances leading declines by a margin of..."

Obviously, stocks and the stock market are important, but you may find that you know very little about them.

What is a stock?

What is a stock market?

Why do we need a stock market?

Where does the stock come from to begin with, and why do people want to buy and sell it.

Let's say that you want to start a business, and you decide to open a restaurant. You go out and buy a building, buy all the kitchen equipment, tables and chairs that you need, buy your supplies and hire your cooks, servers, etc. You advertise and open your doors.

Let's say that:

• You spend RM500,000 buying the building and the equipment.
• In the first year, you spend RM250,000 on supplies, food and for your employees.
• At the end of your first year, you add up all of the money you have received from customers and find that your total income is RM300,000.

Since you have made RM300,000 and paid out the RM250,000 for expenses, your net profit is:

RM300,000 (income) - RM250,000 (expense) = RM50,000 (profit)

At the end of the second year, you bring in RM325,000 and your expenses remain­ the same, for a net profit of RM75,000. At this point, you decide that you want to sell the business.

What is it worth?

­One way to look at it is to say that the business is "worth" RM500,000. If you close the restaurant, you can sell the building, the equipment and everything else and get RM500,000. This is a simplification, of course -- the building probably went up in value, and the equipment went down because it is now used. Let's just say that things balance out to RM500,000. This is the asset value, or book value, of the business -- the value of all of the business's assets if you sold them outright today.

Selling Shares

­ If you keep the restaurant going, it will probably make at least RM75,000 this year -- you know that from your history with the business.

Therefore, you can think of the restaurant as an investment that will pay out something like RM75,000 in interest every year.

Looking at it that way, someone might be willing to pay RM750,000 for the restaurant, as a RM75,000 return per year on a RM750,000 investment represents a 10-percent rate of return.

Someone might even be willing to pay RM1,500,000, which represents a 5-percent rate of return, or more if he or she thought that the restaurant's income would grow and increase earnings over time at a rate faster than the rate of inflation.

The restaurant's owner, therefore, will set the price accordingly. You might price the restaurant at RM1,500,000. What if 10 people come to you and say, "Wow, I would like to buy your restaurant but I don't have RM1,500,000." You might want to somehow divide your restaurant into 10 equal pieces and sell each piece for RM150,000.

In other words, you might sell shares in the restaurant. Then, each person who bought a share would receive 1/10 of the profits at the end of the year, and each person would have one out of 10 votes in any business decisions.

Or, you might divide ownership up into 1,500 shares and sell each share for RM1,000 to make the price something that more people could afford. Or, you might divide ownership up into 3,000 shares, keep 1,500 for yourself, and sell the remaining shares for RM500 each. That way, you retain a majority of the shares (and therefore the votes) and remain in control of the restaurant while sharing the profit with other people.

In the meantime, you get to put RM750,000 in the bank when you sell the 1,500 shares to other people.

Stock, at its core, is really that simple. It represents ownership of a company's assets and profits. A dividend on a share of stock represents that share's portion of the company's profits, generally dispersed yearly.

If the restaurant has 10 owners, each owning one share of stock, and the restaurant makes RM75,000 in profit during the year, then each owner gets a dividend of RM7,500.

One measure of the value of a company, at least as far as investors are concerned, is the product of the number of outstanding shares multiplied by the share price. This value is called the capitalization of the company.