Well ok, but if you know something I don't I'd be glad if you could share since I don't want to make any mistakes that are going to cost me a lot of money.
Questions about eTrade
- Thread starter hooyacrusty
- Start date
Well ok, but if you know something I don't I'd be glad if you could share since I don't want to make any mistakes that are going to cost me a lot of money.
Well it's been working like a charm with my paper trades for the past two months. I'd sure like sombody to let me in on how it's eventually going to fail, because I really, REALLY don't want to loose my cash when I start real trading. So if anyone want's to take the time to explain, I'm all ears (err... should I say eyes
).See, I've only done paper trading so I know very little about the actual trading process. I've been buying at the current price and selling at the current price. I want to know how real trading differs from that. Just a step by step outline of what happens would be very cool.
EDIT: I've peen paper trading using an online portfolio at CNN, simply becuase it lets you enter a commision value.
When you place a market order you pay the asking price to buy and the bidding price to sell (where the bid is less than the ask). The difference between the bid and the ask is the spread.
So if you buy a stock and turn around and immediately sell it you have already lost money (in addition to commission) equal to the spread.
On a $100/share stock a .05 spread isnt that big a deal, but on a .10 stock even a couple cent spread is going to be a big hurdle to overcome before the trade is profitable. It is possible to place limit orders to get better prices then you would get just hitting the market price (bid/ask) but then you may not get filled.
Really, you shouldnt even be comtemplating opening an account if you don't understand this stuff. Sorry if that sounds harsh, I'm just trying to save you from blowing your money.
Why do ya think I'm here asking questions? Do you think I'd actually waste my money on a venture without researching it - and proving it's viability first?
Thanks for the info.
The above sentence provides the perfect answer as to why I have anticipated the loss of your capital. You have leapfrogged to choosing a broker and funding an account before learning how to trade. I encourage you to educate yourself both on the fundamentals of trading, as well as, risk assessment and money management techniques. Failure to do so only increases the likelihood of your money ending up in someone else's account.
- Spydertrader
So how is the market value related to the bid and ask prices?
Thank's winter. I'll see if I can work this into my paper trading setup. You've been a big help.