In share trading, contra is the buy and subsequent selling of shares without payment. One is given 3 days to pay up for shares that have been bought. If one sells the purchased shares within these 3 days without paying or "picking up", this is known as contra trading.
Assuming you bought $10,000 worth of stocks at $1 on a Monday. On the Wednesday, the price went up to $1.05 and you decide to sell it off. Based on this, you do not have to pay up for the $10,000 because you have already sold the stocks. In fact, the firm would credit to you 5cents of profit per share, all without you putting up a single dollar. Literally making money out of thin air.
The dangers of this is that most investors would not be able to understand the risks involved, and would end up buying more than they can afford. Do note, that most contra traders actually lose money.
Before you start investing in the stock market it is a good idea to ask yourself, “How does the stock market work?” The answer to this question is simple. Companies go public by offering a specific number of shares in their company to the public through the stock exchange. Investors then can use the stock exchange to buy and sell stocks of companies that they are interested in. While this basic description of how the stock market works is adequate enough to understand what the stock market is, to get a better understanding of how it actually works it will be important to learn about some of the terms that are commonly used when discussing the stock exchange including stock prices and market capitalization.
The first term that you may hear when you start learning about how the stock market works is stock prices. Stock prices are the price that a specific stock sells for. This price is set by several market factors including the health of the economy, trading trends, spending trends, and financial or technical reports put out by a company or an independent third party. The next term that you may hear about is market capitalization. Market capitalization is the value of the company or the stock that is being offered. To calculate the market capitalization of a company, or stock, simply use this formula: The number of outstanding shares X the price of the stock = market capitalization of the company.
After you learn about the basics features of the stock exchange you will next need to learn how to buy and sell shares. To buy a stock you will need to establish some kind of investment account. In most cases you will open an investment account with a stock broker that works at a local firm. However, today you can also open an online investment account and make trades without the help of a stock broker. After you have set up your account you will need to fund it before you can make a purchase. Once your account is funded you will be able to enter your order for a stock purchase. When you are ready to sell your shares you will either tell your stock broker that you want to sell X number of shares of Company A, or you will need to enter a sell order via your online investment account.
Tip 1: Volume and breakout
Volume is an important indicator in breakouts above resistance levels (or breakouts below support levels). Volume often spikes sharply when a breakout occurs.
A surge in volume often precedes a price breakout, then the breakout point through the area of resistance becomes a level of support a few days later. A decline in volume during down days is often a sign that the sell off is only a temporary setback in a generally upward trend.
There is a tendency for round numbers to stop advances or declines, at least in the short term. These round numbers, such as 50, 80, 100 will often act as psychological support or resistance levels. A trader can use this information to his or her advantage and begin taking profits, or enter the market, when round numbers are approached. to be continued...
Tip 2: The market told me to do it....
Often it is safer to let the market tell you if it is okay to buy into something. If we rally, make a fast profit and take it. But if we are weak, sit it out and watch for a while.
Tip 3: It can be very powerful...
Sometimes you will see a stock consolidating in a "cone pattern" where you see lower highs and higher lows, basically compressing it smaller and smaller. Often on patterns like this, when the break out comes (in either direction but more times than not its up) it
is very powerful.
Once you've decided to diversify your portfolio with a fixed income investment, you'll need to decide whether bond funds or individual bonds may better suit your risk tolerance, goals, income needs, and desire for liquidity. In many cases, a bond fund may be more appropriate as it offers a convenient, liquid, and cost-effective way to invest in the fixed income asset class.
*When you sell shares in a fund, you receive the current net asset value (NAV), less any redemption fee, if applicable.
Money – Value stock investing is for those investors who are interested in the financial workings of the companies in which they buy stocks. This type of investing is based on analyzing the potential for a stock based on its company's earnings and current financial picture.