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STOCKS

Definition of Stocks

The equities market allows you to gain voting rights and purchase ownership in a publicly traded company.
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The market is categorized into 4 parts: Indexes, Sectors, Industries, and companies. It is traded in shares and moves in penny increments.
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There’re 5,400 companies to choose from; that does not include OTC or the “Grey Market.”  
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It is traded primarily on the NYSE and the NASDAQ and is subject to all appropriate regulation.

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Benefits of Stocks Trading

Some companies provide a dividend payment for the shareholder.

It provides variety by giving the trader or investor over 5,400 companies to choose from.

This allows you to select volatility levels and prices that you are comfortable with.

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Cons of Trading Stocks

Low rate of return due to high capital requirements $25,000 minimum account balance to day trade Settlement Cycle: it can take up to 3 days to settle and be able to access your capital. This creates down time between trading opportunities and most experience sluggish withdrawal process.

Extreme gaps are very common due to the markets being closed 17.5 hours each day, not including weekends.

Due to these lengthy closures, a “stop loss” becomes ineffective in minimizing risk. The educated trader uses Options and Futures to hedge this overnight risk. This market is very sensitive to news announcements regarding the company, its industry, and the overall economy; therefore traders can experience extreme volatility.

Open 5 days/week and 6.5 hours per day; 9:30am EST TO 4:00pm EST Monday – Friday.

Closed on weekends and all major US Holidays.

Ideal Account Size for Stocks

To gain access to liquid equities and have flexibility of trading frequency, a trader would want to have at least a $30,000 account.
An educated trader/investor should be aware of appropriate account size, position sizing, and risk management when trading or investing in any market.

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Types of Accounts for Stocks

Cash
IRA
(Traded through a custodial firm)
Various Entity Structures (LLC, Corp, LP, etc.)

Ideal Equities Trader

Someone that works full time and can’t be in front of the computer in the morning for day trading

Someone who has less than $10K to fund a trading account for income

Someone who has seven-figure accounts to hedge fixed income currency risk

Someone who is looking for a simple swing trading market

Novice Mistakes

Not using appropriate risk management; for example—using Options or Futures to hedge for overnight risk.

Not using the Futures market to determine overall market direction.

Focusing on a limited number of companies rather than analyzing sector rotation to

Misunderstanding the “Globex” sessions in the Futures and Forex markets and how that affects the Stock market open.

Unaware of major news announcements in the company as well as the overall economy that have varying degrees of effect on the Stock market.

Focusing on the company’s fundamentals rather than evaluating the actual Stock (price action) that dictates profitability.

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General Disclosure:

Trade With the Pros LLC (“TWP”) is a financial education provider for customers looking to build the skills and proficiency necessary for retail trading and investing in the financial markets. TWP is not a Broker-Dealer, an Investment Adviser, or any other type of business subject to regulation by the SEC, CFTC, state securities regulators or any “self-regulatory organization” (such as FINRA).

The programs and content that TWP distributes are for informational and educational purposes only. No one should consider the information disseminated by TWP to be personalized investment advice, a recommendation to buy, sell or hold any investment, an offer (or a solicitation of an offer) to buy or sell any investment, or the provision of any other kind of advice that would require TWP to register as a broker-dealer, investment adviser or similar entity. No one associated with TWP is authorized to make any representation to the contrary.

TWP provides information that its customers may use to make their own investment decisions. However, any customer will be responsible for considering such information carefully and evaluating how it might relate to that viewer’s own decision to buy, sell or hold any investment. Such decisions must be based on that customer’s individual and independent evaluation of his or her financial circumstances, investment objectives, risk tolerance, liquidity needs, family commitments and other factors, not in reliance on any information obtained from TWP.

Statements by any person (whether identified as associated with TWP or any other entity) represent the opinions of that person only and do not necessarily reflect the opinions of TWP or any other person associated with TWP.

It is possible that any individual providing information or expressing an opinion on any TWP program may hold an investment position (or may be contemplating holding an investment position) that is inconsistent with the information provided or the opinion being expressed. This may reflect the financial or other circumstances of the individual or it may reflect some other consideration. Customers of TWP programs and consumers of its content should take this into account when evaluating the information provided or the opinion being expressed.

Although TWP strives to provide accurate and reliable information from sources that it believes to be reliable, TWP makes no guarantees as to the accuracy, completeness, timeliness, or correctness of any such information. TWP makes no guarantee or promise of any kind, express or implied, that anyone will profit from or avoid losses from using information disseminated through TWP.

All investments are subject to risk of loss, which you should consider in making any investment decisions. Customers of TWP programs should consult with their financial advisors, attorneys, accountants or other qualified professionals prior to making any investment decision.

The risk of loss in trading equities, options, forex and/or futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage that is often obtainable in options and futures trading may benefit you as well as conversely lead to large losses beyond your initial investment. Past results are not indicative of future results. No representation is being made that any account will or is likely to achieve profits similar to those shown.

Risk Disclosure:

All investments are subject to risk of loss, which you should consider in making any investment decisions. Viewers of Trade With the Pros programs should consult with their financial advisors, attorneys, accountants or other qualified professionals prior to making any investment decision.

The risk of loss in trading equities, options, forex and/or futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage that is often obtainable in options trading may benefit you as well as conversely lead to large losses beyond your initial investment. Past results are not indicative of future results. No representation is being made that any account will or is likely to achieve profits similar to those shown.

Testimonial Disclosure:

The aforementioned testimonials are made by individual subscribers to Trade With the Pros services. The experience of these individuals may not be representative of the experience of other subscribers, like yourself. In addition, the aforementioned testimonials do not guarantee future success by using such services. No consideration was paid to the individuals that submitted these testimonials.