Recently TradingSim launched a free trading simulator that is specifically geared for day traders.

Day trading is unlike other trading strategies in that all decisions must be made quicker, and you have to rely on strict rules to protect yourself from monumental losses. TradingSim aims to help traders learn and practices this type of active stock trading without risking any money.

More about TradingSim

TradingSim streams tick data through their web interface, allowing users to practice/fine tune their day trading skills through a historical market replay. They store the last 5 weeks of trading data for all Nasdaq symbols so users can trade any symbol they want for any of those days. The app has been taken one step further and offers the time and sales information as well as the level 1 info.

How To Use TradingSim

TradingSim is pretty easy to use and is a fun resource to play around with.

1. Pick a stock and let it stream.
2. Based on the current setup, determine what the proper trade would be.
3. Once you have made your decision, fast-forward the streaming chart and see what the actual result was.

Tradingsim requires no downloads and is completely web based (as compared to the other apps which force a download). Additionally, there is no need to have a brokerage account. You just have to create a free account to actually transact through the simulator (its for legal reasons)

Best of all, the app is completely free to use! Try out TradingSim.

If there is a resource that allows us to eliminate a hours worth of work, then imagine what you can make up in that new hour. The same case goes for holding a stock.

I always preach that you should allow your stock room to breath. Rarely will anybody call the exact bottom or exact top. That being said, there are some warning signs that should tip you off it is time to sell.

1. Bad News

Regardless of how much research and risk management you use, the inevitable will always happen. Maybe some type of natural disaster , company being sued, or threat. Whatever it may be, certain news affects certain stocks. If pertinent bad news break, then its probably a good sign to sell.

2. Large Volume

If technical analysis is your thing, then you’re probably aware of the importance of volume compared to the move in stock price. If there is heavy volume on a swing downwards, then its probably a good sign to sell.

3. Doesn’t Follow Plan

You should always have a plan before entering a stock. Where to buy and take profits; however, sometimes these plans don’t play out like they were supposed to. For example, if you bought a stock that is supposed to rise as oil goes up and oil goes up but stock doesn’t, then you might want to consider selling.

While these are very simple methods and ideas, they can easily help you prevent losing more than anybody wants to.

There are plenty of people out there that create “exclusive email courses” with little or no credentials to actually backup their teachings. So, I think it’s right that I share a little bit about him with you before we even start.

Adam was a former floor trader on the IMM, IOM, NYFE and LIFFE as well as a risk manager of a large, multinational corporation in Geneva, Switzerland. He also has written books on forex trading and trend following. In 1995, Adam founded INO.com and later co-founded MarketClub. He has been in the trading biz for over three decades and has seen it all. Thankfully, he has created this course as a way to give back and share trading tips and techniques that he still use in his trading today.

Get your 10 free trading lessons

In this Free Mini Email Course, Adam will show and explain the tools and strategies you need to increase your success rate in the marketplace.

1. (1) The importance of psychology in price movement
2. (2) How to spot mega trends
3. (3) Understanding of technical price objectives
4. (4) How to picture price objectives
5. (5) How to trade with moving averages
6. (6) How to use point and figure trading techniques
7. (7) How to use the RSI indicator
8. (8) How to correctly use stochastics in your trading
9. (9) How to use the ADX indicator to capture trends
10. (10) How to capitalize on natural market cycles.

Plus, you will you will learn all about fibonacci retracements, MACD, Bollinger Bands and much more.

Just fill out the form and we’ll get you started right away.

Wall Street has gone out of it’s way to make it easy to buy stocks but at the same time convince you that the market is way too sophisticated for the average investor. They promote the professionals while promoting a buy and hold strategy.

I think the main reason that they recommend buying and holding your stocks is because they don’t know when to sell. Since they don’t know when to sell, they promote never selling. What an easy out. The time to buy is always right now and the time to sell is long term.

If you really want to make money buying stocks you can’t adopt that philosophy. You’ve got to study the stocks to buy and look for two distinct prices — the price you are going to buy at and the price you are going to sell at. Doing that is easier than you think but it’s an art not a science. What that means is that the skill doesn’t come without practice.

To do this, you need one important tool and that’s a stock chart that shows the price and volume action for the stock over period of time. What you are looking for is identifying when the stock is being bought by institutional investors which are the driving force behind pushing a stocks price higher. You do that by noticing when a stocks price is closing higher on higher than average volume. How can you tell when to sell, by looking at the exact opposite. When a stock price closes lower on higher volume, that’s your cue to exit the stock. By observing these clues to who is buying the stock, with practice you can pick when to buy and sell stocks like a professional.

To actually perform the stock trades you will need either a capable phone or wireless device (i.e. Blackberry, iPhone) or quick access to computer to check price and execute orders.

To be able to trade almost anywhere, a smart phone would be desirable. Popular stock brokerages such as E*Trade, thinkorswim, and TD Ameritrade offer applications for the Blackberry and iPhone, which allow you to access your account from directly through your phone. Obviously, these applications makes having an account with these brokerages more desirable. That being said, if you can’t or don’t want to open an account with them and your current brokerage does not offer some type of smart phone application, then you will have to live with the ability to need quick access to a computer.

Next we need some way of checking stock prices. Once again, if you don’t have a smart phone, then you will need access to a computer to quickly check current prices. Later in this article we will be looking at how to minimize your monitoring, so you do not have to constantly use the computer. On the other hand, if you have a smart phone then you are in luck. Check out a complete list of recommended mobile stock trading applications for the iPhone. Many of them also have a version for the Blackberry.

Okay, so now that we got all the equipment out of the way it is time to start planning our stock trading process. Remember that since we are not stationed at a computer, we need to make each check-up more efficient. That is where the pre-planning comes in.

If you are following a stock that looks ready to buy or sell, then you need to create your price targets: entry, stop, exit. These are specific prices for where you want to execute some action. By knowing these prices ahead of time, we are able to quickly check a price of a certain stock and take necessary action. I use simple technical analysis indicators and patterns to predict price movement.

Another way to make your stock trading more efficient is to use other types of stock market orders.

The whole idea of trading on the go is to be able to effectively make money from wherever you are. It really is a powerful feeling. As technology has evolved, no longer are limited by location-constraints to where we can trade. As long as we do our proper preparations and efficiently track our stocks’ statuses, then all traders should be able to make money in the stock market from anywhere.

Check out a full list of online discount stock brokerages that offer mobile trading apps.

Well we’re going to explore this here in just a minute. Lets look at one technique and go over some examples of how these markets behave in those settings.

Before I can talk to you too much about the first example. we need to define a few things for you. First candles… the approach that I use with Japanese candle charts, and that is what you’re looking at here, is not the standard approach. So from my perspective, I don’t focus on patterns, I focus on behavior. If we see a green candle that represents buying, that means that the closing price is higher than the open. If you see a red box that represents selling it means that the closing price is below that opening price. If you see a white line on top that’s called a shadow, I think that represents selling. If you see a white line on the bottom that represents buying. Now with that in mind, the sizes of the bodies and the shadows tell us about the degree of buying or selling.

Now let’s talk about this set-up here…

To get the rest of the tips, please check this video out.

Quick example: You buy shares of Stock X at $20. The stock goes down to $10. In order to try and limit your risk and losses, you buy the same amount of shares of Stock X at $10. Now your shares of Stock X is $15.

As you can see from the example above, you essentially bought more shares of Stock X to try and hedge your losses. While it is a common practice, many traders have various opinions on whether is a good or bad thing to do.

By obviously look at the end picture, we can come to conclusions. Yeah, if Stock X makes it way to $30, then averaging down was a great thing to do. What if it went down to $5? Because you wanted to average down, now you invested more capital into a still sinking stock. Are you going to average down again? What if Stock X goes to $3?

You can see that there are two distinct outcomes of averaging down. The positive and the negative. The debate about averaging down is when do you consider the trade a loss and get out?

When you initially bought your second round of shares at $10 you instantly added more capital into that holding. That is cash that can’t do anything. Yeah, if it goes up good, but what if it continues to go down? Will you sell, average down again, or just hold?

If you sell, now you incur the losses from both rounds of shares. If you average down again you are now taking on more risk. Think of it like a bet. You lost the first time, so you now offer double or nothing. Lost again, so now you offer triple or nothing. When will you consider enough is enough? Finally, what if you decide to hold? With your first attempt at averaging down, you put more money into the stock because you felt it would go up. When will you consider the trade a bust?

Kind of bringing this back to the debate, whether this is a good or bad idea? It really depends on your strategy? Are you investing in the company or just playing the stock game?

If you are investing in the company, then you did your research and have a good feeling of what should happen with the stock.

If you are just playing the stock game and feel the stock should go up higher sometime, then why waste time. Minimize your losses, get out, and move on to the next stock.

What do you think about averaging down?

Well you can through a method called shorting a stock. Personally, I am not a huge fan of shorting, but that should not stop me from letting you benefit from it.

How to short a stock.

Although it is an easy process, it takes a little more work then simply buying stock. First, off you have to find out if your brokerage has shares to short. Unlike going long into a stock, shorting requires you to borrow shares, sell them to another buyer, and then eventually buy them back at a later time.

Obviously because you are borrowing the stock there is more risk. What happens if the stock goes up? You are going to lose money; however, unlike your regular stock buy, shorting has no roof, so technically your losses could be infinite; whereas, buying shares you risk only the capital you put in.

So to recap:

1. Ask your brokerage for shorts (since there are so many different types, it is best to find out how within your specific brokerage). Usually it is as easy as just asking somebody (be it by online chat or phone).
2. You borrow shares of the stock you want to short and sell them to another buyer. Eventually you will have to buy them back.

Example:

You feel Stock X will go down, so you decide to short it. You sell short 100 shares of Stock X at $10. Now you are credited with $1000 to your account. The stock falls to $8 dollars and you buy back the shares at a complete value of $800. Throughout that total transaction you have made $200 on Stock X going down.

Seems easy enough, but lets look at one more example:

Lets say instead of coming down to $8, Stock X actually bounced up to $15. Now you are required to buy back the stock (otherwise you risk losing even more). So now the complete value of your short shares is $1500. Subtract that from the $1000 you borrowed, and you are required to pay back another $500.

There is a high degree of risk with shorting, especially if you have no idea what you are doing. Yes, you are able to leverage the capital you really have by borrowing, but if that stock sky rockets higher, then you are forced to come up with the money to pay back your losses.

There are traders that have made millions off shorting stocks alone, but it takes discipline and dedication to execute it.

What do you think about shorting? Have any experience with it? Think you might give it a try?

Overcoming stock prejudice is is sometimes are hard thing to do, but just because somebody else is recommending something does not mean you have to follow it. To each its own, and it is up to you to see if that particular stock is right for you.

I think it is safe to say there is no shortage of stock recommendations or advice. With StockTwits, you can get something every second of the day.

That being said, anytime somebody recommends a stock or advises you to do something always run it through your own analysis. If it does not work for you, fine. You never know what the other person’s risk threshold is, how long do they plan to hold the stock, or what kind of return they are looking for.

So the next time somebody recommends a stock and you hate their methodology, don’t instantly criticize them. Run it through your own method, and if you don’t like it then move on…

The following is a list of things to consider before listening to somebody’s stock recommendation:

What is their time frame? What may be a good buy for a year time frame, most likely isn’t for somebody looking to hold a stock for a couple of weeks. Make sure that the analyst and you are on the same page when it comes to time frame.

What is their risk level? Pretty simple. Some people can tolerate and take on more risk than others. Know what kind of risk taker the analyst is.

What is their success level? Now I am not asking for the analyst to be correct 100% of the time, but are you able to see their previous track record? Does he or she like to flip flop? Do some research through previous articles and stock recommendations before listening to them.

What do they consider failure and profit? To different people, profit means something different. To some it may mean 5%, while others might consider 15%. Know what the stock analyst deems successful and failure trade.

If you haven’t gotten the point yet, the idea is to make sure the analyst has the same kind values as you do. They may be the best stock analyst in the world, but not be good for you because they trade too fast or slow for you.

You must always perform a “background check” before finally listening to somebody’s stock recommendations.