Trading 101 – A Starter Pack from Money Morning LIVE

We put together a Trading 101 Starter Pack to get you prepped for trading. Keep in mind that our experts have been trading their entire professional lives, and it’s taken them many years to attain the knowledge they have now. We want to help you make money ASAP, but we also want everyone trading responsibly and learning the right way.

In fact, that’s the whole reason we started Money Morning LIVE in the first place. So make sure to join the show every morning at 8:30 AM ET, and in the meantime, take advantage of the Trading 101 Starter Pack. We also have an options trading starter pack. 

Trading strategy 101

Consider Paper Trading

 

AKA simulated trading. Most brokerages give you the ability to practice trading with fake money before putting your own money to work. This is a great way to practice different strategies, risk-free, while learning about the market and your specific trading platform. 

Have a Plan

 

Yes, we discuss a ton of trade ideas at Money Morning LIVE, but NEVER buy a stock or option we mention without a plan first. At the end of the day, our goal here is to teach you HOW we do what we do, so you can eventually do it on your own.

Also consider that there many different ways to trade… but what could work best for YOU? We have a variety of different experts at Money Morning LIVE, so stick around to find the trading strategy that’s right FOR YOU.

No matter what style best fits you, you will need to put in the work to execute it.

Start Small

 

A losing trade should never blow up your account, especially when you’re just starting.

Never Sell Your Entire Position at the Same Price

 

This is a Kenny Glick classic. If you buy 10 shares and the stock goes higher, we could usually not recommend selling all 10 at the same price. Depending on your goals, you could sell a few shares and then set a new stop. Speaking of...

Terms to Know

ETF = Exchange Traded Fund

 

ETF stands for exchange-traded fund. There are ton of different ETFs out there tracking basically every sector under the sun. There are ETFs for every stock sector, such as housing, tech, and banking, along with commodity-focused ETF for things like oil, gold, and even weat. Seriously, there are ETFs for everything, and they're a good way to track where the market is strong or weak. 

 

 

The QQQ AKA "The Qs"

 

If you're trading with the Money Morning LIVE team, you need to have the QQQ on your radar. The QQQ is an ETF (just ignore when Kenny Glick refers to it as a stock) that tracks the Nasdaq-100 index, which means it's tech-focused and is heavily weighted towards the stocks that matter most in the market. 

Targets & Stops

 

These are the important concepts to know when first trading because it forces you to form a plan.

Every trade needs a target, either a profit target or price target, that marks your exits on a move in your favor, plus stop levels, meaning levels you’re willing to get “stopped out” on if the position moves against you. 

Short Selling / Shorting

 

To short a stock means you’re betting it goes lower. However, the mechanics behind it are sometimes hard to wrap your head around.

 

Options Trading

 

Options are contracts that contain 100 shares of a security. The contracts give you the right to buy the security by a given date, at a given price. Options are an attractive instrument for traders because they provide more leverage versus trading stocks.

For now, understand that buying a call option suggests a trader is betting a stock goes higher, while buying a put option suggests they want it to go lower. Long calls are bullish, long puts are bearish. 

 

Limit Order & Market Order

 

There are multiple ways to enter and exit positions. First understand limit orders and market orders. Limit orders are when the trader sets a price that he would like his order to execute at. If you are buying, an order can be set to mark the highest price you will pay. When selling, it can mark the lowest price you will accept.

A market order simply executes at the current market price.  

Trade Examples

 

We'll have plenty more education coming your way, including more advanced trading material. In the meantime, you can check out this collection of clips of our experts placing a variety of trades.