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Rule #1 and Some Glossary Terms Rule #1: Never, never, never ever trade with real money until you have successfully "paper traded" at least 75% of the time. Glossary Term: Paper Trading - Simulated trading on paper. Glossary Term: Cost Basis - The IRS defines the cost basis of a stock as:
When trading stock you must always remember how much commission you pay to buy and sell the stock. Example: If you buy 100 shares of stock for $3,000 and sell it for $3,010 you might think you made a $10 profit. Not so. If your Round Turn commission is $40, then, you really have a $30 loss. Glossary Term: Round Turn Commission - The Buying Commission + the Selling Commission. You will often see the advertisements from Trading Brokers that say, "$$.$$ per trade". Each Buy and each Sell are separate trades and therefore, a commission is charged for each one. Yep, you guessed it. The Broker gets his commission, both in the Buying and Selling, whether you make a profit or not. A real Bummer! You will need a book or two that explains the structure of the stock markets to include an understanding of Market Makers, Specialists, and ECNs. A good free source is your public library or you can review any of the books in Step 2 in the Classroom. We highly recommend you look through our book section. So now, with the Simulator, the Quick Start Guide, plus a book or two, you are ready to tackle Step 3, Understanding The Markets.Fool School: Take the Motley Fool's School of 13 Steps (Click Here) |



