Trading For Dummies (For Dummies (Business & Personal Finance))

Title Page
Copyright Page
Table of Contents
Introduction
	About This Book
	Foolish Assumptions
	Icons Used in This Book
	Beyond the Book
	Where to Go from Here
Part 1 Getting Started with Trading
	Chapter 1 The Ups and Downs of Trading Stocks
		Distinguishing Trading from Investing
		Seeing Why Traders Do What They Do
		Successful Trading Characteristics
		Tools of the Trade
		Taking Time to Trade More Than Just Stocks
			Position trading
			Short-term swing trading
			Day trading
		Going Long or Short
		Managing Your Money
		Understanding Fundamental Analysis
		Getting a Grip on Technical Analysis
		Putting Trading Strategy into Practice
		Trading at Higher Risk
		Remembering to Have Fun!
	Chapter 2 Exploring Markets and Stock Exchanges
		Introducing the Broad Markets
			Stock markets
			Futures markets
			Bond markets
			Options markets
		Reviewing Stock Exchanges
			New York Stock Exchange (NYSE: ICE)
				The designated market makers
				The floor brokers
				Supplemental Liquidity Providers
			NASDAQ
				Market makers
				Over-the-counter and bulletin-board stocks
			Amex (now NYSE MKT LLC)
			Electronic communications networks (ECNs)
		Understanding Order Types
			Market order
			Limit order
			Stop order
			Stop-limit order
			Good-’til-canceled order
			Other order types
	Chapter 3 Going for Broke(r): Discovering Brokerage Options
		Why You Need a Broker
		Exploring Types of Brokers and Brokerage Services
			Full-service brokers
			Discount brokers
			Direct-access brokers
			Proprietary trading firms
			Futures brokers
		Services to Consider When Choosing a Broker
			Types of orders supported
			Data tools
			Charts
			ECN access
		Knowing the Types of Brokerage Accounts
			Cash accounts
			Margin accounts
			Options
			IRAs and other retirement accounts
		Choosing the Right Broker for You
			Considering more than price
			Doing a little research
			Understanding how you’ll be paying
		Getting to Know the Rules
			Margin requirements
			Settling trades
			Free riding
	Chapter 4 Putting Your Key Business Tool to Work: The Computer
		Making Use of Your Computer
			Identifying trading candidates
			Managing your account
			Improving your trades
		Finding Price Charts
			Checking out Internet charts with delayed prices
			Considering Internet charts with real-time prices
			Looking into charting software
		Digging Up Fundamental Data
		Accessing Analyst Reports
		Selecting a Trading Platform
			Browser-based trading environments
				Pros
				Cons
			Integrated trading platforms
				Pros
				Cons
			Features to consider
		Determining Computer Requirements
			Weighing Windows versus Mac versus Linux
			Configuring your computer system
		Accessing the Internet
			Picking a browser
			Securing your computer
Part 2 Reading the Fundamentals: Fundamental Analysis
	Chapter 5 Fundamentals 101: Observing Market Behavior
		The Basics of the Business Cycle
			Understanding how periods of economic growth and recession are determined
			Using economic indicators to determine the strength of the economy
			Relating bull markets and bear markets to the economy
		Employing a Sector Rotation Strategy
			Early recovery
			Full recovery
			Early recession
			Full recession
			Sector rotation
		Understanding Economic Indicators
			Interest rates
			Money supply
			Inflation rate
			Deflation
			Jobless claims
			Consumer confidence
			Business activity
		Using Data from Economic Indicators
	Chapter 6 Digging Into Fundamental Analysis
		Checking Out the Income Statement
			Revenues
			Cost of goods sold
			Gross margins
			Expenses
			Interest payments
			Tax payments
			Dividend payments
			Profitability
		Looking at Cash Flow
			Operating activities
			Financing activities
			Investment activities
		Scouring the Balance Sheet
			Analyzing assets
			Looking at debt
			Reviewing goodwill
		Determining Stock Valuations
			Earnings
			Earnings growth rate
		Figuring Your Ratios: Comparing One Company’s Stock to Another
			Price/earnings ratio
			Price/book ratio
			Return on assets
	Chapter 7 Listening to Analyst Calls
		Getting to Know Your Analysts
			Buy-side analysts: You won’t see them
			Sell-side analysts: Watch for conflicts
			Independent analysts: Where are they?
		The Importance of Analysts
			Tracking how a company’s doing
			Providing access to analyst calls
				Company-sponsored calls
				Independent analyst–sponsored calls
		Pointers for Listening to Analyst Calls
			Understanding the analysts’ language
			Developing your listening skills
				Earnings expectations
				Revenue growth
				Analysts’ moods
				Just the facts, ma’am
				The future
				Employee satisfaction
		Locating Company Calls
		Identifying Trends in the Stock-Analyst Community
Part 3 Reading the Charts: Technical Analysis
	Chapter 8 Seeing Is Believing: An Introduction to Technical Analysis
		Understanding the Methodology
			Finding everything in the price
			Seeing that price movements are not always random
			Balancing supply and demand
			Understanding where you’ve been
			Understanding where you’re headed
		Answering the Detractors
			Walking randomly
			Trading signals known to all
		Executing Your Trading Plan
		Using StockCharts.com
	Chapter 9 Reading Bar Charts Is Easy (Really)
		Creating a Price Chart
			Looking at a single price bar
			Measuring volume
			Coloring charts
		Identifying Simple Single-Day Patterns
			Single-bar patterns
			Reversal patterns
		Recognizing Trends and Trading Ranges
			Discerning a trading range
			Spotting a trend
			Paying attention to time frame
		Searching for Transitions
			Support and resistance: The keys to trend transitions
			Finding a breakout
				Waiting patiently for winning patterns
				Fine-tuning your trading-range breakout strategy
			Sipping from a cup and handle
			Deciding what to do with a double bottom
			An alternative double-bottom strategy
			Looking at other patterns
	Chapter 10 Following Trends to Boost Your Probability of Success
		Identifying Trends
		Supporting and Resisting Trends
			Drawing trend lines to show support
			Using channels
			Trending and channeling strategies
		Seeing Gaps
			Common gap
			Breakout or breakaway gap
			Continuation gap
			Exhaustion gap
			Island gap
		Waving Flags and Pennants
		Withstanding Retracements
			Three-step and five-step retracements
			Subsequent trading ranges
		Dealing with Failed Signals
			Trapping bulls and bears
			Filling the gaps
			Deciding whether to reverse directions
	Chapter 11 Calculating Indicators and Oscillators
		The Ins and Outs of Moving Averages
			Simple moving average
			Exponential moving average
			Comparing SMAs and EMAs
				Consistency
				Reaction time
				Sensitivity
			Interpreting and using moving averages
			Support and resistance factors
			Deciding the moving average time frame
		Understanding Buy and Sell Pressure through Stochastic Oscillators
			Calculating stochastic oscillators
			Interpreting stochastic oscillators
		Tracking Momentum with the MACD
			Calculating the MACD
			Using the MACD
		Revealing Relative Strength
			Calculating relative strength
			Putting relative strength to work
Part 4 Developing Strategies for When to Buy and Sell Stocks
	Chapter 12 Money Management Techniques: Building a More Robust Portfolio
		Achieving Your Trading Goals with Smart Money Management
		Managing Your Portfolio
			Thinking of trading as a business
			Recognizing the trader’s dilemma
				Falling in love
				Fixating on mistakes
			Finding a better plan
				Dealing with seasonal stock
				Keeping your inventory current
		Protecting Your Principal
			Recovering from a large loss: It ain’t easy
			Setting a target price for handling losses
			Strategies for managing profitable trades
				Breaking the pattern of higher highs and higher lows
				Using trailing stops
				Tracking market indexes
		Understanding Your Risks
			Market risks
			Investment risks
			Trading risks
	Chapter 13 Combining Fundamental and Technical Analyses for Optimum Strategy
		Seeing the Big Picture
			Knowing when the Fed is your friend
			Keeping an eye on industrial production
			Watching sector rotation
				Anticipating a new bull market
				Watching the economy rebound
				Approaching a market top
				Weathering a bear market
			Finding the dominant trend
				Looking at weekly index charts
				Using the bullish percent index
		Selecting Your Trading Stock
		Trading Strategies
			Trading the bullish transition
			Trading in a bull market
			Trading the bullish pullback
			Trading the bearish transition
			Trading in a bear market
			Trading the bearish pullback
			A hypothetical trading example
	Chapter 14 Minimizing Trading Risks Using Exchange-Traded Funds
		What Is an ETF?
			Examining the advantages
			Avoiding the flaws
		Does Family Matter?
			Market-weighted ETFs
			Equal-weighted ETFs
			Fundamentally weighted ETFs
		Sector Rotation Strategies
			Early recovery
			Full recovery
			Early recession
			Full recession
		Analyzing ETFs
		Portfolio Construction
			International trading with ETFs
			Commodities and ETFs
			Currency trading and ETFs
			Leveraged ETFs
			Inverse ETFs
			Actively Managed ETFs
	Chapter 15 Executing Your Trades
		Entering and Exiting Your Trade
			Keeping straight the bid and the ask
			Understanding the spread
			Devising an effective order-entry strategy
				Using limit orders
				Using stop orders and stop-limit orders to enter a trade
				Using stop orders to exit positions
			Timing your trades: Entering orders after the market closes
			Reviewing a week in the life of a trader
		Selling Stocks Short
		Avoiding Regulatory Pitfalls
			Understanding trade-settlement dates
			Avoiding free riding
			Avoiding margin calls and forced sales
				Understanding margin fees
				Understanding margin collateral
			Avoiding pattern-day-trader restrictions
		The Tax Man Cometh
	Chapter 16 Developing Your Own Powerful Trading System
		Understanding Trading Systems
			Discretionary systems
			Mechanical systems
			Trend-following systems
			Countertrend systems
		Selecting System-Development Tools
			Choosing system-development hardware
			Deciding on system-development software
				Trading system–development and testing software
				Spreadsheet software
			Finding historical data for system testing
		Developing and Testing Trading Systems
			Working with trend-following systems
				Identifying system-optimization pitfalls
				Testing with blind simulation
			Using breakout trading systems
			Accounting for slippage
		Keeping a Trading Journal
		Evaluating Trading Systems for Hire
Part 5 Risk-Taker’s Paradise
	Chapter 17 The Basics of Swing Trading
		Selecting Stocks Carefully
		Looking at Swing-Trading Strategies
			Trading trending stocks
				Trading pullbacks
				Surfing channels
			Trading range-bound stocks
			Trading volatility
			Money management issues
		Using Options for Swing Trading
		Getting a Grip on Swing-Trading Risks
			Taxes (of course)
			Pattern-day-trading rules apply
	Chapter 18 The Basics of Day Trading
		What Day Trading Is All About
			Institutional day traders (market makers)
			Retail day traders
				It’s all about access
				Day-trading firms
		Understanding Account Restrictions
			The Fed’s Regulation T: Margin requirements
			Settlement: No free rides
		Strategies for Successful Day Trading
			Technical needs
			Trading patterns
			Scalping
			Trend traders
		Recognizing That Risks Are High
			Liquidity
			Slippage
			Trading costs
			Taxes (of course)
		Avoiding the Most Common Mistakes
	Chapter 19 Doing It by Derivatives
		Types of Derivatives: Futures and Options
			Buy now, pay later: Futures
				What’s your position?
				Making money using futures
				Commodities futures
				Index futures
				Bond futures
				Stock futures
				Foreign currency futures
			Wait and see: Options
				Options lingo
				Option pricing
		Buying Options and Futures Contracts
			Opening an account
			Calculating the price and making a buy
		Options for Getting Out of Options
			Offsetting the option
			Holding the option
			Exercising the option
		The Risks of Trading Options and Futures
		Minimizing Risks
	Chapter 20 Going Foreign (Forex)
		Exploring the World of Forex
			Types of currency traders
			Why currency changes in value
			What traders do
		Understanding Money Jargon
			Spot transactions
			Forward transactions
			Options
		Looking at How Money Markets Work
			Different countries, different rules
			The almighty (U.S.) dollar
			Organized exchanges
		Taking Necessary Risks in the World Money Market
			Understanding the types of risks
				Market risk
				Exchange risk
				Interest rate risk
				Counterparty risk
				Volatility risk
				Liquidity risk
				Country risk
			Seeking risk protection
		Getting Ready to Trade Money
Part 6 The Part of Tens
	Chapter 21 More Than Ten Huge Trading Mistakes
		Fishing for Bottoms
		Timing the Top
		Trading against the Dominant Trend
		Winging It
		Taking Trading Personally
		Falling in Love
		Using After-Hours Market Orders
		Chasing a Runaway Trend
		Averaging Down
		Ignoring Your Stops
		Diversifying Badly
		Enduring Large Losses
	Chapter 22 Ten Trading Survival Techniques
		Build Your Trading Tool Chest
		Choose and Use Your Favorite Tools Wisely
		Use Both Technical and Fundamental Analyses
		Count on the Averages to Make Your Moves
		Develop and Manage Your Trading System
		Know Your Costs
		Have an Exit Strategy
		Watch for Signals, Don’t Anticipate Them
		Buy on Strength, Sell on Weakness
		Keep a Trading Journal and Review It Often
Index
EULA