Online Trading and Investing: Using Internet Tools

Online trading investing has become more than just a hobby for many people today. With increased use of the Internet as not only an entertainment medium, but as an actual tool for business and income, the proliferation of websites that offer every day individuals the opportunity to control their own investment portfolios has also dramatically increased in recent years.

Online Trading Basics
Today, it is easy to open an online trading account. There are many companies like Scott Trade, E-Trade and others which allow individuals to open an account for a small minimum dollar amount. The process is simple and usually only requires a small amount of personal information to open an account.

Once an account is open, it is possible to purchase stocks and hold them for either the long term or for short term gains. By accessing their account, an investor can place an order to purchase stock at a certain price, sell stock at a set price or track the progress of stocks they have already purchased or intend to purchase in the future.

Using Online Investment Tools
One of the sources for online investment tools is the NASDAQ. This stock index offers several different free online tools that are available to anyone, including a basic stock research tool.

Step 1
Logon to NASDAQ.com and go to the main page. Looking at the upper left corner, you will see a section that says “Get Up to 10 Stock Quotes.” Click on that section and enter the ticker name for the stock you want to research. Now click on the “Summary Quotes” button.

Step 2
Look in the center of the chart for the “50 Day Average Volume” number. In order for a stock to be a good potential investment, not only do you want the value of the stock to increase over time, but you also want it to be popular enough to be traded often. You are looking for a volume average of over 250,000 in order for the stock to be worth trading.

Step 3
Now, look in the upper left corner of the screen and use the drop down menu that currently says “Summary Quote,” and choose “Charts.”

You want to look at the short term movement of the stock. This will give you information on recent changes in the value of the stock. You are looking for stocks that have given firm indications that they are on an upward movement. Generally, you are looking for stocks that have traded higher in recent days than for the previous three months.

Step 4
Now look at long term price changes. You are looking for a general increase in price over the past 12 months.

Step 5
Now select “Revenue/EPS” from the drop down menu. Look for revenue, which is the income of the company, to be steadily increasing over time. This indicates health and growth in the company.

Evaluate EPS (earnings per share) by looking at the value of each share. This number is broken down quarterly, so you are looking for a steady increase in the value of the share over time.

Summary
As you use the free NASDAQ evaluation and research tools, you begin to see how easy and important it is to research stocks before you purchase them. While the NASDAQ tools only apply to technology stocks that are traded on that particular index, there are numerous other similar tools available for almost every other kind of stock traded on the market. By carefully researching stocks and trends, online traders can take control of their own investment portfolios.

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