Imagine you were a brand new trader. Fresh out the womb. And you wanted to learn how
to make money trading stocks just like the big boys.
But you wanted just one place, one video series, to learn absolutely everything.
No bulls. Just pure knowledge. A-Z, every topic, a complete blueprint on
how to learn the market from a complete beginners perspective.
Well that s what you re watching right now. Yeah, you clicked it.
I posted a video a couple weeks ago titled how to start trading stocks as a complete
beginner In that video, I said if it got 1,000 likes
I would make this a complete series and teach you guys every thing I know from start to
end. And let s just you guys got the video to 1,000
likes. Actually, you got to 1,000 likes within 20 minutes
So that shows you guys have a huge interest in this video series.
So I m a man of my word, and that s why im making this video. This is the part 2 of this
series. Let s not waste any time, lets get straight to it.
First things first, we need to go over some common trading terminology.
Us traders have these common vocab words that means specific trading terms.
It s almost like a secret handshake in a way. But if you re a new trader, you definitely
have to know what these terms mean, especially if you re going to watch this series, because
im going to say them all the time. First term, is long.
To put it very, very, very simply. When you are long on a stock. That means, you make
money as the chart is going up. So if you a buy stock at $10. That means you are in
a long position and if it goes to $20. You made money. Pretty simple.
The complete opposite of that is a short. A short is when you make money as the chart
going down. Again, ill try to explain this as simple as possible. Essentially what you
re doing is this. Say if the price is at $10. You then ask your
broker. hey can I borrow 5 shares of stock at $10, I promise ill give it back . They
say yeah, sure why not homie. So you now have $50 worth of short shares. 5x10. So what you
want is the price to go down. beacuse if the price goes down to say $5. You can then buy
back 5 shares at $5, totaling $25.. So you got the 5 shares of stock cheaper than what
you borrowed them for. You then do a little switcharoo give the shares back to the broker,
just like you said you would. And then you can keep the rest of the profit. So in this
scenario you would have made $25. Hopefully that makes sense.
So big picture. Long positions you make money as the chart goes up. Short positions you
make money as the chart goes down. Next is bulls and bears.
If you re completely new, you ve probably have heard traders say this before and you
thought to yourself, why is there animals in the stock markets. Yeah its weird, I don
t know. But it s the lingo So basically if you re a bull. That means
you think the market is going to go up In the future or you take long trades. So often
times you ll hear, oh there s good market news today, im bullish
If you re a bear, that means you think the market is going to go down or you take short
trades. An easy way to remember this is when a bull
charges at you, they swing their horns upwards. When a bear claws at you, it goes downwards.
See you re a professional trader already. Next, we ll talk about the spread.
And this is when it starts getting really juicy.
But before we get into that, let s talk about today s sponsor hankotrade.
If you re a new trader and you haven t heard of hankotrade, you need to look them up.
They are who I use as my personal forex broker and there s a reason for that.
One. They re pretty hot. All jokes aside, they re awesome. Low fees,
low spreads, which is what we re about to go over in this video, and they make it extremely
easy to execute orders. The reasoning why I think they are so good
for beginner traders Is because they basically help fund your account when first starting
out. If you use the link in my description hankotrade
will match whatever you first deposit. So if you put in say $100. They will literally
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They re awesome. ill put a link in my description. Go check them out.
Alright, let s go back to the juicy information and cover what a spread actually is.
In trading,there s basically two main prices. The bid and the ask.
The bid and ask refer to the prices at which buyers and sellers are willing to trade a
stock. The bid price is the highest price that a buyer is willing to pay for a stock,
while the ask price is the lowest price that a seller is willing to accept for the same
stock. For example, if a stock has a bid price of
$10 and an ask price of $11, this means that a buyer is willing to pay up to $10 for the
stock, while a seller is willing to sell the stock for at least $11. The difference between
the bid and ask prices is called the spread, which represents everything in the middle.
Often times when you watch professionals traders during livestreams they ll have this moving
data on their screen and it makes them look really cool and professional. Well this data
is called level II data and these moving numbers are the bids and asks.
So these numbers on the left are the bids. So as you can see here, the highest price
someone is willing to buy this stockat is this price. and this number is the amount
of shares they want to buy. The numbers on the right are the ask prices.
So this number right here is the lowest amount someone is willing to sell this stock. at
The amount between these two numbers are the spread.
While we are on this topic, let s talk about the different types of orders.
So when purchasing or selling a stock there are different ways you can do it. I m going
to go over 4. There are more order types then this, but these main are 4 you should know.
There s market, limit, stop, and stop loss.
A market order is you basically saying I want the stock right now . No matter what the ask
price is. You want the broker to instantly buy the stock at whatever the stock is right
now. The pros of a market order is that you know
for sure you ll be in the trade no matter what, but the con of that pro is your essentially
paying a premium. Because you re buying that stock for whatever the ask price is right
now. Next is a limit order.
A limit order is you basically saying, if the stock hits this price, I want to buy it.
So say for example a share of stock is at $50. You can put a buy limit order for $40.
That means your broker will only purchase that stock once the price goes down to $40.
Once it hits 40 it ll purchase it automatically. The pros of a limit order is that your essentially
getting the stock at a cheaper price, but the con of that pro is you may not get filled.
Because there are going to be some scenarios where the price doesn t go down to your limit
order and you ll miss out on the trade. Next is a stop order.
A stop order is kind of the opposite of a limit order.
Essentially a buy stop order is you saying You only want to enter a trade if the stock
goes up to a certain price . For example. If you have a stock consolidating
or moving sideways in a range. And the top of this range is at $50.
And you only want to enter into this stock once it breaks that range at $55. You would
create a buy stop order for $55. Once the price breaks this range and reaches
$55, you re broker will then purchase the stock.
Next is the 4th and final order type which is the stop loss order. And this arguably
the most important one. Unlike the 3 other orders where it enters
you into a trade, a stop loss takes you out of the trade.
So say the price is at $50. You re in the trade, but you say to yourself, if the price
ever goes down to $40. I don t want to be in the trade anymore. Well, what you would
do is set a stop loss at $40. If price ever goes down to that point, you re broker will
automatically exit for you. So little recap. Market order is you want
to buy the stock right now, no matter the price. You want to enter instantly. A Limit
order is you want to enter if price goes down to a certain price. A stop order is the opposite
of a limit order and you want to enter if price goes up to a certain price. And a stop
loss is you want to exit if price goes down to your stop loss.
Now like I said, it can get a little more complicated than this, but for the sake of
this video, these are the 4 order types you should know.
These are the absolute basics, but its kind of that one thing that s a little boring,
but its one of those things we had to go over. To be honest if this series was an A-Z series.
We haven t even really passed B yet. My goal with this series is to slowly get
more and more advanced as we progress throughout the series. So that way, by the time we get
to the Z video. You re basically ein stein when it comes to trading.
So since you guys smashed the 1,000 like goal last video. Lets make this video s goal 5,000
likes. If we get this video to 5,000 like I will upload episode 3 and we ll get a little
bit more advanced and start looking at some actual setups.
Thanks for watching. And ill see you guys next time.