2) You should always protect your capital. Everyone knows that your capital is everything. In simple terms “No Capital, No Trading” that’s how plain and simple it is.

3) You should always employ a hard stop. Having to enter in a hard stop on your every trade will help you set a limit as to the amount of money that you can lose in a trade.

4) You should never turn a winner into a loser. Don’t let a winning trade turn into a loser.  You should be willing to bank on some profits when you can get them.

5) Losers average Losers. You should never add to a losing position under any circumstances, this is because markets may remain illogical far longer than you can remain solvent.

6) Trade for the extremely consistent gains. By developing your mindset to have a steady banking and also a consistent profits rather than having a few home-run trades.

7) You should take the best setups from some different stocks. You should only choose the best trade setups that you can from your analysis.  Be willing to do both financial and technical analysis in determining which stocks you are going to invest in.

You don’t need to bet the farm in any particular trade. To have a successful trading, you do not need to swing for the fence.  Do not invest more than five percent of your portfolio in any particular trade.

9) You should have the discipline to stick with your method through the drawdown.  Remember stocks go up and down.  Becoming too greedy may not bode well for your profitable trades.

10) Your Day trading plan should be designed to fit your personality. This means that you should continually refine your methodology.

In general, once the funds are in, you can trade at 4x the amount of the maintenance margin for the prior business day, though individual brokerage houses can impose their own minimum equity levels and restrict the multiple at which the day trader can invest in trades.

If you create some net losses and need to pledge more capital to meet the equity minimum again, you have five days to do so, during which you will be restricted to trades at a maximum of twice your margin requirements. After five days and if you still haven’t contributed the necessary funds, you can only trade your cash amount until you meet the cash call (or if 90 days passes).

Note that you have to meet the equity minimum even if you never do leveraged trades (on margin trades), like if you only trade options, which almost always require a 100%, in cash commitment. You shouldn’t be day trading in cash accounts, either, to try to avoid the maintenance margin. Short-term trading in cash accounts is almost always prohibited as “free-riding” and will result in your broker freezing your account for three months.

You also have to wait to business days to use any new funds that you had to deposit to satisfy the minimum $25k or any margin calls you might have been subjected to. The reasoning behind all these restrictions, even if you don’t believe you’re engaging in very risky moves, is that something can always go wrong -  the stock tips help that you’ve relied upon could end up losing you a lot of money, and you might not be able to pay back without the maintenance margin as a protective cushion.

The fact is, you cannot plead ignorance in your finances because it’s your life.  It hurts no one but yourself if you are clueless.

So how can you remedy this situation and become financially literate?  It helps if you learn from the best and the best investor in the world is Warren Buffett.  Warren Buffett stocks are known to be long term stock picks.  He doesn’t do the day trading thing which is so popular nowadays with the trading software and stock screeners now available.  Buffett does things the old fashion way and that is by buying good blue chip stocks that are undervalued.

The obvious question often posed is how can you determine undervalued stocks?  The answer lies by reading financial statements and making phone calls to the prospective company you want to invest in and making the exact phone call to the competitors.  This way, you get a good gauge of the industry from the horse’s mouth and the competitors.

Not a lot of people go through this trouble and just listen to the advise of their financial advisors.   In my opinion, no one cares more about your money than yourself so ultimately, it’s in your best interest to do due diligence.

Not just the big guns either. Increasingly, smaller broker dealers and proprietary trading firms are setting themselves up as high frequency trading shops, and it looks as if the trend is set to continue.

According to the High Frequency Trading Review, over 400 firms now participate in some form of high frequency trading (HFT). In terms of volume figures, industry estimates put the total share of HFT as between 60% and 80% of total US equity volume, which is hugely significant by any standards.

The question is, have we reached the peak? The answer depends upon who you ask. Some pundits think that HFT has grown as much as it is likely too, others say that there is room for still more growth.

One thing is clear though, and that is that there are still firms jumping on the HFT bandwagon for the first time, hoping to get a piece of the action. If the market is starting to become saturated, those new players will find it increasingly difficult to compete. In fact, it seems that just as quickly as firms are joining the HFT fray, others are leaving or even going out of business.

Competing in the HFT space is tough. In order to be successful, there are all kinds of expensive things you need, not just on the hardware, software and communications front, but also in terms of highly-paid staff, as some of the top brains in the industry work on HFT projects. Smaller prop shops will find it very difficult to compete with the big guns of Wall Street and match their deep pockets.

So in conclusion, our prediction is that high frequency trading will continue to grow for the first half of 2010 and then will top out, particularly as regulators start to become more closely involved. Watch this space!

Short-term Investments: If you will be investing within one or two years, try to choose a mutual fund that will secure the capital while generating some income.  This would be where you buy shares in mutual funds with a high dividend payout.

Mid-term Investments: The money that is invested within two to five years period will require a reasonable degree of security for your capital along with the opportunities for the income and maybe some capital appreciation.  This is a mixture of dividend paying with some growth potential.

Long-term Investments: This has the higher-risk of investing that is held for more than five years period, which would gradually generate higher returns for your money. A long-term investment has a lot of time to recover if ever there is a market downturn.

Mutual fund investment has its own strategies and using these strategies will allow you to preserve your capital.  This is by investing in low-risk mutual funds such as money market funds or in a short-term bond funds. This is the short-term investment options that having a lower return, for your capital would be quite safe.

You should never invest in any funds with money that you are going to need in the near term time horizon.  Stock or mutual fund investing has a history of higher returns but the risk is higher also.  You need to be aware that there may be some ups and downs with your investments.  Plan on this.  In order for you to make money with your investments, you will probably need to wait a while.  It may come sooner but also it may not.

Average Returns

At present, a five-year CD investment with an IRA is expected to earn 4.01%. Through laddering, you can obtain a little more, though your maximum profit potential for a five-year $5,000 investment is only about $1,500. Thus, if you place your account in other investment vehicles, you can earn much more profit.

The Roth IRA interest rates for people who venture in the stock market are normally between 4% and 9% annually. If you are receiving this rate of return this year, you are very fortunate. Note that only a few stocks perform well in this market.

If you want to place your funds in a ‘safe’ investment platform, you should invest in treasury bills. Since these are secured by the federal government, your funds are surely protected with them. Today, a 30-year note makes about 4.17% returns, thus most investors who failed to find luck in the stock market, stow away with T-bills.

The Best Rates of Return

The most excellent returns at present can be seen in self-directed retirement accounts, particularly those that were invested in the real estate industry. Through this investment vehicle, you can earn rental revenue, holding mortgages, as well as generate money through re-selling the property and many more. The profit potential in this market is almost limitless.

The Roth IRA returns vary from your investment choices. That’s why it is very significant that you do your homework and study all the available investment options to you. This will make certain that you’ll lock-in the option with the highest profit potential.

Before making ANY decisions with any company or any stock investment, make sure you do your research! If possible, start out low and work your way up until you start to understand how this works! First off, you have full-service brokers, then you have discount brokers and last you have online brokers.

For the most part a full service broker is going to have the most advice to give you ie; full-service. But, in the same way that any full-service company works, this is also going to be the more expensive option.

I think you have to look at your experience over what you are willing to pay. If you do not have a lot of experience with stocks and you do not paying into it, this is a good option for you. These full-service brokers will keep an eye open for your picks and they will chime in when they think you should make any changes to the stock.

Second off, for the discounters, this will cost less than the full-service, but it is also going to take you more knowledge and expertise to figure out how to go about this. It is your responsibility completely!

They offer much less advice than the full-service so make sure you really know where and what to research. Thirdly, you have the online brokers. These are websites like E-trade, Scottrade, Schwab, etc. With this you do not get any advice per se from an individual, however, there is SO much information on these websites its like info-overload.

You still need to have some kind of an understanding about how this works. You cannot just go in there, buy everything up, and expect to make something in return. So this is less-advice, but it is also MUCH cheaper. Full-service brokers get paid on the percentage of stocks you purchase – they live on commission.

Which is one of the reasons we think they are the better choice because if YOU make money THEY make money. The discount brokers have stocks for $10-$20 per 1100 shares. And the online brokers cost $9-$15! These are the most popular ways on how to buy stock online. If you find other ways, superb. But, they might not be legit! Remember to always do your homework!

This is because, you can access your account online, but it does not necessarily mean that any of your posted trades will be instantaneous. You should limit your losses in these fast-moving high tech markets by simply knowing what you are buying and understanding the risks involved in trade and knowing the trading process for fast-moving markets.  You should establish your trading system to avoid potential problems.

Also you should guard yourself against some of the most common problems that investors may encounter in this fast-moving market. One of which is by avoiding market orders vs. limit orders , this usually happens when stocks drop or soar suddenly, being stuck in the process of trading can be the difference between making a sizable profit and losing a bundle.

Trading in an online business will also have its own feature or its own dangers. There are some problems with modems, servers, or the failure of broker-dealer hardware that can all cause a delay in trading stocks or either a failure in an immediate stock trade.

Often investors have mistakenly thought that their order did not go through and placed another order for the same stock. This results in their buying shares that they did not really want, or even selling stock they did not want to really sell. But, you need to be sure that you can check with your broker once or twice about what to do if you aren’t all that sure if your trade has gone through.

When you are buying and selling in a fast-paced market that would usually takes using a broker who is capable of handling transactions quickly. There are no Securities and Exchange Commission rules that a person needs to follow in any of the trades that are ready to be executed in a specific amount of time.

Having no broker to go through has numerous advantages. First and foremost, it enables you to take full charge of your investments with the use of a stock trading platform. In fact, because it was found that investors prefer to do things themselves rather than rely on a broker, may trading companies have come up with databases where investors can directly check and control where his stocks go. By doing things yourself, you can even learn how to make your way around initial deposits. If you like the idea about controlling your own stocks, first research about trading companies and whether they offer this kind of service. If not, inquire whether a dividend reinvestment plan is available. Reading reviews as well can help a lot. There are some companies that offer this service to investors however, there are hidden charges. Getting comprehensive reviews about trading companies will help you avoid such situations. If you are interested in getting a dividend reinvestment plan, make sure that you already have stocks at your disposal. Investors who leap before they look often find themselves in a situation where they know absolutely nothing about the trading company hence lose a lot of money in the process.

In order to make it big in the stock market, consistent research is necessary. Remember that in this industry, it is your money on the line. All the hard work and sleepless nights you had to endure to come up with a fund is not something you just throw away because you were not able to do your research.

With an online discount broker you are able to research, chart, and execute your own trades.  You are in complete control of your finances.  Most of these online brokers don’t offer any sort of investment advice, however.  If you are looking for investment advice you may have to go the route of a traditional broker or look at on of the online hybrid brokers.   Scottrade and Charles Schwab both operate local branch offices and have various financial management services.

The best online trading sites are the ones that fit your personal needs.   Sogotrade is the absolute cheapest trading site that I have found.  They offer trades starting at $3.00 for unlimited shares.  This is a very big discount on the cost of trading for active traders.  ThinkorSwim has arguably the best software package.   You can even code your own technical indicators with this software. TradeKing and Zecco are both competitively priced discount brokers with good track records.  Then there are the two hybrid brokers that I mentioned above.  Of those two, Scottrade is much cheaper on a per trade basis.  It is often nice to be able to go talk to an actual person about your stock portfolio.

The best advice is to test out a broker before depositing any cash into your account.  Make sure you like the trading interface.  Is customer support adequate?  There are other factors to consider when opening a trading account besides the bottom line.