For people who already trade
Stock trading tips that show their working.
Each tip takes one position and works the sum in front of you, then says where it stops applying. Alongside them you'll find the terms your broker uses and straight answers for the moment an order does something strange.
Latest
- 1099-B to Form 8949: Which Box, and When to Skip It Which Form 8949 box each 1099-B sale belongs in, what goes in each column, and when covered sales bypass Form 8949 for Schedule D totals. Questions
- 1099-B Box 1g: Reading the Wash Sale Loss Disallowed What the figure in 1099-B box 1g means, where the disallowed loss went, and why the number can look wrong next to your own trade log. Questions
- Dividend Capture in an IRA: No Tax Bill, Same Price Drop What changes when you run dividend capture in a traditional or Roth IRA: the tax drag goes, the ex-date drop, spreads and settlement limits stay. Tips
- Dividend Capture With Options: Covered Calls vs Puts How a buy-write or a married put changes a dividend capture trade, why early assignment can take the dividend, and what the options charge. Tips
- Dividend Harvesting: Rotating Ex-Dates for Income What dividend harvesting means, what rotating through ex-dates costs in drops, spreads and tax over a year, and how it compares with holding payers. Tips
- Does a TIPS Trade Settle on the Settle-Date Factor? Which index ratio a TIPS trade uses, trade date or settlement date, how the invoice is built, and a worked comparison of both factors. Questions
- Does Dividend Capture Work? Where the Payout Goes Does dividend capture work? Where the payout goes on the ex-date, what spreads and ordinary-income tax take, and the few cases it can pay. Tips
- Gap Down at the Open: Rules Before You Sell What to do when a stock gaps down at the open: rules for finding the cause, handling stops, avoiding market orders and sizing any add. Tips
Tips worth arguing about
All tips → T07
Mental Stops Fail at Exactly the Moment You Need Them
Put the stop in as a resting order, because a stop kept in your head relies on you acting at the moment you are least able to. T12Round-Number Stops Sit Where Everyone Else Put Theirs
Place a stop where the trade idea is proven wrong, plus a buffer, and size the position to that distance. T18Start in a Cash Account and Let Settlement Slow You Down
Newer traders should start in a cash account, where trading only settled money forces a pause that curbs overtrading and removes margin risk. T05Hide the Dollar P&L While a Trade Is Open
While a trade is open, watch it in multiples of your initial risk or as price against stop and target, and keep the dollar figure out of sight. T04Gaps Do Not Have to Fill, Whatever the Saying Claims
A gap fill is one possible scenario, to be traded with a stop and a time limit, and a news gap may never fill at all. T13Scaling Out Feels Safer Than It Pays, So Test Both Exits
Scaling out can pay less than holding for the full target, and the only way to know which suits you is to measure both in your own trades.Terms your broker uses
All terms →- Good faith violation In a cash account, buying a security with unsettled sale proceeds and then selling that new position before the original proceeds have settled. Settlement and rules
- Wash sale A sale of stock or securities at a loss where you buy substantially identical stock or securities within 30 days before or after the sale. The IRS disallows the loss for that year. Tax
- Pattern day trader Under FINRA Rule 4210, a margin customer with at least four day trades in any five business days, when those trades exceed six percent of the account's activity for the period. Settlement and rules
- Stop-limit order An order with two prices: when the stock reaches the stop price, a limit order is placed at the limit price, and it fills only at that limit or better. Orders
- Limit up-limit down A US market mechanism that sets upper and lower price bands around a reference price based on a stock's recent trading, and pauses trading when the stock cannot trade within those bands. Market structure
- National best bid and offer The highest displayed bid and the lowest displayed offer for a stock across US exchanges, as defined under the SEC's Regulation NMS and published by the securities information processors. Market structure
Questions traders type
All questions →- Why Did My Stop Loss Sell Below My Stop Price? A standard stop turns into a market order once triggered, so it fills at whatever bids exist next. Why that can be well below your stop, and what you can change. Orders and fills
- Why Didn't My Limit Order Fill When the Price Touched It? The chart hit your limit price and the order still sat there unfilled. Queue priority, odd lots, quotes, time in force and session settings explain most cases. Orders and fills
- Can I Day Trade in a Cash Account? You can day trade in a cash account using settled cash, with no pattern day trader limit. How T+1 caps how often each dollar trades, and the violations to avoid. Accounts and rules
- What Happens When a Stock I Own Is Halted? Why exchanges and regulators halt a stock, what happens to your orders during the halt, how the reopening auction sets the price, and what to check right away. Halts, gaps and events
- What Happens to My Stop Loss When a Stock Gaps Past It? A stop only triggers on a trade, so after an overnight gap it fires at the open, well past your price. How stop-market and stop-limit orders behave, with the sums. Risk and exits
- Do I Owe Tax on Trades If I Never Withdraw the Money? In a US taxable brokerage account, a gain is taxable in the year you sell, even if the cash never leaves. How losses, wash sales and retirement accounts fit in. Tax and records
Economy, for traders
All economy →Buyer's guides
All guides →- Certificates of depositHow to Choose a CD, and When Locking Up Cash Makes Sense
- Crypto exchangesHow to Choose a Crypto Exchange Without Taking Hidden Risks
- Savings accountsHow to Choose a High-Yield Savings Account for Trading Cash
- Robo-advisorsHow to Choose a Robo-Advisor, and When a Trader Would Use One
- Online brokersHow to Choose an Online Broker for Active Stock Trading
Calculators
All calculators → Trade planning
Trade risk worksheet
Shares from your stop, with the spread, stop slippage and a gap scenario priced in, so you see the risk you would really be carrying.
Trade planningMerger arbitrage spread calculator
The gap between a cash offer and the target price, what it pays per year if the deal closes, and the odds the price implies.
Trade planningVWAP calculator
Paste bars as high, low, close and volume and get the running volume-weighted average price with every step shown.
Accounts and costsMargin interest calculator
What a margin debit costs per day and over your hold, and how far the position must move just to pay for it.
Accounts and costsDays to cover and borrow cost calculator
How crowded a short is in days of volume and as a share of float, and what a borrow fee costs you each day.
Rules and datesDay trade counter
List your day trades and see the count in any rolling window of five business days, and when the oldest drops out.