Question about stocks on Etrade?

[Joe]

I'm new to the stock market. I registered an account on Etrade and have been doing research for a few weeks. Yesterday I looked at facebook's stock and it went as low as $48, today it got up to $52. So, if I purchased 20 stocks yesterday I would make $80 in one day minus the $10 Etrade fees? Or am I missing something?

I am planning on investing about $1,000 on twitter stocks so I'll purchase about 50 stocks, can I easily buy on etrade and sell whenever I want, or is there any restrictions?

I am just kind of confused so if anyone can add any other relevant information it'll be great. I'm also not sure how I can later get the money. I can buy the stocks on etrade but then after making some money can I transfer it to my bank account?

Thanks guys! Cheers.
Ok I think I was slightly misunderstood judging from the first answer. I am not interested in day swing, I can keep the stocks there for a year. I was just asking if I understand it correctly. Also, I think etrade has some policy about keeping stocks for a certain amount of time, correct me please?

Like I said I wasn't referring to day trading or swing, just asking in general if my assumption is correct.

[Common Sense]

Why eTrade? What is about them that fits your trading requirements? How many books have you read so that you don't make typical costly mistakes in the Stock Market?

If you had purchased FB @ $48.... and sold @ $52 your net would be +$60.
($80 profit.... less $10 to buy the shares and $10 to sell the shares). If you had done this in one day, that's called day trading. If you had done that in 2 days that's called swing trading.

It can take, on average, 3-5 years to learn the skills to day or swing trade. 90%+ fail.
So..... if it looks so easy..... nothing in the stock market is easy.

To day or swing trade I'd suggest reading 6-12 books on the subject. Concentrate on the psychology of trading and risk management. Once you've created your own strategy find a platform that specializes for day and swing traders

Good luck.

[David]

Yes, you are correct, regardless of time frame.

Newbies always look at potential profits first (that they have no way to make consistently), rather than risk. You are talking about buying FB around the earnings report, or shortly thereafter. That report could have caused price to go either way, so your risk ahead of that report is enormous.

You could just as easily have bought 20 shares of FB after the report (after hours) at 57 and puked out the next morning at 47 for a loss of $10/share, and lost $200. It only traded at 47-48 for a few minutes, so what makes you think you would have bought it there when price had come crashing down from 57? Would you really buy a stock that just now crashed 10 pts and lost 20% of its value in a few hours?

You're talking about "trading", not investing, which is several years beyond your understanding. That's why the other answer focused on "trading." So your question of whether you could make money trading an earnings report is inapplicable. But your math is correct. It's your presumptions that are incorrect, method is incorrect, your best-case scenario of timing is incorrect, and extracting profits from illogical fallacies that are incorrect.

The same thing could happen with Twitter, but you're already counting your profits instead of planning ahead to safeguard your capital against a 20% hit. Trading IPO's and earnings reports are a gamble, unless you possess advanced trading techniques, good money management principles, and an iron will of discipline to stick with the plan. But you don't even have a plan. You're treating the markets like a casino. What do you think the eventual result of that will be, or sitting down at a professional poker table without even knowing the rules or methods or strategy?

Learn something first. Learn how to invest first. Develop a trade plan. Learn about risk and money management. Learn what happens when you're wrong first, and how to protect yourself. Test your theories on a simulator while you learn in up and down markets and around events like earnings and IPO's before ever risking a dime. When you start making simulator money, great. Or revise the plan.

Answered a similar question here:
http://answers.yahoo.com/question/index;...019AA2R65M