If you ask anyone in the financial world what they think about investing or trading penny stocks, the answer that you will probably get will be: “Don’t do it. You will lose your money since 90% of penny stock companies are scams. penny stock companies just want to sell shares and are not interested in developing their businesses.” The truth is that investing or trading penny stocks is a very risky business. So here is the most important tip about penny stocks: Invest only money that you can afford to lose.
If penny stocks are so risky then, why do people invest in or trade them?
The answer is because you can make a lot of money in a short time if you know what you are doing.
If you are still reading and have decided that you want to trade penny stocks, you need the right tools and good advice to help you survive and even win some money.
Step # 1 – Finding the Right Penny Stock to Buy
To discover the right one stock, you will have to do some investigation, or Due Diligence. There are a lot of websites that will help you with your DD and you can find a list of useful ones at www.stocks-reporter.com.
The following points will guide you in learning important information about a company in which you are interested in investing:
1. Share structure: AS (Shares Authorized) and OS (Outstanding Stock) and Float.
2. Transfer agent transparency
3. SEC filing
4. Financial track record
5. Competitive position in its industry
6. Business model
7. Earnings power
8. Valuation or the potential value of the company.
For example, when looking into share structure what you want to see is that there is no dilution. A good sign is when the company has maximized the OS and is close to AS. Watching Level 2 will also give you good indication if there is any dilution from the company. A good strategy is to follow insiders who know the company better than anyone else.
Step # 2 – Deciding When to Buy
After finding the penny stock that you plan to buy, you have to find your entry point and how to execute it the right way. Following the trading in that particular stock for a few days together with chart analyzing will give you a lot of valuable information. At this point it is highly recommended for anyone to learn some basic chart reading or at least let others analyze the chart for you. You can ask for help on many of the popular message boards that discuss stock trading and chart analyzing. An important tip about how to execute the trade in a penny stock is: Be very patient and always try to buy at the BID price.
Step # 3 – When to Sell or The Exit Strategy
The exit strategy is something very personal to different traders or investors.
It is very important to implement your strategy immediately after executing the buy order. In most cases, a good idea would be to set a sell order of 50% of your position at around 20%-30% PPS spike. Another 10%-20% rise of PPS and then sell another 50% of your current position and let the rest ride for a while. In general, your exit strategy should be very flexible and change with news, momentum, and volume. 90% of the time, though, you should sell at the ASK so it won’t affect the run.
TIP: Remember always to take profits.
Happy Trading
Ron Kaye
Stocks-Reporter.com
10/06/2007
10/05/2007
Selecting a good Stock Trading Software
There are so many different stock trading software packages on the market that you could try a different one, every day of the year, and never run the same one twice.
Many trading professionals use some type of stock trading software to keep their emotions in check and to enable them to focus on their stock trading strategy while avoiding the effects of fear and greed.
Depending upon the program that you choose, stock trading software can help you in the following areas:
- Identify Channel Breakouts
- Generate high probability mechanical buy/sell signals
- Control your dollar risk
- Forecast new tops and bottoms with great accuracy
- Reveal trading trends for any time frame
- Timing Bands to forecast the dates/times for the next cycle high, and cycle low.
- Curb your tendencies toward Fear and Greed
The nice thing about using stock trading software is that is has no emotions. It doesn't love or hate the stock that you own and it doesn't want to get rich. It simply crunches numbers and tells you what it "thinks" about when to buy, sell, or hold. And while it is not flawless, it's a lot smarter than most of us are.
Stock trading software is not really a necessity if you are investing in stocks and will be holding them for long periods of time. If, however, you are day, swing, or position trading, then it is an absolute requirement for you to be able to watch every up and down ticks, monitor your short positions, and stay on top of your stop loss settings. This is where stock trading software excels.
Before selecting a stock trading software package, download and try it out first. If the program that you are considering doesn't have a free trial, or a 100% money-back guarantee, then pass and look for another. Software that doesn't meet your requirements isn't going to do you a bit of good.
Although there are software packages that specialize in one particular function, such as providing real-time stock quotes, for example, you would be better off to select an all-in-one package that provides everything you need to make informed decisions. As a minimum, your stock trading software should provide the following:
- The opening price of the day in each market to determine price direction.
- Telltale signs in the market that signal a breakout to the upside (or downside if trading short) is coming and allow you to position yourself to profit with the move.
- Moving average monitoring that shows you the average price of a security over a specified time period (the most common being 20, 30, 50, 100 and 200 days), used in order to spot pricing trends by flattening out large fluctuations.
- Trigger monitor that will alert you to preset events such as such as reaching a specified price target or some other event that alerts you to take prescribed action.
- Pattern Identification so you can identify patterns in any market and use them to your advantage. This gives you a greater chance of selling at the top and buying at the bottom of the markets.
Stock trading software is a must have for all serious investors. You cannot afford to trade in today's markets without having the impartial advice and inside intelligence that a good software trading system provides.
About The Author
Stock-Trading-advice.com provide you with solid information and articles that you can use to increase your personal wealth by making the right investment and trading decisions.
contact@stock-trading-advice.com
How To Make, And Keep, Money Trading Stocks
If you are serious about making and keeping money by trading stocks, then there are three things you need to do, and do well.
- Money management
- Orders
- Trading system
Money management
Money management comes first. Without a rock-solid method of managing your trading funds, you trading results will be only be fair at best. Money management is more than just knowing how much money you have tied up in a trade. It's a method of using the right portion of your trading account on any one trade relative to the perceived risk and reward.
There are a few things to consider to managing a trade successfully:
- What is your account size?
- How profitable is your trading system?
- What is the initial amount at risk on a per share basis?
- What is the profit potential?
Account size
Your account size determines how long you stay in the trading game. If you are skillful, then you will not require a large account. On the other hand, even if you are a new trader, you can use a small account as long as you control your risk.
Controlling the risk means never using more money then you need on any one trade. A very simple formula for stock market success is to risk less than 3% of your total account value on a single trade.
If you have a $10,000 account, this means you never lose more than $300 per trade. If your account drops to $9,000, then you risk less than $270.
As your account grows, while the total amount at risk increases, you still only risk a maximum of 3% of your account. Say your account is at $12,000, then your maximum amount at risk is $360.
In theory, this ensures that you never go broke! And that is of utmost importance.
Profitable
If your system is profitable, then you will typically win more money then you lose. While some consider the percentage of winners relative to the number of losers, nothing could be further from the truth.
It doesn't do you any good to have a system that wins on nine out of very ten trades if you give all of your gains back on the one loser. More important is that the winners overwhelm the losers.
A profitable trading system might have a third of the trades result in the maximum loss planned for, a third of the trades either make or lose a little money, and a third of the trades bring in the profits.
Risk
It's worth repeating, risk no more than 3% of your total account value on any one trade. If you keep this in mind, you are ensured of minimizing losses to your account. At what price you enter a stock and where you place your initial stop price are used to determine how many shares you trade.
Profit
The profit potential of a system is the "edge". If you can estimate how much money you *might* make over time, and if that profit comes from many trades over time, then you probably have a winning system.
A trading system will either have a profit target that determines when to enter AND exit (good) or it will tell you when to enter and keep you in a profitable trade as long as possible without giving back much, or any, gains (better).
Orders
No matter what trading pattern you use to enter a stock, you will make the most money by using the correct orders.
When you wait until a stock has proven it's intensions - typically by trading above the previous day's high for a buy, or below the previous day's low for a sell short - then having an order in place that captures that exact price is crucial.
Let's say your favorite trading pattern signals a buy for. If you are an end of day trader, then the next morning you watch the opening price for the stock. If the stock opens less then yesterday's high, you place a stop order to buy above the previous day's high. Even better is to include a limit price with that buy stop order.
How much above the previous day's high is your call. As long as it is greater than the previous day's high, you are making the stock prove that it is going up.
Sure, you give up some of the profit potential. But you are more likely to turn a profit with a stock that is moving in your favor.
Once you are in a position, then you need to protect yourself from loss. If your method of picking stocks is good, then it's unlikely that the stock will revisit the current prices. Continuing with the buy example, to protect your account from a catostrophic loss, place a good-till-cancel sell stop order below the recent low. If yesterday's low is lower then the current day's low, that's where the sell stop order goes.
And make certain that the order does not include a limit. Stocks can and do gap down. Expecting that you will have a sell order filled at your stop price is a quick way to the poor house.
Trading system
Your choice of what method to enter and exit stocks plays a critical part in your stock market sucess.
A great trading system looks for low risk opportunities to enter a stock. Knowing at exactly what price signal to enter and when to exit - even if it is for a small loss - will keep your account growing. As long as you consistently follow the rules layed out by a well designed trading plan, you can count on steadily growing your trading account.
My favorite trading pattern does a great job of identifying stock likely to move rapidly in your favor.
There is no reason to be trading stocks that are not ready to deliver the biggest gains in the least amount of time.
If you are serious about taking your stock trading to a higher level, then read about this trading pattern.
Regards,
Dave
About The Author
Dave Wooding is NOT a registered investment advisor, nor does he suggest you trade with money you can't afford to lose. Instead, he offers practical swing trading pattern information at http://www.trading-pattern.com that comes from years of trading experience.
Do You Know What is the Single MOST Critical Mistake in Trading the Stock Market…?
Well maybe that's overstating it a little, but it's certainly one of the most important.
It is…(drum roll please)… “the need to be right”!
Now that probably wasn't what you were expecting. You might have thought it was going to be something like not picking the trend or putting too much money on a single trade or one of a dozen other things.
But I can assure you, from bitter experience, that this one attitude causes more problems than most other things you might do as a trader. And it's worse for men! Something to do with ego or testosterone…
You see our whole society is based on the importance of being right. The need to be right.
Your parents rewarded you when you are right and told you off when you were “wrong”. They probably still do this now that you are grown up!
>From your earliest days at school you are taught that being right is the most important thing. Isn't that what tests teach you? And this is reinforced through the rest of your life. Your boss probably reminds you of this just about every day!
But some of the best things occur when we aren't right. Like the time you take a wrong turn. Either in your travels or in your life. And you end up at this amazing place or with this amazing person that you never would have, had you done the “right” thing.
Plus there's not a lot of point beating yourself up when you aren't “right”. Because, as we all know, it's going to happen pretty regularly!
Coming from Australia, I don't know a lot about baseball. But I do understand that batters get paid a lot of money to miss hit the ball an awful lot! Think about that. Top baseballers step up to the plate every day knowing that they are more than likely not going to get it “right”. Yet they are confident and successful because they know that over a season they are going to get it right often enough.
Don't Beat Yourself Up or the Market Will join In!
I went to a speed-reading course many years ago. I didn't learn how to read faster (!) but I did learn an attitude that has stuck with me ever since. It is - “Focus. No attachment to the outcome.”
This guy was telling us about how he taught elite sportsmen to achieve their best (hope he was better at that than teaching people how to read fast!). He explained that the trick was to get them to keep taking the shot (or making the jump or whatever) without getting upset with themselves if they got it wrong.
The key was for them to focus on what they had to do in that moment, not on the outcome.
Maybe I have lost you? But the point I'm trying to make is that you need to go into each of your trades with your focus - not on being right - but on following your trading system.
And then the key is to not beat yourself up if you “get it wrong”. Because if you have followed your system and you know the system works over time, you have done the “right” thing.
Once you have confidence in your trading method your only focus is on following the signals.
“Focus. No attachment to the outcome.”
By the way, try this approach in other areas of your life. It really works! My golf was much better once I stopped getting angry at myself for every lousy shot.
Deadly Attitude in the Market
In the stock market you can't afford to hold onto the need to be “right”!
When trading, you cannot be right 100% of the time. In fact, you can be right only 50% of the time and still make lots of money. But this means you have to be wrong an awful lot!
The market will do what the market will do - no matter what your opinion might be. If you are holding a stock and you expect it to go up in price but it starts to go down, what happens?
If you are like me, a little voice inside says something like “…but this wasn't meant to happen!…it can't do this to me!… I know I'm right - it's just a temporary set back; it will come right, I'll just wait it out…
This “voice of reason” is your ego. You can't bear to be wrong, so you justify your decision to yourself. You must be right! You tell yourself that you know what's going to happen…the market's just confused…it's just got it wrong! (totally illogical reasoning - the market can never be “wrong” - but it makes sense at the time!).
This deep-seated, primordial need that we have to be right can destroy you in the stock market. It will make you put too much money on one trade. And it will make you hold onto stocks that you should have sold days or even weeks ago.
It will mean you will miss opportunities you should have taken because your view was the opposite of what actually happens. And you can miss getting extra profits from a trade because you were convinced that “…it couldn't possibly go any higher…”
By being aware of this “need” you can overcome it - over time! You need to get to the point where you “want what the market wants”. Not what you want.
Just remember.
“Focus. No attachment to the outcome.”
The above comments are offered for educational purposes only. We are not providing you with financial advice. We are simply sharing with you what has and hasn't worked for us personally. If you wish to trade or invest in the stock market you should obtain advice from a registered licensed advisor.
About The Author
David Chandler
http://www.stockmarketgenie.com
For your FREE Stock Market Trading Mini Course:
"What The Wall Street Hot Shots Won't Tell You!" go to: http://www.stockmarketgenie.com
What Is Stock Trading and How Does It Work?
First a stock is a share in the ownership of a company. Stock represents a claim on the company's assets and earnings. As you acquire more stock, your ownership stake in the company becomes greater. Whether you say shares, equity, or stock, it all means the same thing.
Stock trading is done at an exchange, which are places where buyers and sellers meet and decide on a price. Some exchanges are physical locations where transactions are carried out on a trading floor. The other type of exchange is a virtual kind, composed of a network of computers where stock trading is done electronically.
A stock market is nothing more than a super-sophisticated farmers market linking buyers and sellers. You can use a broker for stock trading who act as a "market maker" for various stocks. They may match up buyers and sellers directly but also maintain an inventory of stocks to sell to other stock trading parties.
If you are new to investing online, don't put your entire life savings into an online account. Start with a smaller sum, which will be easier to handle and keep track of. Once you feel confident, you can then decide to add more money to your investing online account.
Once online, many investors tend to concentrate on stocks, specifically large-cap domestic stocks. While these stocks should make up part of your portfolio, they shouldn't be ALL of it! Take into account your time horizon and risk tolerance to develop a well-balanced portfolio of stocks, bonds, and cash.
If you're new to investing online and are looking to open a brokerage account, there are some important facts you should know before choosing a broker. Each one has strengths and weaknesses, but not everyone sees a broker in the same way. For example, if you're comfortable finding your own research for investing online, then the deep discount brokers will work well for you.
Ask yourself…
What services are offered? Do they have research available? What is the cost to you for investing online? What are the real commission costs to do a trade, including any handling fees? How are confirmations sent to you -- by e-mail, by snail mail, by phone? Can you enter orders by phone, by e-mail, directly on-line? Does it cost extra to call and talk to a broker for help with your account?
Spreading risk is critical to long term success in stock trading. If you have invested your entire savings into one company and that company’s stock falls by 50%, you have lost half your savings in one go. If you have spread your risk by investing in 4 companies, and one of the companies stock falls by 20%, you only lose in one area. Spreading risk assures you that if a stock goes down you have others to balance your situation.
About The Author
Matt Clarkson is a specialist in both traditional and online business that has years of experience in borrowing money and investing for capital growth.
The Free Information Online website is designed to help people find unbiased advice and tips with out the worry of any high pressure selling.
For more free and unbiased advice go to… http://www.freeinformationonline.com
At Last .. A Trading Veteran Reveals The Truth About Technical Analysis of Stocks vs. Fundamental Analysis
Nothing we do in society prepares us to function effectively in the commodity markets and an environment with no real boundaries. But, most of us are brought up to function well in society, so we`ve acquired strategies for fulfilling our needs and desires that are geared toward social interaction and acceptance. We don`t just take what we want, we take other people into consideration, too. Not only have we learned to depend on each other to fulfill our needs and desires, but in the process we`ve acquired many socially based techniques for assuring that other people behave in a manner that is consistent with what we want.
The commodity markets may seem like a social endeavour because there are so many people involved, but they`re not. While we may have learned to depend on each other to fulfill basic needs, the market environment is different: it`s every person for themselves.
Not only can you not depend on the market to do anything for you, but it`s extremely difficult to manipulate or control anything that the market does. If you`ve become effective in your personal lives at fulfilling your needs and desires by learning how to control your environment, but are existing as a trader in an environment that does not know, care, or respond to anything that is important to you, what do you do? You take control.
One of the principal reasons so many successful people have failed at trading, is that part of their success, outside the market, is due to their ability to control their social environment. To some degree, everyone has developed techniques to make their external environment meet their needs and desires. The problem is that none of those techniques work with the commodity markets. The commodity markets don`t respond to control and manipulation, unless you`re a very large trader.
However, you can control the way you deal with market information and your own behaviour. Instead of controlling your surroundings so that they fit your idea of the way things should be, you can learn to control yourself. Then you can view information objectively, and choose to behave in a manner that is in your own best interests. You do this by creating rules to trade by, and following them.
Nearly everyone agrees that you need to have rules to be successful in trading, but most traders have no intention of following any. Most people who are interested in trading resist the idea of creating a set of rules. The resistance may be subtle, but it`s still there.
Often this is a response to how we acquired our first set of societal rules. Our parents, relatives, teachers, or friends gave most of the guidelines we live by to us when we were children. These guidelines were taught to us, we did not create them, an important distinction. During this time, many of our natural impulses to move, express, and learn about the nature of our existence through our own direct experiences, were stifled. Some of these impulses were never reconciled, and can still exist inside of us as frustration, or disappointment. The accumulation of these types of feelings can cause a person to resist anything that keeps them from doing whatever they want, whenever they want to.
The very reason most people are attracted to trading, the unlimited freedom of choice and decision making inherent in trading, is the same reason they feel a natural resistance to rules and boundaries. The need for rules may make perfect sense, but it`s difficult to generate any enthusiasm for these rules when you`ve been trying to break free of them most of your life. It usually takes a great deal of effort to break down a traders resistance to establishing and abiding by a trading regime that is organized, consistent, and reflects prudent money management guidelines. But, once they do, the possibilities for attaining consistent trading success are limitless.
About The Author
David Jenyns is recognized as the leading expert when it comes to designing profitable forex trading systems.
Discover the "secret formula" of trading that anyone can use to consistently generate BIG profits from the market by downloading your FREE copy of David's new Ultimate Forex Trading Systems course.
Click Here To Download ==> Forex Trading Systems http://www.ultimate-trading-systems.com/forex.html
Winning at Stock Trading
The world of trading and investment can be as frustrating as it can be rewarding! You need to be prepared...
Firstly, decide if you are a trader or an investor.
An investor is someone who enters the stock market inadvertently - usually via their superannuation policies. A trader is someone who makes a decision to buy and sell shares via the stock market. This can be done online or by using the services of a stock broker.
If you decide to become a trader - to win - you must have a survival strategy...
You need to study the market yourself - not just rely on 'reading the news', or listening to others advice and tips.
Take advantage of technology - computers, software, electronic data - all at your finger tips. Seek out charting software and appropriate internet sites - they are plentiful.
Ensure that you 'manage' your money and keep some in reserve.
Have the ability to quickly identify failures as well as successes.
Stock Market trading appeals to those who are a little adventurous - rather than just placing their capital into bricks and mortar.
But - be mindful that portfolio values are less stable than real estate as they are continually moving up and down.
However - investing in the Stock Market means that you are putting your money to work - be aware, and enjoy the gains!
About The Author
Gay Redmile is the webmaster of several finance and investment sites. Having been a trader for most of her adult life she understand the importance of research and fully understanding the market. For further information visit her site at http://www.thestocktradingsite.com.
Professional Stock Investment Advice - Most Common Trading Mistakes
The best Stock Market advice you will ever read is to learn from mistakes when someone else has made them. So, this stock market advice list I made a list of some of the most common trading mistakes that are made. Even I’ve made some of these. If you have already made some of the mistakes, you can rest assured that you aren’t alone in making them. If you haven’t made them, then here’s a way to get around having to learn by making the mistakes yourself, by reading my stock market advice list.
The Stock Market advice tip #1, and worst mistake that people make is that they believe trading is the easy answer, a way to get rich quickly. People will often expect to become wizards in the market overnight, but they fail to realize that trading is like any profession; you must learn how to do it first.
For example, would you attend a weekend doctor’s seminar and expect to conduct heart surgery on Monday? Of course not! I am shocked at what people expect when they go to a weekend trading seminar. They think they will create wealth without having to work, invest or think, and it just doesn’t happen that way.
After treating trading like a get rich quick scheme, my next stock market advice tip #2 and most common mistake, is to approach the market without a plan. Without a trading plan, traders approach the market in an inconsistent manner. One day they trade stocks and the next they trade the foreign exchange. Or, they may use one set of indicators one day, and the next day they will throw these indicators out the window and take on a completely new set. Without a consistent approach, the only thing governing their trading decisions is really emotions, and that will doom them to failure.
If a new trader has managed to skip these last two mistakes, they often fall down when they try to go it alone. This is my Stock Market advice #3, all traders should find themselves a coach, or a mentor. Someone who can help them spot the errors in their system that they might not have noticed. An outside point of view can help you avoid other costly mistakes, and greatly increase your profits.
These are some common and quite basic mistakes. The next errors I’ll mention are ones that are just as prevalent in the trading industry, but they often occur once traders have been around for a while. I have some personal experience with these mistakes. Let’s call this stock market advice list, the three most expensive mistakes I’ve made.
My stock market advice mistake tip #4, or the first most expensive mistake, I made was to search for the “Holy Grail” of trading. This was an incredible waste of both time and money. During the first three years of my trading career, I spent over $25,677 on a library full of books, videos and seminars as well as spending thousands of hours in search of the perfect trading methods. Honestly, 95% of what I bought was pure junk… I should have listened to my mentor earlier and realized the “Holy Grail” of trading is simply excellent money management!
My stock market advice mistake tip #5 or the second most expensive mistake I made was not having a predefined exit point. Early in my trading career, I remember trading a stock I thought had a high percentage chance of rising. I was too confident. I fully leveraged the position. Unfortunately, when things did not go as planned, I did not know when to exit, and was paralysed. I kept rationalizing why I should hold onto that stock. As the stock continued to fall, I made more and more excuses. At the very end, I remember thinking, “I can’t take it anymore!”
I sold out. That, of course, was the point the stock turned.
I learned two very valuable lessons that day. First, always have your exit points predefined. Second, big losses once started out as small losses, and it is much easier to take a small loss than a big one.
My Stock Market advice mistake tip #6 or the last most expensive mistake, I made is not one that took money out of my pocket; instead it was a mistake that made me leave money on the table. In fact, this reoccurring mistake cost me big.
Early on, I remember selling positions as soon as they showed a profit. I would not let my profits run, as I was too afraid to give the money back to the market. I figured the profit as mine. The result was that I ended up selling the stocks that were making me money.
It wasn’t until my mentor explained to me that when you are trading, and showing a profit, that is the point where you should be adding to the position, not closing it out, that I began to understand what I was doing. Once I started following his advice, my trading profits soared.
Trading is not an easy profession, but it give you great rewards. Avoid these common errors on my Stock Market advice list, create a simple, well-designed trading system, and learn your market. If you take the time to study the market, and learn from other’s mistakes as well as your own, you will become a successful trader.
About The Author
David Jenyns is recognized as the leading expert when it comes to designing profitable trading systems.
Discover the "secret formula" of trading that anyone can use to consistently generate BIG profits from the market by downloading your FREE copy of David's new Ultimate Trading Systems course.
Click Here To Download ==> Trading Systems http://www.ultimate-trading-systems.com
The Hidden Secrets of Successful Stock Market Trading Rules - Fine-tuning Your Stop Losses
There are two cardinal successful stock market trading rules that I am sure you are quite familiar with by now.
The first of the two most common stock market trading rules are to cut your losses short. The second of the two most common successful stock market trading rules are to let your profits run. However, you can take it one-step further by fine-tuning your trailing stop losses, and becoming more risk seeking once your stock is in profit. Increasing your risks, at the right time, can allow you to get all the profit you possibly can out of your system. You may wish to test the effects of these successful stock market trading rules by having a wider trailing stop loss than your initial stop, and see how this is reflected in your system.
For example, you could set your initial stop loss at two ATR but set your trailing stop loss as three ATR. This allows the stock, once it`s in profit, a little bit more room to move. You`re still limiting your risk at the beginning of the trade by keeping a tight stop loss; however you`re going to become risk seeking in a profitable situation. That is to say you`ll be willing to risk more once you`re already in profit.
Personally, I think this is one of the many successful stock market trading rules you can use to take it a step further than most people are willing to go. With this strategy, I also mix and match my stop loss methods. For example, in one of my stock market trading rules, I set my initial stop loss at 2.5 ATR, but my trailing stop loss is calculated using a completely different method. I use what`s known as the lowest low stop. The way this stop loss works is you find the lowest low in the last X number of periods, and base your trailing stop loss on it.
Now, for that trend following system, I actually find the lowest low in the last 40 days. I then position my stop one cent below this low. It`s almost as though it`s consulting the price action itself by identifying where the lowest low is, and this can be highly effective. Many times my stop has been set one cent below a support line.
The way this trailing stop loss works is that on each day a new trading day is added to the chart, and one of the old days drop off. I then find the lowest low in the last 40 days, and reposition my stop at that point, if it needs to be repositioned. This stop has been extremely valuable for me, and it may be a stop loss that you may want to consider testing.
But, before you go looking for that perfect trailing stop loss, realize that in it`s own way, it`s very similar to the initial stop. There is no perfect stop that will guarantee to get you out of the stock at the perfect time, and save you the most profit.
Sometimes it will work for you. Other times it won`t. The real key and secret of having a stop loss and an initial stop do their best for you is not how you calculate it, it`s just having them in place.
You need to find an initial and a trailing stop loss that you`re comfortable with. You also need to understand how they work so that the actions they direct you to take makes sense to you. How do you find a stop that you`re comfortable with?
Test them. Pick out a whole lot of charts of stocks that you`ve been looking to trade, and marking where you would receive an entry signal, set various initial stops and trailing stop losses. Progress through the trade, revaluing your trailing stop loss and see which one works the best.
Often successful stock market trading rules are designed with simple concepts that works best at this point. When you base your system on understanding, rather than optimization, you are more likely to stick with it. If you can come up with a good, straightforward set of your own stock market trading rules, you will be able to apply it across a number of markets on most trading instruments. Really, when designing any system around a set of stock market trading rules, all components should apply to this same principle. You want to keep things as simple as possible, that way it`s robust and can be applied to any market. As long as you follow this underlying principle, you`ll be on the right track.
About The Author
David Jenyns is recognized as the leading expert when it comes to designing profitable trading systems.
His most recent course Trading Secrets Revealed is a step- by-step trading roadmap to having excellent money management. Learn how *you* can become one of his students. Click Here ==> http://www.trading-secrets-revealed.com
Receive David’s free trading tips by signing up for his eZine at: ==> http://www.trading-secrets-revealed.com/pop.html
Professional Stock Market Advice Reveals Most Common Trading
The best Stock Market advice you will ever read is to learn from mistakes when someone else has made them. So, this stock market advice list I made a list of some of the most common trading mistakes that are made. Even I`ve made some of these. If you have already made some of the mistakes, you can rest assured that you aren`t alone in making them. If you haven`t made them, then here`s a way to get around having to learn by making the mistakes yourself, by reading my stock market advice list.
The Stock Market advice tip #1, and worst mistake that people make is that they believe trading is the easy answer, a way to get rich quickly. People will often expect to become wizards in the market overnight, but they fail to realize that trading is like any profession; you must learn how to do it first.
For example, would you attend a weekend doctor`s seminar and expect to conduct heart surgery on Monday? Of course not! I am shocked at what people expect when they go to a weekend trading seminar. They think they will create wealth without having to work, invest or think, and it just doesn`t happen that way.
After treating trading like a get rich quick scheme, my next stock market advice tip #2 and most common mistake, is to approach the market without a plan. Without a trading plan, traders approach the market in an inconsistent manner. One day they trade stocks and the next they trade the foreign exchange. Or, they may use one set of indicators one day, and the next day they will throw these indicators out the window and take on a completely new set. Without a consistent approach, the only thing governing their trading decisions is really emotions, and that will doom them to failure.
If a new trader has managed to skip these last two mistakes, they often fall down when they try to go it alone. This is my Stock Market advice #3, all traders should find themselves a coach, or a mentor. Someone who can help them spot the errors in their system that they might not have noticed. An outside point of view can help you avoid other costly mistakes, and greatly increase your profits.
These are some common and quite basic mistakes. The next errors I`ll mention are ones that are just as prevalent in the trading industry, but they often occur once traders have been around for a while. I have some personal experience with these mistakes. Let`s call this stock market advice list, the three most expensive mistakes I`ve made.
My stock market advice mistake tip #4, or the first most expensive mistake, I made was to search for the “Holy Grail” of trading. This was an incredible waste of both time and money. During the first three years of my trading career, I spent over $25,677 on a library full of books, videos and seminars as well as spending thousands of hours in search of the perfect trading methods. Honestly, 95% of what I bought was pure junk… I should have listened to my mentor earlier and realized the “Holy Grail” of trading is simply excellent money management!
My stock market advice mistake tip #5 or the second most expensive mistake I made was not having a predefined exit point. Early in my trading career, I remember trading a stock I thought had a high percentage chance of rising. I was too confident. I fully leveraged the position. Unfortunately, when things did not go as planned, I did not know when to exit, and was paralysed. I kept rationalizing why I should hold onto that stock. As the stock continued to fall, I made more and more excuses. At the very end, I remember thinking, “I can`t take it anymore!”
I sold out. That, of course, was the point the stock turned.
I learned two very valuable lessons that day. First, always have your exit points predefined. Second, big losses once started out as small losses, and it is much easier to take a small loss than a big one.
My Stock Market advice mistake tip #6 or the last most expensive mistake, I made is not one that took money out of my pocket; instead it was a mistake that made me leave money on the table. In fact, this reoccurring mistake cost me big.
Early on, I remember selling positions as soon as they showed a profit. I would not let my profits run, as I was too afraid to give the money back to the market. I figured the profit as mine. The result was that I ended up selling the stocks that were making me money.
It wasn`t until my mentor explained to me that when you are trading, and showing a profit, that is the point where you should be adding to the position, not closing it out, that I began to understand what I was doing. Once I started following his advice, my trading profits soared.
Trading is not an easy profession, but it give you great rewards. Avoid these common errors on my Stock Market advice list, create a simple, well-designed trading system, and learn your market. If you take the time to study the market, and learn from other`s mistakes as well as your own, you will become a successful trader.
About The Author
David Jenyns is recognized as the leading expert when it comes to designing profitable stock trading systems.
Discover the "secret formula" of trading that anyone can use to consistently generate BIG profits from the market by downloading your FREE copy of David's new Ultimate Stock Trading Systems course.
Click Here To Download ==> Stock Trading Systems http://www.ultimate-trading-systems.com/stocks.htm
Risk and Stock Trading Fees: The Two Barriers To Overcome If You Want A Successful Trading Career.
You know the old joke:
"How do you make a million in the stock market? Start with two million?"
There is no way around it, risk and stock market fees are a part of trading that you can`t avoid. But, you can manage your risk. You can also manage the brokerage stock trading fees that eat away at your trading float. All it takes is some planning and making good choices.
If you think you`re ready to start trading, look carefully at where you`re getting your money from. Maybe you`ve been considering trading for a while and built up some savings. That`s good planning. Or maybe you`re considering borrowing money. This is generally a bad idea. Maxing out your credit cards is a quick and easy way to get cash, but the effects can be devastating.
It`s hard enough to worry about making trading profits along with the stock market fees you have to pay. But, worrying about the debt servicing on your credit cards builds too much stress. You will be too concerned with making payments to be concerned about good trading. Don Miller talks about this in Trading Markets World Meet the Traders when he tells new traders to worry about trading well, not making money. One of the best ways to learn trading is to begin on a part-time basis. This allows you to hone your skills while you still have an income stream. As a trader, you need to realize the risk you`re taking by simply putting your money into the market.
With good money management, you`ll be able to limit your risk. But, there is a kind of risk that can`t be minimized, and that`s "market risk”. This is the risk that the market might not be there tomorrow. Just by putting money in the market you are putting it at risk, so make sure you only trade with money you are willing to lose. This isn`t to say that you are going to lose all your capital - it`s just to say that you need to be able to focus on trading well, not trading to make money. See, you can only do this if you work with money you can afford to lose.
Once you`ve got your capital together, you can consider the next barrier to trading, stock trading fees. Although there is no perfect amount of capital to start trading with it`s no secret that the bigger the trading float you begin with, the easier it is to trade and the less percentage of stock trading fees you will have to pay. This is because of the single biggest expense in trading - brokerage stock trading fees.
Every broker has many different stock trading fees, but many charge flat stock trading fees per trade. These flat stock trading fees are easier on traders with larger fund sizes. For example, to obtain a better understanding on how stock trading fees work, let`s consider two traders. One is starting with an opening position of $1,000 and the second is starting with an opening position of $10,000. All traders are charged flat stock market fees of $100. So, our first trader, with a position of $1,000 has to make back ten percent of his float on each trade before he breaks even. But, our second trader only has to realize a one percent gain to reach his break-even point. This doesn`t mean that you can`t start trading with a smaller float, but if you do you are at a bit of a disadvantage.
However, you can use your trading float size to help determine your trading system. If you have a very small trading float, it`s recommended that you look at a long-term system. With a long-term system, you will be incurring far fewer stock trading fees. A short-term system, where you are receiving lots of buy and sell signals will chew up your trading float very quickly with the cost of the different stock trading fees.
This is why short-term systems, such as day-trading, are best suited to larger trading sizes - it is easier on the stock trading fees. I actually recommend that when you begin trading that you look at a longer-term system. You can manage a long-term system while still working full-time. Once you are successful with the long-term time frame, you might look at moving to a shorter-term system and focussing more time on your trading.
You can mange both risk and stock trading fees with planning, and by making good choices. Your level of capital will be set by what you can afford, and what you are comfortable risking. How that capital grows will be set by the time-frame of the systems your planning to trade, and the instruments you trade with. from winter's barrenness, they desert us too quickly!
About The Author
David Jenyns
Discover BIG profits from the market by downloading your FREE copy of David's new Ultimate Stock Trading Systems course. http://www.ultimate-trading-systems.com/stocks.htm.
Trading Expert Discovers Ways To Beat Stock Market Odds With Money Management
The first point to mastering money management is that you have to understand when you’re trading on the stock market is that you are playing the odds – but unlike many forms of gambling, you can make money. The key to making this money is to respect the risk that is part of the market, and manage it. Money management is a set of rules and guidelines that enables you to turn a profit. By being triumphant with your money management skills, you can keep your risk at a level at which you’re comfortable with, keep from making poor trading decisions, and ensure you don’t loose your trading capital. This is why it is so important to follow money management rules.
Why do these money management rules work? You know, it’s funny. I once thought I had a fool-proof way of making money on roulette. You see, I’d bet on red and black. I’d sit at the table. After the ball had landed on black or red five times in a row, I would start betting on the opposite color.
Let’s say I had five reds in a row. I would then start to bet on black. If I was wrong, I would go ahead and double down, so that if I started my bet at one dollar, the next time I would be able to bet two dollars, then four dollars, then eight, then 16. With this system, eventually I’d win and I’d come out one dollar ahead.
So, here I am at 23 and I’ve set up my computer program to test my theory. I made a ridiculous amount of money in the program. I really thought I had the Holy Grail here. But, if it’s so easy for an 23 year old to figure it out, why aren’t all the casinos out of business and why aren’t we’re all millionaires? Unfortunately, roulette doesn’t work this way.
You see, if we’re flipping a coin, heads has a 50 percent chance of turning up on each flip of the coin and so does tails. But, each flip is independent of the last. The last coin toss has nothing to do with the one before it, each flip is a random event. This means it’s possible to get a hundred heads in a row if you do it long enough, and believe it or not, that’s what happened to me. When I first played roulette in a casino, I saw a string of 23 blacks in a row. I went home defeated.
Trading is the same. A percentage of your trades will not work out. A certain percentage will not go in your favoured direction, and the next trade has nothing to do with the last one. Even if you have the world’s most accurate method, over time you will go broke if you don’t practice good money management.
Money management rules include defining your trading float, setting your maximum loss, calculating your stop loss, and most importantly learning how to choose your position size. Once these rules are in place, it’s important to stay with them. They will keep you from making snap decisions, and playing the odds longer than you should. This is why money management rules are a critical part of any effective trading system.
About The Author
David Jenyns
Discover BIG profits from the market by downloading your FREE copy of David's new Ultimate Stock Trading Systems course. http://www.ultimate-trading-systems.com/stocks.htm.
Stock Market Investing - Top 10 List
The 10 dumbest things investors say to advisors.
1} When my investment gets back up to what I paid, get me out.
This is surely a big mistake. That stock has absolutely no idea that you're waiting for it to go up so that you can sell.
2}The stock is selling at $3.00 a share. How much can I lose?
$3 multiplied by the number of shares.
Oh yeah, don’t forget to add in commission.
3} I want to buy shares of XYZ Company. Three years ago, they were selling at $60; now the stock selling at $5.
You can actually make a lot of money investing in good companies when their stocks are out of favor (go to dictionary – look up: “Warren Buffett”). You cannot make money buying junk just because it’s cheap. (Same dictionary – lookup “cheap junk”). If this creates confusion – please see item 2.
4} The stock is up 10 % this past month.
It’s too high, I can’t buy it now. Have you ever heard of a long-term uptrend? Just because you missed the bottom doesn’t mean you missed the boat. I’ve heard that the shortest time measurable by man is the time between when it’s too soon to buy a stock and when it’s too late.
5} I paid $60 for that stock 3 years ago. Today it’s selling at $4.
I can’t afford to sell. I don’t want to lose so much. I’m just guessing here, but did you say the same thing at $30? $20?
6} I bought the stock at $10 and now it’s $35. I have too much profit.
I can’t sell here. I don’t want to pay so much in taxes. My wish for everybody is that next year you have more than twice the profits and that you have to pay twice as much in taxes.
7} I never sell an investment at a loss. I’m a long-term investor. Eventually, they always come back.
Ever heard of ENRON? Pan American Airlines? Polaroid? Penn Central Railroad? If I were to be your advisor for the next 20 years, I GUARANTEE you that you will have losses. Losses are a very important part of a successful investment program. Since the perfect human hasn’t been created yet, the perfect advisor hasn’t been created yet. Expect to have some losses and plan accordingly.
8} Sell my utilities; buy DOTCOMS.
Stock brokers heard this, a lot, just a few short years ago. Every up cycle investment advisors are instructed to sell safe, but dull investments and buy something with sex appeal that’s moving. The worst possible thing has happened – one of the clients' friends or acquaintances is making more money than they are. It’s the CINDERELLA story. They’ll look great for a short time. Then, the clock strikes “OVER” and their limo turns back into a pumpkin.
9} I know as much about the stock market as any broker.
What would you think of me if I came to your place of business and told you that I know as much about your business as you do? Can you outperform a professional in the short run? Absolutely. You would never say this to your doctor, lawyer or accountant. You wouldn’t even say that to your butcher or your barber. Stock market investing is the only profession where the amateurs think they know as much as the professionals because they might have picked a winner at one time.
10} That total stranger made the investment sound like such a great idea.
Of course he did. That’s his job. Do you remember your mother telling you “Don’t talk to strangers.”? When was the last time you ran with scissors? If you develop the practice of giving your money to strangers, sooner or later, you will come to harm. Or, as Al Capone used to say “Anybody found sleeping in the trunk of a car, deserves to be shot.”
1} When my investment gets back up to what I paid, get me out.
This is surely a big mistake. That stock has absolutely no idea that you're waiting for it to go up so that you can sell.
2}The stock is selling at $3.00 a share. How much can I lose?
$3 multiplied by the number of shares.
Oh yeah, don’t forget to add in commission.
3} I want to buy shares of XYZ Company. Three years ago, they were selling at $60; now the stock selling at $5.
You can actually make a lot of money investing in good companies when their stocks are out of favor (go to dictionary – look up: “Warren Buffett”). You cannot make money buying junk just because it’s cheap. (Same dictionary – lookup “cheap junk”). If this creates confusion – please see item 2.
4} The stock is up 10 % this past month.
It’s too high, I can’t buy it now. Have you ever heard of a long-term uptrend? Just because you missed the bottom doesn’t mean you missed the boat. I’ve heard that the shortest time measurable by man is the time between when it’s too soon to buy a stock and when it’s too late.
5} I paid $60 for that stock 3 years ago. Today it’s selling at $4.
I can’t afford to sell. I don’t want to lose so much. I’m just guessing here, but did you say the same thing at $30? $20?
6} I bought the stock at $10 and now it’s $35. I have too much profit.
I can’t sell here. I don’t want to pay so much in taxes. My wish for everybody is that next year you have more than twice the profits and that you have to pay twice as much in taxes.
7} I never sell an investment at a loss. I’m a long-term investor. Eventually, they always come back.
Ever heard of ENRON? Pan American Airlines? Polaroid? Penn Central Railroad? If I were to be your advisor for the next 20 years, I GUARANTEE you that you will have losses. Losses are a very important part of a successful investment program. Since the perfect human hasn’t been created yet, the perfect advisor hasn’t been created yet. Expect to have some losses and plan accordingly.
8} Sell my utilities; buy DOTCOMS.
Stock brokers heard this, a lot, just a few short years ago. Every up cycle investment advisors are instructed to sell safe, but dull investments and buy something with sex appeal that’s moving. The worst possible thing has happened – one of the clients' friends or acquaintances is making more money than they are. It’s the CINDERELLA story. They’ll look great for a short time. Then, the clock strikes “OVER” and their limo turns back into a pumpkin.
9} I know as much about the stock market as any broker.
What would you think of me if I came to your place of business and told you that I know as much about your business as you do? Can you outperform a professional in the short run? Absolutely. You would never say this to your doctor, lawyer or accountant. You wouldn’t even say that to your butcher or your barber. Stock market investing is the only profession where the amateurs think they know as much as the professionals because they might have picked a winner at one time.
10} That total stranger made the investment sound like such a great idea.
Of course he did. That’s his job. Do you remember your mother telling you “Don’t talk to strangers.”? When was the last time you ran with scissors? If you develop the practice of giving your money to strangers, sooner or later, you will come to harm. Or, as Al Capone used to say “Anybody found sleeping in the trunk of a car, deserves to be shot.”
About The Author
Gary Wollin is a Warren Buffet style investment advisor with 45+ years of Wall Street experience. He has been regularly featured in The Wall Street Journal and New York Times. He writes and speaks on sales, customer loyalty, and the stock market. http://www.garywollin.comStock Market Wisdom from The Tortoise and the Hare
Once upon a time, there was a young hare, a hotshot rabbit investor who would always brag to anyone that would listen and that he was the smartest, fastest, best performing investor in the world. He would constantly tease the old tortoise about his slow, solid investment style.
Then, one day, the annoyed tortoise answered back: "There is no denying that you are very aggressive in your investment strategy. You take very high risks and get high returns. But even you can be beaten."
The young hare squealed with laughter. "Beaten? By whom? Surely not by you. I bet there's nobody in the world that can win against me, because I'm so good. If you think that you can beat me, why don't you try?"
Provoked by such bragging, the tortoise accepted the challenge. Each of them put an equal amount of money into a new account and the race was on. The hare yawned sleepily as the meek tortoise trudged slowly off.
As might be expected, the tortoise invested in high quality blue chips, companies with household names.
The hare, as anticipated, invested his money in dotcom stocks and options.
You know the story. The aggressive hare jumped out to a big early lead. In a rising market, the highest risk stocks perform the best. This is called momentum investing. Money flows into the investments that are performing the best.
The hare, having jumped out to such a large early lead, stopped paying attention to the market environment. Basically, he fell asleep. He thought to himself, "I'll have 40 winks and still remain way ahead of that stupid old turtle."
The hare awoke from his sleep and gazed around looking for the tortoise, who was nowhere in sight. Unfortunately, while he was sleeping, dreaming about what he would do with his winnings, the market turned against him.
His very high-risk portfolio had taken a terrible beating and was now practically worthless.
The tortoise, a Warren Buffett style investor, had passed the sleeping rabbit long ago. He had been plodding forward, steadily, since the beginning of the contest. The Tortoise never for a moment stopped, but went on with a slow but steady pace straight to the end of the course.
The hare realized that the tortoise was way ahead of him, and away he dashed. He leaped and bounded while gasping for breath, but it was too late. The tortoise had beaten him.
There are two very important lessons to be learned here.
First – slow and steady wins the race.
Second – never confuse your own intelligence with a bull market.
About The Author
Gary Wollin is a Warren Buffet style investment advisor with 45+ years of Wall Street experience. He has been regularly featured in The Wall Street Journal and New York Times. He writes and speaks on sales, customer loyalty, and the stock market. http://www.garywollin.comStock Market Wisdom Gained from Humpty Dumpty
Humpty Dumpty sat on a wall;
Humpty Dumpty had a great fall.
All the King's horses
And all the King's men
Couldn't put Humpty together again!
You know this tragic story.
During the 45+ years that I have been a financial advisor, I have seen this over and over and over again.
A new client comes into my office and asks me to review their old portfolio. Very often it is littered with holdings that make no sense. It might have been possible that each of those holdings was purchased for a specific reason at the time, but when put together it looks like a patchwork piece of cloth, a crazy quilt.
Investment professionals refer to this as a Humpty Dumpty portfolio. This is a portfolio that is broken beyond repair. Truly, all the king's horses and all the king's man couldn't put this portfolio together again.
What's the lesson here?
How can you avoid being burdened with a Humpty Dumpty portfolio?
And, if this does happen to you, what's the best thing to do?
The most important lesson to be learned here it is that while it is important to trust your financial advisor, it is also very important for you to pay attention to your own investments. After all, it is your money.
It is important for you to understand that your portfolio should have some coherence. It should be something that matches your long-term financial goals. Your portfolio should not be populated by the latest "stock du jour", recommended by your broker.
The main way to avoid the problem is to find a financial advisor who understands your goals and has the ability and willingness to help you reach them.
Lastly, if this has happened to you, I'm afraid you will have to swallow some bitter medicine. You might have to sell most or all of your holdings, and start over again. There is no sense in compounding a mistake into an even larger mistake.
Conventional wisdom states that your portfolio should be built upon a very strong foundation. This strong foundation should be comprised of high quality stocks and high quality bonds. The best way to visualize the construction of your portfolio is to visualize a pyramid. As we move up along with the slope of the pyramid, you might consider having smaller and smaller pieces of slightly higher risk investments.
Conventional wisdom declares that you should have the proper amount of diversification. Conventional wisdom is never the cutting edge. You may not to double your money overnight with this philosophy but you can be relatively certain that your money will be there in the future when you need it.
Conventional wisdom is generally right. Otherwise it would be called conventional stupidity.
I grew up in Brooklyn, New York. When this specific event happened, I was far away, on a business trip, so I didn't see it, but I know a guy who knows a guy who did see it and he claims that Dumpty was pushed.
But that's another story.
About The Author
Gary Wollin is a Warren Buffet style investment advisor with 45+ years of Wall Street experience. He has been regularly featured in The Wall Street Journal and New York Times. He writes and speaks on sales, customer loyalty, and the stock market. http://www.garywollin.comStock Market Wisdom from Chicken Little
One day, while Chicken Little was walking in the woods, an acorn fell and hit him on his head.
"Goodness gracious me!" said Chicken Little, "The sky is falling, the sky is falling. I must go warn everyone."
We see this all the time. The stock market goes straight up for eight or nine months, and if there are 2 or 3 down days in a row, there is hand-wringing and the moaning all over the place.
Who are these people that panic at the first sign of a downturn or with the slightest bit of profit taking?
The first group are people who get in the near the top and are now worried that their small losses will turn into big losses. Also, people who haven't invested in the stock market are in this same box. For many, many years they were wrong to not have invested, but now that the market has declined very slightly for a few days they would like the point out how smart they are and how dumb everyone else is.
Short–sellers are the next group. Short selling is selling a security that the seller does not own but is committed to repurchasing eventually. It is used to take advantage of an expected decline in the security's price.
The press comes next. You have heard this before: "bad news sells newspapers."
The 24–hour television news stations must make every tiny move in a stock or in the stock market seem like a momentous occasion. Imagine hearing such a stupid statement as "this is the largest stock market decline since last week."
The slimiest are the politicians whose party is out of power. They try to make themselves look good by making the other guys look bad. It does not matter which group you belong to or who is in power or out of power at the moment.
An out of power politician must find the cloud in every silver lining.
So, how can you protect yourself? What should you do to keep out of "the sky is falling" trap?
The most important thing that you can do is to be clear about your long-term financial goals and objectives. Yes, in the very short run, many circumstances can affect the value of your portfolio. In a well-diversified portfolio, these declines will be relatively small and short lived.
Twenty years from now, it will not have mattered who was shot during the past twenty years or who was in power or who went to jail or to war. Simply ask yourself, "how will three dollar a gallon gasoline affect my retirement twenty years from now?"
Don't worry about tales of imminent doom and gloom. Don't listen to, and certainly, don't act upon rumors and scare stories. And, most of all, don't spread these stories yourself.
About The Author
Gary Wollin is a Warren Buffet style investment advisor with 45+ years of Wall Street experience. He has been regularly featured in The Wall Street Journal and New York Times. He writes and speaks on sales, customer loyalty, and the stock market. http://www.garywollin.comFast Facts: Trading Stocks in a Fast Moving Market
The U.S. Securities and Exchange Commission warns investors that buying and selling "hot" stocks that have the tendency to rise and fall quickly can be dangerous if unexpected delays occur. Without even realizing it, investors can find themselves losing money.
The U.S. Securities and Exchange Commission warns investors that buying and selling "hot" stocks that have the tendency to rise and fall quickly can be dangerous if unexpected delays occur. Without even realizing it, investors can find themselves losing money.
Just because you can access your account online, doesn’t necessarily mean that your trades are instantaneous. Limit your losses in these fast-moving high tech markets by:
·knowing what you are buying
·understanding the risks involved in your trade
·know the trading process for fast-moving markets
Guard against some of the most common problems investors encounter in fast-moving markets.
Market Orders vs. Limit Orders
When stocks drop or soar suddenly, being stuck in the process of trading can mean the difference between making a sizable profit, and losing a bundle. Delays can develop in fast-moving markets, slowing down executions and trade confirmations. What you thought you were selling at one price, may be end up selling for quite another. Avoid buying and selling at prices higher or lower than you expected by placing limit order instead of a market order. Limit orders are executed automatically when they reach a set upon price, unlike a market order which is filled at the price that second, not necessarily the price set at purchase time.
For example, when you place an order for a $10 stock, placing a limit order will ensure that you don’t end up paying $35. The same is true for selling. The stock will sell when it hits the target limit, eliminating sudden losses. The risk here is a loss of control to hold certain stock just a little longer in the hopes that it will continue to rise. Once it hits the selling target, it is sold.
Remember, Online Trading Isn’t Instantaneous
Trading online can feature its own dangers. Problems with modems, servers, or delayed broker-dealer hardware can all cause a delay or failure in an immediate stock trade. Know what trading alternatives your firm offers (telephone, fax, etc), in the event a technological problem interrupts your transaction.
Avoid Double Buying/Selling
Too often investors mistakenly think that their order did not go through and place another order. This can cause them to buy stock they did not want, or even sell stock they did not own in the first place. Be sure to check with your broker on what to do if you aren’t sure if your trade has gone through.
Choose the Best Broker
Buying and selling in a fast-paced market takes a broker who’s capable of handling transactions quickly. There are no Securities and Exchange Commission rules that require any trade to be executed in a specific amount of time. Finding a broker that doesn’t delay is up to you, the investor. Take your time and research brokers carefully in order to avoid losing important assets unexpectedly.
About The Author
For the past ten years Bob Freeman has been helping people build more money in their retirements. Now he has taken his successful strategies to a new level by offering teleseminar courses to help people make a better retirement for themselves than they ever thought possible. For more tips and strategies see http://www.retirementwealthforyou.com.7 Stock Market Tips You Can't Live Without
Every day there are a dozen new HOT stock market tips that guarantee your financial success. Every day there are hundreds if not thousands of people that jump on the bandwagon, and every day, each of those people are disappointed.
When it comes to popular stock market tips, there is no golden ticket to striking it rich. So I'm going to show you how to make your own HOT guidelines that will ensure you stay on the right course-the one that leads to success.
Stock Market Tip #1: Play Your Game
Develop a set of rules that you can follow. Whether they include some of the tips in this article or are strategies you've always lived by, STICK WITH THEM. An inconsistent, but more importantly an undisciplined trader will never make a profit. Chasing stock market tips won't make you money. Your rules are your money. Again, there will always be hot stock market tips that ensure success, but if you continue to whole-heartedly practice your own tips, you'll see profits in no time.
Stock Market Tip #2: Control Your Risk
There are many adventurous traders out there…and those are the ones that loose their fortunes. If you always look out to protect your capital base you'll ensure your financial safety. Now one of the most important stock market tips I can give you is to continue to let that capital base grow. That way, even if all of your investments fail, you won't be jeopardizing your previous profits. As a general stock market tip, never risk more than 3% of your portfolio on any one trade.
Stock Market Tip #3: The High Road in Cutting Your Losses
Things happen. People lose money…LOT'S of money. So don't be one of them. Basically this stock market tip means don't be stupid. If one of your investments turns sour don't stick around hoping it will right itself. Have a set target loss percentage where you can cut and run. Again, it's about being disciplined, remember? Set it no higher than 15% of your opt in, and you'll have a save exit with every trade.
Stock Market Tip #4: The Sky's the Limit
In contrast to Stock Market Tip #3, if a stock is rising beyond belief, don't jump out in fear of it suddenly falling back to reality. Instead, ride it out as long as humanly possible. This is how the biggest and most talked about gains are made-this is how FORTUNES are made. This stock market tip will ensure that you give yourself the best chance possible of striking that gold mine. Now if the stock does in fact start to fall, go ahead and opt out. It'll be worth more to you to risk that little loss in the end for that huge gain you'll make.
Stock Market Tip #5: Back to School
You know the saying, “Learn one new thing every day?” Do it. Seriously. Our stock market is ever-changing, diversifying, and adjusting, and YOU need to do your homework. It takes a lot to stay on top of it all. So if you come across something that you're not familiar with just look it up. If you think you know it all…go LOOK for something. One of the easiest ways to accomplish this stock market tip is to know all of the trading vocabulary. That's also the easiest way to ensure you're prepared to take on any obstacle that comes your way.
Stock Market Tip #6: How to Bring Your “A” Game
Stock market trading isn't only about successful financial advancements. Well actually it is, but you're not going to be able to do that every day if you don't have the emotional strength to pull it off. This stuff is supposed to be fun. If you're not at your best psychologically, you're not going to be focused, you'll make poor judgments, and most importantly you won't make money. Just think about the meaning of this stock market tip. If you're enjoying yourself, it's no longer work, so you are free to “work” in a mentality that will, in fact, play to your strengths…and wallet.
Stock Market Tip #7: Staying Above the Curve
You don't have to make a fortune with every trade you make. You don't have to become a millionaire at the end of every trading day. Here's stock market tip #7: You won't. The people that shoot for that glory every day are the ones that are losing fortunes, not making them. What you need to do is play above the curve. Don't be average, but don't be extraordinary. Extraordinary has WAY too many risks to worry about. Fortunes are made gradually. It takes discipline and consistency…something the “average” trader lacks.
When it comes to popular stock market tips, there is no golden ticket to striking it rich. So I'm going to show you how to make your own HOT guidelines that will ensure you stay on the right course-the one that leads to success.
Stock Market Tip #1: Play Your Game
Develop a set of rules that you can follow. Whether they include some of the tips in this article or are strategies you've always lived by, STICK WITH THEM. An inconsistent, but more importantly an undisciplined trader will never make a profit. Chasing stock market tips won't make you money. Your rules are your money. Again, there will always be hot stock market tips that ensure success, but if you continue to whole-heartedly practice your own tips, you'll see profits in no time.
Stock Market Tip #2: Control Your Risk
There are many adventurous traders out there…and those are the ones that loose their fortunes. If you always look out to protect your capital base you'll ensure your financial safety. Now one of the most important stock market tips I can give you is to continue to let that capital base grow. That way, even if all of your investments fail, you won't be jeopardizing your previous profits. As a general stock market tip, never risk more than 3% of your portfolio on any one trade.
Stock Market Tip #3: The High Road in Cutting Your Losses
Things happen. People lose money…LOT'S of money. So don't be one of them. Basically this stock market tip means don't be stupid. If one of your investments turns sour don't stick around hoping it will right itself. Have a set target loss percentage where you can cut and run. Again, it's about being disciplined, remember? Set it no higher than 15% of your opt in, and you'll have a save exit with every trade.
Stock Market Tip #4: The Sky's the Limit
In contrast to Stock Market Tip #3, if a stock is rising beyond belief, don't jump out in fear of it suddenly falling back to reality. Instead, ride it out as long as humanly possible. This is how the biggest and most talked about gains are made-this is how FORTUNES are made. This stock market tip will ensure that you give yourself the best chance possible of striking that gold mine. Now if the stock does in fact start to fall, go ahead and opt out. It'll be worth more to you to risk that little loss in the end for that huge gain you'll make.
Stock Market Tip #5: Back to School
You know the saying, “Learn one new thing every day?” Do it. Seriously. Our stock market is ever-changing, diversifying, and adjusting, and YOU need to do your homework. It takes a lot to stay on top of it all. So if you come across something that you're not familiar with just look it up. If you think you know it all…go LOOK for something. One of the easiest ways to accomplish this stock market tip is to know all of the trading vocabulary. That's also the easiest way to ensure you're prepared to take on any obstacle that comes your way.
Stock Market Tip #6: How to Bring Your “A” Game
Stock market trading isn't only about successful financial advancements. Well actually it is, but you're not going to be able to do that every day if you don't have the emotional strength to pull it off. This stuff is supposed to be fun. If you're not at your best psychologically, you're not going to be focused, you'll make poor judgments, and most importantly you won't make money. Just think about the meaning of this stock market tip. If you're enjoying yourself, it's no longer work, so you are free to “work” in a mentality that will, in fact, play to your strengths…and wallet.
Stock Market Tip #7: Staying Above the Curve
You don't have to make a fortune with every trade you make. You don't have to become a millionaire at the end of every trading day. Here's stock market tip #7: You won't. The people that shoot for that glory every day are the ones that are losing fortunes, not making them. What you need to do is play above the curve. Don't be average, but don't be extraordinary. Extraordinary has WAY too many risks to worry about. Fortunes are made gradually. It takes discipline and consistency…something the “average” trader lacks.
About The Author
Joe Harris provides all the proven stock market investing tools you need to succeed today, including the best tips and strategies. For details visit his site: http://www.myeinevstor.com.The Stock Market Is Not The Place To Gamble!
Dear Fellow Investor.
For several weeks now the stock markets have been in a very good shape right around the globe which must be a very soothing feeling especially for those that are still licking their wounds having to cope with losses.
But there’s a flip side to this positive global atmosphere. And that side is pretty dark especially for newbies. What I mean is that more than ever people are being bombarded with investment recommendations that resemble gambling more than anything else! These stock recommendations have absolutely nothing to do with a serious and thoughtful investment.
On October 6, 2006 I wrote a newsletter article about this topic. You can view this article by clicking on http://www.stockbreakthroughs.com/Newsletters/otc.htm
Not only several renowned newsletters are trying to draw investors into buying stocks that will allegedly double and tripple within days, but also spam emails are infesting the inboxes of many email accounts. I get hundreds of these emails every week that promise profits that are from another galaxy and beyond our imagination.
These newsletters and email spams recommend stocks that most of us have never even heard of.and in many cases we don’t even know how to pronounce the company’s name.
It makes my stomach turn when I read the recommendations of these “carnival barkers” because I know that, unfortunately, they will find common ground with a lot of beginners.
Attracted by the possibility (no matter how minute) of fast and huge profits, they will even charge at stocks that only cost a few cents – so called penny stocks – believing that one can’t lose much with these cheap stocks. WRONG!!! That’s a fallacy!
If a 10 cent stock drops to 1 cent it’s still a 90% loss no matter what! And that can happen easily! It sometimes goes faster than one expects because more often than not some dubious organisation is manipulating these kind of stocks. They buy them dirt cheap and then create a hype hoping and expecting that many investors will buy these allegedly “highly profitable” stocks not wanting to miss the boat.
And there are enough buyers that will fall for these tricks. This will then cause the stock price to go up and up, and as more people see this stock rise and shine even more will buy in fear of missing their big and fat chance, making the stock go up even further.
OK. Now this obviously sound good. That’s what we’re looking for. A rising stock. But before you know it, these shady organisations then sell these stocks as fast as possible cashing in the big bucks. This sell-off will cause the stock to drop significantly and before you catch wind of it your stock is basically worthless and your money is gone.
The peril here is that these stocks are OTC stocks. I also wrote an article about this topic. You can view it under: http://www.stockbreakthroughs.com/articles/otc.htm
Very few OTC stocks are successful in making the jump from this market to the NASDAQ, NYSE or any other major exchange due to their INABILITY to meet the listing requirements of the major exchanges.
These kind of securities are very risky because there's no controling body or organisation like the SEC which oversees the securities industry and promotes full disclosure in order to protect the investing public against malpractices. That's why you should be very wary of OTC stocks because they are either penny stocks or hold bad credit records.
I will never understand what makes people invest thousands of bucks in siberian uranium mines, chinese energy stocks or even an australian internet casino. Yes! You read correctly! You’ll be surprised what investments people come with.
And the same people will spend weeks and months paging through brochures and magazines when it comes to buying a new car or the latest plasma TV set. They’ll make comparisons, they’ll ask friends and relatives and go through all kinds of troubles just to get the real deal.
So why don’t they apply the same scrutiny when it comes to investing thousands of bucks in the stock market instead of using hunches and guess work rather than the brain???
Your hard earned money shouldn’t just be gambled away. It should be invested wisely and with scrutiny. That’s the only safe way to accumulate real financial wealth!
Yours in Successful Trading
Ricky Schmidt
About The Author
Ricky Schmidt's website http://www.stockbreakthroughs.com was created out of frustration in trying to decode books, magazines and newsletters on the subject, which are supposed to be for beginners but are not because they’re too difficult to understand. Too many “Big Words” and too much intelligent sounding grammar is used which is not very useful.Online Sports Stock Market
So I am sure you know a little about stock markets…but what about an online sports market? With many sports books having to shut their doors to United States customers, an idea which has been around for years is beginning to get more and more publicity. A program in which users are able to trade shares of certain sports teams. The concept is simple – buy low and sell high. There are also several other methods in which people can make money using this new system. One of these methods is to simply own shares of a winning sports team. When a team wins a game they collect a percentage of the losing team’s current dividend reserve. Then the winning team pays a dividend to all share holders from a portion of their dividend reserve. It may sound complicated, however it is really an easy concept to grasp.
Just like researching real stock, users are able to use tools to track the performance of the various sports ticker symbols. Users can look at previous dividend payouts, 52 week highs and lows, and 30 day average prices just to name a few. With more and more people joining programs like this across the internet, it may just be the best method to currently make money using sports betting knowledge, but without actually sports betting! In some ways it may be easier to profit using a system like this rather than using a traditional sports betting bookie.
One such system that is available online offers great incentives to join as they have setup their system so that anyone can start with as little as $25.00. There are multiple funding methods available making it easy for anyone to fund their account. Some of the deposit methods include Neteller, PrePaidATM, Credit Card, MoneyBookers, Western Union, and E-Gold. Members are able to withdraw the funds at any time which is another great feature of this program. Commission must be paid on each trade that is made on the site. This fee varies between 2.5 and 5 percent of the total transaction amount. There is also an additional fee of $0.50 if you were to cancel an order before you specified it to expire. So anyone who is already big on sports betting should check out this new trend that is growing rapidly all over the internet!
Just to clarify a few things I would like to make sure that everyone understands this program is not really like a stock market in that the owners do not truly own part of the sports team like a shareholder of a company would in the real stock market. The way this system works is that people own sports derivatives which are perpetual instruments in the online sports market. Owners can hold on to them forever or decide to sell them at any time.
So if you are interested in learning more about these online sports stock markets please visit the website linked below.
Just like researching real stock, users are able to use tools to track the performance of the various sports ticker symbols. Users can look at previous dividend payouts, 52 week highs and lows, and 30 day average prices just to name a few. With more and more people joining programs like this across the internet, it may just be the best method to currently make money using sports betting knowledge, but without actually sports betting! In some ways it may be easier to profit using a system like this rather than using a traditional sports betting bookie.
One such system that is available online offers great incentives to join as they have setup their system so that anyone can start with as little as $25.00. There are multiple funding methods available making it easy for anyone to fund their account. Some of the deposit methods include Neteller, PrePaidATM, Credit Card, MoneyBookers, Western Union, and E-Gold. Members are able to withdraw the funds at any time which is another great feature of this program. Commission must be paid on each trade that is made on the site. This fee varies between 2.5 and 5 percent of the total transaction amount. There is also an additional fee of $0.50 if you were to cancel an order before you specified it to expire. So anyone who is already big on sports betting should check out this new trend that is growing rapidly all over the internet!
Just to clarify a few things I would like to make sure that everyone understands this program is not really like a stock market in that the owners do not truly own part of the sports team like a shareholder of a company would in the real stock market. The way this system works is that people own sports derivatives which are perpetual instruments in the online sports market. Owners can hold on to them forever or decide to sell them at any time.
So if you are interested in learning more about these online sports stock markets please visit the website linked below.
About The Author
R.D. Warren from http://www.sportsbettingcash.com/reviews/allsportsmarketcom-review/.Stock Research and Market To Be Affected Big Time Post November Election
Stock research normally tells us that pick the right stocks and it really doesn’t matter what the market does. When you survey history however, this seemingly true statement turns out not to be the case. You can have all the stock research in the world, but if the market goes against you, it doesn’t matter.
The stock market is making new highs with the Dow Jones Industrial Average piercing the 12000 barrier for the first time since the Dow Jones was created. The question now becomes which way is the next 1000 or 2000 points, up or down. The market has always told us that it doesn’t like uncertainty. Far better is the devil you know, than the devil you don’t know.
The massive uncertainty facing the country is which way does Iraq go? Iraq is eating at the social fabric of this country. Traditionally, Presidents are held on a short leash when it comes to wars, and entanglements. Yes, as a country we have always fully supported the President initially, as we rally around the flag. As time moves on, Americans become impatient with their Presidents. This has been true in the past, and it is true today. Patriotism will only carry a President so far. Harry Truman was a very popular President at the end of World War II. A year into the Korean War, he saw his approval ratings fall to such lows that he couldn’t even think of running again for the Presidency in 1952.
Viet Nam destroyed Lyndon Johnson’s Presidency in spite of being elected up until then, by the largest popular vote landslide in history, almost 16 million more votes than his opponent. Jimmy Carter found himself entangled by the Iranian hostage situation, and lost his Presidency as a direct result. During the last 2 weeks of the 1980 election, I was told by Ronald Reagan’s campaign manager that if Carter secured the release of the hostages from Iran, Carter would win the election. The release never came, and Carter was driven out of office in a landslide.
We now see President Bush entangled by the Iraqi conflict. How does the war work itself out from this point forward? All Washington insiders if quizzed privately would tell you that the President is between a rock, and hard place. The wish that the Iraq people would embrace freedom, and democracy has turned out to be a Presidential vision that the Iraq people never shared, or embraced.
Democracy is every Iraqis’ second choice. If you are a Kurd, your first choice is that the Kurds be in power, and you are willing to fight and wage terror for that goal. The same is true of the majority based Shia, and the minority based Sunnis. When Saddam Hussein was in power there was an old story, “Did Saddam make Iraq, or did Iraq make Saddam.” It is inconceivable to believe, but nevertheless may be true that only a despotic, merciless dictator like Saddam Hussein could shape Iraq into a country. In Saddam’s case, he embraced and required terror to govern.
How does Iraq play out?
Enter the Iraq Study Group (ISG), a group headed by former Secretary of State James Baker, and former Democratic Congressman Lee Hamilton. The public purpose of the group doesn’t matter, the private purpose does. This President knows that his policies in Iraq have FAILED. He needs political cover to effectuate massive change. The Iraq Study Group will give him that cover. They will probably propose everything, and anything that is different from the current course we are on.
If the President is shrewd enough, he will embrace those portions that suit his purpose. That purpose is to change our current policies. The President also recognizes that the momentum this November is for the Democrats to take over the House, and perhaps come close to taking the Senate. As I write this, the Senate is in play, which means the Senate could also go either way. If either chamber of Congress changes party affiliation, the President’s hands could be tied severely.
Only the Congress has the authority vested in it constitutionally to appropriate and authorize the spending of funds. We could reach a point in time where spending for our military activities in Iraq will not be authorized. President Bush must act before we get to that point. The Iraq Study Group will provide the alternatives that this Administration will pick and choose from, to change our direction and get us out of the mess, which we have put ourselves in.
Two of the issues the ISG must deal with is why do we have the same number of troops (140,000) when the police and military in Iraq now number 300,000 plus. A few years ago, there were no police and the military was sent home - what gives? A second question is how do we leave Iraq, and not destabilize the country to the point where we throw the country into the hands of Iraq’s long-time enemy, Iran.
We are in a dilemma which is defined as a situation requiring the choice of two equally undesirable alternatives. The President will have to act very quickly after the election. He will not have much time if there is a new party in control in either chamber of Congress. The stock market will begin to act in a downward manner due to the uncertainty as to future policy choices.
We will probably have to consult and deal with both Syria and Iran, even though we do not want to. Both countries are major players in the region. Our dealings will be independent of other policy considerations involving Iran’s desire to possess nuclear armaments. The great experiment in creating democracy in Iraq is coming to an end. It could have worked, but the steps necessary had a brief window of opportunity, and that window has now closed.
The disbanding of the Iraq army years ago, along with the police, plus the firing of the top layers of the people who ran the government were all retrospectively MISTAKES. There is NO GOING BACK to revisit them. When the Iraq Study Group makes its recommendations after the November election, President Bush will have a brief window with political cover to change directions. If he does, the stock market in this country will more than likely continue to prosper. If he doesn’t take decisive and long overdue action, all bets are off.
Goodbye and Good Luck
Richard Stoyeck
http://www.stocksatbottom.com
The stock market is making new highs with the Dow Jones Industrial Average piercing the 12000 barrier for the first time since the Dow Jones was created. The question now becomes which way is the next 1000 or 2000 points, up or down. The market has always told us that it doesn’t like uncertainty. Far better is the devil you know, than the devil you don’t know.
The massive uncertainty facing the country is which way does Iraq go? Iraq is eating at the social fabric of this country. Traditionally, Presidents are held on a short leash when it comes to wars, and entanglements. Yes, as a country we have always fully supported the President initially, as we rally around the flag. As time moves on, Americans become impatient with their Presidents. This has been true in the past, and it is true today. Patriotism will only carry a President so far. Harry Truman was a very popular President at the end of World War II. A year into the Korean War, he saw his approval ratings fall to such lows that he couldn’t even think of running again for the Presidency in 1952.
Viet Nam destroyed Lyndon Johnson’s Presidency in spite of being elected up until then, by the largest popular vote landslide in history, almost 16 million more votes than his opponent. Jimmy Carter found himself entangled by the Iranian hostage situation, and lost his Presidency as a direct result. During the last 2 weeks of the 1980 election, I was told by Ronald Reagan’s campaign manager that if Carter secured the release of the hostages from Iran, Carter would win the election. The release never came, and Carter was driven out of office in a landslide.
We now see President Bush entangled by the Iraqi conflict. How does the war work itself out from this point forward? All Washington insiders if quizzed privately would tell you that the President is between a rock, and hard place. The wish that the Iraq people would embrace freedom, and democracy has turned out to be a Presidential vision that the Iraq people never shared, or embraced.
Democracy is every Iraqis’ second choice. If you are a Kurd, your first choice is that the Kurds be in power, and you are willing to fight and wage terror for that goal. The same is true of the majority based Shia, and the minority based Sunnis. When Saddam Hussein was in power there was an old story, “Did Saddam make Iraq, or did Iraq make Saddam.” It is inconceivable to believe, but nevertheless may be true that only a despotic, merciless dictator like Saddam Hussein could shape Iraq into a country. In Saddam’s case, he embraced and required terror to govern.
How does Iraq play out?
Enter the Iraq Study Group (ISG), a group headed by former Secretary of State James Baker, and former Democratic Congressman Lee Hamilton. The public purpose of the group doesn’t matter, the private purpose does. This President knows that his policies in Iraq have FAILED. He needs political cover to effectuate massive change. The Iraq Study Group will give him that cover. They will probably propose everything, and anything that is different from the current course we are on.
If the President is shrewd enough, he will embrace those portions that suit his purpose. That purpose is to change our current policies. The President also recognizes that the momentum this November is for the Democrats to take over the House, and perhaps come close to taking the Senate. As I write this, the Senate is in play, which means the Senate could also go either way. If either chamber of Congress changes party affiliation, the President’s hands could be tied severely.
Only the Congress has the authority vested in it constitutionally to appropriate and authorize the spending of funds. We could reach a point in time where spending for our military activities in Iraq will not be authorized. President Bush must act before we get to that point. The Iraq Study Group will provide the alternatives that this Administration will pick and choose from, to change our direction and get us out of the mess, which we have put ourselves in.
Two of the issues the ISG must deal with is why do we have the same number of troops (140,000) when the police and military in Iraq now number 300,000 plus. A few years ago, there were no police and the military was sent home - what gives? A second question is how do we leave Iraq, and not destabilize the country to the point where we throw the country into the hands of Iraq’s long-time enemy, Iran.
We are in a dilemma which is defined as a situation requiring the choice of two equally undesirable alternatives. The President will have to act very quickly after the election. He will not have much time if there is a new party in control in either chamber of Congress. The stock market will begin to act in a downward manner due to the uncertainty as to future policy choices.
We will probably have to consult and deal with both Syria and Iran, even though we do not want to. Both countries are major players in the region. Our dealings will be independent of other policy considerations involving Iran’s desire to possess nuclear armaments. The great experiment in creating democracy in Iraq is coming to an end. It could have worked, but the steps necessary had a brief window of opportunity, and that window has now closed.
The disbanding of the Iraq army years ago, along with the police, plus the firing of the top layers of the people who ran the government were all retrospectively MISTAKES. There is NO GOING BACK to revisit them. When the Iraq Study Group makes its recommendations after the November election, President Bush will have a brief window with political cover to change directions. If he does, the stock market in this country will more than likely continue to prosper. If he doesn’t take decisive and long overdue action, all bets are off.
Goodbye and Good Luck
Richard Stoyeck
http://www.stocksatbottom.com
Stock Market Basics
The term stock market, as the name connotes, is a place where you can market or trade a company's stock, which the corporation issues through shares in order to raise capital. Of course, capital is the cost that a company incurs in relation to producing its products and services.
The people who buy these shares are the shareholders, and the term can refer to an individual or an organization.
The term stock market can also apply to all the stocks available for trading (as well as other securities), for example, when used in terms like "the stock market performed well today."
The stock market involves the trading of bonds, which is a debt security that stipulates that the issuer of the bonds holds the holders a debt. It is exactly like a loan, only that it is in the form of a security. These bonds are traded over-the-counter, which means they are traded directly between two parties. Thisis opposed to exchange trading or the trading that occurs on stock exchanges or future exchanges.
The stock market also involves the trading of commodities, which refer to raw commodities such as agricultural products (coffee, sugar, wheat, maize, barley, cocoa, milk products) and other raw materials (pork bellies, oil, metals).
The stock market is different from the stock exchange, which is primarily concerned with bringing togehter buyers and sellers of stock and securities.
You can participate in the stock exchange as an individual stock investor or as major player (large hedge fund trader). Orders at a stock exchange are usually made through a broker.
There are two types of exchanges where stocks can be traded. There is the exchange that has a physical location where verbal trading takes place. This is the more famous type of exchange because it is often depicted on TV showing animated trader shouting at each other, waving and running around frantically. That's exactly how the stock exchange works. What happens is traders enter into verbal agreements on the prices of stocks. The other type of exhcnage is the virtual kind where traders deal electronically through computer terminals.
About The Author
Jonathon Hardcastle writes articles for http://4investing.net/ - In addition, Jonathon also writes articles for http://1stconsumerinfo.com/ and http://universeofjobs.com/.Stock Market Speculation or Gambling. What is the Difference?
The art of speculating in one form or another has been around forever.
When it comes to speculating, there are always three things that you can be sure of – there will be always people willing to speculate, there will always be people who will love to play the game with the first group. Lastly history can be counted on to repeat itself.
Sure the object of speculation may change, the rules may change and the technology may change. But in the end it is always the same.
However what has happened before is 100 % sure to happen again. You can count on it. Everyone thinks always that they are so original when it always the same story again and again. Whether it is tulip bulbs, precious metals, mutual funds, lottery tickets or penny stocks human nature is human nature.
Ignorance, greed, fear and hope determine how people react and thus how prices move and markets behave. People have speculated on everything at one time or another,
For the last hindered years and certainly into the foreseeable future speculating on stock prices offers liquidity combined with legitimacy and purpose. Stock speculation, trading and investing have become an essential and vital parts of both our economy and our lives.
Trading is just another word for speculating and investing is nothing more than speculating, except that it supposedly encompasses a longer time horizon and for some odd reason implies less risk. Speculators speculate, trader’s trade and investors invest to make money. Traders buy stock or any other object of speculation because they anticipate a price appreciation.
Speculation and gambling are similar, with a few important distinctions. One difference is the perception, sometimes true, that successful speculators profit due to their skill or an unseen advantage, while gamblers prosper due to chance or luck.
Remember though that it may not happen to you but in the end given enough time or chances the odds will always prevail. The casinos in Atlantic City and Las Vegas were not built with winner’s money.
Another distinction is that gambling in most forms has been illegal (at least until government got involved and changed the rules in their favor) while speculation plays an essential role in our markets and thus our economy.
These important distinctions make speculating which indeed is what our investment industry purveys as an accepted occupation – indeed one with one prestige and gamblers not being accepted in the same light.
Whether a gambler, a trader or a speculator, in all cases the attraction is the same – the chance to make a lot of money in a hurry. It is the immediate gratification of the win that makes these games irresistible - an opiate of sorts.
Indeed problem gamblers have been compared to alcoholics in needing that rush which gives them such pleasure and serves amazingly to release endorphins to relax their troubled minds.
On top of that the unpredictability of the wins serves to even reinforce this addictive behavior.
Not far off of the methods of B.F. Skinner and the rats of operant conditioning fame.
Indeed some people will tell you that “it will almost always end with crying!”
Senior Investment Analyst
Substantial Incomes Com
frxforex@yahoo.com
http://www.forexforexforexforex.com
http://www.substantialincomes.com
When it comes to speculating, there are always three things that you can be sure of – there will be always people willing to speculate, there will always be people who will love to play the game with the first group. Lastly history can be counted on to repeat itself.
Sure the object of speculation may change, the rules may change and the technology may change. But in the end it is always the same.
However what has happened before is 100 % sure to happen again. You can count on it. Everyone thinks always that they are so original when it always the same story again and again. Whether it is tulip bulbs, precious metals, mutual funds, lottery tickets or penny stocks human nature is human nature.
Ignorance, greed, fear and hope determine how people react and thus how prices move and markets behave. People have speculated on everything at one time or another,
For the last hindered years and certainly into the foreseeable future speculating on stock prices offers liquidity combined with legitimacy and purpose. Stock speculation, trading and investing have become an essential and vital parts of both our economy and our lives.
Trading is just another word for speculating and investing is nothing more than speculating, except that it supposedly encompasses a longer time horizon and for some odd reason implies less risk. Speculators speculate, trader’s trade and investors invest to make money. Traders buy stock or any other object of speculation because they anticipate a price appreciation.
Speculation and gambling are similar, with a few important distinctions. One difference is the perception, sometimes true, that successful speculators profit due to their skill or an unseen advantage, while gamblers prosper due to chance or luck.
Remember though that it may not happen to you but in the end given enough time or chances the odds will always prevail. The casinos in Atlantic City and Las Vegas were not built with winner’s money.
Another distinction is that gambling in most forms has been illegal (at least until government got involved and changed the rules in their favor) while speculation plays an essential role in our markets and thus our economy.
These important distinctions make speculating which indeed is what our investment industry purveys as an accepted occupation – indeed one with one prestige and gamblers not being accepted in the same light.
Whether a gambler, a trader or a speculator, in all cases the attraction is the same – the chance to make a lot of money in a hurry. It is the immediate gratification of the win that makes these games irresistible - an opiate of sorts.
Indeed problem gamblers have been compared to alcoholics in needing that rush which gives them such pleasure and serves amazingly to release endorphins to relax their troubled minds.
On top of that the unpredictability of the wins serves to even reinforce this addictive behavior.
Not far off of the methods of B.F. Skinner and the rats of operant conditioning fame.
Indeed some people will tell you that “it will almost always end with crying!”
About The Author
Amy GoodmannSenior Investment Analyst
Substantial Incomes Com
frxforex@yahoo.com
http://www.forexforexforexforex.com
http://www.substantialincomes.com
Stocks - Getting Started in the Market
Hollywood loves the stock market. The chaos of the stock exchange floor, the tension of boiler room day-trading, devious power brokers making back room deals; it all makes for great drama. Then you have the true-to-life stock market stories in the news: insider trading, big money IPOs, the dot com bust. All of it is enough to make you steer clear of the market for good and travel down a safer investment path. But don’t be frightened, history shows that long-term, there’s no better place to put your money to watch it grow. Here are a few tips to get you started.
Stocks 101
Simply put, when you purchase stock in a company, you become part-owner of that company. Along with other shareholders, you all combine as investors in the business, and therefore reap its rewards, or suffer its losses. Stocks are most commonly divided into separate categories depending on the size and type of the company (e.g., mid-cap, small-cap, energy, tech, etc.).
While speculation can drive stock prices in the short term, it’s long-term company earnings that determine a stocks gains or losses. Speaking of short term, that’s when stocks are extremely volatile. Over a span of just a few months or years, stocks can climb to astronomic heights or drop to pitiful lows. But, since 1926, the average stock has returned over 10 percent per year. That’s better than any other investment vehicle out there, and that’s why stocks are your best bet for long-term investment.
Picking Stocks
Before you dive head-first into the market, there are a few things you should know about picking stocks. First, the market’s performance as a whole is not necessarily a reflection of its individual stocks. Good stocks can keep growing even in a down market, while bad stocks have the frustrating tendency to drop or remain stagnant in a strong market.
Also, remember that history is not indicative of a stock’s future performance. Even solid stocks can slip from time to time. Remember that stock prices are based on a company’s earnings outlook, not its past performance. If the future looks bright for a company, a $100 dollar stock is probably a good buy. If earnings look less than promising, even a $5 stock can be a waste. Finally, investors determine a stock’s value by measuring a handful of primary criteria, most notably cash flow, earnings, and revenue.
“Diversify”
It’s the rallying cry of all smart investors. When compiling an investment portfolio of stocks, it’s smart to own shares in companies from several different industries. Consider it a “hedge bet”. When one part of the economy experiences a downturn, you’ll have other stocks in your portfolio to put your faith in.
When building your portfolio, the safest bet is to pick from financially strong businesses with earnings growth above the average. Surprisingly, that limits the lot to choose from, as only around 200 stocks today fit that bill. A solid portfolio features somewhere in the ballpark of 20 stocks selected from seven or more industries. A general rule of thumb is to invest in stocks with an above-average rate of growth and reasonable valuations.
Buy and Hold
Day trading is a great way to lose your nest egg, but quick. As we noted before, stocks over the short term are highly volatile. Sure, brokers today are offering cheap trades, but beware. There are a ton of hidden fees and taxes involved with day trading, not to mention the amount of attention required by you to monitor the blow-by-blow proceedings of the market. Our recommendation: buy and hold. A ten percent return over the long term is nothing to sneer at.
Stocks 101
Simply put, when you purchase stock in a company, you become part-owner of that company. Along with other shareholders, you all combine as investors in the business, and therefore reap its rewards, or suffer its losses. Stocks are most commonly divided into separate categories depending on the size and type of the company (e.g., mid-cap, small-cap, energy, tech, etc.).
While speculation can drive stock prices in the short term, it’s long-term company earnings that determine a stocks gains or losses. Speaking of short term, that’s when stocks are extremely volatile. Over a span of just a few months or years, stocks can climb to astronomic heights or drop to pitiful lows. But, since 1926, the average stock has returned over 10 percent per year. That’s better than any other investment vehicle out there, and that’s why stocks are your best bet for long-term investment.
Picking Stocks
Before you dive head-first into the market, there are a few things you should know about picking stocks. First, the market’s performance as a whole is not necessarily a reflection of its individual stocks. Good stocks can keep growing even in a down market, while bad stocks have the frustrating tendency to drop or remain stagnant in a strong market.
Also, remember that history is not indicative of a stock’s future performance. Even solid stocks can slip from time to time. Remember that stock prices are based on a company’s earnings outlook, not its past performance. If the future looks bright for a company, a $100 dollar stock is probably a good buy. If earnings look less than promising, even a $5 stock can be a waste. Finally, investors determine a stock’s value by measuring a handful of primary criteria, most notably cash flow, earnings, and revenue.
“Diversify”
It’s the rallying cry of all smart investors. When compiling an investment portfolio of stocks, it’s smart to own shares in companies from several different industries. Consider it a “hedge bet”. When one part of the economy experiences a downturn, you’ll have other stocks in your portfolio to put your faith in.
When building your portfolio, the safest bet is to pick from financially strong businesses with earnings growth above the average. Surprisingly, that limits the lot to choose from, as only around 200 stocks today fit that bill. A solid portfolio features somewhere in the ballpark of 20 stocks selected from seven or more industries. A general rule of thumb is to invest in stocks with an above-average rate of growth and reasonable valuations.
Buy and Hold
Day trading is a great way to lose your nest egg, but quick. As we noted before, stocks over the short term are highly volatile. Sure, brokers today are offering cheap trades, but beware. There are a ton of hidden fees and taxes involved with day trading, not to mention the amount of attention required by you to monitor the blow-by-blow proceedings of the market. Our recommendation: buy and hold. A ten percent return over the long term is nothing to sneer at.
About The Author
Joseph Kenny writes for the Loans Store which offers more information on home loans, secured loans and other loan topics available on site.
Visit Today: http://www.ukpersonalloanstore.co.uk
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