Iron Condor » Money

Stock Trading Disaster (std) Prevention

admin — Mon, 28 Dec 2009 02:56:26 +0000

I thought such an eye-catching title would be appropriate for an article on risk management. Often times, beginning traders forget the fundamentals of proper trading in their quest for instant riches in the stock market. Those of us who have been trading for some time now are fully aware of the danger in that type of thinking.

I was a cocky beginning trader. Soon after attending a stock trading seminar, I had several big wins. In my own mind, I was the exception to any and all stock market trading principles. I could do no wrong. My short-lived reign as a trading Adonis came to an abrupt end. All my money began raining down into the pockets of real stock market professionals. Fortunately, I wised up before it was too late.

In short, I was a young punk who knew everything about nothing. I often times had to learn things the hard. Learning to trade in the stock market was no exception. So, here are my top three ways to prevent an STD.

#3 Way To Avoid An STD

Perform thorough market research! Taking proper research for granted is a one-way ticket to Brokeville. Trust me, I know. Due diligence is required in order to side step a poor stock decision. Remember, getting into a bad trade is simple…getting out is costly. Give market research the time and attention it deserves.

#2 Way To Avoid an STD

Remove hope from your emotional make up when trading! Wishful thinking is a dangerous mindset to be in when you are a stock trader. Hope and wishful thinking lead to irrational decisions based on emotions rather than factual information. Going down with the ship is far from an act of nobility. You will make mistakes. As a trader, you must be willing to make corrections quickly. In the stock market, making too many errors, too fast will certainly cause you to be prematurely ousted from the markets if you do not adhere to the method #1.

#1 Way To Avoid an STD

Make use of a protective stop loss! After placing your order, ALWAYS set a protective stop. Failure is not to far off in the distance for a trader who handles the duties of risk management in the absence of a stop loss. A stop loss is not perfect but the only insurance policy a trader has against stock trading career ending losses. Stop being a philanthropic trader who continues to give money away to the markets.

Using a protective stop loss continues to be the most effective method of risk management. Fortunately, it is also the easiest of the three to apply. Methods 1 and 2 are developed over time as you gain experience. Simply use my top three ways of preventing an STD and you have cut your chances of getting burned.

A Simple 5-step Trading Plan

admin — Thu, 24 Dec 2009 02:44:50 +0000

As a beginning stock market trader, I frequently visited an unpleasant place called Loss Vegas. It was teeming with would be investors and traders with grand aspirations of making a killing in the stock market. Differing life experiences, bank account balances, and strategies separated them but they were all bound by the possibilities of great riches there for the taking. Some were even aware of the chances of success being less than ideal and were not deterred. I could be counted among those who would not be denied.

The numbers don’t lie! 9 out 10 stock traders will fail, miserably! That is the same ratio for starting a business. At least in the case of running a business, there’s a 5-year failure window. I would say that a very small minority of beginning traders makes it past their first year. The reason for such an unbalanced success/fail ratio is simple. 9 out of 10 people entering the market would be better categorized as gamblers and not traders. Yes, I too, was one of those gamblers masquerading as a stock market trader.

Successful traders employ proven, winning trade strategies. Most beginning traders systematically make the same mistake over and over again. Venturing into the market without a sound trading plan is financial suicide. Here is a guide to structuring your own winning trading strategy.

Many principles of running a successful business can be applied to stock trading. Having a trading plan is essential to the success of your new venture. Consider this trading plan to be your road map that guides you to stock trading mastery. Skipping this step will ensure your permanent residency in Loss Vegas.

The trading plan must outline the why or purpose for trading the markets. If your purpose is to simply make money, you are in for a rude awakening. The number one objective of a stock trader is to trade well NOT make money. Focusing on trading well will result in you making money. Making profitable trades is a by-product of trading well. Calculating profits while practicing your trade is counter-productive to your efforts. You certainly wouldn’t want a lawyer tabulating his fees while researching your case, would you? The same focus needs to be applied while you trade. There will be plenty of time for counting your windfall once you have closed out your position.

After committing yourself to learning to trade well, the next step in the process is executing the plan. This includes but is not limited to:

1. Conducting Market Research-stock selection, risk/reward ratios

2. Pinpointing Entry Points

3. Money Management- where to place protective stops

4. Establishing Exit Points

5. Trade Review

I use this exact process when trading stocks and options. Deviating from your trading plan can hinder your progression as a trader in two areas. First, the effectiveness of a trading strategy cannot be accurately measured when a trader is inconsistent in the execution of a trading strategy. And secondly, altering your strategy in the midst of a trade is hazardous to your wealth. A prime example would be moving your protective stop in the opposite direction of your trade. This allows for a wider, much riskier stop loss cushion. Moving protective stops in the opposite direction of the trade is a sure sign of a rookie trader.

Following this simple formula will not eliminate visits to Loss Vegas but will ensure shorter, less frequent stays. Happy trading and here’s to your success!

How to Make Consistent Profits Futures Trading

admin — Tue, 08 Dec 2009 14:43:00 +0000

The issue of direct access is an important one and it becomes more important the more short term your trading is. The market can change from a state of seeming paralysis to one of shocking volatility and activity in a flash. The length of time it takes between you deciding to enter an order and the order actually being in the market is obviously important.
When I first started trading I used a phone broker and was dismayed that my fills would often be so far from the price the market was trading when I first entered the order.
The first time I visited the trading floor, I discovered why. When I called in an order, first my discount broker would check my account equity, then he would call a phone booth on the floor, the phone broker on the floor would then write the order down and pass it on to a booth next to the appropriate pit, at that booth my order would be written down again and then signaled to a broker in the pit to be executed.
As you can imagine this would take quite a long time, even longer of course if the market was very active, as this would mean that the broker in the pit would be too occupied to take new orders. Compare this to my experience of trading as a pit trader. In the pit I was in the heart of the market and could observe every single order as it was executed (there was no delay in my price feed!).
To initiate a trade, whether it was to buy or sell at the market, or join the bid or the offer, all I had to do was open my mouth. You can start to see the huge advantage that trading on the floor gave me over off floor traders; and that doesn’t take into consideration the fact that my round trip costs fell by 96%.
Now the floor no longer exists, not in Europe at least, so why talk about the advantages of pit trading? Well the level playing field is now open to all, but very few take advantage of it. Trading with an electronic trading platform is exactly the same as trading in the pit, except I can sit down, it is much quieter and there are no crude jokes flying around.
I can trade with the click of a mouse; my order shoots to the exchange, enters in the market and appears back on my screen before I have time to blink. I think the advantages of direct access trading are clear and any futures trader still using a phone broker should move to direct access, they will also find their commissions are less (around $8 for private client traders).
The next question that arises is why trade futures? That is an important consideration given that there are a variety of alternatives vying for your trading capital (spread betting, CFDs and options), but in my opinion, futures are the only option (no pun intended) for successful short term trading.
A lot of traders are trading the stock indexes like the FTSE, the DAX, the S&Ps, NASDAQ and the DOW, but rather than use futures they are using spread betting firms. The reasons for using these firms is that they require very small amounts of capital to get started, a trader can trade very small amounts (like $1 a point on FTSE as opposed to $10 for FTSE futures) and these firms make opening an account so easy.
I understand the lure of being able to open an account with very little money and trading small amounts, but I have some serious considerations about using spread betting as a realistic vehicle for professional trading.
The two biggest selling points are no commissions and no capital gains tax. There are many different costs to trading, commissions are one and the spread is another (especially when you have to trade at the market as you do with spread betting, with futures you have the choice of joining the bid or the offer).
Commissions are important for an active trader and as an active trader you can get them very low, but lets assume they are $8 per round turn for futures and lets assume that the spread in FTSE futures is an average of 2 points. If the spread with a spread betting firm for FTSE is 6 points and assume that we are trading $10 a point we can compare the two trading vehicles.
Last week I made an average of 2.42 points per contract traded and I traded 48 times. That is, for each contract I bought and sold I made $24.20 before commissions, assuming my commission rate is $8, I made a profit of $16.20 per contract traded, which is $777.60 net profit if my average size per trade is one contract.
Had I had the same success trading with a spread-betting firm, with a 6-point spread, I would have lost $1718.40! Now I would rather pay tax on a profit that no tax on a loss.
There is one other very important reason for trading the futures market rather than a non-exchange traded market such as those offered by spread betting firms. The futures markets are exchange traded and this means that they are fully transparent, i.e. everything is visible and above the table, I can see every single trade that happens. Imagine the trading pit, as it used to be when traders stood physically in a ring trading with each other.
When a trade is entered, the order goes into the pit and is represented there, free to be taken by any other market participant. We can all see what is happening, we trade with the same information and with the same advantages/disadvantages.
Now assume you are a trader who can only trade with one broker in the pit, you can trade as much as you like, any size you like, but he sets the spread he is willing to offer you and you have to trade at market (i.e. buy at his offer and sell at his bid). This broker doesn’t want to loose money, naturally, so he always makes his spread wider than the real market spread, he also, naturally, puts his interests before yours, so he won’t always be willing to trade when the market is moving fast and he is uncertain.
Remember whenever you make money he loses, so he is very careful to maintain his advantage at all times. Who wouldn’t want to be in this brokers position (he isn’t really a broker, though he claims to be)? When you trade with a real futures broker, all the broker does is facilitate your trade; he gives you the ability to have you orders represented in the pit. A real brokers concern is that they execute your order as efficiently as possible, that is their job, they do not take positions and they do not take the opposite side to you.
They naturally want you to make money because by making money you become a client who will continue to pay them commissions. Trading with a spread betting firm is absurdly costly, spread betting firms are like amusement arcades, they can be fun, but to imagine you are going to make your living from slot machines is illusory.

How to make money trading shares

admin — Sun, 29 Nov 2009 04:20:05 +0000

It’s been over 10 years since I first became interested in trading even more so I can still remember those first days when I was so excited about making money from the stock market.

Back then I was always in a hurry to trade, buying shares for no reason at all just because they were up in the morning I’d believe they still had further to go. I would carry out no research on the stocks I traded not even to determine whether or not the stocks were going to rise in value. After buying the shares in particular blue chip companies I would sit by the telephone calling up the broker every 10 minutes making a nuisance of myself by asking the broker whether or not I had made money. After a few years of losing hefty amounts of money I decided that trading was not for me and that those who were making money from trading had been given some sort of special power when they were born enabling to understand how the stock market worked.

Now that I had stop trading I would often think to myself could I have been a better trader if I studied the company fundamentals before I brought shares in them. Yes no I couldn’t make mind up whether things would have been different and would I have been a millionaire by now. The thought played on my mind for a while till I eventually started reading books on how to trade. I would read books published by warren buffet, Jim Slater of Zulu principles and even books like one up one wall street by peter lynch.

Even though I had some knowledge of how to lose money on the stock market It was good to gain more knowledge by reading from masters on the pitfalls of greed and impatience in trading.

After a year and a half of not trading and reading books night and day on the topics like how to value a company and even some books on trading options. I now felt I was ready to go back into the market so I called up the brokerage firm I had an account with to make sure it had not been closed since I had not used it in quite a while. To my relieve it was still open so I set about researching a few companies with the new learned skills I had acquired from the masters. I found some very attractive companies with the new methods I employed and now that I had learnt how to value a company by dividing the company’s price per earnings ratio by its earnings per share or let’s say growth I was able to determine whether the shares of the company were cheap or expensive. So later that week I placed my first trade well I like to say my first trade because now I had felt I had not been trading at all, I had been gambling. To read on go to www.bestcompanyformation.com Were I will reveal the secrets of trading that no one else will for free.

Trading the Markets after a Recession

admin — Thu, 12 Nov 2009 14:50:41 +0000

So it looks like we have avoided a 1930’s style depression however the current forecasts still suggest slow growth and a difficult time ahead. So what should you do in a difficult environment with your own finances?If we were to be honest with ourselves, then we should probably accept that we can improve on at least a couple of the following; tax efficient investments, long term investments, actively reviewing our existing investments and looking at new opportunities that the financial markets are currently providingI am sure we all appreciate that we could benefit from planning more. That is not to say everyone is simply sitting on their hands. Many people actively trade stocks and shares.The increase in the popularity of spread betting is understandable. A few of the attractive benefits include the fast nature of placing a trade and the large variety of global trading options on offer.Naturally, as with all types of investment, be it on Stocks and Shares, ETFs, pensions etc, there is a negative side and with spread bets you need to be careful because you can lose more than you initially invested.If there is a risk to your capital then why should you contemplate spread betting as part of your investment strategy? Spread betting can be beneficial on a number of fronts, from tax efficient investments* to ease and speed of making a trade.There are many benefits. For example, spread betting profits do not incur capital gains tax*. You are not actually buying and selling any assets or stock or shares. You are simply speculating on the future price or value of a particular financial market.As discussed, investing does have its risks. Nevertheless, there are things you can do in order to reduce your downside. Adding a Guaranteed Stop Loss Order to your spread bet helps reduce your risks. If you start to lose on a trade and the market continues to move in the wrong direction but hits your Stop Loss then your trade will be closed and you won’t lose any more money.In order to spread bet you do not take possession of any assets or stocks. You are just speculating on the future value of a market. This allows you to place trades quickly and with little fuss, an important feature in fast moving markets.Where to trade? A number of spread trading firms offer the usual benefits of letting you trade thousands of international markets as well as letting you trade outside normal market hours. Companies, like Capital Spreads and FinancialSpreads.com, will also let you trade markets like Crude Oil, Gold, the German Dax and the UK FTSE from Sunday evening all the way through to Friday evening.So whilst there are a good number of positives, it is important to understand the negatives.Spread betting carries a high level of risk. You should only speculate with money you can afford to lose. Like the adverts say, before you trade, ensure that spread betting matches your investment objectives, make sure you familiarise yourself with the risks involved and, where necessary, seek independent advice.What else should you consider when trading?In the numerous chat rooms and internet forums there are many trading tips and theories. Some are fairly sensible, some less so. The following includes some of the more common principles.It is worth having a look at a spread trading practice account. These are free accounts with virtual funds. If you are less familiar with this form of trading then a little practice should help you understand the positive and negatives as well as the various types of bet you can place.Greed can be your worst enemy when trading. It can be tempting to trade lots of positions in lots of different markets. Personally, I tend to trade 0-5 markets at any one time. I have no idea how anyone can fully research and make informed decisions on 20 open trades, especially if they start moving against you.* Since you are placing a bet rather than buying an asset or share, it is treated like a bet by the UK and Irish tax authorities which means your profits are tax free. Tax laws can change.

Rick Redmont Bases Trading on Wyckoff Theories

admin — Sat, 07 Nov 2009 15:15:18 +0000

Off-floor trader Rick Redmont gained his first experience trading stocks as a college student during the bull market of 1961. “I had $10,000, which turned into $20,000. I followed the Chartcraft (Inc.) point and figure book-but it didn’t really matter what you bought. The only thing that made you mad was if your friend’s stock went up more than yours did.”
“Then in 1962, I started losing. The reason I was losing was because the stock market wasn’t going straight up anymore,” Redmont explained. “I turned $10,000 into $20,000 and $20,000 into $2,000.” Redmont jokes that his family members gave him books for Christmas that year with title like I was a teenage bankrupt. However, Redmont was spurred on by his financial setback. “I decided anything that had the potential to double my money and lose it all was worth learning about,” he said.
He launched into a study of “almost everything that has been written from 1900 to date” on trading and technical analysis. After graduate school, Redmont joined the brokerage business and remained a broker until several years ago, when he broke away to trade for his own account. One of the books Redmont read early on was the classic Technical Analysis of Stock Trends, by Edwards and Magee.
However, Redmont thought “intellectually, if it’s this easy-if all you have to do is look at head and shoulders, triangles and rectangleseverybody would be rich!”
Through his exhaustive reading of the materials available on financial markets and trading, Redmont happened upon a course offered by the Stock Market Institute that really hit home for him. “It is all based on the work of Richard D. Wyckoff. It teaches you how to use real point and figure charts and the origin was from floor traders back in the 1800s.”
“It teaches you the relationship of volume and price and point and figures. From there, I really learned how to understand how the market operates,” Redmont continued. Tbough he added, “I spent three years on this.” Additionally, Redmont notes that he enrolled in an Elliott wave course offered by C. Ralph Dystant and learned about an indicator called %D. Now, Redmont calls himself strictly a technical trader. “I use Wyckoff, I use Elliott, and the indicator I use is fast %D.”
Currently, Redmont trades “about 98% OEX options.” Redmont trades on an intraday basis, though he does hold positions overnight but overall, he tends to be a short-term trader. Throughout the day Redmont monitors five minute charts, 30-minute charts and 60-minute charts. “I look for divergences between the Dow, the OEX and the S&P (500).”
“I look at different time periods. I look at the premium. I look at the advance/decline line on a five minute basis and tick volume,” Redmont added. While Redmont bases his trading primarly on Wyckoff’s volume theories, he admits “there is no system. It’s total discretion-it’s as good as I am. I keep it simple. I buy calls and I buy puts. I don’t spread them. I just want to know what direction it is going.” Redmont champions Wyckoff’s volume theories saying “it works because it is the market. You are analyzing the law of supply and demand,” he explained.
To further explain a basic premise of Wyckoff’s volume theory, Redmont gives a simple example. “You are looking at a stock. It trades 10,000 shares and goes up one point on the first day. The same thing happens on the second day. On the third day, it trades 20,000 shares and goes up 1 point. On the fourth day, it trades 40,000 shares and goes up half a point. On the fifth day, it trades 80,000 shares and is unchanged.”
“On the third day, you had to exert twice as much effort to get the same result (as the first day),” Redmont noted. “The key to analyzing supply and demand is that the demand side burns itself out. There is no pressing reason, except being caught short, why someone should buy something. But, there are a million reasons to sell something.”
“When the buying is through and satisfied-there is always supply there. That’s why prices go down faster-because supply is always there and demand is not. All you have to do is withdraw people who want to buy and prices fall.”
While Redmont primarily trades OEX options, he believes that Wyckoff’s volume theories are just as applicable to the futures markets. “What difference does it make if you are analyzing the S&P or sugar or cotton or the Japanese yen-the analysis is the same,” he said. In his trading, Redmont notes he does monitor the size of market’s corrective retreats and rallies. “As (Fibonnaci numbers) became more popular, the markets started connecting 61.8% and 38.2%. Today, very rarely do they correct 50%.”
Based on work by Fibonnaci, many technical analysts have speculated that financial markets tend to move in sequences that can be measured by these numbers-including 61.8% and 38.2%. However, Redmont said, “these things work in the markets because people use them-it’s not because it’s mystic, or in plant life, or in the pyramids.” For example, in watching the markets, Redmont said, “if you have a move up and you have a correction, you want volume to drop off and you want that to fall into a 61.8%.”
While Redmont notes that Wyckoff theory works for him, he suggests potential traders read two books-Market Wizards and The New Market Wizards, by Jack Schwager. “Read them with one purpose in mind-to understand that there are 40 people who were successful doing different things.” When asked what some of the characteristics he believes are necessary to successful futures trading, Redmont answered, “dramatic concentration powers to understand the markets and to spend the time learning the niche of whatever it is they do.”

Forex/currency Trading/fx – is It the Right Choice for You?

admin — Sat, 07 Nov 2009 02:59:52 +0000

With the current questioning on whether or not property [whether residential, buy-to-let, or industrial] is the place to invest at the present moment; the experts assessment that a further interest rate rise is on the cards; the large amounts of money required for any significant promise of profiting from shares, even if you pick the correct ones… and the costs involved; the gloom and doom in pension funds – are you looking for a bright spot?
The Currency Trading/Forex/FX markets could be that bright spot… after all billions are traded there on a regular basis, day after day, month after month, year after year.
It doesn’t matter whether you buy or sell, the potential for profit is there whichever way the market is headed.
Did you know that it is a TAX-FREE market? That it is relatively cheap to enter, especially when compared to shares? And that costs are extremely low?
It is quite easy to learn the ins and outs which you will need to know to make successful trades, if you don’t know anything about it in the first place, then a course will put you in the know. Don’t expect it to be difficult to learn and don’t be put off by the technical terms. They are extremely simple to pick up, you will find it interesting, riveting even, and the details of the actual amounts of money which are traded are guaranteed to be an eye opener.
Once you have learnt HOW to trade, you can sign up with an online trading platform… remember to take advantage of their FREE courses, tutorials, and most importantly their demo account.
Does this sound like an avenue worth exploring… get your research off to a resounding success… visit http://www.5thNovember.com for all the lowdown on the best courses and trading platform, plus free tips which you won’t want to miss.
This article has, of necessity, only been an introduction to the fascinating subject of currency trading. Newbies need a reliable source of introductory information, even the more experienced can benefit from study. There are numerous books on every aspect available… I’m sure you could find some at your local library. The only problem with this approach is that before you have done a basic introductory course, you could…
1. become overwhelmed, plus you wouldn’t understand the basic terms.
2. find the books rather ‘dry’ and hard-going in the extreme.
My advice, do a basic course first… then if you feel you want to expand your knowledge… follow the above option.
Remember, remember, the 5thNovember.com!

Option Trading: Thinking “Outside the Box”

admin — Thu, 29 Oct 2009 15:18:40 +0000

Wouldn’t it be great if we could buy an option with five months left until expiration and sell an option with 2 months left until expiration for the same price? You couldn’t lose. Well we can’t. I love options spreads so much I realized something very important. We can buy a spread that has a lot of time value left at almost the same price as we can sell one with less time value left. The reason really opened my eyes and gave me new insight into options. Here is what I came to realize.
I started comparing how expensive options were in relation to the other strike prices in the same month and to the other months. I wanted to know based on th e price per day which options were more expensive.
The first 1 or 2 option months, as everyon e knows loses time value quickly. The at the money strike prices are very expensive compared to the out of the mon ey strike prices. Since there is not that much time left, how much can they charge for an out of the money option? Not much.
The next several months, the opposite is true. Compared to each other, the strikes that are closer to the money are cheaper in terms of price per day than the options further out of the money. Let me explain it another way using the S&P market.
6 days left at the money option cost 12 points
6 days left out of the money option cost 2 points
70 days left at the money option cost 43 points
70 days left out of the money option cost 29 points
There is more than 10X the time left but the 70 day at the money option (43 points) is only less than 4X the price than the 6 day at the money option (12 points).
The 70 day out of the money option (29 points) is almost 15X the cost of the 6 day out of the money option (2 points) but only has 10X the time value. We will buy the cheaper options and sell the more expensive ones.
Sell 6 day at the money and sell 70 day out of the money. Buy 6 day out of the money and buy 70 day at the money. This will be done for a 4 point debit. We are now buying a spread that has 10X more time value than the one we are selling and are only paying 4 points for it.
When the 6 day options expire we can sell the next month to take in more premium, still keeping the 70 day option spread.
What goes up, must come down! We have all heard this befo re in reference to the laws of Gravity. We have laws in the commodity markets as well. What comes down, must go up! The greatest traders of our time like War ren Buffet know this. He is perhaps the greatest Stock trader ever. He had never traded commodities until a few years ago. He bought silver in the futures market. When the market went even lower he bought more. The “smart money”, commercials will not be scared into selling when a market they have purchased drops even further. They know better than anyone that a commodity has real value and will always be worth something.
There is a famous book, “You Can’t Lose Trading Commodities”. The author buys commodities and then just waits for the market to go higher. He would purchase more as the market fell.
You need a big bankroll for this. Personally I know corn won’t go to $1.00 but what if it did? I want to minimize the risk in case I want to end the trade.
I started trading the Soy Complex this way several years ago. Not with options. Strictly futures. I bought what was similar to a crush spread. I increased the contracts as the market went against me until the spread rebounded a little. Since I increased the contracts I didn’t need the market to come back to where I started. It only had to rebound to the next level.
Black Jack players did this until Casinos caught on and put limits on bets. It is a known fact that futures traders make good gamblers and professional gamblers make good futures traders. I am against gambling but even gambling done with a system is not really gambling.
These card players would bet something like this: $5 lose, $10 lose, $20 lose, $40 lose, $80 win. The losses add up to $75. They would win $80, so the profit is $5. Not a lot, but they would do this all day. Black Jack is just under 50% probability for the player.
The problem is there is a slight chance that you could lose 40 times in a row. Now with Commodities we have a 50% probability and we won’t lose 50 times in a row because the market can’t go b elow zero.
Now before I go an y further, I need to tell you that I am not recommending you double down on your trades. What you can find are mark ets that are near their lows where you can do a small scale trade. Spreads offer even better opportunities. They have a closer range (high to low).
By now you can see we only use this to go long a market since we can never b e sure how much a market can go higher. First we need to find a market that is low already so we won’t have to wait that long and also so there will be less capital needed. I prefer to trade this using options. There are many ways to do this. You could buy an option in a market like soybeans and choose how many cents the market will drop before you buy more. The problem is, an option is a wasting asset. The Theta (time decay) would cause you to lose money.
I use spreads so I am not paying for time decay. I will probably sell more Theta than I buy, so if the market does nothing I will make money just on time decay.

Why Should You Invest in Learning to Trade Forex

admin — Wed, 28 Oct 2009 16:22:53 +0000

People can get rich by buying and selling currencies. Banks, companies and individuals are now turning heads on how to learn forex exchange and getting the forex trading they need, because they know already that it is the largest market, the fastest and safer way to earn unlimited income than Stocks and Futures. Before Forex was not even available to individuals like you and me. But due to the age of the internet, Forex trading is now an option to people who want to earn a lot of money. Depending on how much they are willing to risk, this is the best way to start earning from home and enjoying life.Learn why this is the future of potential earning unlimited money in less time than usual. Here are some of the reasons why:Transaction Duration: In a good opportunity of trade, you can turn a little amount of $200 into $2000, assuming you have devoted time to learn the craft.Operation Cost vs. others : You don’t need to pay taxes, commissions and rent in trading currencies. Liquidity or Flexibility : It is always open, as long as you have seen an opportunity to place a great trade, you can earn any time and any where internet is available.Security: Bad news does not affect the trade, you can earn even in a down or up market. It does not have a physical address and cannot be controlled by anyone so you can be sure everybody has the chance to get rich in Forex. Forex Trading TipsAlthough anyone can start trading currency, and yes, even it is easy money, not all people who venture into this is rich. If you really want to earn money week after week, you must take time to learn properly how to learn forex exchange. With all the forex trading courses offered, some are good, some are just there for the money. Choose a Forex course that can give you:-quality forex training : and I mean not just the basics, but the forex strategies needed to become an elite trader. Courses made by a forex mentor can help you do just that.-quality support : anyt trader needs all the help he/she can get in trading. Forex Courses that are worth your money and time are the ones that has a great support group.-flexibilty : you have a job, and learning Forex does not have to make you quit now and just sustain yourself with Forex. A great Forex Course has materials available online and lets you learn at your own pace.After getting the quality education, you can get a great currency trading software platform to help you practice in a forex demo account and have the broker that would give you the best forex trade signals possible .How much money you would want to make? What would you feel about it if you had that money week after week, in less time that you spend having lunch? Forex is the future of investments, with manageable risks and higher earning potential than any market to date. Invest time in learning to trade forex with now and enjoy life.

You, The Dummy, And The Stock Market

admin — Tue, 20 Oct 2009 06:24:03 +0000

Ok, so you want to dabble in the stock market. Unfortunately, you don’t know how and where to begin. So what do you do?

Well, the first relevant thing to do is ask the basic question of what is a stock and its significance.

A stock symbolizes ownership of a company. Some view stock as certificates. So the more stocks a person owns of a particular company, the more of the company they own. And the more the company they own, the bigger the influence they have in running the company. This is called equity investment.

The next thing to do is familiarize yourself with financial terms such as ‘price-earnings ratio’, ‘margin’, ‘option’, ‘earnings per share’ and ‘leverage’.

Then, it’s on to knowing where and how to actually buy stocks.

There are two ways to buy stocks:

1. brokerage service
2. online exchanges (e.g. banks)

Exchanges are services that allow investors to access stocks all over the world. Here, they can buy and sell stocks without the need for a broker. Certain banks allow you to set up your own stock portfolio and buy and sell stocks online using the money you have in these banks.

Brokerage services are rendered by brokers. These middlemen do all the work for you. They research the stock market, give advice, and buy and sell stocks according to the wishes of their clients. These brokers earn a commission from the stocks bought or sold.

Once you have chosen how to buy and sell stocks, the next thing to do is to open an account. As stated earlier, exchanges allow you to monitor and control your stock portfolio personally. If you choose to enter the stock trade with a bank, then ask your bank the specifics of setting up your own account.

If you choose to trade stocks via a broker, find a reputable broker and ask them to open and manage an account for you.

After you have successfully set up an account, it’s time to study the stock market and plan your strategy: will you be conservative in investing your money? Or will you be aggressive? Are you in it for the long term? Or are you a day trader?

After you have identified your plan, it’s time to do some research on the stocks offered in the market. Having a broker will significantly make it easier for you as they will do the research and give you advice. But, it is still best to study the market yourself.

Be warned though, the stock market is volatile. Be prepared for a roller-coaster ride.