|Stocks & Mutual Fund Information|
Successful Trading ? Establish Your Risk Level
Before you embark upon a journey of trading stocks or futures, and before you make any trades, you MUST determine and establish your risk level. Traders that fail to do this are usually doomed from the start. The fact is that most trading accounts that go bust are because of the failure to determine at what point the trader will cut their losses and move on to the next trade. Rookie traders are particularly prone to do this. They hang on to losing positions hoping that they will turn around ? only to watch the price drop even further. Too much thought and effort are expended on the buying decision instead of the selling decision. The sad truth is that it's the selling decision that will determine your fate as a successful trader. And successful trading is dependent on how long and how well you can protect your account against loss until the big profit comes your way. Setting a risk level for your account and for your trades will provide such protection.
If you're like everyone else, you've got an online trading account and you're free to move in and out of positions without the input or interruption of a broker. If you're not doing this, we recommend that you do. So when you buy a position, have you determined where you would to sell it if the price would fall? Many traders only think about the price going up ? they never think about what they'll do if it goes down. You MUST determine this limit BEFORE placing a trade.
We recommend that get out of the position if it drops anywhere from 7% to 10% from where you purchased the stock, option or commodity (or any other market derivative). Yes, it could rebound and take off 100 points after you sale, but it could also drop 100 points and your account would be wiped out. Consider this, if your account drops 50%, then you need a 100% gain to get it back where you were! This is why you MUST place a stop-loss after every trade you place with your broker. Do this without fail IMMEDIATELY after placing a trade with your online broker. Once you've placed a stop-loss level with your online broker, the system will automatically sell your position when that level is reached. Remember, stay in the game until you hit that big trade!
Chuck Cox is a Technical Writer and Industrial Scientist by professional with a background in statistics. He has used mathematical and statistical methods to invest and trade in the stock, futures, and options markets. Chuck has owned various businesses and presently operates several websites. To learn more about trading in the markets, visit his website, http://www.earncashathometoday.com/trading-stocks.htm
Online Investing & Stock & Share Trading: 4 Reasons Why Most Online Investors & Traders Go Broke
Are you attracted to the idea of being in control of your financial future, but confused about how to start investing in the stock or share market, while avoiding costly mistakes?
Two for the Money
Look back over the years and try to remember how many different stocks and mutual funds you have owned. Suppose you had owned only 2 different equities during that entire time. One when the market was going up and the other when the market was going down.
Swing Trading Strategies
Using Swing Trading Strategies and Technical Analysis when Trading Stocks to Make Consistent Trading Profits.
Basics of Stock Market
Financial markets provide their participants with the most favorable conditions for purchase/sale of financial instruments they have inside. Their major functions are: guaranteeing liquidity, forming assets prices within establishing proposition and demand and decreasing of operational expenses, incurred by the participants of the market.
Boiler Room 7/17/00
On Friday or Saturday evening my wife gets a movie from Block Buster and after dinner we sit, hold hands and watch. This week she brought back one that I think every investor or anyone contemplating investing in the market should see. It is called "Boiler Room".
Catnip of the Stock Market
I have watched my cat play with a bag of catnip. At first he is having fun and slowly he becomes drunk with pleasure and then finally he becomes so tipsy he falls over to sleep it off. The pleasure part is great, but I am not sure if he awakes without a hangover.
Stocks & Oil, Sat Jun 18th, 2005
Both the stock market and oil prices rallied recently, which seems to be a paradox, because high oil prices are negative for earnings (i.e. a higher production cost and a higher consumer tax). However, the stock market was worried about another "soft patch," of slower economic growth, and the sharp rise in oil prices suggest the U.S. economy is still expanding at above trend growth.
Stock Market Insanity
Let's first define insanity. It is doing the same thing over and over and expecting a different result. And that is what most investors do and they can't understand why they are not able to make money in the stock market.
Selection Vs Direction
As I have said many times before in this column it really doesn't make any difference what you buy ? stocks, funds or indexes - it takes smarts to know when to sell. Direction of the general market is more important than selection of any equity.
The Stock Market Doesnt Care if You are a Beginner?. Get Prepared to Succeed at Trading
Stock trading remains a very competitive field and the stock market doesn't care if you are an experienced stock trader or an aspiring one. The rules and the trading opportunities are the same for all of us, so either youre going to make money when you pick a stock and make a trade, or you are going to lose some of it in favor of the more seasoned traders.
Trade Stocks for Real
I read a comment by a forum member on another site earlier today that suggested that every investor should back test their system for at least twenty years. I disagree and will now tell you why. Back testing and paper trading seem to be the most over emphasized techniques offered by market theorists, educational elite, market novices and/or market fakes. While learning the pure basics, I can see why a novice investor may want to paper trade; to see the results of the developing system but I will warn that these results are completely false. The results will not contain the emotional decisions that go along with risking your own cash. Anyone and I mean anyone can paper trade successfully. It's simple, place a trade and hope it goes up and if it doesn't, you have no worries because you can't lose. The emotional imbalance that occurs when you really start to lose money is not present. Don't fool yourself by believing the results of your paper trading or virtual simulation portfolio. These things may give you some confidence in your system but they don't prove a damn thing in the real world. The real world, specifically the stock market, is run by emotional human beings. People make decisions that are irrational and base their trading decisions on fear and greed. Paper trading lacks fear and greed because there is no gain and no loss; therefore there is no consequence to deal with.
Trend Trading - Trading Stocks Using Technical Analysis and Swing Trading Strategies
Peter is a professional trader, Paul is not. Peter has a tested, proven, written trading plan that he follows each time he enters a trade, Paul does not. Peter has agreed to meet with Paul to help Paul become a more successful trader.
Where Is The Beef?
Where is the beef? Or maybe it should be where is the bull? Market, that is? The chief investment strategists and analysts of the major brokerage houses have been promising us a new bull market.
Trading For A Living - Part 1
There can't be many traders who haven't at least considered the idea of telling the boss what they think of him, throwing it all in and going off to trade the stock market for a living. It's a big risk financially, and that uncertainty is what stops most from jumping ship. Is it really possible to trade for a living?
The Secret Method to Selecting a Winning Trading System
Every successful trader has a winning system. There are of course, as many systems out there, as there are traders. Some systems get you to buy on strength and sell on weakness others do the opposite.
Are you paying any attention to your retirement savings? Do you have it in cash or an account with a broker? Maybe you have a professional manager who is investing your money as you add to it every month.
What the heck am I talking about?
How To Buy And Hold
One of the most believed bits of conventional wisdom from Wall Street is to Buy and Hold. Any stock or mutual fund should be put away for eternity and never sold. This is total hogwash and is guaranteed to reduce your investment income.
Buying Stocks and the Importance of Correct Timing
An investor can find and research the best stock on the market, one with huge potential but if the general market indices are negative, it will most likely be the wrong time to buy. A stock with tremendous accelerating earnings, rising sales, an up-trending chart pattern and a strong industry group may sound excellent to buy but will mean absolutely nothing if the market is positioned to move in the opposite direction of your expectations. As soon as a stock is purchased, the time comes for an investor to make a decision to hold or to sell. If the position shows a profit, hold as your judgment is correct. If the position shows a loss, cut it quickly and don't rationalize the situation before it doubles in size. Timing will play an important role in determining if you are right or wrong.
Mutual Fund Commissions
You have heard about a particular mutual fund from a friend, saw it advertised on TV or read about it in some publication thought it would be a good buy. Next you call your broker to get his advice before you buy because he is an expert and is there to help you make money.
|home | site map|