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Top Moving Average Secrets

Jan 27

Posted by ArtQ in Finance | No Comments

One of the most popular technical analysis indicators is the simple moving average also known as SMA, if you learn how to use these correctly they can be a very useful tool to help you to make good trading decisions.

The 50 simple moving average, or 50 SMA, is simply the sum of the last 50 values for each period, divided by 50, this is a moving window, as time moves on so does the average. Notice that I used the term period because this indicator works on any time period in exactly the same way.

It can be used on monthly, weekly, daily, hourly, 30 minutes, 15 minute and on whatever time period you want to monitor and trade. Although the SMA is the most commonly used there is also the exponential moving average or EMA. This is a weighted version of the formula using the mathematical exponent function to give more weight to the more recent values, this has the effect of making it a much faster average that many traders like.

The reality is that it probably does not matter if you used the SMA or the EMA, what does matter however is that you use one or the other and then be very consistent with it. Do not switch between them, it is more important that you trust your chosen indicator then a slight difference in its value.

The simple moving average is primarily used to determine what the current trend of the stock is, depending on the value used it could be a short term, medium term or long term trend. An important point to note is that moving averages are really only useful when the stock is trending, if the moving average is flat, i.e. horizontal on your chart it can become very choppy, this is a good time to not trade.

The general rule is that if the chart price is above the SMA the trend is up, if below the trend is down. This is very important to understand because it forms the basics of trend trading and trading with the trend.

For the short term trend many traders like using a 5-8 SMA or EMA, here is a trading secret, never trade again the direction of the short term tend, actually this is really just common sense when you think about it.

Moving averages can often act as support or resistance, many traders use the 15, 21 or 30 SMA for this purpose.

There are a number of other very important moving averages that you need to know about, these are the 50, 100 and 200 SMA, and this mostly applies to the daily and weekly charts. A lot of big players in the markets, like the the mutual funds, investment banks etc use the 50 and 200 SMA as support and resistance, if they decide to buy or sell based on these you need to follow suite, the 100 to a lesser extent. These are very useful averages to watch if you trade EFT’s like an Oil ETF.

A useful tip is that when a stock breaks through one moving average it will often move all the way to the next, for example, if a stock breaks the 30 SMA it may move to the 50 before finding some support or resistance.

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How To Buy The Best Stocks

Jan 27

Posted by ArtQ in Finance | No Comments

Although it may seem obvious to most stock market swing traders there are a number of simple rules that you can follow which will ensure that you have more success when buying stocks:

In the USA stock market there are 3 major indexes which are each made up of a basket of stocks, they are the S and P 500 (also known as the S&P500), the DOW 30 and the Nadaq 100. These stock indexes generally only contain major blue chip stocks, as long as you buy from these 3 groups you will at least know that you are getting a well known solid stock.

For example the DOW 30 contains major industrials and large multinational stocks such as Home Depot (HD) and Johnson and Johnson (JNJ) whereas the Nasdaq 100 mainly contains techical companies such as Apple (AAPL) and Miscrosoft (MSFT).

Always buy a stock that is liquid, this means that it is a highly traded stock, this will enable you to easily buy and sell at the price you want without having a delay. You will also get a lower spread, thats the difference between the BID and ASK price of the stock. For a stock to be considered highly liquid it should trade at least 500,000 shares per day, ideally even more.

It is best to avoid stocks that are bellow as this usually means the company is in trouble, although with the bear market of 2008 there have been a lot of good stocks at bargin prices between and . Avoid buying a stock below at anytime.

Another consideration is options, does the stock has options?, this will be important if you want to trade options around your stock, such as a covered call, or you may want to buy a PUT option in order to protect your stock.

Be very cautious about buying a stock just before it’s earnings release, stocks often drop significantly if you come out with a poor report. Earnings releases are 4 times a year with one of them being the annual report.

If you are going to trade options make sure that you learn how to trade by getting some good education. There are many swing trading strategies that work well with stocks in todays volatile markets.

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INO Technical Market Analysis Signals

Jan 26

Posted by ArtQ in Finance | No Comments

INO Technical Market Analysis Signals

Rating: 5 out of 5 stars

Reviewing: The INO Trade Triangles and Chart Analysis Score

Sign up here for INO Technical Market Analysis Signals

The INO Trade Triangles are the technical market analysis signals system included in INO’s MarketClub. Traders and investors have a variety of tools helping them make decisions but sometimes an automated signal is best. Emotion often clouds choices making a signal based system of assistance. INO has a terrific proprietary technical market analysis signal system called the Trade Triangle. Available on three time frames: Daily, Weekly, and Monthly, these buy and sell signals are made to suit investors of different time horizons.

Regardless of the instrument, the Trade Triangle will attempt to calculate future market prices and provide a long or short signal.  They are best used in association with a tool that quantifies trend strength such as Chart Analysis Score which is also a feature of INO’s MarketClub. In Conjunction these tools can help traders and investors find long and short opportunities with the momentum to move in their favor.

The Trade Triangle gives long and short technical market analysis signals based upon a series of weighted factors including nominal price change, change in percentage, multiple moving averages, and new highs and lows. The technical market analysis signals are not trying to catch highs and lows but rather identify the greater part of a swing trend.

If you would like to find the latest Trade Triangle or Chart Analysis Score buy and sell signals you:

  • Select to search for Equities, Futures, Forex, Mutual Fund, or Index

  • Choose what Trade Triangle (daily, weekly, monthly), or Chart Analysis Score (+100, +90, +75…) interests you.

  • Choose how far back you would like to search (today, yesterday, 3 days, 1 week or 1 month)

  • Hit Scan

From the criteria you enter, the tool will generate specific trading and investing ideas.  Pair up a directional signal with strong momentum and the probability of being on the right side of the trade is greatly increased. The adaptability of the system is also useful for identifying inter-market relationships such as currencies and commodities. Usually the more popular symbols will appear at the top of the list.

Bottom Line:  Traders and Investors seeking to identify changes in trend and energy levels in momentum will enjoy the technical market analysis signals of INO’s Trade Triangles. There is a 30 Day no risk trial which means you have nothing to lose and much to profit.

Sign up here for INO Technical Market Analysis 

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Stock Market 101: Double Tops and Double Bottoms And How To Cash In On Them

Nov 20

Posted by ArtQ in Finance | No Comments

Most amateurs get killed in the stock market when double bottoms and double tops form. Keep reading to discover how you can make thousands of dollars when double tops and double bottoms form.

All stock market rallies reach a point where bulls say, ok, I’ve made enough, I’m going to sell and take profits. Charts top out once adequate bulls get their profits, whilst the revenue from fresh bulls is not sufficient to replace what was drawn out.

Bulls who just bought in are mad as they came in too late. They are trapped. Their trading account keeps piling on losses. Should they hold or sell? If enough bulls decide the stock has overshot to the downside, theyll step in and buy. So as more and more of these bulls step in, the stock begins to rise and the rally continues. Now prices approach the level of their old top, and thats where you can expect sell orders to hit the market.

Many battle scared traders who got caught in the previous decline take a blood oath to get out if the market gives them a second chance.

A reflection of this position happens in the securities market at market bottoms. The market falls to a new low at which enough bears start taking profits by covering shorts and the market rallies. Once that short covering rally stalls and the stock begins falling again, all eyeballs are on that previous low-will it hold? If bears are stronger than bulls, prices will break below the first low, and the downtrend will continue. If bears are weaker than bulls, the downward move will stop near the previous low and create a double bottom bounce. Technical indicators assist in decoding which of the two is more expected to happen.

Any time you see a stock rise to its previous peak, the main question in your mind should be will it rise to a new high or form a double top and turn down. Technical indicators like the RSI, MACD, and volume are very helpful in answering this question.

If the volume, RSI, and stochastics start falling as the stock approaches its previous high, then it is likely that a double top pattern will form.

When a stock falls to its previous low, a double bottom is most likely to form when the volume, MACD, RSI, and stochastics are rising.

For more helpful advice from master stock traders go to stock market trading tips and for  great technical analysis and free stock picks visit stock market picks 

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A Review Of The Options University?

Nov 16

Posted by ArtQ in Finance | No Comments

More and more folks in the marketplace are starting to appreciate that options are an excellent tool for maximizing profitability, and safeguarding capital and assets with proper hedging.

In fact Options are often known as the only true method of hedging. While this is correct, it’s just now that folks are really starting to appreciate the potential advantages of options, the problem is that they’re still badly understood and basically used the wrong way by traders within the marketplace.

The method to make sure that a trader totally understands how to use options in a way to ensure maximum profitability for their trading or business, is thru smart education and preparation. This can be the one most vital issue {that a} trader will do in their trading career.

But, there is a frequent issue with this, in that most of the options trading corporations teach options the wrong way round. This means that they teach basic options strategies to their students and then just leave them to get on with trading live in the marketplace.

This is the point where the Options Uni comes into its own. they teach the philosophy that the real way to be ready to trade options properly, is initially by having the ability to discover opportunities where Options can be used effectively.

They teach their clients to be able to find the opportunities and when a trader is capable of doing this, they then go on on to teach the effective methods and techniques for each different situation.

Options University offers a full vary of courses from the basic level thru to advanced and mastery courses.

The company is run by successful options traders who trade full time within the marketplace. This means they possess the skills and experience to effectively teach what they know. They also give live trading events and seminars, where traders will study and make trades in live markets with their coaches.

No other options trading company currently uses this approach, or offers the same opportunities to trade and learn alongside successful skilled traders.

But, if a trader is committed to realizing all of the potential of options then they have to go further than simply signing up with the options university.

To become a profitable options trader an individual should be ready to be 100% committed to the program and training.

An example of what is potential when fully committed Options University was demonstrated two years ago when Ron Ianieri, one of the founders of the company and an extremely well thought of options trader in the marketplace, took a group of twelve inexperienced traders thru an intensive 12 week course that brought them by the hand and led them through to a complete options mastery level.

For additional information on thisOptions University Review, just Follow the Link.

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Swim Clear Of The Sharks In The Stock Market

Nov 16

Posted by ArtQ in Finance | No Comments

Revealed for the first time. This article could completely turn around your trading.

This behind closed doors secret about institutional traders will save you from being ambushed. This secret has saved me thousands of dollars and now I’m breaking my silence to show you how to do the same.

Institutional traders use dirty tactics in the stock market that are so bad, they should be illegal.

After reading this article, these dirty tricks might make you angry. It may piss you off.

It may even make you want to close this page and forget you saw it.

But I’ll make you a promise – stick with it, hear me out.

Because you will learn an entirely new way of looking at the stock market and in particular false breakouts.

Let us talk about what support and resistance lines REALLY are, and then I’ll talk about false breakouts.

Learning the how and why resistance lines and support lines form will help protect you against false breakouts.

When most traders buy and sell, they make an emotional commitment to their trade. It is emotions that keep a market going higher or sent it into a downtrend.

When a stock falls, some traders jump out and book profits, some traders jump out and take losses, and some traders hold on.

A chart is really nothing more than the result of emotions coming from the crowd of people in that particular stock.

Emotions Are Why Support And Resistance Lines Form

When the stock finally climbs back to a traders cost basis, she is probably going to sell it. There are lots of painful memories of being trapped in the stock and all he wants to do is to get out of the stock as fast as possible. This selling will temporarily stop a rally. Bad thoughts like this are one of the main reasons you see resistance and even support lines form.

For example, suppose a stocks falls from down to where it trades for a couple of weeks. The more time that passes that the level holds, the more that think support is at . Suddenly, after a couple of weeks of trading at , the stock falls down to . Seasoned traders will let their losers go quickly and will exit the position somewhere between and . Newbie stock traders will dig their heels in and will hold on making the stock their own personal Vietnam War. Some amateur traders will get out at . The newbie traders who did not capitulate at will be the first to run for the exit if the stock can climb back up to . They would love the chance to get out of this stock at break even. Their selling will temporarily stop a rally and form a resistance level.

Think Of Support and Resistance Lines As Regret Lines

Traders who come across a stock that has spiked up feel as if they have missed the train. If a stock drops back or fills the gap, the traders who regret missing the first move will buy in anticipation of another such move. This regret then satisfaction when the stock pulls back causes support levels to form.

When you study a chart, draw support lines and resistance lines at recent bottoms and tops. Expect a trend to slow down in those areas, and use them to enter positions or take profits.

Most Headfakes or False Breakouts Are Created By Institutional Activity

When the market rises about resistance and pulls in new buyers and then suddenly reverses and falls back below that resistance, this is called a false breakout.

A false downside breakout happens when a stock falls below support, attracting more bears just before a rally.

All stocks are fair game but especially any stock that has a high percentage of institutional ownership.

Institutional traders love causing false breakouts because this is where they make the most of their money.

Institutional traders can see all the limit orders for a given security. They know exactly how many buy orders are waiting to be automatically executed above a certain resistance level.

Institutional traders engage in what is called running the stops. A false breakout happens when institutions engage in hunting expeditions to run stops.

For example, when a stock is slightly below its resistance at $30, the buy limit orders come flowing in near $28.50. The institutions calculate the liquidity ratio which measures how much the stock will go up if all buy limit orders are executed at $28.50. They calculate that the stock will run to $31 if all the buy limit orders at $28.50 are executed. They short the stock at $30 to push it down to $28.50. At $28.50 they cover their short position and go long as the wave of buy orders are automatically executed pushing the stock up to $31. If greedy traders start piling in, the institutional trader will stay long the trade. As soon as the buy orders start drying up, they sell short and the price falls back below $30. That’s when your chart shows a false upside breakout.

If you are knocked out of a trade because of a false breakout, do not be afraid to get back into the stock. Amateurs usually make a single run at a stock and stay out if they are stopped out. Professional traders will make several runs at a stock before nailing down the trade they want.

For more free stock trading tips, tricks, and secrets go to stock trading help and if you are tired of losing money in the stock market see the excellent article at investing

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On Playing The Stock Market

Nov 15

Posted by ArtQ in Finance | No Comments

The smart stock market investor knows that in order to be successful a person must stay informed. That means watching your stock daily and being able to chart trends. Luckily you have three very viable options when tracking software. You can buy a software program that will track your stocks. You can buy a membership to a website that will allow you to track your stocks or, of course, you can turn to a brokerage to handle all of your trading and financial advisement for you. If you want to control your own stocks then the best of all worlds is VectorVest.

So what does VectorVest offer you in terms of membership and software? Well for starters you can download the software, input your stocks and then set an alarm to notify you when it is time to buy or sell. This can be completely customized to meet your needs. It also offers you plenty of information about the hottest stocks on the market so you will have some financial advisement if you take the time to read the material.

But what separates the software/website from many others is the enormous amount of training material that is offered. It offers research material, training material and also many other software programs to help make your life easier. This is something that many other standalone programs fail to offer. For those new to trading stocks, having the right information on hand is absolutely essential to a prosperous portfolio. The website even offers you advice on stocks you should know about that are perfect for your stock portfolio. So essentially it is like having a financial advisor there for you when you need it most. If you have already invested in stocks the website can even analyze the data for you so you can know if you are on the right track.

The only real downside to VectorVest is that you are going to have to pay a subscription fee and licensing fee for the products. But if you think about it, you truly are getting your money’s worth. Right now you can get a 9 week special offer to try the membership and product for only .95 which is really a great bargain considering how much you get in return. Granted, it is going to take you time to learn the programs but with so much training being offered you will be off and running in no time.

Sarah Lomas is a foremost expert in the yeast infection cure. She has had extensive experience and conducted countless experiments in finding yeast infection medications. She is also a highly acclaimed writer in the yeast infection field and you can find out more at Remedyforyeastinfection.com.

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What is a Stock Portfolio About?

Nov 15

Posted by ArtQ in Finance | No Comments

Investing in your future is something that takes decades to come to fruition. As a young adult entering the workforce after school you are told to invest your money wisely and save for retirement. But far too often young adults put it off because the future seems so far away. Before they know it retirement is looming and their investment portfolio is empty. Investing in stocks is a great way to build a solid investment portfolio and ensure that your future retirement plans are fully financed. And you need to be able to watch your investments. The answer is a stock tracking software such as Stox/Stock Portfolio Management.

Mac users often find themselves out in the cold with a lot of software programs on the market that are designed to track stocks but Stox/Stock Portfolio Management is completely for Mac users. The software, once installed and connected to the internet, will pull from various online sources to keep your stock information up to date. Plus everything is color coded and neatly organized so you can use it much easier. You can even set it to alert you to when a stock dips in price so you will know exactly when to sell or buy.

All that is well and good but you have to actually take the performance into account. Many users are heavily disappointed in how the software operates. One of the most common complaints is that the software is unstable. It seems that there are functions that will often fail to work or if they do work it is improperly. And a key disappointing factor is customer service. Good customer service can make or break anything and this software is not an exception. So you really have to wonder if the price is worth it. Yes, you can find it on Amazon.com for $38.49 but even that may be too expensive for what the software is capable of doing.

You really need to be wary when any stock tracking software claims to be able to make you a financial guru or rich. Stox/Stock Portfolio Management is simply a program to monitor your stocks and investments. It is not going to tell you when to buy and sell. It only works as far as you can take it. That is why it is laughable for the designers to make such bold claims. There are plenty of other stock tracking software programs on the market so you may want to take a look at them first before buying this one.

Beth Kaminski is the co-author of Curing Your Anxiety And Panic Attacks which detailed treating panic disorder as well as tips on the various anxiety disorder medications available at www.anxietydisordercure.com.

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Stock Market:Invest on It?

Nov 15

Posted by ArtQ in Finance | No Comments

The stock market is a great way to gather a financial portfolio that you can use later in life. Stocks tend to be a great investment if you know what you are doing. The key is long term planning and research. You cannot go on speculation and you do have to gain access to the right information. It is up to you, in the end, to make sure you watch your investments. There are a lot of stock tracking software programs to choose from so you need to choose wisely. StockMarketEye may be something you need to check out to see if it works for you.

StockMarketEye is a relatively simple and inexpensive tool to use to monitor your stocks and portfolio. You simply input the stock data and keep an eye on it. You can even put in stocks that you are interested in to watch so that you will know when to invest your money. It allows you to chart your investments, allows symbol searches and gives you free stock quotes.

Being able to visualize your stock’s performance is really key to any software. You have to be able to see how the stock is doing. Simply seeing a plus or minus sign is often confusing to some people. This software gives you that visual charting so you can see how your stock is doing. That is incredibly valuable. And unlike other stock tracking software, this one is relatively inexpensive so you are not spending a lot on the program itself. You can easily find it for $29.95 and it does not require any renewing or monthly membership fees. You can even try out the program for free for 30 days. The free trial is a full version so you can get a feel for how the software will work for you. Another great bonus is that you can also get a Mac version which is great for those dedicated Mac users.

Every single piece of software you could possibly use to track your stocks comes with its good side and its bad. The key is knowing the software weakness and finding a way around it. StockMarketEye does have positive and negative aspects. This software is not designed to give you financial advice and there is no one on staff at the support center that is going to give you that. So you have to be responsible for your own investments. But with its ease of use and low price it is definitely one you should check out.

Beth Kaminski is the co-author of Curing Your Anxiety And Panic Attacks which detailed help for panic attacks as well as tips on the various panic disorder medications available at www.anxietydisordercure.com.

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Your Manual on How to Buy Stocks On the Internet

Nov 15

Posted by ArtQ in Finance | No Comments

One of the most rewarding forms of investments, buying stocks has become a popular choice given that you know how to be successful in it. Regardless of the tough economic climate, people are still daring to succeed due to the fact that a lot of people have already become successful and they have earned tremendous profit through buying stocks. But if you venture down this path, you might want more information on what is the best stock to buy. Getting more information on penny stocks to buy or best stocks to buy now is the best way to make sure your stock investments are a success.

But then, having inadequate experience of how stock investments work is one hard thing to embark on. Knowing the secrets on how to buy stocks will definitely help you a lot in becoming successful. The most preferred and the cheapest way available to buy stocks is through online and that is preferably what you must try to master.

When it comes to stock investments, you can save ample time through buying stocks online. A large number of online brokerage firms are already available and it will be your decision which brokers to trust preferably depending on their level of credibility.

After picking out which online broker to trust, the next step you need to do to be able to buy stocks online is to open an account and deposit some money. You can now already start buying or even selling out the stocks of your choice mainly depending on the limits you will set with the guidance of your online broker to further ensure success.

To further enhance your stock searching capabilities, Most online brokers make use of back up researches and innovative tools available over the internet that you can make use of. Using these tools and the support from your online brokers will help you buy the stocks that are profitable and it will also help you determine which stocks to avoid buying.

An inexpensive fee that commonly starts from nine to fifteen dollars is charged per transaction by your online broker. The fee will be automatically deducted on your account. In comparison with the fees from full-service and discount brokers, the transaction fees from online brokers are actually the cheapest available so you should using it to your advantage.

To further protect yourself from losing profit from your stocks; you need to specify a stop loss order to your online broker. A stop loss order will help you get protected from losing profit through letting your broker sell your depreciating stock when its value goes below a certain amount you will set.

Being a novice to the field of online stock investments requires you to be educated with the necessary tools that you will need for success. Never hesitate to communicate with your broker to get help since it will be a lot risky for you once you start to hold back. Buying stocks online still provides the same risks and successes so you really need to arm yourself with the right strategies and understanding.

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A Quick Guide To ETF Trend Trading

Nov 15

Posted by ArtQ in Finance | No Comments

Below you will find a short overview on ETF (Exchange Traded Funds) trend trading, which will allow you to make a more informed decision about whether it is the right type of investment for you.

It was during the 90’s that ETFs were introduced into the world of investment. Their purpose is to act as an investment vehicle, to be traded as comparable stocks, or to be used as shares on the stock exchanges. Investors are attracted to the funds because of the tax efficiency that they have. They are also attracted to the similarity to stocks and the low costs, which are definite benefits.

When you get into ETF trend trading, you will find that it is similar to mutual funds, in so much that they allow investors to acquire various types of securities through funds. Still, there are enough differences between the two to make them distinguishable.

ETFs maintain all of the features that ordinary stock have. As an example, limit orders, options and short selling. However, they still give easy diversification, expense ratios and tax efficiency of the index funds. Unlike the mutual funds, they will not have as much of a net asset value that is calculated each day.

As with stocks, the value of ETFs change throughout the trading day as they are bought and sold by investors. These value changes can be tracked and monitored using financial indexes, with the Dow Jones Industrial Average being a prime example.

ETFs are known to be the most innovative investment medium of the past twenty years. In fact, about sixty seven percent of the professional investors call it this. Of those professionals, about sixty perfect have reported that the ETFs have changed how they build their investment portfolios.

For the most part, ETFs are seen as a long term investment plan, with the reason being that there is always a chance that they may be economically acquired. However, there is definitely money to be made in the short term through regular day-to-day trading of them, so long as you are aware of, and can implement, specific investment strategies.

Speaking of learning investment strategies, there are some courses that you will be able to take on the Internet that will make you a better trader. You should go for one that will be willing to teach you all you need to know along with the tips and secrets of the trade. While you take that course, you need to pay attention to every bit of it as overlooking any aspects of it could result in you losing money once you begin trading.

If you’re serious about earning some extra money, even making a full-time income with ETF trading; go check out the ETF Trend Trading course now.

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How To Buy A Trading Course

Nov 7

Posted by ArtQ in Finance | No Comments

If you are about to start, or are already in the process of learning how to trade, or day trade, you may have already been searching the internet using Google or Yahoo for day trading training education, tools, software or seminars, and have found that there is a lot on offer.

For example “trading course” brings up 758,000 pages in Google and “trading seminar” another 109,000 pages, the question is what should you be looking for when selecting a trading course or seminar. In this article I’ll point out some of the things to check before spending your hard earned money on your trading education.

1. Becareful of the hidden costs involved in a trading seminar that is away from home, account for the expense of hotels, meals travel and car rental?, it may be a lot more than you expect.

2. What is the return policy, this can vary widely between trading education companies, for some you only have a 3 day cooling off period while for others you may have up to 12 noon or the end of the 1st day to ask for refund if you decide this was not right for you.

3. For a live seminar are you also given DVD’s of the same or similar content?, so often live seminars fail to explain all the very important details involved in day trading. Having a set of DVD’s enables you to review the content over and over again at home until you get it. Beware that some companies will bill you extra for the DVD’s even though you have already paid for a live trading seminar.

4. Check the internet for feedback on the company and trading seminar. Use search terms like “company name review or “company name scam”. Often reviews are posted in trading forums, these can be found by searching for “trading forum”.

5. In advance try and find out exactly who will be presenting the seminar. The last thing that you want is a professional “teacher” giving a seminar on trading, what you want is a “trader” who makes his living by trading and only does a few seminars a month out of interest and for personal reasons, not because they need the money.

6. If you are buying an online day trading or investing course where the content is 100% viewed online you should get at least a 30 day 100% money back guarantee, if not stay away.

7. If you are buying a course or trading seminar in which DVD’s and manuals are being shipped to your house, again you should expect a 30 day 100% money back return policy, less shipping and handling, again if not stay away.

8. It’s very likely that you will have questions after taking either the live or online course or watching the DVD’s, make sure that you will be able to ask questions and have them answered, either one on one or in a forum setting.

9. Last, but not least, before buying do a lot of window shopping. The price for trading seminars, either stocks, options, Forex or futures varies widely from for an ebook to over K for a comprehensive set of training. You may be able to find the same material much cheaper at a different company.

Also be aware that day trading education and seminar companies are always running specials and offering discounts, before you buy search the internet carefully for any deals and also call the company directly and ask for a low price guarantee. In other words make sure that you are paying the lowest price that they are offering the product for.

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Popular Share Trading Strategies

Nov 5

Posted by ArtQ in Finance | No Comments

Brought to you by ETFtrendtrading.

There are two basic ways to trade the stock market – shooting in the barrel or using strategies to determine which stocks to buy, when to sell, and how to protect your investment dollars. Needless to say, strategies outperform barrel shooting by a large margin. There are, however, hundreds of trading strategies to choose from. Of all of these there are a couple of tried and trued methods that have worked well for investors over many years. The beginning investor is advised to investigate some of these basic strategies and see for himself how they perform. New strategies can be explored once the basic ones are well-understood.

Hedging
Hedging is a way of protecting an investment by reducing the risks involved in holding a particular stock. The risk that the price of the share will drop can be offset by buying a put option that allows you to sell at the stock at a particular price within a certain time frame. If the price of the stock falls, the value of the put option will increase.

Buying put options against individual stocks is the most expensive hedging strategy. If you have a broad portfolio a better option may be to buy a put option on the stock market itself. This protects you against general market declines.  Another way to hedge against market declines is to sell financial futures like the S&P 500 futures.

Dogs of the Dow
This is a strategy that became popular during the 1990s. The idea is to buy the best-value shares in the Dow Industrial Average by choosing the 10 stocks that have the lowest P/E ratios and the highest dividend yields. The companies on the Dow Index are mature companies that offer reliable investment performance. The idea is that the lowest 10 on the Dow have the most potential for growth over the coming year. A new twist on the Dogs of the Dow is the Pigs of the Dow. This strategy selects the worst 5 Dow shares by looking at the percentage of price decline in the previous year. As with the Dogs, the idea is that the Pigs stand to rebound more than the others.

Buying on Margin
Buying on margin means to buy stocks with borrowed money – usually from your broker. Margin gives you more return than if you were to pay the full cost outright because you receive more share for a lower initial investment. Margin buying can also be risky because if the share loses value your losses will be correspondingly greater. When buying on margin the investor should have stop-loss orders in place to limit losses in the case of market reversal. The amount of margin should be limited to about 10% of the value of your total account.

Dollar Cost and Value Averaging
Dollar cost averaging involves investing a fixed dollar amount on a regular basis. An example would be buying shares of a mutual fund on a monthly basis. If the fund drops in price the investor will receive more shares for his money. Conversely, when the price is higher, the fixed amount will buy fewer shares. An alternative to this is value averaging.  The investor decides on a regular value he wishes to invest. For example, he may wish to invest $100 a month in a mutual fund. When the price of the fund is high he puts a higher dollar amount in the fund and when the price is low he spends less money. This averages out his investment to the original $100 per month. Value averaging almost always outperforms dollar cost averaging as a percentage return on the money invested. When used as part of a broader trading strategy it can help secure the growth of your investment fund.

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What Are Share Splits?

Nov 5

Posted by ArtQ in Finance | No Comments

Brought to you by What Are ETF Trends?.

One of the alluring myths that surrounds the share market is the prospect that a certain stock may split, giving stock holders twice as many shares as before. What is poorly understood by the outsider, though, is that although the investor has more stock after a split, the value of each share is reduced. For example, if a corporation decides to split its stock 2-for-1, it issues one new share for each outstanding one. At the same time, the value of each share is cut in half. So the stock holders now hold twice as many shares but the total value is the same as before the split. A share split is like receiving 2 five-dollar bills for a single ten-dollar bill.  Same value – twice as much paper.

Why would a company do this?

A lot of it has to do with investor psychology. The price-per-share of a stock may be so high that the average investor feels it is out of his reach. A stock split reduces the price so that it may be more affordable to smaller investors. In reality, the small investor could have bought a smaller number of pre-split shares for the same price, but the appeal of buying a $20 share as opposed to a $60 may be strong for some investors.

Shares can be split by a number of ratios but the most common are 2-for-1, 3-for-2, and 3-for-1.  stocks can also be reverse-split – the company reduces the number of outstanding shares so that each share holder has fewer shares than before. Reverse share splits are less common, but can be used for several reasons: the price per share may be so low that it appears as a poor investment; the company may be attempting to stave off possible de-listment on the stock exchange; to push out minority stockholders; or as a way to go private.

Advantages

Lower prices per share can result in greater liquidity – stocks are easier to sell at lower prices and there is less of a bid/ask spread. This is especially true for shares that are priced in the hundreds of dollars – small investors view them as out of their budget and the high bid/ask spreads (the difference between buying and selling prices) can put off bigger investors.

Other advantages have to do with investor psychology. A split is usually seen as a bullish indicator – stock prices are increasing and the company is doing well financially. There is usually a short-term rally around a stock which splits, but the market tends to normalize after a short period.

On the downside, a split may cause investors to expect more about how the company performs. If these expectations are not met investor confidence may be shaken and the result could be a drop in share prices.

The bottom line is a stock split does nothing to affect the worth or performance of a company. It may be nice to own more shares, but in the end your 2 five-dollar bills are still worth the same as your ten-dollar bill.

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Up Markets And Down Markets

Nov 5

Posted by ArtQ in Finance | No Comments

Brought to you by ETF trend trading.

The share market moves up and down every day, but when movements continue downwards for a period of time the market is referred to as a ‘bear market’. Upward moving markets are ‘bull markets’. If a particular share is doing well, it is said to be bullish. If it is losing value it is bearish. 

Bull and Bear are the terms to describe the general conditions of the stock market. These do not refer to short term fluctuations – a bear market is commonly understood as one where prices of key shares have fallen in price by 20% or more over a period of at least 2 months. Even during a bear market, however, prices may increase temporarily. Bull markets are the opposite of bear markets – they are indicated by a rise in prices of key stocks over a certain period of time.

Usually stock market conditions reflect the state of the economy. During bull markets the economy is doing well, unemployment is low and interest rates are reasonable. Bear markets usually occur during times of economic slowdown.  Investors lose confidence and companies may begin laying off workers. At the extremes, an exaggerated bear market can lead to a crash brought on by panic selling. An exaggerated bull market can be caused by over-enthusiasm of investors.  It leads to a market ‘bubble’ that will eventually burst.

Although most money can be made during bull markets, there are also opportunities during bear markets. Knowing the characteristics of each type of market allows investors to profit from them. As would be expected, when the market is bullish investors wish to buy up share. The economy is doing well and people have extra money which they wish to invest in stocks. This creates a situation of short supply which drives up prices even higher. During bear markets, on the other hand, prices are falling so investors wish to unload their shares and put their money in fixed-return instruments such as bonds. As money is withdrawn from the stock market, supply exceeds demand which drives prices down even further.

It is easiest to make money during a bull market. Getting in right at the beginning will allow you to make the most profits. During a bull market any dips in the market are temporary and should soon be corrected. The upward rising prices can’t go on forever, though, so the investor needs to be able to gauge when the market reaches its peak and sell at that time.  

Bear markets represent opportunities to pick up stocks at bargain prices. Getting in near the end of a bear market offers the greatest chance for profit. The prices will most likely fall before they recover, so the investor should be prepared for some short term loss. Short-selling is also an investment strategy during bear markets. Short selling involves selling stock that you do not own in the anticipation of further price drops, so that when it comes time to deliver you can buy the stock for less than you sold it.

Fixed return investments such as CAs and bonds can be used to generate income during a bear market. So called ‘defensive stocks’ are also safe to buy at any time. These include government owned utilities that provide necessities no matter what state the economy is in.

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Online Options Trading Basics

Nov 4

Posted by ArtQ in Finance | No Comments

Learn Options Trading

Trading options is both similar to and different from trading stocks. Trading stocks offers many strategic possibilities from buying and holding a stock for the long term to a day trader’s use of technical analysis to make quick buying and selling decisions.In this regard,options and stock trading, are similar.

When an options trader is first starting out, he or she  needs to understand the basic difference between an option and a stock. An option is a “right to purchase” a particular stock over a period of weeks or months,and it expires on a specific date.The price of the stock itself can fluctuate, as we all know,over the expiration interval so there’s the usual volatility factor in market prices.

Options, on the other hand, expire on a specific date, so you’ll need to exercise them on or before that date. And there’s no rule saying you have to exercise your option if you choose not to. Plus, you can purchase an option for a fraction of the actual price of the stock.Options traders can leverage their investment by being able to trade more stocks.They can acquire the option to buy a 0 stock for only a fraction of that price.This way you can purchase a stock for only a fraction of its market price,leaving you the money to purchase more stocks.This ability to leverage your investment makes options very attrative.

There are several different types of options. You can exercise an American option any time up to and including the expiration date, but European options can only be exercised on the expiration date.and to make matters more confusing, where you purchase the option has no bearing on whether it’s American or European.The “American” options tend to apply to stocks and bonds, while the “European” type applies more often to indexes. And most options expire the Saturday after the third Friday each month. But U.S. markets are closed on weekends, so “American” options expire on the third Friday of the month and ”European” options the following day.

An option is the right to either buy a stock (“call” option) or sell a stock (“put” option) either on or before its expiration date.You have several choices when you purchase an option. You can exercise it any time either before or on the expiration date.Or you decide not to exercise it and try to sell the option before the expiration date and recoup a portion of your investment. If you don’t exercise the option before it expires, you lose your investment.Let’s look at these situations more closely:

Let’s say you buy an option for Acme Chemicals Corp.for a share with a strike price of . Most options contracts require a minimum purchase of 100 shares, so your investment would be 0.Acme’s stock price rises to two weeks later and rather than waiting for the expiration date, you decide to take your profit and run. You exercise the option, acquire the stock for and turn around and sell the stock right away for .You deduct the  -per-share cost of the option and you’re left with a per share profit,or 0 less brokerage fees.That’s a conservative strategy, but a profitable one.And that’s a good thing!

But what happens if the stock goes down below the strike price. But what happens if Acme’s stock price declines. What if it goes below ? You could sell your options for less than the you paid for them–say per share–and you’d be out half of your 0, or 0. Bear in mind that owning an option does not require you to purchase the stock. In this case, you can sell your option and recoup a portion of your investment. This is better than acquiring 100 shares of Acme’s stock outright. You could exercise your option as soon as you can realize a profit or you could wait it out and try for a bigger profit any time before the expiration date. I personally think the more conservative approach is more likely to result in consistently positive returns, albeit perhaps lower than a more aggressive strategy. But that’s just the way I would do it. The higher the risk, the higher the return. Greater profits. And, of course,potentially larger losses.Just like most other investments.

This is just a simplified explanation of what trading options entails. It is more complicated than this and you should really educate yourself before you commit much of your capital to it. The best options trading trading tutorial I know is the one taught by David Vallieres, which you can review here and the video above from the free demo video series he provides. What make this course so good is not only will you learn all the nuts and bolts about trading options, but David also shares with you his strategies that resulted in his success trading options.

 

 

 

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Protect Your Stocks Using Put Options

Nov 4

Posted by ArtQ in Finance | No Comments

Hoping and praying that the stocks that you just bought will go up is not the best strategy to use, however it is the one very often used by the average Joe stock trader who is stock trading internet. The only salvation they have is that in bull markets most stocks will go up.

Statistics show that in a bull market approx 75% of the stocks will follow the general trend and go up, and in a bear market 75% will also go down. Trading with the trend is the best way to trade as 8 out of 12 stocks will follow the trend and give you the best chance of making gains on your stock purchases.

But what if you own some good stocks and don’t want to sell when the market is clearly going down, or about to go down?. There are a couple of tactics that you can consider, both of which involve the use of options, CALL options and PUT options. There is the widely known strategy called Covered Calls, and the much lesser known one called the Married Put.

If you are going to trade options it is important that before you start trading you get the best option trading education that you can. You should also practice stock trading until you are comfortable with the process. This is a very important point that must be taken seriously, if you don’t understand the terminology and the theory then you should not be trading options. If the terms Put option, Call option, Married Put and Covered Call are new to you then don’t trade until you have studied sufficiently.

Selling call options against your stock in 100 share increments is the basis of the covered call strategy and it can provide about a 2-7% buffer against the loss in stock price. However a bigger drop in the stock price will not be compensated for using the covered call strategy, in general.

Stocks in a bear market, and even in a bull market, can drop quickly on news or earnings releases, as much as 15 to 40% within a month. Using covered calls to protect your stocks will only provide limited protection of less than 7% at best and so will not save your account if the stock takes a 40% tumble.

The better solution to providing downside stock protection is the option strategy called the Married Put. As the name suggests the PUT that you buy is used to provide protection when the stock goes down because Put options will increase in value when the stock decreases in value. The term married is used because the option that is selected has to be a good fit with the stock, in other words a good match, if the strategy is to work.

The selection of the best Put option is not straight forward and involves several criteria which are listed below:

1. The strike price of the option

2. The current stock price

3. Choice of options, in or out of the money

4. Put expiration time

Even though the married Put protection only has a limited life span if offers much more protection than the covered call. It can provide as much as 95% loss recovery in the event of a significant drop in the stock price.

The downside of the good protection is that you have buy the Put which is a debit whereas the covered call is a credit. But there are ways of off-setting this expense and there is much more to this strategy when executed correctly. The Married Put can be made to pay for itself and used to generate very good gains if the market, or stock to be specific, moves a lot.

The general idea of the Collar Trade is to combine the covered call and married Put strategy into one, this is what is called the Collar Trade. In effect you put a collar around the stock, sell a call and buy a PUT. If you do this correctly most of the cost of the Put can be offset by the credit from the covered call so you can protect your stock at almost no cost. Yes this is a great strategy which the general public is unfortunately ignorant of, and most brokers don’t understand.

The strategy that I have outlined above is unknown to the average stock market trader but is one of the best trading systems you could have.

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What You Need to Know About Trading Online

Nov 4

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The process of stock trading has of course evolved a lot over the years as technology as developed. In the early part of the 20th century you had to visit a stock brokers office or trading room to buy and sell stocks.

When the postal mail became into common use you could then buy and sell stocks by mailing a letter to your broker, of course today nobody would think of doing either of these.

Today the most common form of trading uses either the telephone or stock trading online. When using the telephone to trade stocks you can still do it by speaking to a broker and giving them your clear instructions, or you can do it yourself by using some form of menu system using the digital key pad.

But by far the most common form of trading is done online, so what do you need to know about stock trading online?, much more than you may think!

Here are some points that you may not have considered:

1. Virtually every broker can do stock trading but what about options, Forex and futures?. While you may not be interested in trading either Forex, futures or bonds it is quite likely that at some time you will want to trade options online, even if it is just covered calls. Make sure that your chosen broker allows you to trade all the markets that you want to.

2. Of course the fee’s charged by your online broker is an obvious point to check, the fee’s can vary a lot and if you are doing hundreds or thousands of trades a day it can add up to quite a lot of money. Did you know that you can call up your online broker and ask for a reduced commission charge?, yes you can, I’ve done it. Of course they don’t advertise it but if you do a lot of trades they will want to keep your business.

3. Have you planned what you will do if you are in a trade and your internet connection goes down for any reason, it could be a power failure, problems with the internet or your PC crashing?. If you are day trading you will want to telephone your broker and manage your trade, probably you will just want to close it. How will your broker deal with your call, will they answer quickly, will they look at the charts for you and describe what is going on?. Make sure that your broker provides good telephone support.

4. Are your trading accounts safe?, make sure that your broker is a member of SIPC, the Securities Investor Protection Corporation, which protects against losses caused by the financial failure of the broker-dealer, but not against losses resulting from the decrease in a security’s value. Usually accounts are protected by the Securities Investor Protection Corporation (SIPC), up to 0,000 (including up to 0,000 for cash claims).

Whatever you decide to do, before trading stocks, options or anything else make sure that you get a good trading education by reading the best trading books that you can.

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Warren Buffett Book

Nov 4

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Warren Buffett was born in 1930 in Omaha, Nebraska and has become probably the world’s most successful investor. He is the son of a stockbroker and Congressman, and of course everyone wants to learn about his investment secrets.
 
I don’t think that Warren Buffett has actually written a book about his investment principals himself, in that sense there is no Warren Buffett book, but he has from time to time given hints in his annual letters to share holders of Berkshire Hathaway, and in other short notes and reports to the media.
 
However there have been a lot of books written about Warren Buffett by others who have tried to put together the story and ideas behind the man and his fortune.
 
In fact if you go to Amazon and do a search for “Warren Buffett” will find 2,576 books being listed, compare that to “Bill Gates”, who for a long time was also considered to be the riches man in the world, and you only find 11 listings, that should give you some idea about the public obsession with the man.
 
I have only read one of his books called “The Warren Buffett Way”, it was hard work and somewhat of a boring read. Much of the content of all these books on Warren Buffett seems to be the same basic information about value investing and being patient with your investments. I don’t think there is much to be gained by reading more than one of them.
 
Here is a small selection of some of the better known ones:
 
The Warren Buffett Way, Second Edition written by Robert G. Hagstrom, Ken Fisher and Bill
The Snowball – Warren Buffett and The Business of Life
The essential Buffett library
Investing – The Last Liberal Art – by Robert Hagstrom
Buffett: by Roger Lowenstein
The New Buffettology, by Mary Buffet and David Clark
The Interpretation of Financial Statements: by Benjamin Graham
Value Investing: by Janet Lowe
Robert Hagstrom, The Warren Buffett Way -
Mary Buffett and David Clark, Buffettology
Janet Lowe, Warren Buffett Speaks – Wit and Wisdom from the Word’s Greatest Investor
John Train, The Midas Touch – The Strategies That Have Made Warren Buffett ‘America’s Preeminent Investor’.
Andrew Kilpatrick, Of Permanent Value, The Story of Warren Buffett
Warren Buffett, Lawrence Cunningham (editor), The Essays of Warren Buffett
Janet M. Tavakoli, Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street
 
Many of these books are quite large, with many pages that would take a long time to read, and even longer to understand and make any sense of. A better way of understanding Buffett maybe to find investment articles which have summarised the Buffett principals into short concise lessons that can be quickly learnt and applied.
 
One point of caution however, and this is not investment advice, Buffett has made most of his fortune during the years of the great USA bull markets, times have changed and it is possible these principals are no longer as effective as they used to be.

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Top Moving Average Secrets For Trading

Nov 4

Posted by ArtQ in Finance | No Comments

One of the most popular technical analysis indicators is the simple moving average also known as SMA, if you learn how to use these correctly they can be a very useful tool to help you to make good trading decisions.

The 200 simple moving average, or 200 SMA, is simply the sum of the last 200 values for each period, divided by 200, this is a moving window, as time moves on so does the average. Notice that I used the term period because this indicator works on any time period in exactly the same way.

It can be used on monthly, weekly, daily, hourly, 30 minutes, 5 minute and on whatever time period you want to monitor and trade. Although the SMA is the most commonly used there is also the exponential moving average or EMA. This is a weighted version of the formula using the mathematical exponent function to give more weight to the more recent values, this has the effect of making it a slightly faster average that many traders prefer.

The truth is that it probably does not matter if you used the SMA or the EMA, what does matter however is that you use one or the other and then be very consistent with it. Do not switch between them, it is more important that you trust your chosen indicator then a slight difference in its value.

The SMA is oftern used to determine what the trend of the stock is, depending on the value used it could be a short term, medium term or long term trend. An important point to note is that moving averages are most useful when the stock is trending, if the moving average is flat, i.e. horizontal on your chart it can become very choppy, this is a good time to not trade.

The general rule is that if the current price is above the SMA the trend is up, if below the trend is down. This is very important to understand because it forms the basics of trend trading and trading with the trend.

For the short term trend many traders like using a 5-8 SMA or EMA, here is a trading secret, never trade again the direction of the short term tend, actually this is really just common sense when you think about it.

Moving averages can often act as support or resistance, many traders use the 15, 21 or 30 SMA for this purpose.

There are a number of other very important moving averages that you need to know about, these are the 50, 100 and 200 SMA, and this mostly applies to the daily and weekly charts. A lot of big players in the markets, the mutual funds, investment banks etc use the 50 and 200 SMA as support and resistance, if they decide to buy or sell based on these you need to follow suite, the 100 to a lesser extent. These are very useful averages to watch if you trade EFT’s like an Oil ETF.

A very useful tip is that when a stock breaks through one moving average it will often move all the way to the next, for example, if a stock breaks the 30 it may move to the 50 before finding some support or resistance.

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How To Buy Top Stocks

Nov 4

Posted by ArtQ in Finance | No Comments

Although it may seem obvious to most stock market swing traders there are a number of simple rules that you can follow which will ensure that you have more success when buying stocks:

In the USA stock market there are 3 major indexes which are each made up of a basket of stocks, they are the S and P 500 (also known as the S&P500), the DOW 30 and the Nadaq 100. These stock indexes generally only contain major blue chip stocks, as long as you buy from these 3 groups you will at least know that you are getting a well known solid stock.

For example the DOW30 contains major industrials and large multinational stocks such as Home Depot (HD) and Johnson and Johnson (JNJ) whereas the Nasdaq 100 contains almost all technical companies such as Apple (AAPL) and Miscrosoft (MSFT).

Always buy a stock that is liquid, this means that it is a highly traded stock, this will enable you to quickly buy and sell at the price you want without having a delay. You will also get a lower spread, thats the difference between the BID and ASK price of the stock. For a stock to be considered highly liquid it should trade at least 500,000 shares per day, ideally even more.

It is best to aviod stocks that are bellow as this usually means the company is in trouble, although with the bear market of 2008/9 there have been a lot of good stocks at bargin prices between and . Avoid buying a stock below at anytime.

Another consideration to make is options, does the stock has options?, this will be important if you want to trade options around your stock, such as a covered call, or you may want to buy a PUT option inorder to protect your stock.

Be very cautious about buying a stock just before it’s earnings release, stocks often drop significantly if you come out with a poor report. Earnings are released 4 times a year with one of them being the annual report.

If you are going to trade options make sure that you learn how to trade by getting some good education. There are many swing trading strategies that work well with stocks in todays volatile markets.

 

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Make Sure You Know Your Investment Style

Nov 4

Posted by ArtQ in Finance | No Comments

This is something that most people don’t even think about, but knowing what your risk tolerance and investment style are very important. This will help you choose investments that are more suited to you, and which the long run should do better as you will be less stressed about them and make fewer trading errors. 

While there are many different types of investments that one can make, there are really only three specific investment styles, and those three styles tie in with your risk tolerance, these are conservative, moderate, and aggressive.

Naturally, if you find that you have a lowish tolerance for risk, your investment style will most likely be conservative or moderate at best. If you have a high tolerance for risk, and are relativily young, you will most likely be a moderate or aggressive investor. At the same time, your financial goals will also determine what style of investing you use.

If you are saving for your retirement in your early twenties, you should use a conservative or moderate style of investing, but if you are trying to get together the funds to buy a home in the next year or two, you would want to use an aggressive. Being an active stock market trader would be considered an aggressive style for most people.

Conservative investors want to make sure that they maintain their initial capital and make very modest gains per year, they want to sleep well at night. In other words, if they invest $5000 they want to be sure that they will get their initial $5000 back. This type of investor usually invests in blue chip common stocks and bonds and short term money market accounts. But remember trading stocks, even if they are blue chips can still be very risky as we have seen in the 2008/9 bear market.

An interest earning savings account is very common for conservative investors.
A moderate investor usually invests much like a conservative investor, but will use a portion of their investment funds for higher risk investments. Many moderate investors invest 50% of their investment funds in safe or conservative investments, and invest the remainder in riskier investments.

An aggressive investor is willing to take risks that other investors won’t take. They invest higher amounts of cash in riskier ventures in the hopes of achieving larger returns – either over time or in a short amount of time. Aggressive investors often have all or most of their investment funds tied up in the stock market.

Again, determining what style of investing you will use will be decided by your financial goals and your risk tolerance. No matter what type of investing you do, however, you should always carefully research the investment and never invest without having all of the facts.

If you think you are an aggressive investor and intend to trade stocks activily, make sure that you learn how to trade before making your 1st stock purchase.

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Stock Strategies

Oct 28

Posted by ArtQ in Finance | No Comments

One popular strategy among the hedge funds that focus on short term trading is the concept of mean reversion. Mean reversion may involve a myriad of strategies, such as short term overbought and oversold oscillators, regression channels, Bollinger Bands, moving averages, etc.

Visit: http://www.bestdaytradingstocks.com

Because they are essentially trying to pick tops and bottoms while trying to take advantage of a quick, but significant move in the opposite direction, or to the mean. Or, if a stock is in a downtrend, and has sold off sharply, a quick snap back to that moving average may also be expected.

The key is the entry price. This keeps his potential loss relatively small, while the reversion to the mean could mean a relatively significant move. This is the type of risk and reward setup an experienced trader will look for.

However, the danger is that if the trader goes short and holds the position overnight, the stock could gap through his stop loss, and hand the trader a sizable loss. For this type of strategy, many daytraders choose to exit their position at the close to avoid this type of occurrence.

No matter what type of strategy the daytrader employs for entering and exiting positions, the long term key to success of the trader will be the proper use of risk management, and strong discipline. In order to have confidence in your strategy, it is important to conduct significant trading strategy research. Having confidence in the strategy you select through sound research should result in an ability to have the discipline to stick with the strategy through periods when it is not performing well.

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Protect your retirement account. For 401k Plan advice, 401k asset allocation, 401k investment advice and a 401k investment strategy. It is important to your retirement account to be educated about 401k allocation and a 401k strategy.

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Protect Your Stocks Using Put Options

Oct 27

Posted by ArtQ in Finance | No Comments

Hoping and praying that the stocks that you just bought will go up is not the best strategy to use, however it is the one very often used by the average Joe stock trader who is stock trading internet. The only good point they have is that in bull markets most stocks will go up.

Statistics show that in a bull market about 75% of the stocks will follow the general trend and go up, and in a bear market 75% will also go down. Trading with the trend is the best way to trade as 9 out of 12 stocks will follow the trend and give you the best chance of making gains on your stock purchases.

But what if you own some good stocks and don’t want to sell when the market is clearly going down, or about to go down?. There are a couple of tactics that you can consider, both of which involve the use of options, CALL options and PUT options. There is the widely known strategy called Covered Calls, and the much lesser known one called the Married Put.

If you are going to trade options it is important that before you start trading you get the best option trading education that you can. You should also practice stock trading until you are comfortable with the process. This is a very important point that must be taken seriously, if you don’t understand the terminology and the theory then you should not be trading options. If Put option, Call option, Married Put and Covered Call are new to you then don’t trade until you have studied sufficiently.

Selling calls against your stock in 100 share increments is the basis of the covered call strategy and it can provide about a 2-7% buffer against the loss in stock price. However a bigger drop in stock price will not be compensated for using the covered call strategy, in general.

Stocks in a bear market, and even in a bull market, can drop quickly on news or earnings releases, as much as 15 to 40% within a month. Using covered calls to protect your stocks will only provide limited protection of less than 7% at best and so will not save you if the stock takes a 40% tumble.

The better solution to providing downside stock protection is the option strategy called the Married Put. As the name suggests the PUT that you buy is used to provide protection when the stock goes down because Put options increase in value when the stock decreases in value. The term married is used because the option that is selected has to be very compatible with the stock, in other words a good match, if the strategy is to work.

The selection of the best Put option is not straight forward and involves several criteria which are listed below:

1. The strike price of the option

2. The current stock price

3. Choice of options, in or out of the money

4. Put expiration time

Even though the married Put protection only has a short life span if offers much more protection than the covered call. It can provide as much as 90-95% loss recovery in the event of a significant drop in the stock price.

The downside of the good protection is that you have buy the Put which is a debit whereas the covered call is a credit. But there are ways of off-setting this expense and there is much more to this strategy when executed correctly. The Married Put can be made to pay for itself and used to generate very good gains if the market, or stock to be specific, moves a lot.

The general idea of the Collar Trade is to combine the covered call and married Put strategy into one, this is what is called the Collar Trade. In effect you put a collar around the stock, sell a call and buy a PUT. If you do this correctly most of the cost of the Put can be offset by the credit from the covered call so you can protect your valuable stock at almost no cost. Yes this is a great strategy which the general public is unfortunately ignorant of, and most brokers don’t understand.

The strategy that I have outlined above is unknown to the average stock market trader but is one of the best trading systems you could have.

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Are You A Short, Medium Or Long Term Investor?

Oct 27

Posted by ArtQ in Finance | No Comments

Did you know that there are 4 mains types of trader and depending on what type you are will determine many parts of your trading strategy and trading plan. The 4 types are generally referred to as: scalping, day trading, swing trading and position trading. When you determine the type of trader that you are it will also determine the time frame in which you will be making your trade. This will be a very important decision that you need to make when deciding how you want to learn to day trade.

1. Scalping Trader, if you scalp the markets this means that you are only looking for a few ticks profit per trade and you may only be in the trade for a few seconds or a minute at most. trading. Some people will also call this day trading but it’s really micro day trading, buying the bid and selling the offer, it’s fast trading and you might end up doing 10-50 trades a day. This can be quite a stressful way of trading.

2. Day Trader, the true day trader opens and closes their trade within the same trading session, usually this mean the same day, but unlike a scalper the trade may be held for a few minutes up to several hours. Usually day traders make about 2-6 trades a day and most of them will be in the 5-30 minutes range. This is a less stressful way of trading than scalping but it still requires much attention and quick decision making.

3. Swing Traders, swing trading usually means that a position is held for between 1 to 5-10 days, although some swing traders may keep a trade on for longer most are within this time period. For many this is the idea way to trade because it allows you to review your trade overnight, at the very least you have several hours to make your trading decisions.

4. Position Traders, this just means that you are going to hold onto your trade for longer than 5-10 days, maybe even as long as a few months.

If you are still working out how to day trade then it may be better to go with the longer time frames as it gives you more time to think.

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