| |
| |
|
Stocks & Mutual Funds Information |
|
|
|
Trading Systems
To become a successful trader you must have some kind of method or system to follow that will keep you on track. You may be buying and selling on tips, the weather or phases of the moon (there is a system like that). The two basic methods are based either on fundamental or technicals. In stock the fundamentals take into account sales, gross profit margins, net profit margins, industry growth, management capabilities, price/earning ratios, etc. In technical analysis you would be computing various moving averages (such as 200-day, 50-day 10-day) of the stock price, trend lines, Fibonacci retracement, support and resistance levels, Elliott Waves, stochastics and many others. There are scores of systems for sale and you can pick and choose among them to see which one suits your bank account and personality. Your choices will range from long-term to day trading. One thing for sure - don't buy any system that does not have a good exit strategy. Understand that many systems will trade frequently with small losses, but any method must have a won/lost ratio of 3 to 1 to be profitable. That means over the period of one year you must win $3 for every $1 trading loss. You will learn early in the game to love small losses. Never buy any system that allows big losses. There is a magazine published every other month called Futures Truth that prints the trading record for about 200 commodity systems. A great way to find the best systems without losing your money. Most of the systems you find will be based upon some kind of strict mechanical entry and exit computation and will need computer software that you will receive when you purchase it. The software vendor may even provide you with a broker who specializes in trading their method. The reason many of these mechanical systems do not have a better ROI (return on investment) better called ROS (return on speculation) is computer systems adhere to a strict formula for their BUY/SELL signals. They cannot give you a "maybe" because computers don't understand maybe. There is no subjective influence at all. The latter will have both positive and negative results on your returns. Most people don't want any subjectivity and prefer to follow what the computer spits out whether right or wrong; it relieves the trader of the responsibility of the decisions. There are many professional traders I knew when I was an exchange member who traded strictly on "feel" and I know many who made six figure incomes doing it. Many people start with a professional system and will tweak it to better fit their personality. This is very common, but requires personal discipline to remain with those alterations. You can't be changing all the time. Whether for stocks, funds, commodities or whatever you invest you must have an organized trading system that has a good exit strategy. Whatever you buy it is the exit method that will help you keep the profits you make. To be a successful investor you must have a system. Al Thomas' book, "If It Doesn't Go Up, Don't BuyIt!" has helped thousands of people make moneyand keep their profits with his simple 2-stepmethod. Read the first chapter athttp://www.mutualfundmagic.com and discover why he's the man that Wall Streetdoes not want you to know. Copyright 2005
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Buy and Hold Investment Philosophy Wall Street has been preaching the doctrine of Buy and Hold forever. The worst part about it is the small investor (and some big ones) actually believe it. Why Technical Indicators The fight continues to rage among traders whouse technical indicators and those who preferfundamental information to establish newpositions and to exit current positions.The fundamentalist believe in knowing all thefacts about a company such as price earningsratios, sales growth, product margins,management capabilities, cost of production,cash flow, etc. Managing Investing and Stock Market Risks Reduce your investing and stock market risks by:Setting your sights on the long term, patiently riding with the ups and downs!If you have the time to be patient, you can benefit from time diversification. The more numerous good years for stocks outweigh the bad, pulling your return up. Stocks Options Trading Let's assume that you want to make some serious money and you have chosen to take things into your own hands rather than depend upon a "professional trader" to make your trading decisions. This is usually only recomended if you can afford to lose the money that you are trading with, and you appreciate the fact that there is much more upside potential with this added risk. Gurgle Gurgle Caught in a whirlpool and being sucked under. No life vest or other device to save you. Market Experience of a Naïve Stock Operator Sometime in the third quarter of 1997, someone told me that I should play the stock market. Knowing nothing about the stock market, I turned to some colleagues to seem to know a lot about it. How Covered Calls Turned a Trader Around Sidney felt sick as she looked at her latest OptionsXpress trading statement. In just 8 months, she had managed to turn her $120,000 account balance into less than $70,000. So, What is This Stock Market Thing Anyway? We've all heard of the stock market and probably have a general idea of what it is and how it works either from high school economics classes, television financial reports, and the countless film depictions of what happens on the floor of the New York Stock Exchange. But how does it really work and what is meant by "playing the stock market?"The Stock Market in a NutshellCompanies sell shares of stock as a means of raising capital. Trading Education: The Best of Both Worlds! I made my very first investment in the stock market when I wasten years old. Ever since then I have been hooked! Now I checkout hundreds of trades each year with the same excitement andenthusiasm, and each time try to find that one market at theright time that could dramatically create wealth. Trading as a Business What can I expect to make my first year of trading?We get questions like this one quite often. We find that most aspiring traders don't have a clue as to what to expect from the market. Historical Briefing: Stocks, Finance and Money The World Bank claims that some two billion of the world'scitizens live on $1 per day or less! That fact absolutelyshocked me. With this statistic in mind it becomes important tofocus on all of the things that have served as money over thehistory of civilization. Red, Green, Yellow - or - Stop, Go, Go Very Fast: Which Describes Your Online Trading? Ever notice how behavior in one area of life can apply to behavior in other areas of life? For example, I've noticed a number of things while driving that apply to online trading. One of them is regarding how people behave toward traffic signals. Learn to Calculate a Stock's Pivot Point Stocks breakout from properly formed bases everyday but many investors don't understand how to locate a pivot point or what patterns to study that may contain this very important buy signal. A pivot point can be described as the optimal buy point or the area at the end of a familiar base pattern where the stock breaks out into new high territory. Stock Market Course .... Day Trader Online Seminar ... Can You Generate Profits Trading from Home? When it comes to stock market trading it PAYS to have more knowledge than the rest of the pack. Pure gold can be harvested in each profitable trade that you accomplish. Stock Market Investing Odds The greatest stock market myth is the idea that investing in stocks is a form of gambling!The financial markets are often compared to a casino. Put some money on X stock and you might as well be playing craps!If that's your impression, and it's keeping you out of the markets, consider this:If investing is organized gambling, it's one of the rare kinds where the odds are stacked in your favor!Why is that?Corporate profits are the key to understanding the investor's edge. Expense Ratios Mutual funds and brokers are always preaching not to buy any fund with a high expense ratio. That is the annual costs of the fund to pay for trading of stocks within their portfolio, salaries, rent, telephone, analysts, etc. When Should I Sell? People are always asking me when should I sell my stock or mutual funds?There are some relatively easy answers to this. In fact, so simple that you won't believe them, but they are things I have learned over the past 30 years as a professional trader on the floor of the commodity exchange in Chicago. Hill of Hope Just about now everyone is confused as to which way the stock market is going to go - up or down. For the past 3 years it has been headed south, but the Wall Street experts have told us that the market never goes down 4 years in a row so this has to be an up year. Whos Calling? Its dinnertime and the phone rings. It's Joe Noname with SuchNSuch Investment Company and has he got a deal for you. Outsourcing It's about time someone spoke the truth concerning outsourcing. The politicians sure won't.
|
| home | site map |
| © 2006 |
