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Posts Tagged shares

Investments And How To Find Them

Sep 30

Posted by admin in Stocks Mutual Funds

There are risks involved in all investing. The skill of investing is knowing which risks are worth taking, and which should be avoided. Finding and knowing which risks to take is the essence of good investing and the whole reason that investments can pay such a high reward. It cannot be done without careful research and analysis. You must give yourself every chance to make the right decision. Investing without carrying out sufficient research is like playing roulette. You are giving yourself virtually no chance of covering your investments and avoiding disaster.

There are certain steps you will have to take in order to give yourself a fighting chance of being a successful investor. If you are considering investing in company shares on the stock market, then you should be aware that all publicly traded companies must provide investors and potential investors with access to company financial data. This data is generally available from the company so if you are considering buying into a company, then get access to this information and satisfy yourself that the company is in a good financial state before parting with any money.

Be Aware

If you do research a company, and are taking a look at its financial position, then you should look back two to three years into the past. You probably don?t need to go back further than this but if you go back less, there may be important trends in the finances that you will miss. Take special note of the quarterly statements and the revenue and earnings per share.

You should be trying to identify trends in certain figures. While these are no guarantee of what might happen In the future it is undeniable that an upward trend in revenue and profits will be a positive sign to look out for.

Once you have satisfied yourself with the basic financials of the company and that the prospects of making good profits into the future are favourable you will be in a position to consider putting money into the share. There is an ongoing debate over whether it?s preferable to buy shares that will increase in value, or shares that pay good dividends and the answer to this question must always lie with the individual investor. What must be remembered however is that there is little point in chasing dividends. This refers to the practice of buying a share just before a dividend is expected to be announced. The price of the share will already have taken the dividend into account so you will be paying for it in any case.

Joseph Kenny is the webmaster of the loan information sites http://www.selectloans.co.uk/ and also http://www.ukpersonalloanstore.co.uk At the Personal Loan Store you can find some of the latest personal loans explained in detail.

Writen By : Joseph Kenny

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Six Steps And The Laws Of The Stock Market

Sep 20

Posted by admin in Stocks Mutual Funds

Step 2:
Days, weeks, or sometimes months after a move has started, there is a brief mention in the electronic media (radio, cable, TV) or on one of the internet chat boards that a market has moved. The public hears for the first time and begins to get interested, but does not buy.

Step 3:
A blurb of information appears in print media. The move also begins getting more exposure on blogs and internet message boards. The public starts paying a little more attention, and will buy a little bit.

Step 4:
Wall Street and LaSalle Street brokers go into full hype mode and hawk the market to their customers. The public begins buying in greater volume.

Step 5:
A full-blown front-page article appears about the particular stock or market in one of the major financial newspapers, magazines, or financial websites. This is often six months after the fact and after a market has shown its greatest appreciation. There is often heavy public buying, even a possible frenzy, as all media, brokers, and so-called \”gurus\” start to tout the market.

Step 6:
As step 5 gets underway, the sponsors or smart traders begin to move out of the market and take their profits off the table.

The finale: The move ends, the market falls, and investors lose money.

The good news: It doesn\’t have to be this way.

Mark Crisp

The Stress Free Momentum Stock Trader
http://www.stressfreetrading.com

Writen By : Mark Crisp

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You Don\’t HAVE To Be Trading

Sep 2

Posted by admin in Stocks Mutual Funds

As a novice trader, you?ll often feel the need to trade.

You may be bored or frustrated. Or you just want to try a certain type of trade.

STOP!

Realize that you don?t have to be trading all the time to be successful. In fact not trading is often the very best decision you can make.

The market tells you when to trade. If you feel the urge to place a trade or find yourself chasing a trade, walk away from the computer. Better still; take the opportunity to meet a friend for coffee.

The trades you do when you?re feeling the ?need? will usually be lemons ? and leave you with a very bitter taste in your mouth!

They will usually not have clear signals, but you?ve convinced yourself they are there. After losing your premium, or much of it, you?ll look back and wonder how you could possibly have entered that trade. It?s happened to all of us, so don?t be too hard on yourself. Just don?t do it again.

The market is going to do what the market is going to do, not what you need or want it to do!

And remember the old saying, ?If you can?t see it, it?s not there?. So if you stand back from your computer and the chart pattern or signal doesn?t jump out at you, it?s not there.

EASY IS BEST

The novice is constantly staring at charts, looking for and often inventing signals. If you have your strategy in place and you wait for the patterns to form, your entry points will FEEL easy. They will be obvious ? you won?t need to be searching for them.

WRITE IT DOWN

Remember to keep a log book. We keep one, which includes any potential trades ? those which look like they will possibly provide an entry in the near future. It?s good to see if they eventually develop into a trade. It will help guide you up to a point where you make a decision whether to enter, or to leave it alone.

Also, when you enter a trade, log it in your book with a few details and, commit to a stop loss point and a profit level where you will be happy to exit the trade. Remember, don?t be greedy ? or you?ll see your premium reach that point, pass it and quickly drop back past your original exit point. You?ll then see how you would have been happy to exit at your prescribed price!

Much of the time there won?t be any trades for you to enter, so it leaves you with plenty of spare time for gaining extra knowledge and enjoying life. You probably won?t trade more than a few times a week. So, you can see, there?s a lot of time to be analysing charts ? and feeling the NEED to trade.

Be strong and disciplined!

David Chandler

Ordinary People Making Extraordinary Profits!

For free mini-course on stock and options trading click the following link:

http://www.StockMarketGenie.com

Or visit our blog at:

http://stockmarketgenie.blogspot.com/

The above comments are offered for educational purposes only. We are not providing you with financial advice. We are simply sharing with you what has and hasn\’t worked for us personally. If you wish to trade or invest in the stock market you should obtain advice from a registered licensed advisor.

Writen By : David Chandler

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How Eating Bitumen Made Me A Better Trader

Sep 2

Posted by admin in Stocks Mutual Funds

Trading is a fascinating activity.

There are so many layers to it. And so many paths that you can go down.

Soon after we first got interested in the stock market I became captivated by technical analysis. I finally felt that I was in control. It gave me great confidence to have all these tools to use.

We bought some expensive charting software and I started playing with the hundreds of indicators that it contained. Exotic sounding devices with impossible to understand mathematical formulas.

So, armed with all these new tools, I was sure we would be making a killing in no time. Because now we had science on our side!

And so I spent night after night, weekend after weekend trying to understand them. Backtesting. Trying one and then another.

But still we struggled to pick the winning trades.

I can remember buying this add-on to our software that gave us even more indicators. And I was convinced this would finally make the difference.

So I tried yet more indicators. Using different settings and different combinations.

But success still eluded us.

And it took us quite a long time before we understood why.

But before I explain what we discovered, let me tell you about eating bitumen.

My office is close to home. So some years ago I decided it was silly for us to have a second car. And so I traded it in and bought a scooter.

Now the only real problem with scooters or motor bikes [apart from getting wet in the rain] is that you are fairly likely to get hit by a car at some point!

It just stands to reason.

So I am always careful to watch cars to see which way they indicate they are going to turn or whether they are stopping.

But this one day I was in a bit of a hurry.

And as I approached an intersection a car was parked at the stop sign on my right. I was going straight through and the driver was indicating to turn left.

[At this point I should remind some of our overseas friends that we drive on the left side of the road!]

So I knew it was OK for me to keep going straight through the intersection. Or so I thought!

Next minute I am slamming on my brakes as the car accelerates across the street immediately in front of me. As my scooter hits the fender I go flying across the front of the car and land on the pavement on the opposite side.

For anyone who has experienced such an event you will know what I mean when I say that it was like the whole thing happened in slow motion. Quite weird!

I can remember looking at the car as it headed for me and not believing that this was really happening.

Because I was convinced it was going to turn left. The driver had indicated that he was turning so what was he doing on my side of the road?

But there he was. I couldn?t believe my eyes but eating bitumen convinced me that this was indeed reality!

Ever since, I don?t trust car indicators. Instead I have learned to look at the front wheels. Because this is the true indication of which way the car is actually going to go.

And you can?t rely on looking at the driver, even if you can see them. Because they often don?t seem to know where they are going, either!

But the wheels don?t lie!

The car can only go in the direction they are pointed.

Now what on earth has this got to do with what I was talking about before?

You remember I was telling you about the problems we were having with technical indicators? Well what finally dawned on us was that we were not taking enough notice of price action.

And so we started to study the chart before adding any indicators.

And suddenly we saw what was really happening. It was like looking at the car?s wheels instead of its blinkers.

You see, technical indicators are just what they say they are ? indicators. Not reality. Not price action.

But an interpretation of price. A filter.

And so you need to look at a stock?s price chart on its own to get a picture of what is really going on.

This is not to say that technical indicators are not useful. But the critical thing is to only use them after you have analyzed price action. Not before.

Just remember ? the wheels tell the truth!

David Chandler

Ordinary People Making Extraordinary Profits!

For free mini-course on stock and options trading click the following link:

http://www.StockMarketGenie.com

Or visit our blog at:

http://stockmarketgenie.blogspot.com/

The above comments are offered for educational purposes only. We are not providing you with financial advice. We are simply sharing with you what has and hasn\’t worked for us personally. If you wish to trade or invest in the stock market you should obtain advice from a registered licensed advisor.

Writen By : David Chandler

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What Can Model Airplanes Teach You About Trading?

Sep 2

Posted by admin in Stocks Mutual Funds

I was devastated!

I just couldn?t believe it. I was 10 years old and my dreams were shattered. I never wanted to look at another model airplane again!

But I?m getting ahead of myself. Let me start at the beginning.

When I was about 8 years old my older brother got interested in model airplanes. He had one that was connected to a control handle by fine wires. It flew around in circles whilst he stood in the middle controlling it.

[This was just before radio-controlled planes became popular -that?s showing my age!]

And occasionally he would let me fly it.

The first time I flew his plane I was hooked!

I can still smell the fuel and hear the high pitched wine of the engine as I caused it to rise and dip as this fast moving object tried to pull my arm off!

I wanted one for myself. But I guess my parents thought I was too young. So it was some time later and after saving my pocket money for what seemed an eternity that I finally got to buy my own model aircraft kit.

I can remember going into the hobby shop and choosing which one to buy. And then rushing home to get started on putting it together.

I was so excited as I opened the box. And I got all the balsa wood and other materials out on the kitchen table and studied the plans.

The first task was to cut the sides of the body of the plane out of balsa wood. It was a big plane and so the body was quite long.

The first time I did this I was doing it freehand.

So I borrowed my Dad?s big metal ruler. And I carefully cut along the line that I had marked on the wood.

But it was still crooked!

I tried once more and then I gave up. And I never made a model airplane again!

You see I wanted my first model plane to be perfect. But I realized that I couldn?t achieve that. And so I gave up.

Years later I can still remember the frustration and disappointment that I felt at that moment.

Now what is the point of my telling you about my childhood traumas?

Novice traders often fall into the trap of wanting everything to be perfect before they place a trade. They want all their indicators to line up and they demand a perfect candlestick setup pattern.

Perfectionism has no place in the stock market.

Now, I?m not saying that you shouldn?t try and be the best trader you can be.

But accept that you will never know all there is to know. And that you will have to make your trading decisions based on imperfect information.

And despite that realize that you don?t need to be perfect to be successful.

Misguided perfectionism robbed me of pleasure as a 10 year old. Don?t let it rob you of trading success.

David Chandler

Ordinary People Making Extraordinary Profits!

For free mini-course on stock and options trading click the following link: http://www.StockMarketGenie.com

Or visit our blog at: http://stockmarketgenie.blogspot.com/

The above comments are offered for educational purposes only. We are not providing you with financial advice. We are simply sharing with you what has and hasn\’t worked for us personally. If you wish to trade or invest in the stock market you should obtain advice from a registered licensed advisor.

Writen By : David Chandler

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Why Stock Is More Risky Than Options!

Sep 1

Posted by admin in Stocks Mutual Funds

You probably have been told that options are risky. Even worse, that you can lose your shirt trading them!

Well, what is the truth?

Let?s take a look at stock ownership. What can happen if you buy stock?

The price can go up.

The price can go down.

The price can go sideways.

In the first case, you can make money. In the second you lose money.

And in the third case you don?t directly win or lose but in fact it costs you money in two ways. The direct cost of brokerage and fees. And the indirect cost known as opportunity cost.

This is the cost due to lost opportunities. The fact that you aren?t able to be involved in other, potentially profitable trades.

So if you purchase stock you can only make money if the stock price goes up.

Now some of you may be thinking, ?But what about shorting??

Well yes, short selling stock is possible but it is quite a tricky strategy and has almost unlimited risk so it is certainly not an approach we recommend.

You see, when you short a stock, you actually sell a stock that you don?t own. And your intention is to then buy the stock back at a lower price. The price difference is your profit per share.

But can you see what the problem is here?

Well what happens if the stock price goes up? Particularly if it goes up a lot?

As you have sold the stock at a lower price you now have to buy it back at a higher price. And so your loss can be substantial.

So, to summarize, when you trade stock you can really only make money if the price increases.

Now there is one other aspect to this that I want to address. And this is that owning stock is expensive!

If you purchase 100 shares of a $50 stock it will cost you $5000. And if you buy it on margin it is still $2500.

That is a lot of money to outlay. And, more importantly it is a lot of money to put at risk. Especially seeing that you only have a one in three chance of the stock moving in the right direction.

Plus as stocks don?t trend all that often you not only need to pick the right direction, you also need to be able to pick the right time.

So stock trading is not that easy. And it?s expensive.

But options provide a great alternative.

For a start you only have to invest about 2% of what the stock was worth and yet you still control the same 100 shares.

So in the example above, instead of investing $5000, we might only have to outlay $100.

Plus, if you select the right strategy, you can profit no matter whether the stock price goes up; goes down or even goes sideways!

And finally, your risk is limited. The maximum you can lose is the amount you put into the trade. So in the example above – $100.

But the best thing of all is the leverage that options provide.

In the above example, if the stock price goes up by $5, the profit on the stock trade would be 10% or on margin, 20%.

But with this increase in stock price the value of the option might increase by 100%. And so the profit on the trade would be 100% – or ten times that of the straight stock trade.

So don?t just accept the common view that owning stock is safe and trading options is dangerous.

If you understand options and learn how to trade them they can be a great investment vehicle.

David Chandler

http://www.StockMarketGenie.com
http://stockmarketgenie.blogspot.com/

Ordinary People Making Extraordinary Profits!

The above comments are offered for educational purposes only. We are not providing you with financial advice. We are simply sharing with you what has and hasn\’t worked for us personally. If you wish to trade or invest in the stock market you should obtain advice from a registered licensed advisor.

Writen By : David Chandler

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What Is The Most Important Indicator Of All?

Sep 1

Posted by admin in Stocks Mutual Funds

Most stock market traders have a favorite technical indicator.

The one that they have the most confidence in. The one that, from experience, they trust the most. Or the one that they always look at first.

For some it is the RSI. Others like the Stochastic or the MACD . Or one of the literally hundreds of other indicators that are available.

Well, I love the MACD. And the Stochastic is also a favorite.

But there is one indicator that I refer to more often than any other. However, before I tell you what it is, it is important that this discussion is placed in context.

I always stress with the traders that I mentor that the most important part of your analysis is price action.

By this I mean that the very first thing you should look at is the shape of the stock?s chart. And any patterns that you may be able to identify.

In particular, look for trends and consolidation. Candlestick reversal patterns and support and resistance levels. And be particularly aware of all time or 52-week highs or lows.

Also, be on the lookout for double tops and bottoms and triangles and head and shoulder patterns.

Because it is only in the context of the basic price action that you can make your trading decisions. And it is only from this understanding that you should begin to apply your technical indicators.

So, establish the context for your further analysis. Indeed, use this first process as a screening device.

Because, unless the chart immediately ?speaks? to you, you should eliminate the stock from any further review.

What I mean by this is that unless there is a clear reversal pattern or potential for a breakout, move on. Don?t waste time analyzing charts that have no likelihood of immediate movement.

And one of the best patterns for short-term trading is the channel. Always keep an eye out for these and when you find one, give serious consideration to trading them.
Now, let?s get back to our earlier discussion. What is the most important indicator?

Well, whilst this might surprise some of you, I believe it is volume.

You see volume is an indication of the strength of price action. A market needs high volume or increasing volume to sustain a movement in price.

So we want to see volume moving in the direction of the price. Increasing both in an uptrend and also a downtrend.

But realize that it takes more effort to push prices higher than it does to cause them to drop. So increasing volume is more significant in an uptrend than a downtrend.

If volume is diverging from the trend [going down instead of up] then we would normally not carry out any further analysis. Because the lack of volume means that there is a lower probability of price movement in the direction of the current trend.

Note however, that divergence can be an indication that a trend is about to end. So this can be an early sign of a reversal.

Another important aspect to volume that is often overlooked is in regard to retracements. Because the volume during retracements gives us a significant indication of the strength of the overall trend.

A strong uptrend should have higher volume on the upward legs of the trend and lower volume on the downward or corrective legs. Similarly in a downtrend.

Volume is best plotted below your chart as a histogram, or series of vertical lines.

And it helps to add a moving average line over the histogram to smooth the volume readings. I use a 3 day MA but you can experiment to see what works best for you.

But most importantly, always consider volume before entering a trade.

David Chandler
For free mini-course on stock and options trading click the following link:
http://www.StockMarketGenie.com
http://stockmarketgenie.blogspot.com/
Ordinary People Making Extraordinary Profits!
The above comments are offered for educational purposes only. We are not providing you with financial advice. We are simply sharing with you what has and hasn\’t worked for us personally. If you wish to trade or invest in the stock market you should obtain advice from a registered licensed advisor.

Writen By : David Chandler

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