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Uncover the Myths of Stock Trading

Uncover the Myths of Stock Trading

I’ve made a living as a Stock Trader for over 15 years, and have really learned the ins and outs of the business. But  I didn’t make my start at a big brokerage firm that taught me everything through slick training course.  I made it through trial and error, taking seminars and classes and learning as I go. 

While I may have taken longer to succeed using this self taught method, it has given me a lot more real world knowledge of stock trading than I would have gotten following the one process taught by my employer.  For one,  I have found a number of myths that crop up again and again when talking to people about stock trading.  Here are three of them: 

First, is the myth that only certain types of people make successful stock traders.  True, those folks who can analyze stock trends and pick the big winners are typically left brained thinkers (more than 60%), which is probably how this myth originated.

But there really is something in stock trading for every type of thinker.  If you aren’t a left brained analytical type, you just need to find a process that works well for you. I am definitely right brained, and I am being completely honest when I tell you  I would hate to sit around and analyze stocks all day.  Despite this, I have made a great living trading stocks.  Anyone else can too.     

Second, is the belief that stock trading is speculative, and carries as much or more risk as owning your own business.  Yes, people have lost everything in the stock market, and those are the stories the media loves to report on that intimidate a lot of people.   

But I have discovered that if you can establish a process for setting your stops can limit your risks to a tolerable comfort level, stock trading is really a very low risk profession.  To illustrate, I have created a system for myself that allows me to trade with a success rate of up to 75% , which is hard to beat!  I can’t think of any other business that can give me that kind of low risk return.

Finally, how many times have you heard that its a full time job to make consistent big money in the stock market?  Absolutely true for some kinds of trading and especially if you don’t have good stock pickers to rely on.  Then you are stuck doing the grunt and the leg work in a fast changing environment ” sure that takes a lot of time. 

However, rest assured it is possible to make a full time living trading stock for 2-4 hours a day.  What you do with the rest of the day is up to you!   The trick is to find a process that meets your comfort level of risk and is very efficient with your time.   There are a lot of courses available and I agree it can be intimidating to find the one that’s right for you.  Investigate several choices and make sure to ask lots of questions before signing up.  If you don’t get satisfactory answers to your questions, move on fast, customer will not improve once they have your money!  If you research your options knowing the right process is there for you, you will be  on your way to success at stock trading before you know it.…

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Money Management – Without It You’ll Crash and Burn!

Money Management – Without It You’ll Crash and Burn!

Successful traders need to be good at so many things.

They must know when to enter a stock.

They must know when to exit a stock.

They must master their mental game.

Then, why is it that so many traders neglect money management?

Money management is just as important to your trading as knowing when to enter and exit. Some people think it is even more important! A trader without good money management is an accident just waiting to happen.

You might be a great stock picker but at some point your luck will run out. Without good money management one bad trade can blow out a profitable winning streak! No one is exempt from this. A good trader will always take the time to work out the maths behind each trade.

Before you enter a trade you should:

1) Write down your entry price.

2) Write down your stop price.

3) Write down your profit target price.

4) Apply a money management plan!

A money management plan is needed, so if you get stopped out of a trade the loss will not wipe you out!

Successful traders approach trading no differently to a business. Every good business uses a budget. Every good business has profit forecasts. Why should trading be any different? A business like approach must be adopted to stay in the trading business.

Amateurs tend to think of each trade as an isolated event. An amateur might receive a stock tip. The stock recommended is set to soar! The first thing the amateur does is reach for their piggy bank. Without looking inside they have no idea how much they can afford to invest. The amateur will often dump everything they can into that one stock. They are looking for the home run!

Gurus do things differently. For them, each trade is not an isolated event. Before starting to trade they have worked out how much capital they can devote to their trading business. There is no way they would dump their entire portfolio into one “good” stock. Instead they may allocate a percentage of their portfolio to this stock. Every trade they make is considered within the context of their entire trading portfolio.

To survive and prosper in the business of trading you must master the skills of money management. You must do the maths behind each and every trade. Without money management don’t be surprised if you crash and burn!…

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Forex Robots, Are They Worth It?

Forex Robots, Are They Worth It?

It is my opinion, after 15 years of Forex trading experience, that Forex Robots can be extremely helpful for both the beginner and experienced trader. However, it is important to remember that the use of a robot alone will not necessarily be a full proof way of profiting from Forex Trading. You should download free demo trading, such as the MetaTrader program to try out Forex Trading without risking your money. You also need to become familiar with charts and charting. They come in many different forms. They can look like regular line graphs as well as bars signals and buy sell signals. Some show ranges in which you should buy or sell currency. You need to understand the complexity of the charting and technicalities of the Forex Market.

After you have a full understanding of the Forex Market and have tried a demo program where you use fake money to trade, you can then begin to think about purchasing a robot program. Robot’s follow the market trends and make logical decision in advising you when to buy and sell. The currency market where you buy and trade currency against other currencies is sort of like a roller coaster or a modified bell curve. It is measured in pips which go up and down in fractional measures. You can bet for example that the Euro will go up in reference to the dollar. For simplicity, if you invest $10,000 in the Euro and it was 1 Euro to $130 USD and by the end of the day, it is 1 Euro to $131, you can make approximately $100. The robot’s follow those trends and suggest that you enter a trade when the roller coaster is at a low point in reference to other previous positions and suggest you sell after it has reached its peak and is rolling down the hill. There are robots that will suggest trades over minutes, days or even months.

In summary, trading robots, once you have a clear understanding of how Forex trades occur, can be very valuable. That being said, you need to be very cautious with your money and closely monitor the market. The Forex Market does present a risk of both gains and loses and no robot system is perfect. However, I believe if you play it right, you can make a lot of money using them.…

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Forex Online System Trading – Understanding the System

Forex Online System Trading – Understanding the System

Forex online system trading has opened avenues for those who want to make money without the hassle of going to work daily. This trading market is the world’s largest where on average the approximate turnover is 2 Trillion USD. No other trading market deals in that magnitude of money on a daily basis. Traders today are lucky to take a dip in this lucrative opportunity where earning money is not a problem.

Trading in the forex markets can be done anytime of the day, this is because the market is open 24 hours a day. The transactions are done on a real time basis and the liquidity of money is extremely high. With a forex trading account setup online, you can take the best advantage of this market.

Like any other trading markets, you should know what the forex market is all about and how it works. Getting a proper education on forex trading goes a long way in helping you earn profits along with an impressive portfolio. Once you know about how the market functions and its trends, you will soon learn how to capitalize on this potential. This will also ensure that you are not prone to too many risks while trading. There are also free demo accounts that most online trading software have. This should help you get a grip of the trading market scenario.

Once you understand the basics, you will learn how to work along with your forex online system trading account. The initial stages could be a bit tough, since nothing ever comes easy. You could even encounter a few losses. This should however not deter your decision. This will help you build up on your own personal strategy and you will also learn how to make decisions based on market indicators that your system provides.…

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Forex Training Course, What Is It All About?

Forex Training Course, What Is It All About?

Many people are today realizing that understanding how the foreign currency exchange market works and how to speculate using international currency, can be a lucrative and easy way to trade and do business internationally. With some understanding of how the market works, anyone can successfully participate. Undertaking a Forex Training Course is an excellent option for those who need help in entering the market. Various options are available on the internet primarily through the Forex website.

Another option is by using a robot package. This package is described as selling out fast due to its huge success.

The currency exchange monetary markets are the most changeable of all the available markets. Every week day international currencies are changing hands around the world. Currency values fluctuate continuously. Experienced traders know how to read the signs and to predict the likelihood of a currency increasing in value or decreasing in value. They buy and sell currencies in response to their own predictions. Most available training courses are created to assist people to learn how to read the signs and predict currency values, all important steps in working the Forex market successfully.

This system seeks to help people to learn how to predict the market and read the signs by doing the prediction work for them. For those who do not have the time to undertake training, robot package is a viable alternative.

Downloadable from the internet at a low cost, the application which is essentially a bot runs constantly in the background, keeping track of all the changes in the monetary market and predicting the strongest performing currencies as well as ones that may devalue. The purchaser then uses the information to complete their trading.…

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10 Percent Can Make You Rich!

10 Percent Can Make You Rich!

Do you think a person earning $20,000 per year can become a millionaire? Absolutely! Anyone can do anything they set their mind to it and if they develop a realistic plan and stick to it. Let’s take a look how.

John is a hard working man earning $20,000 per year in his job. He has learned to reduce the money he is spending on taxes, life and health insurance, health care, food, and cars. He has also learned the importance of planning for retirement and purchasing his own home. He is 35 years old, and has set a goal of having $1,000,000 when he retires at 65. What must he do?

First, by reducing many of his living costs, John has worked into his budget a 10% savings plan. This means he will be able to invest $2000 per year into a tax sheltered Retirement Account (which by the way, further reduces his taxes). He might even use a self-directed account, therefore even further controlling the investment vehicle. John knows he MUST earn a minimum of 15% a year on his investments. So, he may select tax liens in Florida (18% a year), stock investing (Dogs of the Dow-17% since 1973), or real estate investments, with rates of return (cash on cash) of 15%.

There are several ways to get 15% or greater on investments, as well as cash flow strategies. Bottom line he is going to get at least 15%! His investments gains an average of just 15% per year over the course of 30 years. How much do you think this has earned him?

$2,000/year x 15% return on investment (compounded) x 30 years = $739,066.

Well, John has not quite reached his goal yet. But remember, he is also investing in a new home. He knows that real estate will appreciate on average at 5% per year (national average). John finds a nice home that suits his taste at 10% below fair market value using the rules of this course for $80,000. The house is actually worth $88,000.

Starting value of $88,000 x 5% annual appreciation x 30 years = $393,161.

So, at age 65, John has $393,161 in equity + $739,066 in his mutual fund, which equals $1,132,227. You see, John has surpassed his goal.

A simple plan can work. The key is being disciplined and saving for your future. Your objective is to make available for savings, 10% of your income. If you cannot achieve this simply by reducing your expenses, you must increase your income.

SUPER CHARGE THE PLAN

Now if we want to supercharge this plan, we have to increase the amount of starting money, or more importantly, get a better rate of return.

For example, if we start with a small amount of money, granted “small” may differ for everyone, so I did a table with various amounts. Added 30 years, at some aggressive rates of return, and you have some unbelievable future wealth. Even Trillions!

30 Years of Investing at different ROI

Amount – 15 percent – 25 percent – 50 percent

$1,000 – $66,212 – $807,794 – $191,751,059

$5,000 – $331,059 – $4,038,968 – $958,755,296

$10,000 – $662,118 – $8,077,936 – $1,917,519,592

$25,000` – $1,655,294 – $20,194,839 – $4,793,776,480

Now the reality, is that we are not going to hit a TRILLION dollars, but it does illustrate the point. Strong rates of return over time, give you outstanding results over time.

My magic number is 15%! In fact one of my favorite trading systems is credit spreads. A high probability system, with outstanding returns. Often, you can earn 5-10 percent per month. No guarantees, investing has risk, but highly probable. You should check it out.…

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A Short Intro About Stock Index Trading

A Short Intro About Stock Index Trading

The stock market is indeed a big scary thing for those people who know next to nothing about it. However scary it may seem, that will not be enough to scare away those people who are truly interested in it. If you think that stock index trading is something that you want to get into, and then by all means let nothing stand in your way. You just have to do a little research about stuff that concerns it so that you will not be totally clueless. It is very unwise to enter into something that you do not understand right? Besides, if you want to get into stock index trading, then you have decided that it is worth doing and anything that is worth doing is worth doing right.

To get you started on the right road you first must know about the benefits that it brings to young traders and it must be said that the benefits are quite good. See, if you are a young investor, you can actually get the most benefits from investing in these index funds. These broad based market funds are always tracking the business cycle very closely. Both bull or bear markets are able to persist for extended periods of time that can be anywhere between 3 years to 10 years at any given time; although if you happen to be a person of a more advanced age, this type of investments could prove to be rather risky for you. It has nothing to do with discrimination it is just that younger investors have more flexibility when it comes to managing the index fund.

You also have to make some considerations and it is a common fact that every investor must already be armed with a strategy that pertains to any and all of their holdings. Despite the fact that index funds can be managed passively, it also requires a certain amount of strategy. Before you purchase any shares, determine the amount of loss that you can allow and the gains that are acceptable to you. This way, you can determine if your investment is performing as it should or if it is just making you lose money.…

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Techniques to trade the options market in Dubai

The options market in the UAE promises a lot of excitement and potential for those who take the time to understand it. However, before exploring what makes this market great, we first need to know what an option is and how it works.

An options contract gives the buyer of that contract the “option” or right but not the obligation to buy or sell a specific financial instrument by a certain date at a set price called “the strike price.” The underlying financial instruments can include stock indices, stocks, currency pairs such as USD/CAD, commodities such as gold or silver, property indexes and even simple contracts between two parties. One party is the buyer, and one is the seller.

In Dubai, traders often buy options to speculate on company stock or index value. If they think that a share price will go up, they will buy a call option contract. Contrarily, if they believe a share price will drop, traders can buy a put option contract instead. The strike price defines how much it would cost to exercise an options trade, which means buying or selling an underlying asset at a specific agreed-upon price. Once you have determined whether you want to purchase or sell an option, this comes into play.

Once you purchase an options contract, the only thing that matters is what happens with your target asset until maturity.

Buy a long call

If you buy a call option, you want the price to go up. Your underlying asset must move beyond the strike price to make money on this contract. Remember, though, if it does go past that point, the buyer has the right to exercise their contract and take delivery of your shares at the agreed-upon price; this is called “exercising.” Their loss is limited by how much they paid for an options trade when they make this decision. In essence, your risk in buying a call is whether or not prices will rise rapidly enough before the expiration date for you to make a profit on exercising it.

Buy a long put

If you purchase a put option contract, you want the underlying asset’s price to drop. If the price decreases enough, you will be able to exercise your contract and sell shares at a profit. In essence, this increases the gain on shorting the underlying asset instead of just selling it outright.

Sell naked calls

Suppose you sell a call option without owning the security itself. In that case, you want prices to go down and stay there until expiration because the buyer of your contract “calls” those shares from you and receives any gains or losses associated with that security upon exercising their options trade. The risk involved here is that prices could rise rapidly before expiration and leave you forced to buy at higher prices than anticipated, thus losing money instead of making it.

Sell naked puts

The concept of “selling naked” is identical with puts as with calls, except you bet on prices staying the same or going down instead of up. The risk here is the same as with selling naked calls.

Buy a long future

Buying a futures contract gives you the right but not the obligation to take delivery of an asset in the cash market at a specific date in time. It can be used when you believe that your target stock or index will appreciate beyond its limit before near term expiration, allowing you to make money by taking delivery later for more than what you paid for the contract.

The risk here is that prices could decrease, leaving you having to buy it at a lower price than anticipated, later on, thus resulting in lost money instead of an opportunity to make more.

Sell a call spread

You receive a premium upfront by selling a call, and your maximum gain is limited. If prices go down, you will have made money because there is no exercise or assignment feature associated with this technique. The risk here is that prices could rise before expiration and leave you unable to sell your stock for more than what was required from the buyer of your option contract, thus losing money instead of making it.

You can find a Saxo fx broker UAE here.…

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Forex Trading Methods – Why Do We Need To Simplify Our Forex Trading Methods

Forex Trading Methods – Why Do We Need To Simplify Our Forex Trading Methods

Forex trading methods are one of the weapons that all traders should hold on their arms as managing fund in foreign exchange market is not an easy thing to do. Foreign exchange market indeed presents us abundant ways to generate money but we should remember that foreign exchange market is also a market which has “high return – high risk” profile.

The currency market is actually not for amateur traders. But it does not mean that every new comer is not welcome to enter the market, however new comers, and including experienced ones, have to be sure that they have whatever it takes to be successful such as good, proven and reliable forex trading methods and for sure they need to have strong determination to be a student of the market all the time.

Perhaps, many newbies are happy with their paper trading or demo account results after a certain of time doing it. But here I have to warn you that foreign exchange market actually gives you a lot of mental pressure once you trade real money. I do not say that paper trading is really bad and an unnecessary thing to do prior to real trading, however you have to realize that paper trading is only a practice, a live lesson, and 100% guaranteed you almost experience no pressure at all. When you do real trading, be prepared you will suffer headache and your stomach feels uncomfortable and many other psychological problems all the time you are in the market.

Hence, you will understand the importance of good forex trading methods and that, in my humble opinion, is not enough. We ought to have simple forex trading methods, for more precise. Why do we need to simplify our forex trading methods? Real forex trading, as I mentioned above, gives you real hard pressures. You have to be able coping with the pressures. Foreign exchange market also demands you to analyze it at first. This activity takes some of your time and energy. And immediately after you do the analysis you need to execute your trade. It is the hardest part in your journey to make money in the currency market.

Now imagine if you implement intricate forex trading methods. For example if you are a technical analyst then you put hundreds of analysis indicator or your chart, you will get dizzy watching on it. One indicator says price will go north the other one say it will go south. That example is only two indicators presenting different readings, what will happen if you have dozens different indicators on your chart? The end result is one of these two: you will be afraid to trade or you will be confused. So right now go simplify your forex trading methods.…

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Quantitative Trading and How to Use Your Algos More Effectively

Quantitative Trading and How to Use Your Algos More Effectively

In today’s trading world, the difference that sets aside the style from trading years ago are a few factors. The old style of buy and hold has taken a backseat to the fast pace of today’s trading. Instead of waiting weeks to years, trades can be done in a matter of minutes, with the trader walking away with a profit. Smart traders will be thinking about maximizing their portfolios, by investing in as many different markets to prevent a bad trade from getting out of control. This is termed as quantitative trading, and if you are serious about earning money from the market, you really should learn more about this trading style.

In simple terms quantitative trading is trading in many markets instead of trading in a single market. Some people might bring up the argument that doing this poses more risk, but the truth of the matter is it safeguards your portfolio instead. The way it works is to invest in markets that are moves differently to your current trades. An easy example is between the S&P 500 and gold, when the market moves up gold prices drop. By placing trades in both markets, no matter how the market reacts you will still have a winner.

When you are doing this kind of trading one important thing you have to remember is the human mindset. All amateur traders have a fatal flaw of holding on to bad traders longer than good trades. Years of training are required to get rid of this habit, or you can think about using automated trading systems to do it for you. Since all trading is now done on computers, you can program your method of trading on your computer and walk away. The key factor you have to remember when you are doing this is the trust you have in your method.

There is no system or method in the world that wins 100% of the time. That is something that is just not possible. When you see a bad trade made in your automated system, you have to control your emotions and not be flustered about it. Remember that as long as you have more winners than losers, you will still walk away with a profit. People that tinker around too much with a good method, only end up making things worse. You do not want to fall into this same trap and waste time and money. Trust your method and let the computer do the hard work, while you are sipping coffee and enjoying life.…