n this article, I'll reveal 5 essential tips you can use to be a successful day trader in the stock market.
This will be especially important for those who are expecting to make thousands overnight. You can set your expectations high, but the fundamentals need to be mastered if you are planning to profit from stock day trading.
Here are the 5 secrets:
Secret 1. Have a trading plan. You should start following a set of specific rules consistently, day after day, and then money will begin flowing to your bank account. One of the greatest trading mistakes one can make is using gut feeling. A trade plan eliminates fear, helping you to cut your losses short and letting your profits run.
Secret 2. Be prepared. Research and understand as much as possible about an industry. You will know then when the market is giving you the correct signals. This ability alone can give you the edge over other less prepared traders. And the more you research and trade the quicker your experience will grow.
Secret 3. Don't overtrade. Don't guesswork unpredictable market movements. Only enter a trade when you plan tell you so and the signals you identified are giving you the go ahead. Overtrading can wipe out your hard earned profits.
Secret 4. Invest only what you can afford to lose. And invest only part of your capital in each trade. The secret to long term success in stock day trading is protecting your overall capital from big losses. If you lose all your money, your trading career will end sooner than you expect.
Secret 5. Learn with successful traders. The shortcut to success is to learn from other people mistakes and successes. Attend seminars and follow the tips from who is already making money from the markets. But don't spend all your money on every course you find. Learn one strategy and apply it extensively, until you learn it well.
I honestly believe you can use these tips in your trading career. Trading can become profitable when you take the right actions. If you want more information, you can visit my website about stock day trading.
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Tuesday, March 24, 2009
Saturday, March 21, 2009
About Stock Market.
The stock market is actually a platform of a commercial nature that individuals and companies use to trade with a commodity that is better known as company stocks and of course, the derivatives of these stocks. They are most often described within the same breath as the bonds market, as well as some other often traded commodities all over the world. Like most markets, the stocks and bonds market can sometimes be of an over the counter nature, which is slightly different from other commodities, which are sold in specific market with their own specific systems of buying and selling.
The most popular place where stocks are traded is of course the NYSE or the New York Stock Exchange, followed by other locations like the Amex and OTCBB. This is in the united states of course, and other countries have their own places where they can trade. The stock market currently stands at a value of slightly more than 20 trillion dollars, which is just half the size of the bonds market. However, the derivatives of the stock market stand at an astounding three hundred trillion dollars, with their most major participants being the US banks. When it comes to trading on the stock market, there are many ways that one can do and most investors base their decision on the price of the stock that they come across.
A good price can sometimes mean that the stock is of good quality and has the potential to rise in value; but that does not mean that that is the only way that stock investing can be done. Always know what you are investing in and knowing the nature of the company or corporation attached to the stock will allow you to have much better insight into the nature of the stock and its intended movement in the market. One of the things that many investors press upon is the option to never choose a load bearing mutual fund - which means that you have to fork out some money for a sales fee that is up front.
This is an unnecessary manoeuvre because in the case of the stock market, there are plenty of mutual funds that will allow you to enter without paying up front with 'no load' involved. The best way to know how your stocks are going to do is looking at the growth curve of the corporation in question, and this is important because most companies and independent analysts would provide independent growth analysis over a 5 to ten period. This technical analysis of the company is very important when it comes to deciding how the company is going to look in the next few years and what value your stock will hold. In the case of any investment, how much you put in is usually co related to how much you are going to make, but always ensure that your capital is risk free - meaning this is the amount of money that you can afford to lose without hindering your life style.
The most popular place where stocks are traded is of course the NYSE or the New York Stock Exchange, followed by other locations like the Amex and OTCBB. This is in the united states of course, and other countries have their own places where they can trade. The stock market currently stands at a value of slightly more than 20 trillion dollars, which is just half the size of the bonds market. However, the derivatives of the stock market stand at an astounding three hundred trillion dollars, with their most major participants being the US banks. When it comes to trading on the stock market, there are many ways that one can do and most investors base their decision on the price of the stock that they come across.
A good price can sometimes mean that the stock is of good quality and has the potential to rise in value; but that does not mean that that is the only way that stock investing can be done. Always know what you are investing in and knowing the nature of the company or corporation attached to the stock will allow you to have much better insight into the nature of the stock and its intended movement in the market. One of the things that many investors press upon is the option to never choose a load bearing mutual fund - which means that you have to fork out some money for a sales fee that is up front.
This is an unnecessary manoeuvre because in the case of the stock market, there are plenty of mutual funds that will allow you to enter without paying up front with 'no load' involved. The best way to know how your stocks are going to do is looking at the growth curve of the corporation in question, and this is important because most companies and independent analysts would provide independent growth analysis over a 5 to ten period. This technical analysis of the company is very important when it comes to deciding how the company is going to look in the next few years and what value your stock will hold. In the case of any investment, how much you put in is usually co related to how much you are going to make, but always ensure that your capital is risk free - meaning this is the amount of money that you can afford to lose without hindering your life style.
Monday, March 9, 2009
What is High-Frequency Trading?
Moving with a shake of the collective head to our topic this week, what is this thing called "high frequency trading," IROs and execs?
Well, it would be a good name for a rock band, but high frequency trading is an indication of the behavior of money and a measure of market risk. It is responsible for 20-30% or more of volume currently. Practically speaking, it's continual, tick-by-tick, high-turnover buying and selling with real-time data to control risk while generating returns from minute change. It's coming from all sorts of capital sources, but don't blame hedge funds alone. All investment advisors must put money to work...and if they can't invest it, they're going to deploy it in other ways. This is the best way right now. (NOTE: Speaking of which, look for money to leave equities in pursuit of the Treasury Department's ridiculous lending facility for high-risk credit assets as options expire next week. This will not be good for equity prices.)
Both Nasdaq OMX and NYSE Euronext announced recent fee changes designed to draw "high frequency traders." If they're trying to attract it, it's because there's a lot of it going on, except it's happening elsewhere. Here's the telling feature: both these exchanges made changes to the cost of CONSUMING liquidity, or buying, while keeping "rebates," or incentives to provide liquidity (another way to say 'offering shares for sale, which attracts buyers') high.
This means there are changes at work in the broad markets. Where "rebate" trading, or furnishing liquidity, is necessary to helping conventional institutional investors like pension funds efficiently buy and sell large quantities of shares, high frequency trading depends on nearly equal and offsetting buying and selling in very small increments. That's the kind of activity currently dominating volumes (and why volumes are on the whole down, too).
What does this mean for investor relations? We've always had a rather arcane profession populated with terms like guidance, and Reg FD and earnings call. Our ability to grasp concepts that often make other peoples' eyes glaze over is a defining mark of the investor-relations professional. Well, guess what? It's happening again.
All this high-frequency trading means that much of the money moving your price and volume sees high equity risk and studies equity-markets behavior, not business fundamentals. This has been going on for some time but it's getting worse and worse, and it's not going to get better anytime soon. Therefore, IR folks, it's time to add this knowledge to your repertoire. After all, somebody's gotta know what's going on out there - since the SEC apparently doesn't - and it might as well be us.
Look, we're purposely aiming to make you chuckle here. But I hope you'll remember this: well more than 80% of American companies (and roughly an equal number of European firms) hold earnings calls. Yet fundamental investment is accounting for about 15% of volume at best. Hadn't we better understand the rest? We think knowing market structure is as crucial to IR now as earnings calls.
And it shouldn't cost you much more than your earnings calls, either. If it is, you're paying too much. IR departments don't need expensive, outdated tools that don't work in modern markets.
Well, it would be a good name for a rock band, but high frequency trading is an indication of the behavior of money and a measure of market risk. It is responsible for 20-30% or more of volume currently. Practically speaking, it's continual, tick-by-tick, high-turnover buying and selling with real-time data to control risk while generating returns from minute change. It's coming from all sorts of capital sources, but don't blame hedge funds alone. All investment advisors must put money to work...and if they can't invest it, they're going to deploy it in other ways. This is the best way right now. (NOTE: Speaking of which, look for money to leave equities in pursuit of the Treasury Department's ridiculous lending facility for high-risk credit assets as options expire next week. This will not be good for equity prices.)
Both Nasdaq OMX and NYSE Euronext announced recent fee changes designed to draw "high frequency traders." If they're trying to attract it, it's because there's a lot of it going on, except it's happening elsewhere. Here's the telling feature: both these exchanges made changes to the cost of CONSUMING liquidity, or buying, while keeping "rebates," or incentives to provide liquidity (another way to say 'offering shares for sale, which attracts buyers') high.
This means there are changes at work in the broad markets. Where "rebate" trading, or furnishing liquidity, is necessary to helping conventional institutional investors like pension funds efficiently buy and sell large quantities of shares, high frequency trading depends on nearly equal and offsetting buying and selling in very small increments. That's the kind of activity currently dominating volumes (and why volumes are on the whole down, too).
What does this mean for investor relations? We've always had a rather arcane profession populated with terms like guidance, and Reg FD and earnings call. Our ability to grasp concepts that often make other peoples' eyes glaze over is a defining mark of the investor-relations professional. Well, guess what? It's happening again.
All this high-frequency trading means that much of the money moving your price and volume sees high equity risk and studies equity-markets behavior, not business fundamentals. This has been going on for some time but it's getting worse and worse, and it's not going to get better anytime soon. Therefore, IR folks, it's time to add this knowledge to your repertoire. After all, somebody's gotta know what's going on out there - since the SEC apparently doesn't - and it might as well be us.
Look, we're purposely aiming to make you chuckle here. But I hope you'll remember this: well more than 80% of American companies (and roughly an equal number of European firms) hold earnings calls. Yet fundamental investment is accounting for about 15% of volume at best. Hadn't we better understand the rest? We think knowing market structure is as crucial to IR now as earnings calls.
And it shouldn't cost you much more than your earnings calls, either. If it is, you're paying too much. IR departments don't need expensive, outdated tools that don't work in modern markets.
Sunday, March 8, 2009
Discover the Keys to Making Money in the Stock Market
Day trading is becoming a hot means for the average Joe to make cash. You will find individuals who do it for a full time profession and others treat it as a means to earn some extra cash. There's a lot of individuals earning great money with day trading which explains why many more people are trying it out.
But, day trading isn't a course to quick and easy cash. You will need to understand some fundamental principles. Day trading has some risks, but learning exactly how to mitigate those risks and make wise choices will provide you with the best opportunity at increasing your gains, while minimizing any losses.
As we know, purchasing stocks low and selling high is how you make cash in the stock market. Obviously, the big question is - how do someone know when to buy and sell?
To make money with day trading, employ these important tips to boost your profit.
Get ready early on. You should be up and ready prior to executing your first transaction. You want to stay aware of happenings in the markets, like buyouts, takeovers, and earnings announcements for major companies. You want to have a strong overview of the happenings in the stock market.
Don't focus on shares that have little price movement. With day trading day trading, cash is made by purchasing and selling stocks that are frequently changing in price. As you probably know, day trading involves selling financial instruments throughout the course of a day. You just don't have the time to wait around and find out what happens as other opportunities are available.
Better your mathematical analysis skills. Being able to interpret financial data and numbers is critical to being a winning day trader. Now don't worry - you won't need to become a math champion - but there are a few primary computations that you must have a good understanding of.
Learn how to have patience and nerves. You need to keep your emotions still to not allow them to alter your judgment. Whether you're too enthusiastic about a big trade, or largely down-and-out about a loss, both of these emotions can hamper your ability to remain in the game, make smart decisions, and keep a clear mind.
You may not become rich overnight, but using these strategies will put you on the route to earning some cash with day trading. With the best tools and strategies, you can take advantage of the great money making potential that day trading makes available to you.
But, day trading isn't a course to quick and easy cash. You will need to understand some fundamental principles. Day trading has some risks, but learning exactly how to mitigate those risks and make wise choices will provide you with the best opportunity at increasing your gains, while minimizing any losses.
As we know, purchasing stocks low and selling high is how you make cash in the stock market. Obviously, the big question is - how do someone know when to buy and sell?
To make money with day trading, employ these important tips to boost your profit.
Get ready early on. You should be up and ready prior to executing your first transaction. You want to stay aware of happenings in the markets, like buyouts, takeovers, and earnings announcements for major companies. You want to have a strong overview of the happenings in the stock market.
Don't focus on shares that have little price movement. With day trading day trading, cash is made by purchasing and selling stocks that are frequently changing in price. As you probably know, day trading involves selling financial instruments throughout the course of a day. You just don't have the time to wait around and find out what happens as other opportunities are available.
Better your mathematical analysis skills. Being able to interpret financial data and numbers is critical to being a winning day trader. Now don't worry - you won't need to become a math champion - but there are a few primary computations that you must have a good understanding of.
Learn how to have patience and nerves. You need to keep your emotions still to not allow them to alter your judgment. Whether you're too enthusiastic about a big trade, or largely down-and-out about a loss, both of these emotions can hamper your ability to remain in the game, make smart decisions, and keep a clear mind.
You may not become rich overnight, but using these strategies will put you on the route to earning some cash with day trading. With the best tools and strategies, you can take advantage of the great money making potential that day trading makes available to you.
Saturday, March 7, 2009
Should You Invest If You're Only a Teen?
You are a teenager and you heard that if you invest money, you could make more money. Other than that, you don't really know how investing works. You work part time and make a small amount of money each week. You'd love to invest if it could make you more money, but you don't really know how it works.
Not sure if you should be investing your money at such a young age? To be honest, if you don't know anything about investing, it doesn't matter how old you are, you shouldn't be investing.
Don't start investing until you learn whatever you can about it. If you don't know what you are doing, you could lose a lot of money. Read as much as you can about investing and different types of investments as you can.
When you know all you can about investing, you will find out that you need to have money to invest before you can actually start investing. As a teen, you probably don't make much money to begin with and feel you have more important things to spend money on.
Don't invest if you are just looking for an extra income source. Investing should be long term and should not be used for this purpose. If you keep withdrawing the money, you'll never make any.
Are you truly interested in building wealth and investing? Spend some time learning and get involved with a free stock market simulation game while you save up money to invest.
When you finally are able to save up at least a few hundred dollars or more and are ready to start investing, set up a brokerage account, and start investing. Make sure you have done all your research first.
If you have trouble getting an account because you're too young, ask your parents to help you out. They should be able to set up one in there name as a custodian that you can take over when you're old enough.
Article Source: Samantha Asher
Not sure if you should be investing your money at such a young age? To be honest, if you don't know anything about investing, it doesn't matter how old you are, you shouldn't be investing.
Don't start investing until you learn whatever you can about it. If you don't know what you are doing, you could lose a lot of money. Read as much as you can about investing and different types of investments as you can.
When you know all you can about investing, you will find out that you need to have money to invest before you can actually start investing. As a teen, you probably don't make much money to begin with and feel you have more important things to spend money on.
Don't invest if you are just looking for an extra income source. Investing should be long term and should not be used for this purpose. If you keep withdrawing the money, you'll never make any.
Are you truly interested in building wealth and investing? Spend some time learning and get involved with a free stock market simulation game while you save up money to invest.
When you finally are able to save up at least a few hundred dollars or more and are ready to start investing, set up a brokerage account, and start investing. Make sure you have done all your research first.
If you have trouble getting an account because you're too young, ask your parents to help you out. They should be able to set up one in there name as a custodian that you can take over when you're old enough.
Article Source: Samantha Asher
Friday, March 6, 2009
Why You Need to Invest With Real Money
I am a firm believer in paper trading. You have to develop a strategy before you put any real money into the market. But aside from that you need to invest with real money eventually and here is why.
1. The Obvious Reason, If you don't invest real money you don't make money.
If you are paper trading and making a great return on your fake money that's great you are half way there. Now you need to figure out how to do it with actual money. Until you start investing with real money you will never get rewarded for all of your hard work. Remember you can't buy anything with your paper trading profits. If you want all this time you spend to be worthwhile you need to invest real dollars.
2. Emotions, Emotions, Emotions
The biggest reason that it is much harder to make money in a real account then a paper account is emotions. You might be constantly making 50% + annually in your paper trading accounts, but trying to break even in your Actual account. What is the difference, emotions.
Trading with real money is a constant battle with your emotions. You might decide not to enter the next trade because you have been losing money on the other trades, or you might get out of a trade too early and not follow your rules.
Trading is easy; keeping your emotions in check is hard. Being able to make money despite being human is the first key to being successful.
3. Gain Confidence
Nothing makes you gain more confidence in yourself and your trading abilities then making a huge return in your actual account. Huge Paper Trading profits just don't cut it. And of course there is nothing wrong with gaining more confidence.
It is very hard to put real dollars on the line, but it needs to be done if you ever plan on being a great trader.
1. The Obvious Reason, If you don't invest real money you don't make money.
If you are paper trading and making a great return on your fake money that's great you are half way there. Now you need to figure out how to do it with actual money. Until you start investing with real money you will never get rewarded for all of your hard work. Remember you can't buy anything with your paper trading profits. If you want all this time you spend to be worthwhile you need to invest real dollars.
2. Emotions, Emotions, Emotions
The biggest reason that it is much harder to make money in a real account then a paper account is emotions. You might be constantly making 50% + annually in your paper trading accounts, but trying to break even in your Actual account. What is the difference, emotions.
Trading with real money is a constant battle with your emotions. You might decide not to enter the next trade because you have been losing money on the other trades, or you might get out of a trade too early and not follow your rules.
Trading is easy; keeping your emotions in check is hard. Being able to make money despite being human is the first key to being successful.
3. Gain Confidence
Nothing makes you gain more confidence in yourself and your trading abilities then making a huge return in your actual account. Huge Paper Trading profits just don't cut it. And of course there is nothing wrong with gaining more confidence.
It is very hard to put real dollars on the line, but it needs to be done if you ever plan on being a great trader.
Monday, March 2, 2009
Foreign exchange market
The foreign exchange market (Currency, Forex, or FX) market is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system till 1971.Today, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements. Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008. The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such currencies.
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