Fact: If 100 people were to start trading for the first time today,only 20 of them would be trading after 1 year.

After 5 years there would be 5 left.

Why: Because the single most difficult decision a trader must make is when to pull the trigger – and most traders

simply do not have the experience, or the nerve, to get it right more often than not.

Technical Analysts need charting services to help them make confident decisions, and giving themselves the

BEST possible chance of identifying an over-bought or over-sold market. That is why selected Charting Services have solved

this problem over the years, with instantly understandable graphical formats for more than 800 stocks, commodities, indexes

and financials.

Traders have always agonised over when to enter the market. It’s a nail biting angst-ridden decision. They often

get the decision right, but the timing WRONG. Mind you It’s not entirely the traders fault, it is alot of the time usually the charting

service they are using.

In another article that featured in about.com, there were over 30 charting sites that were tested and not 1 of them got it right.

Which is pretty scary considering thousands of traders out there use technical charting services to make their investment

decisions. Unfortunately fundamental analysis isn’t any good unless you can incorporate technical analysis.

Having a high FQ(Financial Quotient) helps when reading companies annual reports to pick which companies are a financially

viable choice in regards to your portfolio so you’ve basically covered your fundamental analysis in choosing which company to

buy into. Now the next part is tricky, not many traders can fully grasp the concept of technical analysis or just don’t have the time

to study it. It’s not easy, therefore only a small percentage of traders/investors would study this and understand how to implement it

right and with the utmost confidence. That’s why alot of traders out there invest in charting services, because they know these

services are going to help them buy or sell there stocks/futures/options or currency at the right time instead of missing the boat

and getting caught up in all the hype, essentially kissing your hard earned money goodbye.

Choosing the right charting/data service can at the most of times be an agonising task especially when you know alot of services

out there are ready to take people for the ride of their financial lives. Because if you’re serious enough to look for a charting/data

service then you’re ready to take control of you’re own financial future.

Here are some points to consider when deciding on which charting/data service to go with:

1. Have they got much actual experience with charting?

2. Do they have a trial period so there system can be tested?

3. Do they have live/continuous support?

4. Is all data updated daily?

and so on. There are obviously plenty more questions you can ask and alot of them are usually covered in each services FAQ

section, if not, always send an e-mail to get your question answered.



By: Mark G

About the Author:

An example of this was when I received an email from someone stating that one of his students was consistently making 1000 pips a month trading forex (for stock, options and futures traders, in forex country this is a lot of pips!).

What I thought immediately after reading this was ‘so what’! Now don’t get me wrong, I have a lot of respect for this guy sending me the email, but it reinforces a belief I have that too many traders see trading as 2 dimensional. Let me explain…

If I was guaranteed to make 20 pips a month, this is guaranteed, without fail; then what is that worth to me? If there was no limit to the number of lots I can trade, what’s stopping me from trading 20 lots or even 50 lots? Well it’s the amount of capital and leverage I have available to me of course, but that’s not my point.

If I am able to trade 50 lots on this guaranteed 20 pips a month then that is worth $10,000 a month to me, just on a gain of 20 pips. Which do you think will be harder to achieve and more time consuming, making 20 pips a month or making 1000 pips a month?

The same goes for ROI per month and this may relate more to stock, futures and options traders. I get calls all the time from traders wanting to learn how to make 20-30% ROI per month consistently. When I ask them why such a high return a common answer is ‘I only have a small amount of capital, such as $10000, and I want to make $2000-3000 per month’.

If you think in ‘3D’, then which do you think would be easier to achieve by way of time, effort and learning, making 20-30% per month consistently or starting out with say $20000 and making 10-15% consistently per month? Either way the desired result of $2000-3000 a month is achieved.

If your reply was, “well, I only have what I have (say $10,000)”, then my response to you is; in the time it will take you to learn how to make 20-30% consistently every month, you would have been able to save well more than your original capital.

When I was a student of Peter Bain, one of Peter’s shining examples of a success was a student from South Africa who had taken his trading to the point where he was consistently making $50-55K a month! I can tell you now, he didn’t have to make a 1000 pips month to achieve this, in fact it was less than half this. This student learnt how to think in ‘3D’.



By: Dean T Whittingham

About the Author:

Nowadays, it is certainly hard to go to a book shop and not come across numerous books on stock market trading for the newbie or even to go on the net and not come across a couple brochures about some restricted advice to make it BIG in this activity. All of them contend and swear to you some speedy and leisurely ways to instruct you how to make riches in stock market trading. However, it is just impossible! If you want to acquire the techniques and the way of the stock market, knowledge is the only professor. Because the more experienced you get, the more you learn. There is a few basic tips about how to invest in the stock market.

The first thing that must be done is to locate the trend. This is the most urgent lesson of the stock market trading. If you want to sink your money in the stock market, the first thing you need to do is to take in and apprehend the trend of the market. Peers are forever outperformed in all of the bear and bull markets because all the markets have some losing and winning stocks.

Before you invest in the market, you need to get a feel for the timing to buy or sell stock.

Timimg means the whole ball of wax in stock market trading. Timing repeatedly decides the gap between profit and loss and determines whether your account climbs up or down. If your timing is proficient and is appropriate according to the market, you can even turn a trivial sum to massive profits.

Also, it is a good idea to consider trading stock options. Giving the owner the rights without the obligation to purchase or sell the security for fixed price before or on a certain date, the trading stock options are trading contracts which requires experience to deal with. In trading stock options although the pricing is very complicated, however it mainly depends on the price of the actual underlying stock and the duration left on the trading stock option. Hence, it is very important for you to check out the trading stock options before you decide to invest in stock trading companies.

In order to be successful in trading, a person must identify the stock they are researching. Before investing, you even need to understand and examine the stocks properly. Analyzing stocks includes analyzing company’s fundamental and price figures. Apart from dividing the stocks into almost eleven different sectors depending on the companies business types, investors and analysts classify two of these sectors as defensive and the rest as cyclical. Defensive includes consumer staples and utilities as they usually remain quiet during market downturn providing portfolio stability and falling stock market protection, as expenditure of food and energy never diminishes. Cyclical stocks are the stock belonging to the group of sectors identified with a wide range and variety of increase and fall with each sector varying differently as per market influences.



By: Charles Cox

About the Author:

If you’ve been trading for a while, I bet you have had situations where you just felt beaten. You then either came close to quitting, or you tried to re-assure yourself with positive affirmations which at the time felt like a waste of time. If you’re a novice trader this is bound to happen, as your aim is to make money!

Feelings like this can cause you to trade impulsively, whereby you trade with too much risk at the hope of hitting a big winner. You do this because you may want that feeling of success, pride, adrenalin and so on. The problem with this is that should the trade go wrong, you can turn that beaten feeling into a more severe depressed state of mind.

Changing your mindset to become more detached is easier said than done but there are a few things you can do, and with practice and awareness, they can become a lot easier to implement.

Accept losses. You need to accept that losses will occur. Every single trader out there has to deal with losses, so thinking that you’re alone when it comes to dealing with losses is just silly. Before you set out to trade, you should remind yourself that losses occur.

Now the trick here is not to expect a loss every time you trade. This is a negative mindset and believe it or not, if you expect to have a loss every single time you trade, your mind will play tricks on you and make you do things to support your belief. The mind is a very powerful organ!

Instead, rehearse how you will respond to a loss. Before you trade next, visualize placing the trade and then seeing price go against you and actually taking out your stop. Now monitor your posture, your facial expressions, how you are around other people, especially loved ones and so on.

If you’re not happy with the way you respond, in other words you react, then visualize a different response. It will take practice but you do need to be aware of how you respond or react to losses, because once you become aware, you can prepare better and therefore practice a better way.

Once you become aware and change your response, losses won’t hurt you as much, because you’re prepared for them and you now know how you’ll respond.

Finally, be very careful how much of your capital you risk. Can you afford to lose $100 in a trade without it affecting your account balance and your emotions too much? If you answer yes, then only risk that much. Why put yourself in a state of uneasiness and stress, when you don’t need to. Rather than going with a fixed percentage of your capital in every trade, risk what you know you can handle to lose. If it’s only $50 then only risk that.

You should know by now that most of the time, if you only lose a small amount of money you can find it again from somewhere else. It’s when you go for the big home runs that you risk your capital and your emotional state. Don’t let the lure of a big home run ruin the long term rewards of becoming a disciplined, detached and unemotional trader….



By: Dean T Whittingham

About the Author:

Working for What?

It used to be that you could work a solid eight hours and make enough money to provide for a five person family. However, now things have become much more complicated. Costs continue to rise, and often salaries just aren’t enough to cover the costs. If you’re looking for a break, perhaps it’s time to consider trading some of your money in the stock market.

Many people will tell you that trading is risky at best, but educated traders will tell you that a little education goes a long way. If you are interested in employing the techniques that have made so many wealthy, a bit of knowledge could change everything.

Looking to BetterTrades

BetterTrades will help you find the information and skills you need to become a successful trader. Better Trades is a unique educational company willing to help you learn the tricks necessary to make a reliable income. With live events, interactive web courses, and a host of other resources that are personalized to ensure you get the information you need, BetterTrades is truly different.

Lots of trading companies offer training, but few offer courses that actually allow you to participate. What’s more is that the instructors at BetterTrades are experienced investors with enviable trading backgrounds. With nationally recognized authors and speakers on the team, you’ll get the trading education you need in a format other sites simply can’t offer.

Consider starting with our Market Essentials course, the one place online where you will find the knowledge necessary to begin trading successfully right away.

Joining BetterTrades, though, isn’t only about interactive course offerings. BetterTrades offers you amazing live events, step-by-step tutorials, real time market analysis, trading labs, and newsletters that will help ensure your path to success. Let BetterTrades make a financial difference in your life. A solid knowledge base is the best way to begin your successful trading career, and Better Trades is the only resource for both online and live trading education options to provide you the most flexibility, reasonable costs and knowledge you need to get started.

Taking The Next Step

Successful trading takes skills, and if you’re willing to add a bit of effort to your BetterTrades community membership, you’ll find the individuals who will teach you the necessary abilities you need to be a successful trader.

If you’re looking to learn to trade in the stock market but are too scared to try on your own, why not learn from those who know what they’re doing? The education for any skill level is what sets us apart. BetterTrades is your key to having a lucrative, wealthy life without fighting with that 9 to 5 job anymore.

This article is originally published here: Better Trades



By: Better Trade

About the Author:

The selection and management of a vertical spread are only two-thirds of the game. Closing out, rolling or morphing the position has to be analyzed and executed with the same due diligence.

Looking at the closing out of a vertical call spread, we find there are three possible outcomes. The spread can finish out-of-the-money and valueless. For a call spread, this scenario occurs when the stock closes at or below the lower strike of the spread. In order to close out the spread, an investor would just let it expire. Both options finish out of the money so there is no residual position left over.

If the spread finishes fully in-the-money (at maximum value), meaning both options in-the-money, both options are exercised. You will exercise your long call and your short call will be assigned. They cancel each other out leaving you with no residual position. This scenario occurs when the stock price closes lower than the lower strike call involved in the spread.

Investors encounter a difficult scenario when a stock closes in between the two strikes of the spread. This creates a situation where one strike winds up being in-the-money while the other ends up out-of-the-money. When both options expire in-the-money, they are both exercised. One creates a long stock option, the other a short position canceling each other out. This is not the case here. The option that is in-the-money leaves a residual stock position. Since the other option is out-of-the-money, it cannot offset the residual stock position created by the expiring in-the-money option.

Two actions are possible in this scenario. One involves trading out of the spread on expiration Friday just before the close. Because of the bid/ask spread of the two options, you will probably have to give away some of your profits in order to close out the position. This may be the best thing to do in order to avoid naked, unlimited risk.

If you only trade out of the in-the-money option, you run the risk that the stock moves adversely and the out-of-the-money option suddenly becomes in-the-money. This risk is short-lived because you are doing this late on expiration day of the expiring month. If this happens, you will be naked in the residual stock position.

If there is still time, you can always trade out of the option, but that is very risky. If the stock is at a relatively safe distance from the out-of-the-money option, you may want to just close out the in-the-money option and let it expire worthless.

The two factors that must be considered are: the combination of the distance of the strike from the stock price in relation to the short amount of time for the stock to get there, and the amount of money saved by not buying back the out-of-the-money option. Remember, this takes place at the very end of the day on expiration day. These options only have minutes of life left. The risk is somewhat mitigated, but still there nonetheless.

The catch is the proximity of the stock to the out-of-the-money option. If the stock is close to the out-of-the-money option, it is best to trade out of the spread entirely.

As stated before, if the stock closes either with the spread fully in-the-money or out-of-the-money, the position will adjust itself through the exercise process leaving no residual position. If the stock price finishes between the two strikes, there will be a residual position.

We discussed how to trade out of this position. Your second choice is not to trade out and allow yourself to go through the expiration process. You must remember that if you are going to accept a residual stock position, you must be able to afford it.

If you have 10 July 50 calls and you exercise them, you will be receiving 1000 shares of stock at $50.00 per share. Thus, you must have $50,000.00 of cash and/or margin in your account to receive the stock. If you do not have enough cash and/or margin to accept delivery of the stock, then you must trade out of the position before it expires.



By: Ron Ianieri

About the Author:

The majority of casual investors buy and sell stocks.  If they are bearish on a stock, some will even short-sell stock.  But relatively few investors fully understand and take advantage of trading options. 

 

With stocks, you own a small piece of a company.  However, with options, you purchase the right to buy or sell underlying stock.  There are two basic types of options – calls and puts.  When you purchase a call option, you buy the right to purchase a stock at a specific price before a specific date.  When purchasing put options, you buy the right to sell a stock at a specific price before a specific date.  Like stocks, you can both buy and sell options. 

 

Traders consider buying call options when they are bullish on an underlying stock.  As the stock rises, call options, in general, also rise.  There are, though, some important differences between buying an underlying stock and its call options.  First, options are cheaper than buying the underlying stock.  If you a share of XYZ is $100, it may cost you the same to control 1000 shares with options.

 

Options are cheaper because they have a strike price and an expiration date.  The strike price of a call option is the price at which you have the right to purchase the stock.  If the price of an underlying stock is above the strike price, the call option is considered “in-the-money.”  If the price of the stock is below the strike price, the call option is “out-of-the-money” while it is “at-the-money” if the stock is the same price as the strike price.  Call options that are in-the-money have inherent value.  For example, let’s say the price of stock XYZ increased to $105.  You, however, own a call option with a strike price of $100.  You thus have the option to buy XYZ at $100 while selling it for $105.  This in-the-money call option thus as an inherent value of $5.  Call options that are at-the-money do not have any inherent value.  For instance, it would not be worth it to exercise a call option with a strike price of $15 because you cannot sell it for a profit.  Call options that are out-of-the-money actually have a negative inherent value since the stock would have to rise just to get to the strike price.  The farther the stock price is from the strike price, the lower the inherent value. 

 

The expiration date is the time until which you have to exercise your option.  Because options expire, they have a time value.  As the expiration draws nearer, the time value of call options decrease because there is less time for the underlying stock to increase in value.  A call option that expires in a year will therefore have much greater time value than a call option that expires in a week.  The price of options are roughly calculated by:

 

                  Option price = inherent value + time value

 

There are several exit strategies with call options.  If you do nothing and let an option expire, call options that are at-the-money or out-of-the-money will become worthless – they will have no inherent or time value.  However, if a call option is in-the-money at expiration, you can exercise your option for a profit.  Many option trading companies will automatically exercise options that are in-the-money at expiration for you. 

 

Most option traders, however, have no intention of ever owning the underlying stock.  Traders often sell their options well before expiration.  Call options, in general, increase in value with the underlying stock.  Thus, if a stock rises, you can usually sell a corresponding call option at a profit. 

 

This can be beneficial because it leverages your capital.  Let’s say you have $1000 to invest.  If a share of XYZ costs $100, you can buy 10 shares.  However, a call option of XYZ, with a strike price of $100, costs only $10.  You can thus alternatively purchase 100 call options of XYZ.  If shares of XYZ go to $105 at expiration, owning the stock would give you a profit of $50.  Owning the options, however, would give you a profit of roughly $500.  The risk in call options, however, is that this increase in price needs to occur before the expiration date. 

 

For more information about trading options, visit DayTradingModels.com



By: Greg Chan

About the Author:

There are new entrants into the stock market everyday all seeking to earn their fortunes. With the volumes of information about Wall Street to be digested, many are left with many questions. What is a stock? How do I buy one? How do I sell one? How do I redeem stock certificates?

A stock is a simple concept. When you buy a share of stock you are purchasing ownership in that company. Essentially, you are becoming a partner. Now, not a partner with full rights like you would have in a small company you’d form with a friend, however ownership of a share conveys to you pro rata equity in the venture as a whole.

How do you buy a stock? It used to be there were limited ways to purchase shares of a stock you desired. You had to go through a full service broker paying very high fees. This is no longer the case. There are brokerages of every type and flavor available today. Most are online and allow for trading of any stock, option and even currency under the sun.

Most important to look for are low commission rates. These can come in varying components but most often are either a flat fee or an amount per share. Sometimes a broker can charge a combination of both. Additionally, many brokers charge various and sundry fees for depositing your money, taking it out, or not making sufficient trades. Read all the fine print before opening your account.

Once you’ve selected your account and placed your first trade the question becomes how you sell your shares. Hopefully they have gone up since you bought them yielding you a nice profit. Selling a share is as easy as buying it. You simply enter a sell order instead of the buy order you entered initially to establish your position.

Your shares are evidenced by what are called stock certificates. These are held safely by your broker. You never have to touch them. Through your fees you are paying for the service of your broker holding these on your behalf and then forwarding them to the party to which you sold your stock. Why go through all this hassle yourself?

There is really no reason you would need to take physical possession of your underlying stock certificates. Many consider them relics of the past in today’s electronic world. Let them safely reside in the safes at your broker and concentrate on the important aspects of due diligence and analysis towards crafting your ideal portfolio.

There is no such thing as a bad question. Whenever you need to know something you can ask an expert or look it up online. Next time you ask, “how do I redeem stock certificates”, you know the simple answer is to sell your shares the same way you bought them. The cash will show up in your account just fine.



By: Adam Hefner

About the Author:

Selecting an online stock broker is a very important task. Your online broker will execute your investment trades, store your personal information, maintain your balances, etc. With all the different online brokers competing for your business, you need to compare multiple brokers in order to choose the right one.

Here are a few factors to consider:

Conduct Research: Find out as much information as possible about the broker. Ask your friends who they bank with or conduct a simple Google search to find reviews and comparisons about online stock brokers.

Discount vs. Full Service: It is better to start with a full-service broker for novice investors who wish to develop confidence and knowledge of the markets. As you get familiar with the process, use a discount broker to cut costs and invest independently.

Minimum Deposit Amount: Find out the minimum deposit the firm requires for opening an account. Some firms have high minimum balances, as much as $2,000 to start. Some discount brokers have no minimum deposit at all. A good broker will allow you to open an account with very little money and keep it open as long as you like.

Trading Fees: Price doesn’t always equal quality. Don’t open an account with the broker just because it offers the lowest commission around. You also have to assess whether the broker offers a wide range of trades, broker assisted trades, stock options, ETFs, margin accounts, etc. Again, do lots of research to figure out all the features you need in a broker.

Product selection: When choosing a broker, most people think about buying stocks. Remember: there are tons of investment vehicles available to investors because of technological advancements and the internet. This includes CDs, municipal bonds, ETFs, futures, options, funds, and commodities. Many brokers offer add-on services, such as checking accounts, money market funds, and credit cards.

Site performance: A reliable broker provides 100% site uptime. Make sure your broker’s site loads fast and doesn’t lag during trading hours.

Customer service: Customer service is crucial to your investment success. Test the broker’s customer service before opening an account. Call the company’s service center and ask some questions and take notice of the waiting period. Most brokers answer their customer’s calls fairly quickly, but you should double check anyway.

Ultimately, choosing the right online stock broker takes a bit of research and digging, but anyone can find the perfect broker within a couple hours. Weigh all the broker’s features and benefits before opening an account. By then, you will gather enough information to make a wonderful decision with your money.



By: Tarik Pierce

About the Author:

You’ve decided to explore the exciting world of trading stocks. At first blush, it appears nothing but a mishmash of letters, numbers and symbols. To a novice the market can certainly appear quite intimidating and scary. There is much to learn. Let us start off with the basics by first discussing finding stock symbols. The three or four letters you see many times flashing across the bottom of the screen of your television are a symbol which represents a given stock. There are many variations, but most commonly a stock symbol has either three or four letters. One can decipher an initial tidbit of information from this. Those with three letters typically trade on the New York Stock Exchange (NYSE). After a recent merger with a European counterpart this exchange is actually now called NYSE Euronext. Many major corporations trade on this exchange including some of the largest in existence. Many large NYSE stocks have been commonly referred to as “blue chip stocks” signifying the highest quality. Stocks with symbols containing four letters typically trade on what is called the NASDAQ. This exchange mostly exists in cyberspace. It is an electronic exchange matching buyers and sellers without the assistance of a human in between. The NYSE many times has a person in the middle facilitating the given trade. NASDAQ traded stocks can also be large multinationals, or they can range down to the tiniest of “microcap” stocks. A “microcap” stock is generally defined as one worth under 100 million dollars in totality. There is a very large universe of stocks to select from. Most of the new and “trendy” technology stocks mostly all trade on the NASDAQ as opposed to NYSE. So you notice a hot new product at the store, or a great service you saw online, and you now want to know about that company’s stock. The first step is to figure out the symbol which represents it. Today, online, this is easily done. You can go to virtually any finance web site or portal and use what is commonly termed the “symbol lookup” function. This allows you to type the company’s name in a box and the system will respond with the appropriate symbol. Keep in mind, some stocks can have multiple symbols for different classes of stock. You need to pay attention to which one you desire to select. Once you have the right symbol you are then able to enter it into your “watch list”. This is a list provided by most brokerages on your account that you can use to track the price of your stock as it moves hopefully up. There are many difficult parts to the markets. However, finding stock symbols is an easy step. Anyone can do it. Go to a few sites, pick a few companies and see if you can find the right stock symbol. Once you are fluent in this exercise you are ready to move to the next step towards profiting in today’s markets.



By: Adam Hefner

About the Author: