Yet another stockbroker

10 Simple Tips To Help You To Be Successful At Stock Investing
By Roger Overanout

If you’re looking for success with stock-market investing then you should apply these 10 simple tips to help you.

1. There’s an old Chinese proverb that goes something like this “Prophecies are hard, particularly with regard to the future!” The one fundamental thing you have to accept when you are investing in the stock market is that you cannot predict what is going to happen. No matter what software you use, or which Guru you follow it is impossible to predict what the stock market is going to do next.

2. At the end of the day all that really matters is the price of the stock, everything that is known about the stock, everything that is thought about the stock and everything that is hoped about the stock is in the price. The price is what the market is prepared to pay for that stock right now .

3. If you want to make money as a personal stock investor you’ve got to think in a different way to the big stock investors i.e. the insurance companies the money funds etc. Big-money funds usually follow the index, because of their size is very difficult for them to do anything else. As a private investor you have the ability to pick out individual opportunities which are too small for the big institutional investors. You can be in and out of the market for a quick profit while the big funds are still thinking about how a particular trade will fit in with their overall investment strategy.

4. Technical analysis of stocks and shares is great fun and it produces some very pretty charts, but at the end of the day most of it is a load of rubbish. On any chart it is usually possible to see examples of why a particular system works and also why it doesn’t work both at the same time. Charts are useful, it is well-known that a picture is worth a thousand words.The best way to use stock charts is to look at them and study what you are seeing and then apply that information to your trading.

5. Always ask questions, never accept anything at face value particularly stock-market tips.

6. If you are unsure about any stock you are holding then you shouldn’t be holding it. If you have any doubt about an investment you have made or you feel you have to ask somebody else’s advice about whether you should carry on holding the investment then is time to get out of that trade.

7. You are investing in the stock market for one reason only, to make money, you cannot beat the market go with the flow, in a bull market anybody can make money but be prepared to sell your stock and put the cash in the bank if conditions change, don’t give your profit back to the market.

8. It’s a fact that some people do not have the temperament to take part in stock-market investing. If you find you’re always worried about your investments if you’re more worried about losing than you are excited about winning then perhaps stock-market investing is not for you.

9. The market is always.

10. There is life outside the stock market, trading the stock market is not the be all and end all of everything, the only reason for making money is so that you can enjoy it with the ones you love.

For more exciting fresh information about all aspects of Stock Investing visit http://www.stockinvestingforbeginner.com

Technorati Tags: stock market, stock investing, day trading, make money, trading program

Investing your money online can be quite a difficult task, but by learning the basics you will feel more confident about your investment decisions. By using your computer and a fast Internet connection you have access to a wealth of information to help you with your online investing decisions. There are many services that offer excellent information about both stocks and mutual funds, these information services are independent and accurate and normally not biased in anyway so you can feel confident about using them.

The biggest single improvement for the private investor has to be the ability to go online and get independent information such as market summaries, news, stock quotes, investment ideas and forecasts from a range of different sources at no cost. A few years ago this type of information was only available to large financial institutions or wealthy private investors today it is freely available to you via your computer and the Internet. Taking advantage of the information available and the control you can exercise over your investment decisions that online investing gives you will save you a lot of money during your investing career and significantly improve your chance of success.

One of the best tips I can give you is to consult several different sources of information if they all seem to like the stock you are considering investing in then it will probably be a good investment, if they have a divided opinion perhaps you should look elsewhere or delay your decision for now.

The other very significant advantage that private investors are now able to enjoy by using online services is the very low commission rates are charged. If you are happy to do your own research and make your own investment decisions and do not expect any help or advice from the broker you can save considerable amounts on the commission charges that are made. If you’re still require help and advice of courses this still available via a full service broker, but you will have to pay correspondingly higher commission rates.

One advantage that is frequently overlooked about investing your money online is the ability to may your investment decision immediately at any time of the day or night, also of course you can conduct your research whenever you want to the Internet is always open unlike a Stock Broker only keeps office hours.

The Internet has made low-cost informed investment decisions available to anybody who makes use of the wealth of services that they can now access, this will significantly improve your chances of success in your investment endeavours.

For exciting new information about all aspects of Investing Your Money Online visit http://www.stockinvestingforbeginner.com/

Technorati Tags: online investing, stock trading, online trading, investment decisions

Day trading stock online gives the thrill of the hunt from the convenience of an easy chair. While day trading can be intense and risky, it also holds potential for fast profits. The most successful day traders understand the process and are willing to commit the time necessary to monitor the markets for hours to catch the slightest favorable change. Day trading combines research and instinct with fearless action. If this sounds appealing, start with the 10 commandments for Day Trading Success.

1. Set limits on trading funds. Newcomers to day trading need to gain hands-on experience in the market. Since the potential for profit or loss is great, start with a reasonable limit of money that you can afford to lose without sacrificing the car payment.

2. Set limits on losses. Why ride a downturn hoping for a miracle upswing? As the old saying goes, “know when to cut your loses”.

3. Manage your expectations. Sure, day traders can hit the right time and double their money in a matter of minutes. They can lose just as fast. Day trading offers good profit making potential but does not come with a guarantee. Be satisfied with gradually increasing the value of your trades and avoid betting it all on one stock. Day trading is about risk taking not mindless gambling.

4. Determine a trading strategy. Day trading requires keeping up with trends and ranges but does so on a shorter timeline. Another useful approach is to focus on specific types of businesses or industries to develop expertise.

5. Trading is the means, not the end. Day trading is fast pace that occasionally needs to slow down. Trading repeatedly just to keep trading only makes money by generating fees for the online brokerage. Take your hand off the mouse and think before you click. Day traders might make 3 trades in a day or 12; it’s not the number of trades but the result that counts.

6. Find the trends. Trend analysis shows changes that indicate an up or down move in stock prices. Since day trading is so active, you may choose to subscribe to trend reports rather than take time to develop charts.

7. Lose the emotion. The thrills and chills of day trading must be kept in check so that the buy/sell decisions are based on informed choices. If you lose, let it go. Dwelling on the loss only blunts decision making for the next trade. Put your emotions within a range, neither too high nor too low.

8. Block the fear. After tanking several times it’s easy to start second-guessing your day trading decisions. Successful online traders have to rise above the fear of picking another loser and either work your trading strategy or make changes to improve it.

9. Ignore hype. No matter how much a stock is touted in the tip sheets, if it does not fit your day trading strategy then it’s not right for you.

10. Look backward. Set a regular time to review past trades for profit or loss, application of trading strategy and information sources used. And be honest, was the trade based on tips, facts or emotion. You have to know what drives your day trading strategy to make it work for you.

Get your Momentum Stock Trading System and sign up for my free weekly online trading system newsletter here at: http://www.stressfreetrading.com

Technorati Tags: day trading, stock market, investments, trading strategy

By definition, value investing is the process of selecting stocks that trade for less than their intrinsic value. A value investor typically selects stocks with lower than average price-to-book or price-to-earning ratios. Of course, it is not nearly this simple. Value investing is the corner stone of long-term growth. Those who practice it survive the ups and downs of the market and are more likely to emerge wealthy than those who ride the market, in principle, due to the higher quality of the companies falling under the prerequisites of the value investor. Value investing is essentially concerned with getting the most profit at the lowest cost. The basis of value is profit. Value investing is an investment style which favors good stocks at great prices over great stocks at good prices. Value investor extraordinaire Warren Buffett has used this style to become a billionaire.

It’s important to keep in mind that value investing is not concerned with how much the price of a stock has risen or fallen necessarily, but rather what is the “intrinsic” or inherent value of the stock, and is it currently trading below that price, i.e. at a discount to it’s intrinsic value. The important point here is that when looking at stocks that are trading at or above their intrinsic value, the only hope for gaining value is based on future events, since the stock price already represents what the company is worth. However, when dealing with stocks that are undervalued, or available at a discount, unforeseen events are unimportant in that without any new earnings or additional profits, the shares are already “poised” to return to that inherent value which they have.

The question now, of course, is “why would stock prices not always reflect the true value of the company and the intrinsic value of its shares?” In short, value investors believe that share prices are frequently wrong as indicators of the underlying value of the company and its shares. The efficient market theory suggests that share prices always reflect all available information about a company, and value investors refute this with the idea that investment opportunities are created by disagreements between the actual stock prices, and the calculated intrinsic value of those stocks.

Finding Value Stocks

Value investing is based on the answers to two simple questions:

1. What is the actual value of this company?

2. Can its shares be purchased for less than the actual (intrinsic) value?

Clearly, the important point here is, “how is the intrinsic value accurately determined?” An important point is that companies may be undervalued and overvalued regardless of what the overall markets are doing. Every investor should be aware of and prepared for the inherent market volatility, and the simple fact that stock prices will fluctuate, sometimes quite significantly. Benjamin Graham has often said that if investors cannot be prepared to accept a 50% decline in value without becoming riddled with panic, then investing may not be for them…or rather, successful investing, as it often takes significant losses in a particular security before gains are made, due to the idea that value investors do not try to time the market, and are focused on the underlying fundamentals of the companies. Furthermore, the quality of the companies targeted by the value investors’ screening methods should be, over the long term, less volatile and susceptible to market “panic” than the average stock.

This is also a two way road of sorts. On one hand, there is no sense in worrying about depressions, upturns, and recoveries due to the underlying quality of the value investments. On the other hand, investments should only be made in companies which can flourish and do well in any market environment. Doing solid investment research and making equally solid investment decisions will take investors much further than trying to forecast the markets.

How Many Different Stocks?

In terms of diversification, there are many discrepancies over exactly how many different stocks a solid portfolio should be made up of. My personal view is that there should not be as many stock as normally make up a mutual fund. Many will disagree with this, but what it’s worth, I think that owning a portfolio of 100, 200, or even more companies not only serves to limit risk, but it really limits the possibility for reward as well. Also, as Warren Buffett has said many times, the more companies you own, the less you know about each one.

As I write this, there are 42 stocks in our recommended portfolio. This number may very well grow in the coming months, as it may decrease in number, but one thing to keep in mind is, out of the thousands of companies available for purchase, only a very small percentage meet the stringent requirements of the diligent value investor. This is both a blessing and a curse. Very often, there is simply nothing to buy, and this is fine. The trap to avoid falling into is to lower your requirements for a stock when there simply isn’t anything meeting the normal requirements. This is how many an investor has fallen into making poor investment decisions, putting money into companies not really adequate for their respective portfolio, and it will certainly have a long term effect on gains.

David Pakman has been writing about politics and investing for years now, and runs the websites http://www.heartheissues.com and http://pakman.thevividedge.com

Technorati Tags: investing, stock market, online trading, stocks value

A fickle stock market encourages good-humored mockery.

Recently, as I watched the premiere of a sitcom, an obvious omission breached television etiquette. Silence followed every exaggerated comedic set-up. There was no laugh track. Where were the premeditated giggles from the show’s “audience?” At last, the viewer determines the funny moment.

It then occurred to me, the writers of this new show adopted an aspect used by investment news programs.

I will be the first to admit, in addition to the miscellaneous printed and electronic financial information, the television provides an abundance of supplemental financial news. However, the shows often leave me asking, “What’s missing?” In addition, the shows may very well leave viewers with the ultimate responsibility, which segment is entertainment and which is practical advice.

Perhaps you may recognize one of the canned statements below that investment show gurus continuously utter. Although each may be applicable (and in may cases vital to successful financial planning), notice the missing “laugh tracks.”

How many times have you heard “Invest For the Long Term?” The analyst may be leaving out “because I hope you forget my last appearance and the short term disaster I have caused for the viewers who actually acted on my recommendation.” Each investor’s long-term outlook is somewhat different for the other’s and you should always review the guests’ recommendations with caution. What is his or her reasoning for such revelation?

“Buy and Hold.” The missing part: “because I have no idea of an exit strategy to recommend.” True enough, the more successful investors are those who invest according to a well-planned strategy and stick to it. They generally hold onto their winners. There are, however, times that will dictate an exit strategy.

Finally, there’s “Use Asset Allocation.” The missing part: “because I cannot tell you which asset historically does better in this particular market environment.” There are many ways to accomplish diversification in your portfolio and it does not always have to revolve around the division of stocks, bonds, and cash. Depending on your particular objectives, time horizons, and risks, an appropriate allocation may be derived from the use of just one type of asset. Either way, there are no guarantees when you place your money in the stock market and it is best to remind yourself of the risks of each investment. Try including real estate, collectibles and insurance products in your general financial plan.

We can all watch the appearance investment gurus make on financial shows. Perhaps we can include light-hearted follow-up statements as if we were watching a Rocky Horror film. We often enjoy the amusement provided by television personalities, however, it is important to review your investments regularly. Always examine your motive behind each buy and sell.

In actuality, your financial future is no laughing matter and should be guided with thorough commentary. Television shows come and go; your finances may one day be a legacy.

Wardlaw’s belief is that familiar life elements best illustrate practical investment strategies; not typical investment jargon. With that philosophy, the author assists financial planners/advisors, brokerage firms, periodicals, and other investment information syndicates create informative and entertaining articles. For comments and questions, please contact the author at tools2invest@yahoo.com

Technorati Tags: sitcom investing, television shows, trading

The soybean futures market went limit-up at the open on Friday (29 June, 2007).

Limit days are one of the reasons I prefer day-trading to other trading styles where positions are held for days or weeks. Imagine you had been long when the market closed on Thursday. Then you would be delighted with the action on Friday, sitting on a large windfall profit!

But imagine for an awful moment that you were short on Thursday close with a stop placed 5 points above the close. When the market opened on Friday your stop would have been triggered, but if the stop order was actioned at all it would have been at around 50 points above the previous close! That is an instance of the market gapping through your stop loss and inflicting far greater losses than you had anticipated – ten times more in this case.

But that is not the half of it! More than likely, the stop order would not execute because under the rules for trading this contract, the market was locked limit up (50 points) for much of the session and trading was suspended. Fortunately, on this occasion, price pulled back late in the session allowing trading to recommence, so your stop would have executed before the end of the day. But imagine how you would feel if the market remained limit up into the close. You would endure a miserable weekend wondering if Monday would be another limit up day, costing you another 50 points with no way to exit your trade. Indeed, it is possible to have a run of several limit days in succession, with disastrous consequences for your account.

Of course, markets can gap through stop loss points when day-trading as well, but it is much rarer than when you hold positions over night or across weekends. The day-trader always closes outstanding positions before the end of the primary session, so is not nearly so exposed to dramatic moves through stop loss points.

Is there anything you can do about limit days? The best defense is to protect your position with futures options instead of normal stops. For example, when you go short soybeans at, say, 840 you may be able to purchase the 840 futures call option for 18 points ($900). If you choose to execute this option, you are granted a long futures contract at 840 points. This means that no matter how high the market goes, you cannot lose more than 18 points (because your 840 short is offset by the 840 long, so your only exposure is the 18 point premium).

This insurance will cost you, of course, because if you exit your short position at, say, 820 for a 20 point profit, you will find that the price you get for your 840 futures call will be much less than you paid. If you can get 6 points for it, you have made 20 points on your short futures position, but lost 12 points on your long call position, giving a net profit of 8 points. For the long term trader, this may be less significant. For instance, if the market declines over a few weeks to 700 giving you a 140 point profit, your futures call option will almost certainly have lost the full 18 points of value, but this still leaves you a full 122 point profit and lets you sleep easy through events like limit up days.

Even if you decide against using options in your normal trading strategy, they might still save your bacon in an emergency. When the US experienced the first discovery of Mad Cow Disease the futures market for live cattle went limit down for several days. This was in a period where there had been a sustained up-trend in cattle prices, so many traders were caught in long positions. The thing to remember is that when the futures market goes limit up or down, trading is suspended in futures contracts but not in futures options. Therefore, when the live cattle went limit down, it was still possible to buy futures put options which would serve to protect against further major declines. The problem with this is that the put option premiums are sky high in this scenario, so you will still incur a very substantial loss. Still, if you want to get out at all costs and the futures market is locked, this is the way to do it.

The other thing to notice from this discussion is the importance of trading small. If you are trading too many contracts and get caught on the wrong side of a limit move, you can be wiped out in a flash. That is why professional traders limit planned exposures (their planned stop loss points) to less than 2.5% of their overall account. Even if a disaster occurs, and they suffer a loss 10 times greater than they planned for, they are still in the game. Anybody risking more than 4 or 5% is likely to be dealt a blow from which they cannot recover, and anybody risking 10% or more is dead in the water.

A further consideration is that limit moves following sudden bad news are often over reactions. If your position is small relative to your account size, you will have the capacity to ride out the storm, and exit at much better prices when the first panic recedes and prices retrace towards former levels. Traders carrying too much risk will not be able to do this because they will suffer margin calls and be forced to exit contracts at the worst possible time.

David Bennett trades US commodity futures from his home on the Gold Coast in Australia. He provides coaching and mentoring services for people wanting to start trading for themselves. Visit http://www.12oclocktrades.com to read more futures trading articles.

Technorati Tags: futures trading, stock market, futures market, put options

You no longer have to worry about brokerage fees if you don’t want to. You can simply use the money you already have to give online trading a go. Some stocks can be expensive, but you don’t have to start out with blue chips, or you don’t have to buy many. Just take your time and you can get in at your own speed.

Trading online gives traders the opportunity to get started before online trading is old book. So even if you only have a small amount of money to play with you can start with penny stocks and work yourself up.

Before you begin, have a look at our hints for starting out in online trading.
Do your homework:

There are many online sites about stock trading all over the World Wide Web. It’s often hard to know where to start. You need to take some time to investigate a few sites that you are thinking about using. Some sites are held in high esteem and others don’t have many user reviews. Some sites are easy to use and don’t ask you to risk everything. Others are loaded with lingo and indicate that you should turn over your savings. Be careful of shallow promises and too much lingo. Never turn over your hard earned dollars if you don’t understand the site. When you take part in online trading you need to transfer money online, so you need to make sure you trust the site you are using. Never use a site that you can’t find real information about, like their phone number or address. Check out what kind of built in security they have on their site, who hosts the site and what kind of pricing they provide.
Some more homework:

Even though online trading has made the stock market available to many, that doesn’t mean that you are trading completely without risk. Even trading in penny stocks will leave you slightly bitter if you make the wrong move. Good online sites will offer the new investor some basic lessons and some information about the stock market. Take some time to learn a bit about it before you jump in headfirst. Learn about the risks as well as the rewards and learn about the companies you might potentially be buying into.

Double-check your sources:

Once you feel like you have chosen a trust worthy online stock site and you have looked into the basics of investing, it’s time to get into the game. But before you do so you need to find out how it is going to work. Look in to how you will pay for your stocks, which you can follow up with and if there is some one responsible for your portfolio.

Set your limits:

No matter how careful you are or how much research you do there is still a chance for risk. When playing the stock market game you have to know when to stop. You should never use money that you need to live or that you have already committed elsewhere. You need to set a budget and make sure that you stick to it. Once you make profits you can invest more but never start out spending more than you can.

Expect the un-expected:

Well expect to not expect! If you are trading online you won’t have a full service broker. You won’t have the guidance to begin with. So don’t expect to make millions over night. In fact you will probably start out with mixed results. Learn from those results.

The World Wide Web has made online trading accessible to many people. With lower fees and the fast results of a twenty-four hour market, the investment door is wide open and is every inviting. Don’t forget that you are playing with real money and do your research!

Get your Momentum Stock Trading System and sign up for my free weekly online trading system newsletter here at: http://www.stressfreetrading.com

Technorati Tags: online trading, trading tips, stock options, trading site

“Those that don’t know history are destined to repeat it.” – Edmund Burke

Trading is a business. Like any business, it has items of value. In your trading business, your “inventory” of cash is the most important asset. You must preserve it and increase it at all costs.

You also have financial tools. One of your business’ more subtle items of value is your decision making process. You must constantly be striving to improve it.

This is where a trading diary comes in. A diary lets you log and then analyze your decision making process. Such an “at-a-glance” is invaluable for doing the kind of self analysis you need to make sure your decision process continuously improves.

Every trade you make should be entered in your trade diary. Enter the date, time of entry, symbol, company name, number of shares, price per share, setup, trigger, expected trade duration and your subjective state. These entries should be made at the time of the trade. They decrease in value in proportion to how delayed you are in making the entry. In other words, make them right away!

Trade exits should be noted with similar items to the entry including the profit or loss. Of course, you’ll find that you’ll develop your own list of items to include. Whatever you do, be consistent.

Here’s a neat tip: also log trades you did NOT take but you seriously considered taking. Make a note of why you decided against the trade. Then you can go back later and see what might have happened if you had taken the trade. This will give you additional insights into your decision making process.

In addition to keeping a trade diary, you should also maintain a spreadsheet that shows you all your positions at a glance and how they’re doing. To get you started, here are some ideas for columns you can include in this spread sheet:

• Symbol
• Sector
• Description
• Quantity
• Purchase Price
• Purchase Date & Time
• Comm. Cost
• Latest Price
• Market Value
• Percentage of Assets
• Gain or (Loss)
• Percent Gain or (Loss)
• YTD Return
• Dividend Yield
• P/E Ratio
• Projected Growth Rate
• Average Daily Volume
• PEG Ratio
• Market Cap
• Beta

Depending on your trading style, you can add or remove columns. For example if you primarily day trade, you probably aren’t interested in dividends or PEG ratio. But these and other fundamental attributes are quite useful if you have a long term trading style.

The big difference between the list above and that which is maintained by your brokerage is that you continue to maintain the entries after the position is closed. Brokerages usually remove closed items from your list.

You’ll be surprised at all the things you discover once you start to develop a trade diary with a significant history. How often you review your trade diary will depend on the frequency of your trading. A day trader will want to do a review once a week. A long term trader can review his stocks picks quarterly.

Live long, document well and prosper.

With customers in more than 70 countries Doug Newberry enjoys his position as host of the “Market Toolbox On Demand” online radio show. He is also the editor of the “Market Toolbox Newsletter.” His company, Investing Systems Network specializes in providing financial tools and portfolio management software for its customers.

Technorati Tags: trading diary, stock trading, trading business, stock options