Short Selling - How To Make Money Investing In Bad Stocks

Falling markets always cause investors grief. The media reports any selling in a mortally serious tone, while bullish cheerleaders comfort the masses with promises of better days ahead.
Negative sentiment usually intensifies right along with the selling, and desperate prayers are offered to the heavens as everyone nervously holds their breath.

Well, not everyone. In fact, more folks are starting to take advantage of the normal rising and falling of the market tides by learning to sell stocks short. For example, Investor's Business Daily newspaper founder William J. O'Neil's latest book is titled "How To Make Money Selling Stocks Short."

Selling stocks short is a simple way to make money when stocks drop. To "sell short" you simply borrow the stock from your broker, sell it, and then buy it back when the price drops. You then return it to the broker you borrowed it from and keep the profit. Yes, it's perfectly legal!

Imagine that. A conservative well heeled senior investor such as Mr. O'Neil advocating that investors learn how to sell short. As surprising as it may seem, you only have to look back to when Bill began his investing career to see why he is willing to take this "odd" position.

In the early sixties O'Neil was a young stockbroker for a major New York Stock Exchange member firm. Based on his research he decided to close out all of his stock positions in the market by the spring of 1962. Then he started selling short. By the end of the year he had made a sizable profit while almost everyone else was getting crushed in one of the worst bear markets of that era. A year later he bought a seat on the NYSE and started his own firm.

After more than four decades studying the markets, Bill believes there are two main reasons why most investors "can't sell." First is the obvious lack of knowledge about the subject. Most folks have never even heard of selling short. The second reason is the psychological resistance most investors have against selling short. After all, investors aren't supposed to make money when stocks go down ... right?

Beyond the educational, emotional, and mental programming required to get our heads in gear, a big part of our job as active investors is to find the dominant market trend and profit from it - even when it's down.

Normal investors might scoff at the notion of shorting, but highly successful investors and stock traders aren't normal. While accepting the fact that the stock market will go in whatever direction it pleases, the latest generation of market players knows how to take advantage of the opportunities offered by the down-side of repetitive market cycles. Maybe it's time for you to consider short selling too.

It's very important to get a good stock trading and investing education before you put money in the market. Take your time and carefully choose an online stock trading service that will successfully guide you along the way.

Note: Thomas Sutton has been trading stocks online over a decade. He is the author of "Five Secrets You Must Know To Make Money In Stocks" and the current editor of The RightLine Report for active traders.

Article Source: http://EzineArticles.com/?expert=Thomas_Sutton

Stock Trading Software

Sometimes, unbiased information provided by good stock trading software can prove to be very unhelpful in making an intelligent stock related decision. Stock trading software offers a reliable comparison of stocks and suggests the stocks to be bought or sold. Stock trading software is an indispensable requirement for short-term investors.

A variety of stocks trading software are available, leaving the choice open to the trader. It depends on the investment needs of stock traders, for instance, whether traders want to track their portfolio or research for new stock opportunities. Stock trading software provides traders with a range of fundamental functions like real-time stock quotes, as a result forming a stock-trading software package.

Various basic features provided by a stock trading software consists of settling on the price direction by offering the opening price in market, and helping stock traders earn profits by providing signs that indicate a breakout. Additionally, stock trading software assists in finding out the average price of securities with the help of moving average monitoring and alerts such as trigger motion that helps traders to reach specific price targets. Besides the above features, stock-trading software also provides stock traders with pattern identification.

When stock traders choose stock trading software, it is advisable that they take advantage of any free-trial options offered by providers. This will help traders in opting for the right stock trading software.

The services provided by stock trading software are commendable, though at the end of the day, consciousness, rather than emotions, are supposed to guide one's stock-buying choices. It is important for stock traders to bear in mind that irrespective of the stock trading software they make use of, stock trading is all about purchasing and selling according to their trading set ups. The clearer their set ups are, the faster they can make a favorable decision.

Stock trading requires traders to follow a closely controlled set of rules and tactics. Once these are mastered, stock traders can hope to replicate beneficial trades with uniformity.

Trading provides detailed information on Online Trading, Option Trading, Currency Trading, Forex Trading and more. Trading is affiliated with Stock Trading Systems.

Article Source: http://EzineArticles.com/?expert=Kevin_Stith

How To Make, And Keep, Money Trading Stocks

If you are serious about making and keeping money by trading stocks, then there are three things you need to do, and do well.

Money management
Orders
Trading system

Money management

Money management comes first. Without a rock-solid method of managing your trading funds, you trading results will be only be fair at best. Money management is more than just knowing how much money you have tied up in a trade. It's a method of using the right portion of your trading account on any one trade relative to the perceived risk and reward.

There are a few things to consider to managing a trade successfully:

1.What is your account size?
2.How profitable is your trading system?
3.What is the initial amount at risk on a per share basis?
4.What is the profit potential?

Account size

Your account size determines how long you stay in the trading game. If you are skillful, then you will not require a large account. On the other hand, even if you are a new trader, you can use a small account as long as you control your risk.

Controlling the risk means never using more money then you need on any one trade. A very simple formula for stock market success is to risk less than 3% of your total account value on a single trade.

If you have a $10,000 account, this means you never lose more than $300 per trade. If your account drops to $9,000, then you risk less than $270.

As your account grows, while the total amount at risk increases, you still only risk a maximum of 3% of your account. Say your account is at $12,000, then your maximum amount at risk is $360.

In theory, this ensures that you never go broke! And that is of utmost importance.

Profitable

If your system is profitable, then you will typically win more money then you lose. While some consider the percentage of winners relative to the number of losers, nothing could be further from the truth.

It doesn't do you any good to have a system that wins on nine out of very ten trades if you give all of your gains back on the one loser. More important is that the winners overwhelm the losers.

A profitable trading system might have a third of the trades result in the maximum loss planned for, a third of the trades either make or lose a little money, and a third of the trades bring in the profits.

Risk

It's worth repeating, risk no more than 3% of your total account value on any one trade. If you keep this in mind, you are ensured of minimizing losses to your account. At what price you enter a stock and where you place your initial stop price are used to determine how many shares you trade.

Profit

The profit potential of a system is the "edge". If you can estimate how much money you *might* make over time, and if that profit comes from many trades over time, then you probably have a winning system.

A trading system will either have a profit target that determines when to enter AND exit (good) or it will tell you when to enter and keep you in a profitable trade as long as possible without giving back much, or any, gains (better).

Orders

No matter what trading pattern you use to enter a stock, you will make the most money by using the correct orders.

When you wait until a stock has proven it's intensions - typically by trading above the previous day's high for a buy, or below the previous day's low for a sell short - then having an order in place that captures that exact price is crucial.

Let's say your favorite trading pattern signals a buy for. If you are an end of day trader, then the next morning you watch the opening price for the stock. If the stock opens less then yesterday's high, you place a stop order to buy above the previous day's high. Even better is to include a limit price with that buy stop order.

How much above the previous day's high is your call. As long as it is greater than the previous day's high, you are making the stock prove that it is going up.

Sure, you give up some of the profit potential. But you are more likely to turn a profit with a stock that is moving in your favor.

Once you are in a position, then you need to protect yourself from loss. If your method of picking stocks is good, then it's unlikely that the stock will revisit the current prices. Continuing with the buy example, to protect your account from a catostrophic loss, place a good-till-cancel sell stop order below the recent low. If yesterday's low is lower then the current day's low, that's where the sell stop order goes.

And make certain that the order does not include a limit. Stocks can and do gap down. Expecting that you will have a sell order filled at your stop price is a quick way to the poor house.

Trading system

Your choice of what method to enter and exit stocks plays a critical part in your stock market sucess.

A great trading system looks for low risk opportunities to enter a stock. Knowing at exactly what price signal to enter and when to exit - even if it is for a small loss - will keep your account growing. As long as you consistently follow the rules layed out by a well designed trading plan, you can count on steadily growing your trading account.

My favorite trading pattern does a great job of identifying stock likely to move rapidly in your favor.

There is no reason to be trading stocks that are not ready to deliver the biggest gains in the least amount of time.

If you are serious about taking your stock trading to a higher level, then read about this trading pattern.

Regards,

Dave

About The Author

Dave Wooding is NOT a registered investment advisor, nor does he suggest you trade with money you can't afford to lose. Instead, he offers practical swing trading pattern information at http://www.trading-pattern.com that comes from years of trading experience.

Analyze Your Stocks And Double Your Profit

An investor buys a share of stock by resorting to various approaches that validate his investment by reaping rich profits. Before investing, however, it is necessary for a value investor to study the financials of a business, so that the stock he buys at the company’s intrinsic value promises a greater return at its liquidation value (the value of a company if all its assets were sold). A typical investor would buy growth stocks that have an upward trend, and seem likely to keep growing for a long time. Whereas, a technical investor (also known as a Quant) makes decisions based upon the psychology of the market and related factors, which involve much higher risk but may prove to be more profitable, or, can conversely result in much greater losses. The fundamental analysis of any business can depend on various factors: efficient market theory, value and growth, growth at a reasonable price and the quality of the business.

1. Efficient market theory pertains to stocks being always correctly priced, as all the requisite information is available on the current price.

2. The stock market sets up the price.

3. Analysts decide upon the value of a company based on the potential for its growth.

4. Price and value may not be equal, due to certain irrationalities governing the market.

Value investors need to rely on certain stringent rules governing the nature of the stock which adhere to the following criteria:

1. Earnings: company earnings are profits after taxes and interests.

2. Earnings per share (EPS): the amount of recorded income (on per share basis) available to the company to pay dividends to stockholders, or to reinvest in itself.

3. Price/Earnings Ratios (P/E) ratio (having a justified upper limit): If the company's stock is trading at $80 and its EPS is $8 per share, it has a multiple, or P/E of 10. This means that investors could expect a 10% cash flow return:

$8/$80 = 1/10 = 1/(PE) = 0.10 = 10%

If it's making $4 per share, it has a multiple of 20 (20 times $4 equals $80). In this case, an investor might receive a 5% return (in the same conditions);

$4/$80 = 1/20 = 1/(P/E) = 0.05 = 5%

However, a low P/E is not an untainted value indicator.

4. Price/Sales Ratio (PSR): is the same as a P/E ratio, except that the stocks are divided by sales per share instead of earnings per share.

5. Debt Ratio: percentage of debt a company has relative to the shareholder equity.

6. Dividend yields above a certain absolute limit.

7. Book value ratio: comparison of the market price against the book value of the stock per share.

8. Market capitalization value: Complete total value of a company’s outstanding shares (Market price per share ´ Total number of shares outstanding).

9. Equity Returns - ROE: Net income after taxes divided by owner’s equity.

10. Beta: comparison of volatility of the stock to that of the market.

11. Institutional ownership: percentage of a firm’s outstanding shares owned by certain institutions: insurance companies, mutual funds etc.

Learning to analyze one’s stocks and thus reaping the desirable profit is in fact a continuous process, as no amount of market efficient theories can ever predict a flawless financial return system. Even though one invests judiciously by studying the market, the over-valuation or under-valuation of stocks can often be determined by market emotions.

About The Author
Joe Kenny writes for CardGuide.co.uk, offering the latest offers on UK credit cards, visit them today for some great credit card applications. Visit today: http://www.cardguide.co.uk

The Traders Secret Art of Setting Stop Losses - Guaranteed To Boost Profits

When traders first begin considering their stop losses, keep in mind this comment from Tom Baldwin, a leading day-trader. He said, “The best traders have no ego.”
Successful traders are faced with losses constantly, and they swallow their pride and get out of the position when they have to. This allows traders to survive in the market long enough to be successful. Traders set their stop losses, and then stick to the plan.
How do traders go about setting stop losses? There are several different ways. Traders could base a stop loss on a percentage retracement, where the allowed share prices retrace a certain percentage of the entry price before the exit. Different indicators can be used to identify where the stop loss is going to be set. Traders could also use support and resistance stops to set the level at which exit is made. The key is to simply have a stop loss in place.
Personally, I find these options too subjective. I prefer having a mechanical way to calculate my stop losses, so I use a volatility based stop. The reason I use this type of stop is because volatility generally represents a measurement of how quickly the stock either rises or falls (market noise). Consequently, if I measure the stocks volatility, and take a multiple of that value, I’m probably going to have set my stop loss beyond the immediate noise of the market. This ensures I am not stopped out of a position too often.
Traders can measure volatility by using the Average True Range (ATR) of a stock. This value can be found with most charting packages. Basically, the Average True Range (ATR) indicates how much a stock will move on average over a certain period. For example, if traders had a one dollar stock that moved up five cents on average over the last 20 days, that doesn’t tell traders whether the stock is moving up or down. It just tells traders on average how much the particular stock moves. The average true range is a great tool and that can be utilized in the traders trading plan for more than setting stops. If traders are not familiar with setting stops, I recommend traders to do research. One place for excellent article sources is at the System Trading Blog .
Traders use indicators in calculating the stop loss by subtracting a multiple of the Average True Range (ATR) from the entry price. For instance, I could take two times the ATR and subtract it from my entry price. If we look at the example, I just touched on, with a one dollar stock, an ATR value of five cents and a multiple of two the amount is ten cents. Which, subtracted from our entry price of one dollar gives a stop loss value of 90 cents.
Before traders even enter a position, they should know where the selling point of the stock should be. If the share price doesn’t move in the traders favoured direction, but moves against them, traders will know when to sell. Emotions are removed from the equation, and they simply follow what the stop loss dictates.
This is how most successful traders limit their losses. They know when they’re going to sell before they begin trading. Although their methods of calculating this stop loss may vary, all traders have a stop loss in place. The stop loss is a crucial part of the traders trading system. Without it, even the best designed trading system can’t deliver profits.
About The Author
David Jenyns is recognized as the leading expert when it comes to designing profitable stock trading systems.
Discover the "secret formula" of trading that anyone can use to consistently generate BIG profits from the market by downloading your FREE copy of David's new Ultimate Stock Trading Systems course.
Click Here To Download ==> Stock Trading Systems http://www.ultimate-trading-systems.com/stocks.html

Professional Stock Market Advice Reveals Most Common Trading

The best Stock Market advice you will ever read is to learn from mistakes when someone else has made them. So, this stock market advice list I made a list of some of the most common trading mistakes that are made. Even I`ve made some of these. If you have already made some of the mistakes, you can rest assured that you aren`t alone in making them. If you haven`t made them, then here`s a way to get around having to learn by making the mistakes yourself, by reading my stock market advice list.
The Stock Market advice tip #1, and worst mistake that people make is that they believe trading is the easy answer, a way to get rich quickly. People will often expect to become wizards in the market overnight, but they fail to realize that trading is like any profession; you must learn how to do it first.
For example, would you attend a weekend doctor`s seminar and expect to conduct heart surgery on Monday? Of course not! I am shocked at what people expect when they go to a weekend trading seminar. They think they will create wealth without having to work, invest or think, and it just doesn`t happen that way.
After treating trading like a get rich quick scheme, my next stock market advice tip #2 and most common mistake, is to approach the market without a plan. Without a trading plan, traders approach the market in an inconsistent manner. One day they trade stocks and the next they trade the foreign exchange. Or, they may use one set of indicators one day, and the next day they will throw these indicators out the window and take on a completely new set. Without a consistent approach, the only thing governing their trading decisions is really emotions, and that will doom them to failure.
If a new trader has managed to skip these last two mistakes, they often fall down when they try to go it alone. This is my Stock Market advice #3, all traders should find themselves a coach, or a mentor. Someone who can help them spot the errors in their system that they might not have noticed. An outside point of view can help you avoid other costly mistakes, and greatly increase your profits.
These are some common and quite basic mistakes. The next errors I`ll mention are ones that are just as prevalent in the trading industry, but they often occur once traders have been around for a while. I have some personal experience with these mistakes. Let`s call this stock market advice list, the three most expensive mistakes I`ve made.
My stock market advice mistake tip #4, or the first most expensive mistake, I made was to search for the “Holy Grail” of trading. This was an incredible waste of both time and money. During the first three years of my trading career, I spent over $25,677 on a library full of books, videos and seminars as well as spending thousands of hours in search of the perfect trading methods. Honestly, 95% of what I bought was pure junk… I should have listened to my mentor earlier and realized the “Holy Grail” of trading is simply excellent money management!
My stock market advice mistake tip #5 or the second most expensive mistake I made was not having a predefined exit point. Early in my trading career, I remember trading a stock I thought had a high percentage chance of rising. I was too confident. I fully leveraged the position. Unfortunately, when things did not go as planned, I did not know when to exit, and was paralysed. I kept rationalizing why I should hold onto that stock. As the stock continued to fall, I made more and more excuses. At the very end, I remember thinking, “I can`t take it anymore!”
I sold out. That, of course, was the point the stock turned.
I learned two very valuable lessons that day. First, always have your exit points predefined. Second, big losses once started out as small losses, and it is much easier to take a small loss than a big one.
My Stock Market advice mistake tip #6 or the last most expensive mistake, I made is not one that took money out of my pocket; instead it was a mistake that made me leave money on the table. In fact, this reoccurring mistake cost me big.
Early on, I remember selling positions as soon as they showed a profit. I would not let my profits run, as I was too afraid to give the money back to the market. I figured the profit as mine. The result was that I ended up selling the stocks that were making me money.
It wasn`t until my mentor explained to me that when you are trading, and showing a profit, that is the point where you should be adding to the position, not closing it out, that I began to understand what I was doing. Once I started following his advice, my trading profits soared.
Trading is not an easy profession, but it give you great rewards. Avoid these common errors on my Stock Market advice list, create a simple, well-designed trading system, and learn your market. If you take the time to study the market, and learn from other`s mistakes as well as your own, you will become a successful trader.
About The Author
David Jenyns is recognized as the leading expert when it comes to designing profitable stock trading systems.
Discover the "secret formula" of trading that anyone can use to consistently generate BIG profits from the market by downloading your FREE copy of David's new Ultimate Stock Trading Systems course.
Click Here To Download ==> Stock Trading Systems http://www.ultimate-trading-systems.com/stocks.htm

The Easy Secrets To Determine Stock Market Position Sizing

When trading in the stock market, position sizing is where all the tools of money management come together. It`s perhaps the most important part of your stock market money management rules. Position sizing is simply deciding how much you are going to put into any one stock market trade. You can calculate your position size using the other tools of stock market money management, your maximum loss and your stop loss.

However, many stock market traders believe that they`re doing an adequate job of position sizing by simply having a stop loss in place. While this will tell them when to get out of a stock market position, and will, with a maximum loss, determine how much capital they`re risking, it doesn`t answer the question of how much or how many units they can buy.

If you have already calculated your maximum loss and your stop loss, you can take these values, and plug them into a formula that will calculate how many shares you can purchase without exceeding your maximum loss. Although it is simple, the formula I`m about to give you is extremely powerful. The number of shares for your position is equal to your maximum loss divided by your stop loss size.

You`re already familiar with what a maximum loss is; but may not be recognize the term stop loss size. A stop loss size is the difference between your entry price and your stop loss value. If you were to enter the stock market with a one-dollar trade and set your stop loss at 90 cents, the stop loss value would be the difference between your entry price and your stock price, ten cents. Once you`ve entered these values into the formula, you can calculate how many shares you should buy so that you never risk more than your maximum loss.

Let`s look at how the formula works in practice. If your trading float was $20,000, and you were risking 2%, your maximum loss would be $400. If your stock market entry price was one dollar, and your stop loss value was 90 cents, your stop size would be ten cents. Now, the number of shares is equal to your maximum loss divided by your stop size. In this example, you can purchase 4,000 shares. If this stock reaches your stop loss, and you have to exit the position, you know you`re not going to risk or lose more than 2% of your float, which is $400.

This formula ensures the safety of your trading float. A little finessing that some of my clients like to do is to class their brokerage fee as part of the maximum loss. You could do this by subtracting the stock market brokerage fee from your maximum loss. If the stock market brokerage fee was $40 for your return trip, subtract 40 dollars from your maximum loss. Instead of entering $400 into the formula, you`d now enter $360. Once this is computed out, you can determine how many shares you`d buy, and know that you had included brokerage as part of your maximum loss.

By setting your position size so that you follow the 2% rule, you`re using a strategy that will limit the size of your losses during losing streaks. When you experience a winning streak, your position sizes will grow in a similar manner. By changing the amount of capital you`re deciding to risk, you`ll change the characteristics of your risk to reward ratio. All of your stock market money management rules will work together to make your trading system as profitable as possible.

About The Author

David Jenyns is recognized as the leading expert when it comes to designing profitable stock trading systems.

Discover the "secret formula" of trading that anyone can use to consistently generate BIG profits from the market by downloading your FREE copy of David's new Ultimate Stock Trading Systems course.

Click Here To Download ==> Stock Trading Systems
http://www.ultimate-trading-systems.com/stocks.htm

Stock Terms and Vocabulary for the Budding Investor

Every industry and profession has unique terms and vocabulary that set the insiders and pros apart from everyone else. The stock market and its investors are no exception. Knowing the lingo that investor gurus use is tremendously essential if you want to learn from them - or at least understand what they're talking about.

Securities - A broad term that is used to describe investment mediums that are of financial value. Securities are broken down into two major types: equity and debt. Equity securities include stocks. Debt securities include bonds and banknotes.

Stock Exchange - A stock exchange is a company, corporation, or organization that creates or provides a place for stock brokers to trade securities, especially stocks. There are several stock exchanges across the globe. Some of the largest and most crucial in business are the New York Stock Exchange (abbreviated NYSE), the London Stock Exchange, and the Tokyo Stock Exchange.

Stock Market - This is the market, or place, where stocks can be traded. Stock markets can be public or private.

Stock - Generally speaking, these are units of ownership of a company. Businesses and corporations use the cash flow to finance their business ventures. Because it represents ownership stock is also referred to as "shares of a company"or just "shares". There are different types of stock available to investors with unique benefits and requirements for each one.

Common Stock - This type of stock represents the primary ownership of the company. Investors who purchase common stock are known as shareholders. As shareholders, they have certain rights and voting privileges with the company in which they are investing. The percent of stock owned by a shareholder determines the magnitude of their power and liability with the company.

Preferred Stock - This type of stock also represents ownership in a company; however, its terms are stated in a Certificate of Designation that outlines what rights and benefits the investor is entitled to. For example, investors who purchase preferred stock may not have voting privileges. Instead, preferred stock may have dividends that are paid to preferred stock holders before dividends are paid to common stock holders. There may be an option to convert preferred stock into common stock. In cases of company bankruptcy, preferred stockholders receive payment in company assets after debt holders and before common stockholders. Due to its flexible nature, reviewing the Certificate of Designation is the key to understanding how a preferred stock functions for a specific company. Preferred stock is also sometimes called "preferred shares".

Dividends - These are payments made by a company or corporation to the owners of their stock. The dividends come from the profit the company earns. Every time a business makes a profit, they have two choices. The first is to reinvest the money into the business, and the second option is to pay their shareholders. The payment of dividends is considered to be disseminating the assets of the business to its shareholders. It is not a cost or a company expense. These payments are traditionally cash, but may also come in the form of additional company stock. Dividends are also traditionally delivered to shareholders on a schedule, but companies can pay dividends at any time. When these payments are made to shareholders off schedule, they are sometimes called "special dividends".

SEC - An abbreviation for the Securities and Exchange Commission. They are the U.S. government agency that enforces the federal laws that regulate the stock market. Its purpose is to ensure fair practices between businesses and investors. They are a non-partisan agency and they enforce the laws through civil actions and lawsuits.

Gorilla Trades, incorporated in 1999, offers a risk-controlled, market tested, proprietary system which generates a menu of stock ideas that have consistently proven to identify stock trades with explosive price appreciation potential.

Article Source: http://EzineArticles.com/?expert=Paul_S._Allen

Stock Market Trading - Invest In The Right Direction

In stock market trading what you need is the right attitude, discipline and focus. These things generally decide your success in online stock market trading. With right attitude, many people, especially business professionals earn more profits as compared to individuals from other backgrounds. The main reason that draws a thin line between a successful investor and an unsuccessful investor is the difference in their approach.

You can also become a successful stock investor. Market knowledge is the only secret to your success. Stock market as we all know is very flexible in nature and that's the main reason why you need to keep in touch with the latest market updates. These things have become easier with online trading system. All kinds of information are available on the Internet. Simply browse different stock trading company Websites and keep you abreast of the latest news and information.

For trading stocks your online broker plays a key role in your success. It's your broker who buys and sells stocks as per your instruction. Also, the broker keeps you updated with new company shares that are being launched or available in the market. Since, these brokers are professionally trained, therefore, they know every aspect of the stock market and guide you accordingly.

Once you register with an online stock trading company, you can start trading online. In the Website you can also find a wealth of information. You can learn more about the market, its changing trends, stock quotes information and lots more. Read them and gain knowledge - this will help you keep track of the flexible nature of the share market.

Once you start trading, you must keep an eye on stock quotes and also major companies who offer stocks in the market. Recently, many small growing companies have come into the market. These small industries with their planning and strategy are making a buzz in the market. Look for the share of such company and invest intelligently. For buying and selling of stocks, it is necessary to keep you in touch with the market updates. These are some of the important tips that you should always keep in your mind in order to become a successful stock investor.

Due to the lack of proper knowledge, many people still feel reluctant in stock investment. But the fact is that online trading has completely changed the atmosphere. Now investing in stocks is not a painstaking task anymore. Any individual can start investing online. If your are a techno savvy then it's even quite easier for your to understand the process.

Investment in the present is very important. And in stock trading you not only save your money, you can make more profits in the less timeframe. Though there are many investment options available in the market, but online stock investment is one of the best options you can look for. There are only subtle risks involved and you can get rid of that with time and knowledge of the changing market trends.

Invest in stocks and earn more. Your right attitude, knowledge and focus will determine your success. So, keep these fundamental points in your mind and make a great success in your investment plan.

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Sogoinvest Interest Rates and Fees: trading stock options

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Article Source: http://EzineArticles.com/?expert=Micheal_James

Making Thousands In The New York Stock Exchange - Hidden Ground Breaking Rules

Once you have decided to begin trading in the New York Stock Exchange, there is a bewildering variety of information and advice out there that will guarantee to put you on the way to success. A lot of the New York Stock Exchange advice is good, and some of it isn’t. So where do you start this difficult task? Here is a broad outline of what I consider some of the ground rules you need to cover to begin trading successfully in the New York Stock Exchange. As you progress in your trading using the New York Stock Exchange, it makes sense to learn more about specific parts of trading, but everyone needs to start somewhere.

I’d start with defining your portfolio objectives. These objectives will have a great impact on your style of trading in the New York Stock Exchange. Ask yourself a few questions, such as these, to find your objectives.

• Do you want to trade part-time or full-time?
• How much money do you have to work with?
• What annual rate of return do you want?
• Are you creating a trading system using the New York Stock Exchange for cash flow or capital growth?

Once you’ve set your objectives, you should select a certain stocks to trade with in the New York Stock Exchange. It’s a good idea to avoid the tendency to trade any and all stocks. Many traders fall into the trap of thinking that the more stocks they trade on the New York Stock Exchange, the more money they will make. Unfortunately, this is not true. You need to master and learn about the characteristics of certain stocks that you will consistently trade with in the New York Stock Exchange. Did you know that some of the most successful stock traders only trade using certain stocks? This fact is the key to making real money.

With your objectives and the certain stocks picks you have in mind, the time has come to design your trading plan - your set defined rules you’ll use while trading into the New York Stock Exchange. A well-thought-out trading plan defines your approach to trading in the New York Stock Exchange. Also, a properly constructed trading system for entering and exiting the New York Stock Exchange, leaves no room for human judgment. It should be able to respond to any set of circumstances that arise with clear actions.

The importance of this kind of trading plan - your set defined rules for tradng in the New York Stock Exchange, cannot be overstated. Without a consistent set of guiding principles to govern their trading decisions in the New York Stock Exchange, most traders hop from one trade to the next, driven by emotion or hysteria. When you don’t have a plan, you plan to fail.

Try and keep your system simple. Many traders complicate their trading systems with out even trying. They accomplished this by over-optimizing. So many indicators are added to their system that it becomes nearly impossible to trade. Instead, keep your system as simple as possible. This way, it is robust enough to trade across many market conditions.

Once you’ve designed your system follow it perfectly. This requires a great deal of self-disciple, but bear in mind that your will be rewarded with success. Either undisciplined behaviour or ignorance will be punished by the market in the end, coming by way of direct losses or by the loss of profits, you could have made. However, the market is complex, and does not always act as you might expect. There is a principle of random reinforcement that you might encounter. The New York Stock Exchange has a tendency to reward bad behaviour from time to time. This tendency is one of the reasons why it often takes so long to learn how to trade. Keep these principles in mind so that you will not be surprised, but remember there is no point in having a system if you are not going to follow it.

When you are ready to trade, in the New York Stock Exchange, start small. Give your confidence time to grow, and give yourself time learn the intricacies of your system, and your stock picks. There is always a learning curve when you begin trading in the New York Stock Exchange. It makes sense to take the time to learn the ins and outs of the New York Stock Exchange before you start adding more positions.

Now that you’ve started trading, in the New York Stock Exchange, I have one last, crucial piece of advice for you. Follow this rule when you’re trading in the New York Stock Exchange. Despite the fact, everyone knows the old adage of “cut losses short and let profits run”; many traders fail to do this. Have strategies built into your system to ensure that these rules are followed. Adages only become old when they have proven to be effective.

I could go into much more detail on many of these points, but this is only a broad overview of the steps you need to take when you begin trading in the New York Stock Exchange. With commitment, discipline, and careful consideration, soon you will be well on your way to being a successful New York Stock Exchange trader.

About The Author

David Jenyns is recognized as the leading expert when it comes to designing profitable stock trading systems.

Discover the "secret formula" of trading that anyone can use to consistently generate BIG profits from the market by downloading your FREE copy of David's new Ultimate Stock Trading Systems course.

Click Here To Download ==> Stock Trading Systems
http://www.ultimate-trading-systems.com/stocks.html

10 Tips for Successful Stock Market Trading

1)Do learn what really works on Wall Street. What many books and journalists love to blab on about doesn't actually make money in stocks. Watch what the successful traders do. This is the cornerstone of your success. Follow the wrong method and everything else is waste of time.

2)Learn to be disciplined. If there is one character that separates the winners from loses in this game it is discipline. Top traders learn to follow their rules. They stick with winning stocks and are not afraid to keep out of the markets when conditions are not right. They do not over trade or trade for the sake of trading.

3)Cut those losers. I have never met a trader and never will, who does not have losing trades. It's all part of the business. But winners will cut those losers fast and move on. Losers will hang on and hope it turns around. If you cannot cut those losers you will not be in Wall Street long. That I can promise you.

4)Let those winners run. Occasionally in your stock trading career you might be lucky enough to actually snag a "10 bagger" (a stock that goes up ten fold) BUT in order to do this you must give it room to grow and be disciplined enough to ride those corrections out along the way.

5)Stick to top quality stocks: Contrary to popular belief stocks do not go up out of the blue. Hey go up because they are massive profit pulling businesses that have years of high-powered growth (or expected growth) ahead of them. Institutions and other big traders follow these stocks and invest money into them. This is what makes them move. Penny stocks, poor stocks, beaten down stocks are simply a gamblers paradise.

6)Only invest/trade in favourable market conditions. During the great bear market of 2000 -2002 there was hardly a stock worth trading for me. I was virtually out of the market for 2 years as other trades lost money. When the market finally turned I was able to make great money again. But I needed to protect my capital first.

7)Truest your-self: Learn to find and trade winning stocks on your terms. Do not go looking for other people's advice. It's human nature to want to follow the herd. But the "herd mentality is often wrong" If you have to ask you shouldn't be trading.

8)Risk a little and live to fight another day: For individual traders you should not be risking more than 3% of your trading capital on any one trade. Any more and the very least you are going to experience are enormous equity swings. At the worse you will wipe out. I am telling you now. Risk more than 3% of your capital and the stress will start to eat you up. It isn't a race.

9)Get really good at one possibly two methods of trading: Stop jumping from one method to another. There are many different ways to make money in the stock market but you need an edge and that edge comes from experience. Every method goes through good/flat times. Resist the temptation to jump ship when your method goes through a flat period.

10)Take it easy. The stock market is not a business that can be forced to give up money if we work hard in it. It's opposite to most other types of business. It's pretty weird actually. When conditions are right you will make so much easy money you will laugh. The key is not to give that back when conditions are not right.

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Stock Trading System

What is Stock?

You can gain ownership rights of a company by investing in its stock. A stock/share is a unit of your partnership in the company. The value of each share of the company is determined by dividing the total capital investment of the company by the number of shares. For example, if the total value of a company is $100 and the number of shares is five, the value of each share shall be $20. If you own one share, you have 1/5th ownership of the company. If you want to increase/decrease your ownership of its stock, you need to buy/sell its shares. The words 'stock',' share', or 'equity' are generally used to convey the same meaning.

Stock Trading

Stock trading, therefore, means buying or selling the shares of the stock of a company. Stock trading takes place within certain parameters of a system. For example, you cannot directly buy the stock of any company from the company itself. You have to buy and sell its shares through a broker who is registered with the stock exchange where the company is listed. The shares are sold and bought at the market prices prevailing at a given point of time. Again, the price of the stock cannot be determined arbitrarily by the seller or the buyer. It is determined by a combination of certain market forces comprised primarily of supply and demand, which in turn, is linked with performance of the company and so on.

Stock Trading System

As a general practice, it is practically impossible for a person or a group of people to raise the huge amount of capital, which is required to finance a venture. In order to do so, the sponsors of the company make a public announcement of their intent to start a company and invite the general public to buy its shares. The company decides upon the overall capital required to finance the venture, the number of shares or units and the price of each share. It then appoints brokers to receive subscriptions from the public. This first step is called the initial public offer-IPO. If you cannot buy the company's stock at the time of its initial offer, you can buy it later on as well, but the price of the share of the company will depend upon its performance and the supply and demand of its shares.

Stocks of various companies are traded at stock exchanges like the New York Stock Exchange (NYSE), National Association of Securities Dealers Automated Quotation (NASDAQ) and American Stock Exchange (AMEX).

There are two main types of exchanges, physical and virtual.

Physical Exchange

The NYSE is an example of a physical exchange system where stock trading takes place face to face. In other words, there is a concrete building where the trading actually occurs. Most people may be familiar with the chaotic images of the stock exchanges on TV or in movies. Watch the CNBC television and you will be able to see the 'crazy guys with the blue jackets frantically wave about the pieces of paper and yell out prices'.

Virtual Exchange

The second type of stock trading exchange system is the virtual exchange. The word 'virtual' refers to a computer image of a real situation. The virtual exchanges are like computer networks as they are linked to each other through the Internet. The entire trading in stocks and shares takes place electronically. The NASDAQ, also known as the OTC -- over the counter market, is an example of the virtual exchange. Since it is virtual, there is no trading floor like the one at the NYSE. All trading takes place through a computerized network of dealers. The brokers charge commissions both on the sale and the purchase of the shares. The stock of each company is identified by a shorthand code called symbol or a ticker symbol. The symbol usually consists of letters. Sometimes it may be numbers or a combination of letters and numbers, for example, MSFT is Microsoft, C is Citigroup, and GOOG is Google.

Pricing and Features for Sogoinvest Investment Packages: online investmentSogoinvest Interest Rates and Fees: trading stock options

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The 7 Mistakes Investors Make

Mistake #1: No Written Plan

I'm sure you've heard it before; people spend more time planning their vacations than their finances. It doesn't make much sense but it seems to be the norm.

A Fortune Magazine article stated that people with written plans for their investments average about 5 times as much money as those without a plan.

Of course the plan itself won't make you any money. But putting it in writing gives you focus and makes the investment decisions that much easier. Don't forget to review your plan regularly (at least once a year) to see if you're on track and if you need to make any adjustments. If you don't have a plan how can you know if you're heading in the right direction? The best plans are useless if they sit on a shelf collecting dust.

There are many ways to get started. If you are a do it yourselfer, there are plenty of websites with basic financial plans to get you started. If you have investments of any significance the holder of your money should do a plan for you (If they haven't already). If they can't or won't you should consider moving your money to one who can.

Mistake #2: Putting it Off

Waiting for the "right" time can lead to disaster. Procrastination comes in many forms. You don't start saving for retirement until it's nearly upon you. You should review your investments but there always seems to be more "important" things. What's more important than your finances? You think you can catch up later by contributing more or wait until the markets are "better".

Every day you avoid investing is a day you won't get back. The best time to invest always has and will always be today.

Mistake #3: Allowing Emotions to Drive Investment Decisions

Easily the two biggest forces driving the markets are fear and greed. Try to remember this the next time you listen to a radio or TV commentator explain what's happening in the markets. You'll hear either greed or fear over and over again.

Fear of rising interest rates. Fear of inflation. Fear of falling profits. Somebody's always afraid of something. This is why investors bail out when things look bleak and since everyone else is selling too; prices are down. This increases the loss in the value of the investments.

Greed on the other hand blinds investors. The thinking is it will continue forever. Don't forget the tech bubble of 2000. That was greed in its finest example. Many companies that hadn't shown a profit yet; were worth millions on paper. You can't ignore the fundamentals. Eventually it evens out.

Of course we all want to make money with our investments. But this can easily turn into greed when the desire for profit gets out of hand. At the same time we should respect bear markets but not enough to begin a panic that will exaggerate losses.

Mistake #4: Putting Too Much faith in Recent Performance

Whatever happened will continue to happen. That's true most of the time but the markets are unpredictable by nature and recent performance is a lousy indicator of future performance. The past does not equal the future.

Recent performance is a way of measuring an investments value but there really is no way to know. Longer term (at least 10 years) is better but is by no means infallible.

Investors tend to have an emotional attachment to a good performing investment. Often times to their detriment, by staying with it too long even when its run is over (Remember Nortel anyone?)

Mistake #5: Taking Too Much Risk

There is a very real possibility that you will lose money when you invest. Many investors take too much risk; they chase the latest fad or "hot" investment. The know that high risk can lead to high reward but think they are immune to losses or will somehow "know" when it's time to sell. Usually by that time it's too late.

Far too few investors actually understand the risks they are taking. Most don't understand what could go wrong and have a plan for what to do when it does.

This kind of risk taking is really nothing more than speculation, and is only ok if you are prepared and can afford to lose all you've invested.

Mistake#6: Not Taking Enough Risk

The flipside is those who perish the thought of losing any money at all ever. They want everything secure and guaranteed. Absolute security doesn't really exist.

Very low risk always means a low return. For example a GIC will guarantee you about 4 or 5% these days but if you factor in inflation it's only worth about half of that. If all your investments are with GICs you probably won't have enough money to retire with in the long run.

Of course risk is tempered by a long term approach. The markets have never lost money over a 10 year period or longer.

Mistake #7: Requiring Perfection to be Satisfied

There will always be an investment out there that's outperforming yours. Even if you happen to have the best performing fund this month, it's likely not to be in the same position the next month.

Perfectionists tend to chase the "best" investment using past performance as their guide. There's no way of knowing this will continue.

The way to increase the chances of a good performing portfolio is to stay the course. If you're always chasing for the "best" you'll never stay the course

How To Avoid These Mistakes

· Ensure you have a written plan that outlines what you must do to reach your goals. Use specific and measurable goals so you can easily keep track of your progress

· Educate yourself. Get research from reputable sources on investing. There are plenty of beginner investment books at your local bookstore or library. Remember to look for investment books of a general nature and not that of a specific investment or strategy

· If you don't understand an investment, don't invest in it. It will spare you a lot of stress

· Slow down. It takes time and patience to see a plan through and see real results

· When you notice emotions are driving your decisions, try to be disciplined. If you are having difficulty with that then consider seeking professional investment advice.

Jason Cohen is a financial planner and investment advisor working in the Greater Toronto Area. He has over 6 years experience in all realms of financial planning including investments, insurance and banking.

Jason specializes in alternative investment strategies and tax savings for his clients. He takes a different approach while helping his clients to reach their goals.

Jason can be reached at 416 556-7618 or email at jason@jcfp.ca. For more information go to his website http://www.jcfp.ca

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Internet Stock Trading - Live Out Of the Inbox

The perfect ingredients for the flourishing internet stock trading lies in the urgent need of speed coupled with assuring online tips and brokers. The 21st century, the information era has been completely overtaken by this information superhighway express called internet. Speed, time, place and comfort are the most dynamic features apart from being easy, hustle free and dynamic.

The stock's world has been revealed because of online trading as it provides opportunity even to a layman to invest in stocks. All you need is a PC laced with a software and online brokerage firm registration. Enrolling to online brokerage firms gets any trader access to the stock exchange on their computer screens that help them to bid for stocks. The price changes in the stocks can be seen and hence, buying and selling of stocks become a matter of seconds.

It no longer includes confusing paper work; it has become almost the first choice for any stock investor. No more, are they clinging to ancient methods of investments, which needed individuals to shed sweats in smelly and crowded markets of the stock exchange. Also, practical and feasible relations with a stock broker provides an opportunity to make free decisions as there is no broker present in person, all he provides is some tips and advices for investment. Though, one may avail full freedom through discount brokerages where a broker only has to maintain clients account and no more disturbing and advising factor exists. All this and much more, all online, is a drastic step.

Apart from that, internet stock trading has already proved itself to be faithful, fruitful and flawless. It gets easy investing sitting at home with added flavours of diversity and security, diversity in different stocks and security of accounts being provided by service providers. The different passwords are the key that lies with different investors, hence, making those transactions inaccessible to any other person without the permission of the investor.

Though, one may say that Internet stock trading comes across many frauds and scams, but it should be noted that there are not many Internet frauds in the stock market seeking to rob investors. All one need to do is not to trust completely and remain alert; after all it's the matter of hard earned money. Check the company's profile before investing and find out logical reasons to invest in.

Also, one may come across many suggestions, which must not be blindly followed. Finding your practical and suitable reasons to follow them is the right thing to do as most of the times the situations vary from each other. Apart being alert, it is necessary to be calculative about the future of the company as the bright future is going to pay.

Open an account with sogoinvestIf you are new to sogoinvest: Online stock trading investment

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Things to Know Before Investing In Stock Market

Stock market can be a great source of income if you can trade wisely. Wise trading means that the investors are guided by wit and knowledge. The trade can be a real hell for the ones who take it as a gambling and go on staking their money randomly on the stocks. If you are making investments randomly, there is a very small chance that you will gain. Frequently, the little that you gain would be consumed in paying fee to the stock broker. Now the question arises, what do you need to know before you trade stocks?

There are lots of books available in the market that tells you about the shares, the share market and about other related topics. Before stepping into the share market you should read at least a few of them. The Internet also provides you a vast amount of information on every aspect of the stock trade. Such huge amount of the information available can sometimes be confusing to you. But use your brain to judge what, from the information provided, is required for you and rule out the confusing part as undesired. If you want to escape from the pain of acquiring knowledge, investing in the stock market would be just as good as throwing your money into the dustbin.

You should also know about yourself, i.e. what kind of an investor you are. Some people study the market more subtly whereas some others merely take an overall knowledge of the various aspects. Also see how much money you have to trade with and what is your source that gives you money for investing. If you are taking the stock trade as a full-time income and it is your only source of income, you will have to modulate your investment and trading strategy, so you can support yourself. If the stock trade is your part-time income, you must know exactly how much your source of income allows you to invest. It is often better to invest amounts you can manage to lose, comfortably, so that you do not come under pressure. For, the higher pressure you are under, the greater is your chance to lose.

The common term related to the stock exchange is yet another thing you need to know before investing. The terms such as bull, bear, pig etc. are the commonly used ones in the stock market. For example, the bull represents the investors that always expect the stocks to rise in their value and the bear represents the group that expects the opposite. This means that the bulls in the market have a positive attitude whereas the bears are always negative. Knowing these terms would be a great help for you when you go out to trade. After this, you want to know about the stock brokers. Do you want a full-service broker or a discount broker? Do you want an online stock broker or a traditional one? Analyze your trading strategy and decide finally, take some trading tips from the successful traders known to you.

Pricing and Features for Sogoinvest Investment Packages: online investmentSogoinvest Interest Rates and Fees: trading stock options

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Tips On Stock Trading

Knowing the tricks of stock market trading can help you become rich in a matter of few hours. Prudence is the watch word in stock trading. Mentioned below are certain tips that can be very useful while trading stocks.

Research companies before investing in their stocks: It is important to spend some time on researching companies in which you are planning to invest because researching before you buy stock from that company, actually minimizes the risk of investing in the stocks of a company that is proceeding towards bankruptcy rather than profits. Try and focus on finding out what the company produces and also about what are the company's future plans for growth and expansion.

Invest in stocks of companies you trust: A good strategy is to invest in the stocks of companies that provide you with superior quality products and services that you use everyday such as the companies that manufacture your preferred toothpaste, medicines, clothing or even your vehicle. There are strong chances of other people also getting interested in investing in the stocks of the same company, owing to its consistently good performance which means that your investment will mostly increase with time.

Rise above emotions and loyalty: It is important to rise above emotions and loyalty when you are trading in stocks. Just because you have been using a particular company's products for years, and love their products, it does not mean that you should stick to it and keep their stocks in spite of steep fall in the company's stock values.

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