Who Is Causing You Not Success In Stock Option Trading?

The first thing that you have to know before trading in stock option is that stock options are not stocks, and just because you trade in stock that does not license you to trade in stock option by default. When you are planning to trade in stock option, you should find out as much as possible about the stock option. Search the internet and get all the possible information that you can get on that topic.

Only being aware of what you think about the option is not enough, it is prudent to know what others think about the option also. You should talk to people who trade in stock options, read books on that topic and do everything possible to keep your self abreast of all that is related to stock options. Doing this should fairly give you an idea of trading in stock option, to get some practical experience; you could also try "trading on paper"

There is no ground rule to choose the winner stock, you have to do an extensive research on your prospective company and then decide whether it is worth while to invest.

The basic things that you ought to check in the company are;
1. Company's track record; it is important that you look at the performance of the company in the past few years.
2. Check the price of its stock and its volatility; more often than not after a technical analysis of the stock price you will be able to speculate its price movement.
3. Keep an eye on any current news such as stock split, mergers or accusations or any other investment that the company may be going in to.

In option trading, you can make money either ways. If you expect the stock price to rise, you should buy a call option. A call option is a right that the option holder enjoys, to buy the stocks of the specified company at a specified price. This specified price is called the exercise price. Now, if you buy a call option you will gain if the stock price rises, because you have the right to buy the stock at the exercise price at the expiration of the option. This way you can acquire the stock at a lower cost and sell it in the open market at the market price, there by booking profit.

You can also sell the call option if you are expecting the stock price to fall. In this case there is one catch; you are exposed to unlimited loss and limited gain. Your gain is the premium amount that will be paid to you by the buyer of the option, on the other hand if the stock prices rises instead of falling then you will have to buy the stock at a higher price from the market and sell it at the lower exercise price, to the buyer of the call option. This is a naked or an uncovered call option. You can hedge yourself by purchasing a call option with a lower exercise price and a longer maturity.

Similarly when you buy a put you are expecting the price to fall and when you sell a put you are expecting the prices to rise. If you trade correctly and maintain the right balance of risks you can surely emerge a winner in stock option trading.

Finley Zhang is a stock investing consultant and owner of Tips For Investment. Tips For Investment helps those who are new stock investor to achieve long term and stable income by using Finley's investing tips and methods. You can instantly download the tips, methods, and strategies by visiting http://www.TipsForInvesment.com

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

Focus on Profits with Momentum Stocks by Mark Crisp

There are a multitude of approaches in use for stock market trading, all of which attempt to extract maximum value from the stock market. A momentum trading strategy is one approach.

Allowing a winning stock to continue to ride is an alternate approach to taking profits after a defined percentage is gained. This strategy can maximize profits by extracting the most out of a stock rather than settling for smaller gains and the risk of entering another trade to capture the profit that may have been had if the stock were held longer. This strategy has proven to be successful for many traders and is a key part of the momentum trading system. The big profits are in the big moves.

In the past, trading momentum stocks has shown to be effective in producing stock market profits. Firstly a high performance market is chosen. Next groups of stocks which fit predefined criteria in terms of momentum, based on price and volume changes, are identified. Finally, a stock is identified with greater momentum than others in the group. Thus the odds for success are tipped in your favour. A stock with high momentum has the potential to continue the trend into higher levels of profit.

Some trading methods will tell you that the key to stock market profits is in diversification. Other strategies favour more frequent trading such as daytrading. Momentum stock trading frees you from the necessity of trading constantly and utilizes the concept that "concentration builds wealth". You ride the momentum of the stock market and focusing in on strong momentum stocks is likely to capitalize on the highest possible gains.

Using a momentum trading strategy and focusing on momentum stocks is becoming more popular among savvy investors. Momentum stocks have shown to be successful in generating profits in the stock market. One secret of the stock market is to trade big. A momentum trading system will allow you to trade big and to concentrate your trading on a few well selected stocks to maximize your stock market profits and build wealth.

About the Author

Mark Crisp is an experienced stock trading and the creator of the Momentum Stock Trading System which focuses on big moves for big profits. Pick up your complimentary copy of The Seven Habits of a Successful Trader from http://www.crispstocks.com

Buying & Selling Stocks : Control Your Emotions by Christine Abbate

When traders lose money, it is often because they cannot control their emotions. Those who act on their emotions often make irrational decisions. So, learning how to control emotions when trading will be one of the most essential aspects to success. Successful traders can view the market objectively and are emotionally disconnected from market happenings.

Fear and greed are the two main emotions that traders need to overcome. They are both very powerful emotions. When humans foresee harm, they instantly feel trepidation and react quickly. In the market, reacting to fear usually causes a trader to make an impulsive decision that leads to a trading error. Fear of losing money may cause someone to sell a stock before their target price.

Triumphant traders are not affected by fear and greed. When a stock falls, they are not overcome by fear. They expect small drops in the market. When an inexperienced trader sees a stock reach its target, they are often driven by greed and keep the stock in the trade, hoping to make an even larger profit. So, set your target price, accept your profit and sell. You haven't made a profit until you actually sell the stock.

Fear and greed are the main reasons why the inexperienced trader buys and sells at the wrong times. This is why skilled traders are able to use the volatility of the market to make large profits, while inexperienced traders lose, lose, lose. Regardless of what the market does, a successful trader has a plan and sticks to it.

While at first it may seem hard to buy and sell objectively, the more trading experience you gain, the easier it becomes. There are steps you can take to learn how to stay unemotional and objective:

-Limit your risk by trading with money that you can afford to lose. If a loss won't really hurt you, it will be easier to convince yourself that the outcome is insignificant. Once you have convinced yourself that the outcome is not important, it will be easier to remain emotionally detached.

-Know your risk tolerance. If big risks make you uncomfortable, don't make dicey trades. Start by making safe investments. As you become more knowledgeable and less emotional, start increasing your risks.

-Do your homework. Come up with a trading strategy and be sure to stick to it. Stay away from stock message boards until you gain confidence in yourself. They may have the ability to sway your emotions and thus sway your trade. Successful traders can think for themselves. They don't let the stock boards tell them what to do.

-If you find yourself obsessing over your stock, you are starting to trade on emotion. Stop yourself from becoming attached and confidently remind yourself of your trading strategy.

-Don't trade just to trade. Even though the stock market can be an exciting place, and you probably feel like you are missing out on something, don't buy a stock for the heck of it. Instead, learn how to anticipate the market. Trading more often will not result in more profits. In fact, the cost associated with trading more often may actually cause you to become more emotionally involved. Wait for the ideal entrances and exits.

-Taking a loss is a part of trading. Instead of letting your emotions control you after a loss, come up with a plan for managing them. Some people say that your first loss is your best loss. This is because you will hopefully look back at what you did wrong and learn from it.

If you can learn how to trade without emotional involvement, you will always be more successful. The best way to learn how to emotionlessly trade is not to think of the stock as a company, but just think of it as a stock. As you gain more knowledge about the market, you will become a more confident trader. Begin by taking small steps to overcome your emotion. Study the market, and do your homework. Once you can think objectively, you are on your way to becoming a consistent and profitable trader.

About the Author

TheSUBWAY: Small Cap Stock Promoters (TheSUBWAY.com)
The SUBWAY has established a national reputation for providing investor relations services. We are a full service firm and we work with you through each stage of the investor relations process. Risk Tolerant Investors, Public Corporations, Promoters : We have the best of all three worlds. The one source for High Risk High Return Education and Information.
Submitted by NewSunGraphics.com

Does Your Stock Investing Earning Suck? You Don't Have To Suffer Anymore by Finley Zhang

You may have come across newsletters by Marl, a stock trading robot, who provides constant recommendations of stocks that offer an opportunity to double your investment. Marl is basically a robot who works automatically by picking up stocks with high growth opportunities, but it needs to be used with utmost care.

Most people prefer a stock trading robot due to the unavailability of time or even skill on their own part. A few of the trading systems are difficult to operate in, and need sufficient training for optimal results. But in case of newsletters for Doubling Stocks, you are spared from doing the work yourself and you are spoon-fed with great stock options.

The normal return generated by the stock trading robot Marl is cent per cent, but some people fail to use it properly, and hence disbelieve the system due to improper returns.

I can tell you by virtue of my own experience that the average returns generated by Marl from the stock investing newsletter mentioned above is greater than 100%. This is no mean feat and has become a point of reference in stock investing industries. But many people are just tempted by the "double" return and do not understand what "average return" implies. They sincerely believe that the double returns are generated weekly. So if they invest $50 now, they will be getting $100 after one week, $200 after a fortnight, $400 after another week and at the end or the month, they would have turned their$50 to $800. Really amazing calculations we have here!
Now time for a reality check. People need to understand that not all stocks double their value. The word "average" has its usual implication. If you prefer to invest all your bank balance on a given stock, its crash might crush you as well. Many people are aware of it, but just due to the emotional attitude, fail to consider it at that point of time. Just foreseeing a great fortune by virtue of double returns, common sense simply fails to prevail!

Still, with proper planning and thinking, the process of doubling your investment based on newsletters is not a farce at all. When you start trading, you need to have a heart of steel to brave the odds against your stock or even stocks if they fail to perform as expected. Here, if you have invested all your money in one particular stock which has fallen down, then you won't have enough opportunity to participate in the rewarding stocks in this game and will simply be thrown out of the market.

I recommend that you invest only up to 20% of your money in one stock, and since any given stock won't drop to $0, it means that the risk factor is certainly minimized. This may sound contrary to the doubling of money theory, but in real, this is a crucial factor for success. These are very risky ventures, to be dealt with in the short-run. If you profit from it, sell it off and exit the market. High risk, high rewards. For beginners, this might be a bit difficult to absorb so they learn only after getting hurt. But as long as you take a smart investment decision, the above calculations may actually come true!

About the Author

Finley Zhang is a stock investing expert and owner of Tips For Investment. Tips For Investmenthelps those who are new stock investor to achieve long term and stable income by using Finley's investing tips and methods. You can instantly access the tips by visiting Http://www.TipsForInvestment.com

Discover Online Trading and Free Stock Pick Information by Zachary Riff

One of the most popular trend for individual traders is online stock trading. The many guides and trainings offered by online stock trading sites make stock market easier for beginners. Learn more about online stock trading by signing up to an online stock trading firm.

Begin your online stock trading education by surfing for an online brokerage firm that offers you easy start-up account registration. There are many sites that offer free registration, among other incentives such as online stock market simulator, free stock pick and more.

Many online stock trading sites also teach beginners how to use the tools of online stock trading. Along the same vein, these sites also offer integrated services by which you can keep track of your stock investments, as well as stock market information.

Online firms also provide support for beginners and non-professional online stock traders as they learn more about the trading, as well as in developing their own trading strategies.

Information in terms of real-time stock quotes, free stock market newsletters and free stock pick options are also provided as added incentives for beginners to keep them informed of the current trends and shifts in the stock market. Other financial and market online news sites may also offer information about the stock market, and specifics stocks and options you may be looking to buy, free stock pick and more.

Go for sites that offer the best ways get firsthand information from the market. Other than online brokerage sites that offer information services on stock trading, there are sites that specifically watch the stock market and produce information for stock traders, firms and non-professionals like you. These sites offer stock pick developments, free stock pick information and reports, as well as streaming of stock quote data and after hours stock quote reports, and other trading information.

However, signing up with any online stock trading site can have its disadvantages. Trading stocks online is not as instantaneous as it is on the floor. There is a lag time (that can be up to twenty-four hours!) that occurs from the moment you make a buy offer, till that offer is closed. So, if the stock you're interested moves at a faster pace, you'd be at a loss as to developing your stock options. This is because the internet can't duplicate is the market hours, no matter how fast, or how advanced your online stock trading firm's electronic communication network is.

It is still best to keep yourself up-to-date with after hours stock quote reports, direct investment information and stock analysis data, and free stock pick information. Information is an effective tool to learn in online stock trading, so be sure to keep a pulse on what's happening so you can make adjustments to you online stock trading.

About the Author

Learn how crucial information is as a stock market investing guide. Get your free stock pick information from reliable sources!

Buying And Selling Stocks : Patience Is A Virtue by Christine Abbate

One of the most important skills to have as an investor or trader is patience. You have to know how to control your impulses and not to act on emotion. Patient traders and investors have done their homework- They have precise entry and exit times and they stick to them. Sticking to your strategy is most important. You did research for a reason, you took the time to develop a strategy for a reason, now be sure to follow it.

First, Choose The Right Stock

It's important to remember that there are many different stock opportunities and it is not necessary to grab each one. You want to be sure that the opportunities you take fit within your trading or investing goals. If the stock that you chose isn't meeting your criteria, be patient and find a new one. There are always other opportunities available.

Wait For Your Entry Point

Once you have done your research and picked an entry point, wait for it. You may expect the stock to quickly fall to your entry point, but instead the price rises. Don't panic. Just because the price rises doesn't mean that it won't fall. Don't enter above your planned entry point because you're afraid you'll miss the trade. If you enter above it, you will lose some of your potential profit. Be patient. The stock will eventually fall back. Take some time to remind yourself why you decided on your entry point to begin with.

Wait For The Right Time To Sell

Once you have bought a stock, you have to know how to wait patiently for the right time to sell. All traders / investors must fight the urge to sell too early or too late. If you are a long term investor, it is important to have patience so you do not impulsively sell when the market starts to turn down or buy back at the top of the market. This usually results in losing your money.

If you are a short-term trader, you must also have patience. Even though short-term traders hold onto their stocks for a shorter period of time, they must know how to tolerantly wait for the best time to sell. Selling too early does not allow one's profits to grow quickly. The same goes for holding on to a stock for too long, hoping that it will eventually go up if it hasn't already. Don't turn your trade into an investment. Accept your losses and get out. Most importantly, learn from your mistakes. Waiting for the right entry and exit points is key to every successful trade / investment.

Gaining Patience

One of the best ways to gain patience is to try to view the trades objectively. If you try to view the trades with the attitude that you are not losing out on something big, you may be able to resist the temptation to enter or exit early. A cold approach to trading may increase your tolerance and thus increase your profits. Just because you like the company that you're trading or investing with does not mean you should stick with it regardless. Be objective and don't bring your emotions into it.

Fighting impulse and being objective is the best way to become profitable. Patience is the most vital characteristic to develop in order to be successful.

About the Author

TheSUBWAY: Small Cap Stock Promoters (TheSUBWAY.com)

Has established a national reputation for providing investor relations services. We're a full service firm and work with you through each stage of the investor relations process. Risk Tolerant Investors, Public Corporations, Promoters : We have the best of all three worlds. The one source for High Risk High Return Education and Information.

Submitted by Christine at NewSunGraphics.com

Help in a Bear Market by Scott Kibby

What a glorious week for stocks....that is, if you are short the market. It has been tough watching the value of our stocks shrink so rapidly in the New Year. This is also the kind of market pros, like Warren Buffett, love to see because they can find good value stocks cheap. Mr. Buffett also has plenty of time to sit on these value stocks to wait for them to climb back in favor, which some people don't want to do. No one can tell you when the bottom has been reached and I certainly don't know when that will be, but it is a great time to research stocks and look for bargains.

There are several ways to play a bear market, to stop the bleeding without selling every stock you have and in some cases, even make money. I will go over a few, but by no means is this a complete list or do all of these strategies work all the time.

1. Inverse Stock Market Funds: You can buy mutual funds or electronic trading funds (ETF) that are inversely correlated to the stock market. They are usually tied to major indexes like the DOW, S&P500, Russell 2000, NASDAQ 100, etc... Basically when the index goes down, these funds go up. A few of the companies that provide these types of funds are ProFunds, ProShares and Rydex.

2. Options: These can be risky and complicated, but they are a way to hedge your bet in stocks. Most of your brokers should have information on them if you are interested.

3. Futures: Basically the same as Options, except with Futures you are obligated to fulfill the terms of a contract and with Options you have the right to buy or sell underlying assets at expiration. Again, these can be very risky and complicated to understand for the average investor.

4. Government Bonds: Not really sexy, but safe none the less in a bear market.

5. Defensive Industries And Companies With Cash: The non-cyclical companies will continue to have products purchased through thick and thin, so they are a safe bet in down markets. You will always be purchasing deodorant, toothpaste, shampoo and home cleaning products. It is also prudent to invest in stocks that have hordes of cash, which obviously helps in retreating markets.

Let's face it, making money in a bear market isn't easy, and our goal as long term investors is to weather the storm and take advantage of opportunities when we see them. It is not easy being the contrarian, but it can work to your advantage if you play your cards right. There is a reason why Warren loves markets like this and it is because he can build positions in cheap stocks for the long run.

About the Author

Scott Kibby President Levott LLC - Control Your Success www.Levott.net Email: Scott@levott.net

Jumpstart Your Business with Free Stock Trade by Zachary Riff

Stock trading is becoming more and more available even to those who are not professionals on the field. There are now several worthwhile stock options for these individuals. Consequently, there are now also many sites offering stock trading services like online investment advice, the how-to's of online stock trading, as well as free stock trade information and charts that could help you learn and gain experience in online stock trading.

Before you jumpstart your online stock trading education, know this: Information is an effective tool to learn in online stock trading, so while you're learning the ropes, never neglect to read up on news and updates that could help your investments develop. Be sure to keep a pulse on what's happening so you can make adjustments to you online stock trading.

Start your stock investing by surfing for a reliable online brokerage firm that offers you an easy start-up account registration. There are many sites that offer free account registration. Many online stock trading sites also teach beginners how to use the tools of online stock trading, through guided online stock investment courses, or through online stock market simulators. Along the same vein, these sites also offer integrated services by which you can keep track of your stock investments and growth through stock market information like free stock trade news and information, and more.

Most of these online brokerage firm would also offer online services that address the training needs of beginners like you. To support this, these sites also supply you with real-time stock quotes, free stock trade newsletters, free stock market news and developments.

As beginners, it is important for you to value the importance of stock information. Getting the right kind of information will help you gain experience as a non-professional online stock trader. So, keep track of the current trends and shifts in the stock market. Other financial and market online news sites may also offer information about the stock market, and specifics stocks and options you may be looking to buy, free stock trade quotes, and more.

However, there is a downside to many online trading sites. Be prudent when checking out sites that offer the best ways for getting firsthand information from the market. Other than online brokerage sites that offer information services on stock trading, there are sites that specifically watch the stock market and produce information for stock traders, firms and non-professionals like you. These sites offer stock pick developments, free stock trade information and reports, as well as streaming of stock quote data and after hours stock quote reports, and other trading information.

Be aware, however, that there is one common disadvantage when you sign up for any online stock trading site. Despite the turnkey technology of the Internet, trading stocks online is not as instantaneous as it is on the floor. A lag time of up to twenty-four hours may occur from the moment you make a buy offer, till that offer is closed.

Don't be afraid to move at your own pace so you will be able to understand the varying activities and speeds by which many of the shares are traded online and on the floor. So, be sure to start with small stock investments that are relatively solid, until you get the hang of the pace. And don't forget to keep checking stock information sites that offer after hours stock quote reports, direct investment information and stock analysis data, and free stock trade information.

About the Author

Where can you read data on free stock trade? Check out practical stock market investing guide

3 Trading Horizons Of Options Trading by Jason Ng

Have you ever lost money trading stock options?

Chances are good that you tried to apply the 3 trading horizons of stock trading to options trading and then got yourself hurt real bad.

There are 3 time horizons or what we call trading horizons in stock trading and they are; Long Term, Mid Term and Short Term. Long term horizon in stock trading means the buying and holding of stocks for 3 to 5 years, or sometimes longer. This is ideal for value investing in the long term prospects of a company. Mid term investing in stock trading is the buying and holding of stocks for 6 months to a year or two. Most stock investors use a mid term view to invest in new growth stocks which are expected to perform well in the immediate year. Short term investing in stock trading is the buying and holding of stocks for 3 to 6 months. These are stocks of companies that are expected to make a breakthrough in their industries. However, do these notions of investing apply in options trading? Not at all!

The truth is this: Stock Options are derivative instruments that have very short contractual lives! In fact, the longest expiration for exchange traded stock options rarely exceed 1 year! On top of that, the extrinsic value, or what we call time value, built into every stock options contract decays as expiration draws nearer, diminishing the value of your options even if the underlying stock remain stagnant. Due to these characteristics, stock options are trading instruments, not investing instruments, and have much shorter trading horizons than if you trade stocks. This is also why options trading is associated so closely with technical analysis these days because technical analysis is extremely useful in identifying short term trends or reversal of trends.

So, how is the long term, mid term and short term trading horizon defined for options trading?

In Options Trading, long term horizon is the buying of options with expiration of up to 1 year in order to speculate a long term rally or ditch in the underlying stock. Typically, long term charts on monthly time periods are used to identify such trends. Mid term horizon is the buying and holding of monthly options all the way to their expiration, each trade lasting no more than a month. Charts on weekly time periods are particularly useful for identifying mid term trading opportunities. Short term horizon lasts from 3 to 15 days in order to speculate a quick short term surge or ditch in the underlying stock and typically uses short term daily time period charts to identify trading opportunities.

From the above definitions, it is clear that stock options, as a short term trading or hedging instrument, is useless for anyone who is investing in the long term horizon defined for stock trading. Therefore, before you decide to completely replace your stock investing with options trading, first decide if trading stock options allow you to trade the way you always have with stocks. If it doesn't, it is time for you to either stick with stock investing or learn a trading system which is perfectly suited for options trading.

About the Author

Jason Ng is the Founder and Chief Option Strategist of Masters 'O' Equity Asset Management ( MastersoEquity.com ) and author of OptionTradingPedia.com . He is a fund manager specializing in options trading and his revolutionary Star Trading System has helped thousands.

Have You Invested For Your Future? by John Spencer

Investing is one of the easiest ways to prepare for your future. Every year, millions of people get married and start families. What they don't do is take the time to plan for their future. When you are young, the future seems far away and it seems like it will be long before you need retirement. The truth is, the years pass quickly and retirement can sneak up on you. One day you are twenty something, just starting out, getting married, having children, and in the next breath you are forty something with nothing saved for the future. Those years can pass in the blinking of an eye and suddenly your future is staring you in the face. So many people charge head on into their lives without making sure that their future, and their children's future, is financially secure.

Princeton University and the Consumer Federation of America conducted a study in which they found that approximately 70% of households whose annual salaries were under $50,000 had less than $5,000 saved for retirement. By the same token, the study concluded that most Americans were living precariously, just getting by from one paycheck to the next. By investing, you put away money that will work for you, instead of you working for it. It grows without any effort from you so that by the time you reach retirement, you'll have a comfortable nest egg to live on. While it's true that every type of investing carries some amount of risk, different investment vehicles differ in levels of risk. As an example, mutual funds are considered relatively low risk, while individual stocks can be a higher risk. You also don't just have to depend on the stock market for investment opportunities. There are many options available to you that you can choose from.

Investment Fund Investment funds carry certain advantages that individual stocks do not. By investing pooled funds of retail investors, firms retain a fee and reduce risk for the investors. When funds that come from many small investors are used to make these certain investments, they expose the investors to a wider range of securities that they may otherwise not be able to access. This also cuts out high trading costs and it is easier for smaller investors to get in on the action. The two types of investment funds are open end, or mutual funds and closed end, or investment trusts.

What Is a Hedge Fund? This type of fund is typically not available to the average investor because of the income bracket one has to be in to participate. It's also more difficult to invest, and you must know much more about how the stock market works. In general, institutions and wealthy individuals use hedge funds because they have investment strategies available to them not available to the typical investor. These strategies are more aggressive than those used in mutual funds. Hedge fund investors can do program trading, leverage, sell short, arbitrage, swap, or use derivatives. Additionally, hedge funds do not have to follow the same regulations and rules that mutual funds do. The law restricts hedge funds to a maximum of 100 investors per fund. Because of this, the minimum investment amount for hedge funds is usually extremely high. In general, average investment amounts for hedge funds range from about $250,000 to more than $1 million. A management fee is paid as with mutual funds, but hedge funds are different because managers are also given a percentage of the profits, usually around 20%.

If you haven't started saving for retirement, it's never too late. Whether you're 10 or 20 years away from retirement, beginning to invest wisely now can give you some healthy retirement income by the time you're 65. If you invest, you'll be able to enjoy your retirement years without having to worry about your finances.

About the Author
If you want to invest in your future then checkout this Investment Fund

Position Sizing to Maximize your Stock Trading Returns

Of all the aspects of stock trading, one of the most difficult is deciding what size position to open. Unless you are using a strictly mechanical system that explicitly defines your trade size, figuring out exactly how much of your hard earned cash to 'put on the line' can be extremely hard to decide. Rules of thumb such as 'never risk more than 5% of your portfolio' are fine, but may leave you in the dust on fast moving days. As we here at www.traders101.com would say, faint heart never won fair lady, yet look before you leap! Oftentimes, what looks like an average trade starts to run away as the stock market climbs, and you end up wishing that you had taken a large position. And conversely, if you get it wrong, you can end up banging your head against your computer screen and wishing forlornly that you had been a little more 'prudent' in your trading size.

Not to worry. There is, in fact, a fairly simple formula you can use to determine the correct position size for your stock trades, as long as you are looking for long term growth. Known as the 'Kelly Formula', this is a useful little equation that is simple to understand, and simpler to apply. You will need to have done some trades before, and have the stats at hand (the ratio of your winners to losers, and the size of those winners and losers). Lets say that 'WP' means 'Winning Percentage' and 'WL' means 'Historical Average Win Size divided by Historical Average Loss Size'. The 'Kelly Formula' is then:-

Kelly Forumula = ((WP * WL) - (1 - WP)) / WL

Ouch! Scary maths! Not! To understand this formula, let's take an example, based on a series of 15 trades. Lets say that you made money on 10 of these trades, at an average of $200 profit per trade, and lost money on 5 at $100 per trade (you cut your losses! Good man!). Substituting the figures into the formula, we have:-

An average win size of $200, an average loss size of $100, so the 'WL' number is 2. The Winning Percentage (or 'WP') is 10 / 15 or 0.67

Kelly = ((0.67 * 2) - (1 - 0.67)) / 2

The result is 0.505. In other words, if your win / loss ratio is consistent, you will maximize your returns by only risking about 50% of your equity on each trade. Now the problem you can see is that risking anything above 5% or 10% of your equity on a single trade would be regarded by most traders (and certainly everyone at www.traders101.com) as insanely brave. So the next step is to ask yourself 'What is the absolute maximum I would be happy losing on a single trade'? You then multiply this absolute maximum drawdown by the Kelly number and voila - your position size. If your maximum acceptable drawdown while stock trading is (e.g.) $1000, then your optimum position size would be 1,000 * 0.505 = $505.

What about if your winners were only good for an average of $100, whereas your losers ate up an average of $120? Let's have a look. The 'WL' number is 100/120 = 0.83. The 'WP' or winning percentage is still 0.67. The substitution then gives you:-

Kelly = ((0.67 * 0.83) - (1 - 0.67)) / 0.83

which is 0.274 or about 27.5%. Multiplied by your 'maximum acceptable drawdown' of $1000 this is $275. So as you can see, the formula adjusts as your ratio of winners to losers changes, and also as the size of your winners and loser changes. One final note - this topic ties in with 'Expectancy'. Expectancy is defined as:-

(% of wins x Avg Win Size ) - (% of Losses x Avg Loss Size) = Expectancy

Just remember that you should NEVER trade with money you aren't prepared to lose!

About The Author
Trader Jack likes to write for www.traders101.com - the free stock trading site from traders Initiative helping traders get up to speed fast!

Winning at Stock Trading

The world of trading and investment can be as frustrating as it can be rewarding! You need to be prepared...

Firstly, decide if you are a trader or an investor.

An investor is someone who enters the stock market inadvertently - usually via their superannuation policies. A trader is someone who makes a decision to buy and sell shares via the stock market. This can be done online or by using the services of a stock broker.

If you decide to become a trader - to win - you must have a survival strategy...

You need to study the market yourself - not just rely on 'reading the news', or listening to others advice and tips.

Take advantage of technology - computers, software, electronic data - all at your finger tips. Seek out charting software and appropriate internet sites - they are plentiful.

Ensure that you 'manage' your money and keep some in reserve.

Have the ability to quickly identify failures as well as successes.

Stock Market trading appeals to those who are a little adventurous - rather than just placing their capital into bricks and mortar.

But - be mindful that portfolio values are less stable than real estate as they are continually moving up and down.

However - investing in the Stock Market means that you are putting your money to work - be aware, and enjoy the gains!

About The Author
Gay Redmile is the webmaster of several finance and investment sites. Having been a trader for most of her adult life she understand the importance of research and fully understanding the market. For further information visit her site at http://www.thestocktradingsite.com.

Stock Market Strategies - Defining Hopes

Do you believe in strategies or are you an investor that invests on other's mouths. If you stay in the category, which invest depending on other's calculations, then get ready to pack your bags because the advices are not always beneficial according to your requirements and they are loss generator in the long run. However, for the day traders and investors who believe in themselves and count on their calculations, here are some stock market strategies that help to get a platform for better returns.

1. Investing objectives: first of all, it is important to be clear about the investment objectives including the reasons of stock investing and stocks investments to be made. Be precise over the type of investor you are, and the investment opportunities available in the market. Choose a portfolio manager to work for you that can get you some fundamentals of stock investment.

2. Investment goals: it may sound subjective to any investor, but before investing in stocks, it is important to have detailed information of 5W's and 1H, that is, what, when, where, why, who and how. This specifies all relative terms needed for stock investment. Also, other stock investment strategies can be designed on the goals you set. Establishing goals include the financial measurable goals, funds needed and the current market situation.

3. Designing personal investment plan: creating a personal investment plan includes the mix of investments to be devices. The trading of stocks as such has various categories including the short-term, long-term, safe, risky and other investments. Hence, determining various paths to be followed and their alternatives when in need is another stock market strategy. Also, evaluating the risks along with each investment is essential as it is the essence of every trading one does.

4. Investment fundamentals: each investment has its own categorization and its own set of notions to be followed. However, the two broad fundamentals can be studied as:
The major distinction between savings and investments lies in the returns one gets.
Successful stock traders begin to live off earnings without spending the wealth itself.

5. Investment preparations: it includes major associating with people like broker, portfolio manager and so on. They are important people in trading as they take a share of shares and also, play a conscience role in the investments. Hence, cheap and best is the thumb rule that works all the time that supports sheer services along with sheer fees. Also, selecting a broking firm must be taken care of well, as they are the catalysts that provide access to the stock exchange.

6. Investment selection and philosophies: get a sheer mix of investments to work for you. The integrated portfolio also works better than the investments made in one company. The diversifications of share trading get risk depreciation and also provide better experimental opportunities with the trader. Buying and selling of shares become easier with shares of many companies. However, racking of each company moves is also essential to forecast the share price.

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

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

Can You Win On The Stock Market?

The world of stock market trading and investment can be very confusing, particularly for someone new to stock trading. So what can you do to help yourself to be prepared?

First up let me explain to you the different between a trader and an investor. An investor is someone who comes into the stock marketing through something like their superannuation. A trader is someone who makes a decision on their own to buy and sell shares via the stock market. Trading in the share market can be done online these days or you can still hire the services of a broker.

If you decide to trade in it you are best to have a strategy, you will need to study the trends and study them carefully. Don't just rely on tips given to you by friends or on the news, make sure you do your own research. Manage your money carefully and always be sure to keep some in reserve. It is good to be a little adventurous on it but also be sensible with your trading.

The longer that you are dealing with the share market the more comfortable you will be with it and you will soon be good at identifying both successful companies and failures.

The stock market is a riskier investment than investing in real estate as the market is continually moving up and down. Having said that I will also say that you can do very, very well with the share trading, you are making your money work for you and you will soon be enjoying the gains.

Sheryl Polomka is a successful stock market trader and understands the value of the stock market. To learn more about stock trading visit her site at Doubling Stock

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

The Art Of Comparison - Stock Research As If You Were Acquiring The Whole Company

Years ago, as COO of a company in the quick service restaurant industry, I was charged with the responsibility of making that company grow-quickly but within reason. The fastest way to do that was by sensible acquisition; so I set out to buy as many other similar franchised outlets as possible.

Approaching these acquisitions I learned a few things about buying other companies. The first key was how to value a prospective acquisition. This involved a variety of observations, discussions with others, obtaining objective advice, research, and negotiating with the seller. A critical aspect of the analysis entailed conducting comparisons between the subject acquisition and others available in the general area. This meant conducting endless, time-consuming comparisons, analyses and research of competition, other options, financial projections and so on.

I was thinking about this time-consuming data quagmire the other day, in relation to the task of managing one's own financial portfolio. If you're going to buy stock in one mining or oil company versus another, isn't this almost the same as me making those acquisitions in the past...as if you were buying the company? How do you make those decisions? Do you rely on the advice of others, or do you figure out what to do by yourself?

If you rely strictly on the advice of others, isn't that the same as me not visiting those restaurant outlets, or having them 'mystery shopped', or going there anonymously to kick the tires? How do you really know for sure if you're getting accurate, truly objective advice? It stands to reason that if you are being given certain specific advice, aren't others being given the same? If this is so, won't that help force the stock's price up via demand? Does that cause you to lose your competitive edge? But if you're doing your own research and you have some 'secret weapons' or tools to help you, won't that allow you to find the best opportunities that others don't have or know about?

One such investor, Ian Campbell liked to manage his own stock portfolio. But he found it painfully time-consuming to do the analyses, pouring over piles of charts, other web sites, trying to make sense of all the inputs for so many different companies. Moreover, in many cases, the information he wanted and needed was not there.

He reasoned that there must be thousands of investment advisers and other investors who like him craved a solution to this. During the last year, he has developed a website focused on Small Cap Canadian Mining and Oil & Gas stocks.

Among the many things you can do with his website, is the comparison of the companies embedded there. For instance, users can compare companies in more than 40 different ways: everything from 'Trailing 90 Day Volatility' on a daily basis; to 'Interest Bearing Debt/TTM After-tax Cash Flow'; on a trailing12 month's basis. Each comparison table is generated automatically when selected by a site subscriber; companies are ranked in the comparison table in either ascending or descending order depending on the comparator the subscriber selected.

Using the drop-down menu in the website's Main Navigation bar, company comparisons can be immediately generated at any 'segregation' level a user selects. For example, selecting Company Research -> Mining -> Gold -> Producer -> Mexico from the drop-down menus will result in all companies who produce gold as their main output, and who operate principally in Mexico, being compared by whichever characteristics the member-subscriber then selects. The significance of each comparator is stated, along with how it has been calculated.

This is amazing stuff. I sure wish I had a web site like this when I was figuring out which companies to buy back in the day. If you want to feel comfortable and secure that you have the very best information available to make your own buy or sell decisions, this should probably be a part of your own stock research tool kit.

©Copyright, Roy MacNaughton, 2008

Roy MacNaughton is a business writer and coach. He's a seasoned marketer, with more than 30 years of international experience, in six countries, including eight years online. Check his blog at: http://www.UmarketingU.com

To learn more, go to: http://www.stockresearchdd.com

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

Hottest Penny Stocks

The hottest penny stocks to invest in are the ones that are on the verge of doubling. An increase of just a few pennies can yield exponential returns on investment. If you buy 1,000 shares of a stock that is worth $0.10, and the stock doubles in value to $0.20, you just made $100 profit!

Computer software programs can be leveraged to help analyze the thousands of stocks that are being traded on the market today and to make recommendations on which ones to buy. The ability to process millions of computations per second makes it possible for computers to analyze trends of thousands of stocks and make mathematical extrapolations on which ones are likely to go up in value and which ones are going to decline in value.

MARL is the name of one such computer program. Released in early 2007, MARL (named after the software engineers who co-authored it - Michael and Carl), is a commercial stock analysis software that makes stock recommendations. Since its general release to the public, it has already been credited with making over one hundred millionaires. It has also consistently issued stocked recommendations that, if one were to invest in them, would have resulted in an average net return on investment of 105%.

For example, in early January 2008, MARL recommended IDGJ, which rose from $0.09 cents a share to a high of $0.32 cents a share before stabilizing at about $0.19 a share. This represents an increase of 100% to 200%. Thus, if you had invested $1,000 in IDGJ when it was at $0.09, you would have bought 11,111 shares of the stock. If you had sold the stock at its high of $0.32 cents per share, you would have made a profit of $2,555.53 less any trading commission fees.

As is evident from the example above, penny stocks, when invested in wisely, can yield fantastic returns on investment, due in part to the low cost of entry and the ability to buy hundreds if not thousands of shares, and also due to their volatility. Conversely, this also means that you can lose a lot of money with penny stocks as well. But of course, it goes without saying that all investing bears some degree of risk.

MARL was developed as a means of mitigating that risk through the use of statistical stock analysis to make projections about each stock.

So what are you waiting for? Make this the year you finally achieve financial prosperity. Let MARL pick your stocks at http://www.PickMyStocks.info

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

Are You Stock Trading Ready?

Stock trading is not for everyone. In order to be a good stock trader you must first understand market fundamentals and then build upon that knowledge to make good stock picks.

You must know how the markets move. You must know the various indexes and how they perform. You must know how different types of stock classes i.e. blue chips, small caps, equities, etc respond to real world events.

You must understand how interest rates impact the various stock classes.

You must be able to recognize buy and sell signs. And this list is just for starters.

In other words, stock trading is not for the naive and inexperienced. Before you go and plunk down money in the stock market you must know your stock trading ABC's or have your lunch ate.

There are several ways to gain the education you need to become a good stock trader. You can take a stock trading course at your local community college or courses given by local business groups. You can load up on stock trading books at Amazon.com or from your local library and study them religiously. You can attend stock investment seminars given in your local area. And of course you can search the Internet where there is tons of valuable information on the subject of stock trading.

But your best bet when it comes to stock trading maybe to turn it all over to a professional. Good stock brokers are worth their weight in gold. With a good stock broker you can avoid the stock trading learning curve which is fraught with pitfalls. Indeed, hiring a broker might be the best course of action because stock trading is a serious business that takes no prisoners.

George Stark is an experienced business writer who holds an MBA degree. Visit www.stocktradingclearinghouse.com for more information on stock trading and investing.

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

The Stock Market Doesn't Care if You are a Beginner.... Get Prepared to Succeed at Trading

Stock trading remains a very competitive field and the stock market doesn't care if you are an experienced stock trader or an aspiring one. The rules and the trading opportunities are the same for all of us, so either youre going to make money when you pick a stock and make a trade, or you are going to lose some of it in favor of the more seasoned traders.

As an online stock trader your homework is all about studying and testing different online trading strategies that can help you take advantage of stocks and at the same time protect your profits. Just always keep in mind that a good stock trading strategy is simple and practical.

Complicated stock systems will always make you slow in your decision making process or confuse you from the start.

There are some very good sites on the web where you can access practical stock trading strategies that are easy to implement. One of those sites is Stress Free Traders http://www.stressfreetraders.com

They focus on momentum stock trading strategies that can help you identify and handle hot stocks while reducing your trading risk.

All in all, online stock trading is all about picking the best stock opportunities and following your buy and sell signals with ease and simplicity. Once you learn to master your trading decisions, you can aspire to produce consistent profitable results.

Learn how to stock trade in a practical way at Stress Free Traders http://www.stressfreetraders.com

StressFreeTraders.com helps day traders from any part of the world how to pick and trade stocks to maximize profits.

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

What Is A Stock Option?

An option is a contract to buy or sell a specific financial product officially known as the option's underlying instrument or underlying interest. For equity options, the underlying instrument is a stock, ETF, or similar product. The contract itself is very precise. It establishes a specific price, called the strike price, at which the contract may be exercised, or acted on prior to the expiration date. When an option expires, it no longer has value and no longer exists.

Options come in two varieties, CALLS and PUTS, and you can buy (hold or go long) or sell (write or go short) either type. You make those choices - whether to buy or sell and whether to choose a CALL or a PUT - based on what you desire to achieve as an options investor.

A CALL is the right to buy 100 shares of stock at a fixed price per share, any time between purchase of the call and the specified deadline in the future. The time is limited. As a long call buyer, you acquire the right to buy the stock and as a short call seller, you grant the right to someone else. A short call seller (writer) must also be willing to deliver or has the obligation to sell 100 shares at the strike price if the long call buyer (holder) exercises the option.

A PUT is the opposite of a call. It is a contract granting the right to sell 100 shares at a fixed price per share and by a specified expiration date in the future. As a long put buyer, you acquire the right to sell the stock and as a short put seller, you grant that right to someone else. A short put seller (writer) must also be willing to acquire or has the obligation to buy 100 shares at the strike price if the long put buyer (holder) exercises the option.

Long-term Equity AnticiPation Securities (LEAPS) are simply long-term options that expire at dates up to 39 months in the future, as opposed to shorter-dated options that tend to last no longer than nine (9) months.

RISKS WITH OPTIONS TRADING

Option trading is risky so your funds should be your speculative capital or money you can afford to lose. You should only use funds that you are willing and able to comfortably lose.

Investments in the securities markets, and especially in options, are speculative and involve substantial risk. You can lose your entire investment. Individual results may vary from those achieved by our financial newsletter recommendations and no actual investment positions are taken by the newsletter. Only you, with the assistance of a qualified securities professional (personal financial adviser or broker), can determine what level of risk is appropriate for you and how, when, and where you should participate in the options markets. Our recommendations should only be considered by sophisticated investors who are aware of the risks in options trading. For detail information on options risks, see Chapter X of The Options Clearing Corporation (OCC) "CHARACTERISTICS AND RISKS OF STANDARDIZED OPTIONS" - booklet.

For more information go to http://www.stockoptionking.com/

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

Introduction to Stock Market Basics

How would you like to be the owner of a business, and never have to show up to work? Imagine no commuting, no rush hour traffic. All you need to do is sit back, and watch those dollars roll in.

Most people don't look at owning stocks as owning a piece of a business, but in fact, you are a part owner and in many cases, you have a say. The best benefit of all, you can earn money, help make decisions that impact the business and never have to show up to work for a single day.

Investing in stocks is the cornerstone of any financial portfolio. Without investing in stocks, you wont be able to realize your retirement dreams (unless you actually work for a huge company as CEO and will be getting a package big enough for you not to have to worry about investing, in which case, you should be playing golf and not reading this).

The key to realizing your retirement dream is to know the road to financial freedom. It all starts with an understanding of stock market investing. Its not just knowing how to buy; that just scratches the surface. You'll need to have a full appreciation of what goes on each and every day in the stock market.

If you look at the average daily trading volume over the last 25 years, you'll notice that there has been a lot of growth. That growth has been fostered by the average guy or gal's interest in stocks. What was once a way for the rich to get richer, is now an opportunity for a smart average person to get a few up on the Jones' and even join the ranks of the rich. Now thanks to discount brokerages and the internet, almost anyone can become a shareholder.

That has its good points, and its bad points.

While anyone can become a shareholder, most do not completely understand stocks. They usually buy something based on something they heard on the news or worse, from a friend. They don't know what they own, but, its the next big thing. The once in a lifetime chance to get in before the ship leaves.

Folks, its not 1999 anymore. The dot-com era is over. And thank goodness.

Sure, there are stocks out there that will move quickly and reward shareholders accordingly, however, they are the exception. The market averages about 12% per year. If you are a smart investor, you can earn more. If you are lucky, you can earn more. Once your streak runs out, you'll be losing more than your shirt trying to get some of it back.

We're here to help you become a smarter, more informed investor and trader. Yes, you can do both; you just need to know how and when. We'll teach you that.

We'll show you how to protect yourself, how to manage risk, things to look for before you buy, what to look for after you have bought, and when to consider getting out.

The stock market can make you richer beyond your wildest dreams, but, more often than not, to quote Kenneth L. Fisher, "The market is the Great Humiliator. It wants to humiliate everyone but has a strong preference for the biggest and most famous."

Lets see if we can avoid the Great Humiliator and make some money.

Learning the stock market basics doesn't have to be so difficult. Visit us today to learn more about stock market investing and how trading the triangles can help you become a more profitable investor.

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

Stock Market Strategy - Finding Your Way

"Money Makes Money," I used to hear people say in where I grew up. If you want to earn money in the stock market, it is important not to pay too much attention to daily published each day. Read carefully whether the market is going up or down, and by how much, but skip the off-the-cuff reasoning. Write down some notes of the news events that may affect the economic environment - an increase or decrease of tax will have an impact on after-tax profits, a copper-industry strike in USA that will mean higher prices and more business for Canadian copper producers. Take note of new reports concerning companies with shares listed on the stock exchanges, especially those firms whose stock you won or are thinking of buying. But do not let your view of the market perspective change in response to the opinions published each day. If you do, yo will never hold your opinion long enough to act on it, and you will become a nervous wreck in the bargain.

Creating your own view of the perspective for the market, and sticking to it until circumstances clearly show you are wrong, is one of the two principal methods of successfully playing the game the self reliant way. Successful stock market investors do not hunt with the crowd. They stalk their prizes in lonely isolation, believing that the consensus view of the future is usually wrong - a belief with much evidence to support it. This is so-called contrarian view is not as silly as it sounds when you first encounter it. Stock prices rise when there are more people willing in buying than in selling. It should not be surprising, there, that the majority of investors are bullish just before the market turns down - and that just before a falling market turns up again, you can hardly find a bullish investor.

The second approach is to ignore the hullabaloo over what the market is going to do next. Many thriving stock market investors do this. Academic evidence suggests there is no connection between what the market did yesterday and what it is likely to do today, next week or next month - the so-called random-walk theory. There is also a lot of historical evidence that suggests it is futile to try to predict how the stock market will react to economic developments in the short term. For example, it was considered almost a natural phenomenon that investors will react with enthusiasm to an economy that is expanding faster than expected. But at times in the last few years, investors have not always greeted news of faster-than-expected growth with zeal. So even if you had accurately predicted any particular piece of economic good news, you would not necessarily have done well in the stock market by making a short-term investment based on your prediction.

It is not easy to tell when a bear market is ready to rebound or when a raging bull market is about to collapse. If you are new, you need a good stock trading software to help you make decision. I strongly recommend Marl's Stock Trading Robot. I have made $632 in 2 months following the software's stock picks. This is not a lot of money but it works. You can read the full review of the software here: Marl's Stock Trading Robot Review.

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

Stock Option Trading

Stock option trading can be considered as one of the most financially rewarding strategies one can become involved in. Sometimes, this becomes a destructive investment plan, though. Stock option is the ‘right’ to purchase a stock at a given price within a specified time. Stock option trading is largely dependent on certain factors, such as name of the associated stock, strike price, expiration date, and the premium paid for the option, plus the stock broker’s commission.

Stock option trading involves trading standardized options contracts, which are listed by a variety of futures and options exchanges. In the United States, there are presently six exchanges where stock options are traded, including four open-outcry marketplaces and two electronic marketplaces. The open-outcry marketplaces are Philadelphia Stock Exchange (PHLX), American Stock Exchange (AMEX) in New York City, the Pacific Exchange (PCX) in San Francisco, and the Chicago Board Options Exchange (CBOE). The International Securities Exchange (ISE) and Boston Options Exchange (BOX) are included in the electronic marketplaces. In Europe, the main futures and options exchanges are Euronext.liffe and Eurex.

Another option to trade a stock is the ‘over-the-counter’ (OTC) trading, which is the opposite of exchange trading occurring in option exchanges or futures exchanges. The OTCs are traded not in exchanges, but between two independent groups; hence these transfers are the bi-lateral contracts. In this contract, at least one group is typically a large financial organization with a balance sheet big enough to guarantee such a contract. OTCs are administrated by an International Swaps and Derivatives Association agreement.

Stock option trading, with no intent to ever exercise the option, may be considered as a form of ‘leverage’. The 'grant' price (the price of an option) on a security might increase over the price of the security itself. For this reason, the entire value of trading in options has at times exceeded the total value of trading in stocks themselves.

Stock Options provides detailed information on Stock Options, Stock Option Trading, Employee Stock Options, Stock Option Software and more. Stock Options is affiliated with Stock Broker Career.

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

What Is Stock Trading and How Does It Work?

First a stock is a share in the ownership of a company. Stock represents a claim on the company's assets and earnings. As you acquire more stock, your ownership stake in the company becomes greater. Whether you say shares, equity, or stock, it all means the same thing.

Stock trading is done at an exchange, which are places where buyers and sellers meet and decide on a price. Some exchanges are physical locations where transactions are carried out on a trading floor. The other type of exchange is a virtual kind, composed of a network of computers where stock trading is done electronically.

A stock market is nothing more than a super-sophisticated farmers market linking buyers and sellers. You can use a broker for stock trading who act as a "market maker" for various stocks. They may match up buyers and sellers directly but also maintain an inventory of stocks to sell to other stock trading parties.

If you are new to investing online, don't put your entire life savings into an online account. Start with a smaller sum, which will be easier to handle and keep track of. Once you feel confident, you can then decide to add more money to your investing online account.

Once online, many investors tend to concentrate on stocks, specifically large-cap domestic stocks. While these stocks should make up part of your portfolio, they shouldn't be ALL of it! Take into account your time horizon and risk tolerance to develop a well-balanced portfolio of stocks, bonds, and cash.

If you're new to investing online and are looking to open a brokerage account, there are some important facts you should know before choosing a broker. Each one has strengths and weaknesses, but not everyone sees a broker in the same way. For example, if you're comfortable finding your own research for investing online, then the deep discount brokers will work well for you.

Ask yourself…

What services are offered? Do they have research available? What is the cost to you for investing online? What are the real commission costs to do a trade, including any handling fees? How are confirmations sent to you -- by e-mail, by snail mail, by phone? Can you enter orders by phone, by e-mail, directly on-line? Does it cost extra to call and talk to a broker for help with your account?

Spreading risk is critical to long term success in stock trading. If you have invested your entire savings into one company and that company’s stock falls by 50%, you have lost half your savings in one go. If you have spread your risk by investing in 4 companies, and one of the companies stock falls by 20%, you only lose in one area. Spreading risk assures you that if a stock goes down you have others to balance your situation.

About The Author
Matt Clarkson is a specialist in both traditional and online business that has years of experience in borrowing money and investing for capital growth.
The Free Information Online website is designed to help people find unbiased advice and tips with out the worry of any high pressure selling.
For more free and unbiased advice go to… http://www.freeinformationonline.com

Fast Facts: Trading Stocks in a Fast Moving Market

The U.S. Securities and Exchange Commission warns investors that buying and selling "hot" stocks that have the tendency to rise and fall quickly can be dangerous if unexpected delays occur. Without even realizing it, investors can find themselves losing money.

The U.S. Securities and Exchange Commission warns investors that buying and selling "hot" stocks that have the tendency to rise and fall quickly can be dangerous if unexpected delays occur. Without even realizing it, investors can find themselves losing money.

Just because you can access your account online, doesn’t necessarily mean that your trades are instantaneous. Limit your losses in these fast-moving high tech markets by:

·knowing what you are buying
·understanding the risks involved in your trade
·know the trading process for fast-moving markets

Guard against some of the most common problems investors encounter in fast-moving markets.

Market Orders vs. Limit Orders

When stocks drop or soar suddenly, being stuck in the process of trading can mean the difference between making a sizable profit, and losing a bundle. Delays can develop in fast-moving markets, slowing down executions and trade confirmations. What you thought you were selling at one price, may be end up selling for quite another. Avoid buying and selling at prices higher or lower than you expected by placing limit order instead of a market order. Limit orders are executed automatically when they reach a set upon price, unlike a market order which is filled at the price that second, not necessarily the price set at purchase time.

For example, when you place an order for a $10 stock, placing a limit order will ensure that you don’t end up paying $35. The same is true for selling. The stock will sell when it hits the target limit, eliminating sudden losses. The risk here is a loss of control to hold certain stock just a little longer in the hopes that it will continue to rise. Once it hits the selling target, it is sold.

Remember, Online Trading Isn’t Instantaneous

Trading online can feature its own dangers.Problems with modems, servers, or delayed broker-dealer hardware can all cause a delay or failure in an immediate stock trade. Know what trading alternatives your firm offers (telephone, fax, etc), in the event a technological problem interrupts your transaction.

Avoid Double Buying/Selling

Too often investors mistakenly think that their order did not go through and place another order. This can cause them to buy stock they did not want, or even sell stock they did not own in the first place. Be sure to check with your broker on what to do if you aren’t sure if your trade has gone through.

Choose the Best Broker

Buying and selling in a fast-paced market takes a broker who’s capable of handling transactions quickly. There are no Securities and Exchange Commission rules that require any trade to be executed in a specific amount of time. Finding a broker that doesn’t delay is up to you, the investor. Take your time and research brokers carefully in order to avoid losing important assets unexpectedly.

About The Author
For the past ten years Bob Freeman has been helping people build more money in their retirements. Now he has taken his successful strategies to a new level by offering teleseminar courses to help people make a better retirement for themselves than they ever thought possible. For more tips and strategies see http://www.retirementwealthforyou.com

Why Invest in Stock by Frank Vanderlugt

Many people today are watching the stock market go up and down on a regular basis. They hear the terms about the ‘bull’ and ‘bear’ on the evening news and most people know that this means that the market is very good or very bad. With all of the speculation within the stock market why would anyone want to invest in stocks?

Today the stock market in the US is trading at over 13,000 and it is at an incredibility high rate and it seems to be staying fairly steady. Many people wonder why they should invest in the stock market when it is so high and the chances are that the numbers will go down.

Overall the stock market has been fairly consistent by providing fairly good returns for most investors. There are, of course, people who lose money when they take risky chances with their stock portfolio.

So, why invest in the stock market? If you work with a reputable stock broker, he can provide you with an overview of the market. He will work with you to determine how comfortable you are with the risks that are involved when buying stocks. The two of you will come up with a plan that involves the purchase of certain stocks that have been consistent throughout the years.

Your purchase price for some basic stocks might seem high, especially when you see what these particular stocks were worth a few years ago. But, if you are serious about investing, you have to start somewhere and it is with some of these basic stocks that you can begin a sound foundation on which to build.

Some of your friends and relatives might just ask you the question ‘why did you invest in the stock market’? Yes, it is up right now, but it will go down again. This is definitely a true statement because the stock market does fluctuate—sometimes very dramatically.

Remember that it takes time to make money in the stock market—there are very few overnight successes. You might hear about someone who made a million dollars, but chances are this did not happen overnight. There are some very lucky people out there who for some reason seem to have the Midas touch, but that is not the norm.

If you are unsure about why you should invest in the stock market, make an appointment with a reputable stock broker and talk to them about your interest and concerns.

They will take the time to help you understand what is involved and what the risks are. Knowing all of this information up-front will help you make an informed decision when it comes to investing your hard earned money in the stock market.



About the Author

frank j vanderlugt owns and operates http://www.lazytrader.com Day Trading

STOCK MARKETS by GAURAV SAPRA

Stocks Look Very Expensive:-

Stocks across the emerging market space are looking extremely over bought at the moment, but this is not resulting into a short term correction and investor/trader confidance is at an all time high. This invariably invite sudden and sharp correction and will caught traders on the wrong foot sooner rather than later as extreme bullishness without caution is always a perfect recipy for a correction. However, money from gulf nations is constantly fuelling this stock bubble in emerging markets, especially in india, china, where people have become so bullish that they are selling their land/home to trade/invest in their stock markets! This relentless greed on extreme valuations is a cocktail for any disaster that might unfold due to any international event. Remaining cautious with prudent risk adjustments in one's trading position will be rewarding and shunning short term greed to gain that extra little money will prove handy in the immediate term. Another concern for market players in markets like India is that there is very little volatility and very people are willing to sell even dud stocks which are going up every day without any fundamentals to back their astronomical rise. This is a serious concern and sooner the correction comes, the better will be for the overall health of the market.

About the Author

I am an investor/trader, dealing in financial markets for the past 8 years. I have an Electronics Engineering Degree but my soul lies in the financial markets and their functioning