Money Matters Now

If you are brand new to trading stocks, you’re probably looking for one of those “stock market for beginners” type information. There is a ton of information out there. It can be an extremely confusing subject. You might want to think about the trading the penny stock market.

There are some great advantages to trading penny stocks, especially if you are a beginner, which sounds like you are. First and foremost penny stocks gives you a lot more potential on your investment, through the use of leverage. To give you an example, if you were to look at trading stocks from companies in the fortune 500, for the most part what kind of return could you expect to receive? Companies like this are already established. These are the kind of companies where investors go crazy if they get a return of 10% a year. They are safe companies to invest in a 401(k) and IRA and build for the future.

But for those that want to actually trade the market and see the true potential that it offers, penny stocks give you an infinite possible return on investment. There is a good reason for it. Most of these companies are unknown for the most part. This is where investments can strike oil. For example, if you bought into any of these Fortune 500 stocks now, you wouldn’t expect to be rich? If you bought into them, when nobody knew who they were, then that’s a different story altogether.

Also, think about how little money is needed to invest in these companies. If you want to invest $2000, how many shares of some mid cap or large cap stock could you afford? 50 or 75, maybe? With that same $2000 you can have a perfectly diversified portfolio stretching across different kinds of markets and sectors. This is truly the stock market for beginners.

By: Chris Braff

About the Author:

The stock market has become the venue for millions of Americans who have learned to manage their own portfolios online. For those who do their homework, the profits can be staggering! As a trader myself, I would also have to say that online trading is very enjoyable. It’s as much as a hobby as it is a way to compound funds. Setting aside an hour a night to scroll through charts and assessing the psychological mood of each equity searching for that one stock that exhibits the telltale signs of a stock that has come to a top and is ready to drop in price really gets my heart pounding. That might sound contrary to conventional wisdom but it’s what many traders have come to know as quick profits. While most investors are looking for the price of a stock to rise, some savvy traders are quite content finding a stock that is poised to drop like a rock. Who are these traders? They’re called short sellers and they have discovered what seventy five percent of average investors have yet to find out.

Selling a stock short is the exact opposite as buying and holding stock. It’s profiting from a stock falling in price rather than the more traditional method of buying stock and profiting from the share price gaining in value. When one sells short they expect the share price to lose value and profit from the decline in price. Why would a trader want to sell a stock short? Well, one reason is a stock will drop in price about three times faster than it took to increase in price by the same amount. That equals faster profits. Another reason is traders can take advantage of all the moves a stock has to offer. Many stocks run in cycles due to various economic and seasonal conditions. Taking advantage of the advances in share price, as well as the declines offers the traders more opportunity to profit.

When a trader decides to trade stocks short they must open a margin account. When you sell a stock short, you are actually borrowing the shares from your broker. You are selling shares of stock you don’t actually own. Let’s say the current market price of ABC Company is selling at $25.00 a share and you believe the price of the stock will decline over the next several weeks. You borrow one hundred shares of ABC and sell them at $25.00. Since you’ve done your homework correctly, you watch as the price of ABC drops to $19.00 a share over the next several weeks and you decide to take your profits. To close the short trade you buy the shares back at the lower price of $19.00, satisfying your debt of one hundred shares of ABC to your broker. But instead of paying them back at $25.00 a share, you are paying them back $19.00 a share. Your profit is the difference of $6.00 a share, or $600.00.

The next time you see your stock running out of steam; don’t just sell the stock to profit from the advance. Try selling the stock short and reap the rewards of a falling stock price as well. It’s just as easy and many times twice as exciting!

By: B.M. Davis

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Youngsters today are adventurous and seek to be millionaires overnight. This hurry and easy accessibility to stock market has got the numbers increasing on investors in stock trading. Most inexperienced people think that stock trading is a form of gambling that can make them millionaires in seconds. But, for those who are in this business for a long time, understand that it is not a child’s play or magic that can produce money overnight. Like any other business dealings, stock trading also needs time, money and brain to get good returns.

Most of the investors investing in stocks make a decision in subjective instincts but trading stocks is a lot more than that. It needs proper care and attention to get decent returns. For those who are inexperienced and do not have much of the risk taking capability accompanied with sound calculations, stock trading is not meant for them.

To get into stock trading, first thing that is needed is the assistance of a broker. A broker gets a commission on each transaction for the services provided by him. He not only advises for the buying and selling of stocks but also maintains the portfolio of the trader and keeps a check on the prospective profit options. Once a broker is finalized, the combination of investments is decided.

A combination of investments? Will that be working if we only invest in one company? The answer is no. That’s true. The resolution for stock market to avoid huge losses is to posses a combination of the investments. The diversification in investments integrates the risks. Therefore if a company suffers a loss; the trader will not suffer the loss as much as the company. Other stocks from other companies may cover the losses of the previous one. Hence, segregating the investments is important to trade in stocks.

Another feature of trade stock lies in the trading technique. For all the online traders it is important to sign up for reviews and testimonial from various sites. These sites provide an inside of the reputation of a particular company through demand a fee. Frauds and other risks can be avoided through these reviews. Also, the user experience and tips in the reviews are nice when it comes to making a decision regarding buying and selling of stocks.

Trading stocks also involves few tools like automated investments and stop order limit. These tools help us to overcome subjective decisions of any stock trader. The automated investments help us to maintain a combination of different investments hence, maintaining a balanced portfolio. Stop order limit on the other hand, automatically sells the stocks on the particular limit of falling prices of stocks. If the price of the stock is falling and the trader retains it for long seeking for sudden growth, this situation may lead to a huge loss for the investor. To avoid this condition stop order limit proves to be important because it sells the stock automatically on the pre-decided price.

By: Micheal James

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There are many people out there who seem to be fascinated with the stock market. One option for trading on the stock market is to invest in penny stocks. Penny stocks can start from less than $1.00 and go up to $5.00 in price. Therefore, their typical range is from a fraction of a dollar to $5.00 maximum. People who start investing in penny stocks find this low investment appealing, they realize that at a lower cost they can have a share of a corporation.

There is limited financial information accessible on these penny stocks because the companies are new. Most investors in penny stocks trade with companies that have ups and downs in the market, they hold on to it and then sell it before it falls too far.

Penny stocks are not like usual stocks found in the market, they’re smaller and less active than other stocks. Their movement is unpredictable, they can be considered a penny stock at the beginning of the day but not at the end of the trading day. It’s worth noting that penny stocks have a high failure rate. Most people who trade penny stocks are thrill seekers who enjoy taking risks.

There are a lot of people who trade penny stocks who do their research and gather all the knowledge they can about various types of this stock. This information can be essential to these people because it can help evaluate the penny stock value. People will try to predict the outcome of these penny stock performances with the data that they’ve collected throughout the course of their research.

The one thing to always keep in mind is that penny stocks are, by design, high risk but can also yield incredible rewards!

By: Myla Madson

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How do you find the stocks ready to explode?

If you came looking for a way to really learn how to make a steady stream of really good profits then this article on Daytrading Stock Pick is the place to be. If you came looking for the “Holy Grail” this is not the article to read. Don’t be fooled by those that claim to have found one when it comes to the market. That is not to say however, that there are not some great and very predictable tools by which to judge a stock that is ready to explode. I have been trading for quite some time and like most, I found a great deal of failure at the onset. That failure has turned around in a dramatic way and this is because of hard work and being a true student of the market. What I am about to share with you here is the result of countless hours and research. If you heed this advice and paper trade to confirm the veracity of the statement then you will be much, much further ahead than most traders. So let’s get started:

What direction is the overall market heading in?

In order to figure this out we can observe many different directional indicators. A favorite of mine is the 200 day moving average which is also my tool for individual stocks. When the market is above the 200-day MA, it has historically been a great time to go long on our positions. When the market is below the 200-day MA, it has been a wise idea to begin locking in profits on the short side. One other popular method of testing the direction of the overall market is the VIX. Be very careful when the VIX is 5% above or below its 10-day MA. 5% below usually comes before a quiet/down market. 5% above often comes before a short-term rally. There is also the Put/Call Ratio which usually tells us about where the market is heading. Put/Call ratio readings below .50 are short-term bearish for the market, especially when it’s below the 200-day MA. Put/Call ratio readings above .90 are usually bullish, especially when the market is trading above its 200-day MA. Lastly, you should try and pay attention to the Advancing Issues versus the Declining Issues. There are a whole host of other methods you can use to test the overall direction of the market. One departing tip for this part of the article and that is: Over the long run you will be a much richer trader if you consistently trade toward the trend of the market.

What sectors are hot and which ones are not?

If you know that you are in a bull market you jump into picking the big money stocks right? Wrong! You must carefully break down the tape further. You need to know what sectors are getting the money flow into them and which ones are not. This is not very hard to do and does not take that much time. Yahoo finance has an excellent section dedicated to investing and once you click on this section you will find an area dedicated to “Industries.” You can get a nice read on what sectors are moving in an upward direction. Also, CNBC, MSNBC, as well as other financial websites perform similar functions. So now you know what direction the overall market is moving and you have your eyes on the hottest sector. Now, the next move is to hone in on individual stocks.

Look for trending individual stocks

It is a good idea to look for stocks that first are trading above (long) or below (short) the 200 day moving average. This is only step one in the attempt to find the hottest stocks. If you would like to find out more about this topic as well as profitable strategies you will find no where else check out the link below. You will find an offer for a professional trading coaching session free of charge. Check below.

By: George Knoechel

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There is no doubt that handsome profits can be made from buying company stocks in rising market conditions, and then selling at a profit once the share price has increased. This strategy is called Stock Trading, and you may even know of someone who does this for a living?

Are you aware though, that there is a much more effective trading vehicle that can offer the trader greater profitability at a much smaller cost?

CALL OPTIONS

One of the many benefits of Stock Options is that when Options Trading, you can profit from them whether the stock price is going up (Call Options) or going down (Put Options).

Now you may argue that you can do the same with company stocks through buying and shorting shares, but there are several reasons why I prefer to use stock options over other trading vehicles:

1) Affordability

Call options allow us to control company stocks that would otherwise be quite expensive to own.

Stock Options cost a fraction of the price of the underlying stock but they represent the same amount of shares. So this means with Call Options you can actually profit on the same shares using a much smaller amount of money.

For example if XYZ shares were trading at $ 20 and you chose to buy 50 shares, your cost would be $ 1,000.

However an XYZ Call Option with a strike price of $ 20 might only cost you $ 1. So if you used the same $ 1,000 to purchase Call Options instead, you would have control over 1,000 of the same shares, not 50.

2) Leverage

The power of controlling and profiting from a larger investment with a smaller amount of money produces leverage.

With Call Options not only are you able to control more shares, but your profitability would be much greater than buying the actual stocks.

Using the above examples, Let’s say that XYZ shares increased to $ 40. If you had bought the 50 shares, you would be looking at a profit of $ 1,000.

But if you had purchased XYZ $ 20 Call Options to give you control over 1,000 shares and they were now worth $ 2.00, you would be looking at a profit of $ 2,000.

There are ways to precisely calculate the leverage of a Call Option and this is dependant on where the stock price is in relation to the option strike price.

For instance a call option that is ‘In The Money’ (Current Stock price is above the strike price) offers less leverage than a call option that is ‘Out Of The Money’ (current stock price is below the strike price).

3) Income

Stock Options can be Purchased or Sold. This offers the investor two ways to make money as income.

Writing Options – you can Write (or sell) a Call Option and profit from time decay. As an option draws nearer it’s expiry date, it loses value in time.

As a writer, you receive the premium, or purchase price of the option. When the opinion of the buyer of those stock options is wrong, the Call Option expires worthless and the option premium you received becomes your profit.

One thing to consider however, is that the buyer of a Call Option is not obligated to buy the underlying stock, but the Writer (or seller) of a Call Option IS obligated to sell the underlying shares should the option taker exercise their right.

Writing Calls on stocks you do not own can present an unlimited risk.

Options Trading – you can Take (or buy) a Call Option and on-sell the option to someone else.

This would be the most common strategy involving Stock Options. Options Trading with Calls is most profitable for the trader when the underlying stock price rises or rallies before the expiry date of the option.

As the share price increases, so too does the value of a Call Option and the trader on-sells the option to realize a profit.

Unlike the writer of a Call Option, when buying (or taking) call options you have no obligation to buy the underlying stock, so your maximum risk is limited to the amount which you paid for the option in the first place.

By: Jules Dawson

About the Author:

Having traded stocks for over 20 years I can tell you that it takes an organized approach. It’s not for someone who does put everything into what they do. It takes hard work and discipline.

Before the year 2000 it was much easier to make money, because the market was volatile and you could make nice money with the market swings using a proper plan, discipline and a quick but steady hand.

Since then it has become more difficult. Many of the day traders have gone by the way side for many reasons. Data still shows for the long term the stock market is the best place to be. I have put together just a few ideas of what I believe are good tidbits of information on the market and they are as follows:

1. Sell when you want to not when you have to.

2. Buy after the market has had 2 – 3 days of hard selling then takes out the high of the lowest day in that period. If your stock buy point matches then you got something to look at as a possible trade.

3. Sell after the market has had 2 – 3 days or wild buying then takes out the low of the highest day in that period. If your stock sell point matches then you got something to look at as a possible trade.

4. Use Discipline when trading. Have a plan that clearly states entry and exit points before you buy or sell a stock.

5. Understand your emotions. Greed will try to talk you out of taking a profit, letting the stock fall back before taking action. Fear of taking a loss will prevent you from taking action only to cause further losses.

6. Learn as much as you can by reading and taking seminars from someone who has been successful. Why learn from someone who is only talk. Check them out.

7. You trading plan should specify how much of your portfolio should be a risk for any given time.

I could go on an on. It’s amazing what you learn over the years from trading, reading, seminars etc. I cannot tell you how much I spend on the knowledge side. It was worth every penny.

If you will do your research you can find software that can help you automate the process. I found in my research that they have gone way done in price. It’s amazing what you can get now days for a fraction of what I use to pay. What should you do next?

Think about the above items, develop a plan, find software you like to implement your plan and hopefully you can automate the process. In doing my research I found some new exciting software that can not only automate the process, but help you with the decision making process as well.

Make your you do your research when looking for these programs by either using a website like mine, but not necessarily mine or do the work yourself. It is very important. Give your self a chance at success. Please feel free to read both this article or one of my many others by visiting my link in the resource box below. I always enjoy getting emails pertaining to my articles or my site. Your feedback is important to me.

I wish you the very best.

By: Michael Comeau

About the Author:

We all know that emotions control every decision that an investor makes in any type of money related vehicle. Whether is be the stock market, real estate, art work or antiques, emotions ultimately set the final price on both sides of the transaction. Some investors have greater control over their emotions while other investors are destroyed by their emotional reactions to certain events.

One common occurrence that I have seen many investors make, including myself, is placing a position in a stock at the wrong time. My last article detailed the importance of timing, while this article will concentrate on the importance of staying focused and emotionally stable when things don’t work out as expected. In the past, I would study a stock’s chart, the fundamentals, the general market health and everything else that I felt necessary before placing a large sum of cash behind my beliefs. When things went wrong and I was forced to sell for a small loss, I would drop the stock from my watch lists and remove it from my memory. This was one of the biggest mistakes that I was making during my earlier years of investing. The greatest investors study their mistakes and learn why they were wrong. If you don’t learn from your mistakes, you will continue to repeat them and never move to the next level.

I was usually correct with my analysis on the particular stock but many times I was too early with my entry point during a new up-trend. Months later, I would come across the same stock in my screens but it was now up 25%, 50% or more from my initial buy point and stop loss. I would be frustrated for selling my stock too soon and was getting tired of using rules and missing big winners that I sold for a loss. I knew money could be made in Wall Street by using the law of averages to my advantage and employing strong money management skills but I needed to employ the rules more consistently. I started to practice what I was taught by selling my losers quickly and allowing my stronger stocks to ride their trends. Over time, I was experiencing a few more losers than winners but my stake was growing because these losers were smaller in size than the winners. The words written in the books were true; Jesse Livermore, Gerald Loeb and William O’Neil were all accurate with their lessons about cutting losses quickly.

More importantly, I learned to keep strong stocks on my radar even if I bought too soon and was forced to sell for a loss. My timing was wrong and my ego was shot because I was wrong, so I typically decided to stay away from that specific stock because it had already taken my cash and my pride. Emotionally, I was burned by the stock even though this was not entirely true. Investing is a game of trial and error. It is okay to buy a stock at the wrong time and sell, only to buy it again because they timing may be better. If you cut the losses small and allow winners to grow, the averages will ALWAYS work out, I promise. You must be honest with yourself to allow the averages to work out. You cannot allow a stock to drop past your sell point and you must try to always hold the strongest stocks without selling them during a premature pullback. This all sounds so easy but it is not! If it was so easy, we would all be extremely rich and the stock market would be everyone’s full time job.

I kept using my system of trial and error and started to record every thought and transaction I made. With my revised philosophy in place; I continued to study the stocks that I was forced to sell and tried my best to re-purchase, even at higher prices than my original position if the time was right. Even now I have these issues, the greatest traders of all time always had these issues and every fund manager must decide if the time is right. My latest example, which can relate to almost everyone in the community is Paincare Holdings, a stock that was purchased solely as a “test buy” that I was forced to sell. If things turn around and the general market starts to rally, I would have no problem buying the stock at a higher price than my original position if the opportunity presents itself.

LaBarge is another example, first showing up on the screens at $9.35 but during a down-trending market. The new pivot point and buy area was $14, over 50% higher than the original price but a solid entry point regardless of past gains or prices. Mentally it is always the toughest to buy a stock at a higher price than you were watching it at an earlier date but it can be the most rewarding strategy. Never look at a chart and toss away a candidate because it has moved up 50% or even doubled in recent months, the real move may just be beginning.

The moral of this article is to make you understand that timing may be your only issue when buying stocks so never throw away a possible superstar because you bought too soon. Keep it on your watch list and be prepared to initiate another position, even if it will cost you an extra point or two. If you buy again and it doesn’t work out, re-peat the process, there is always a chance that the stock was not meant to be or your analysis was slightly faulty. In either case, learn what you are doing right and wrong so you can be prepared to use those lessons with the next stock.

By: Chris Perruna

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Before you start trading, you absolutely have to know what stocks you want to buy and hold for a while, which is called going long or holding a long stock position. You likewise have to know at what point holding that stock is no longer worthwhile. Similarly, you need to know at what price you want to enter or trade into a position and at what price you want to exit or trade out of a position. You may be surprised to find out that you can even profit by selling a stock without ever owning it, in a process called shorting.

You can even make money buying and selling options on stocks to simulate long or short stock positions. Buying an option known as call enables you to stimulate a long stock position, in much the same way that buying an option known as put enables you to simulate a short stock position. You make money on calls when the option related stock rises in price, and you make money on a put when the option related stock falls in price.

When placing orders for puts and calls, you are never guaranteed to make money, even when you are right about the direction a stock will take. The values of options are affected by how volatile stock prices are in relationship to the overall direction (up or down) in which they are headed.

Managing your trades so that you don’t lose a bunch of money is critical. Although one can’t guarantee that you will never lose money, experts can provide you with useful strategies for minimizing your losses and getting out before your stock portfolio takes a huge hit. The key is knowing when to hold them and when to fold them. You must think of your trading as a business and the stocks that you hold as its inventory.

By: Thomas Morva

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Here is a very short answer: slowly. And don’t even think about it until you learn a few basic things about the stock market.

I still remember very well my first trade. It was about 10 years ago. The stock symbol was FOTO, no longer listed as its price dropped too low over the following two years. I then sat watching its price gyrations for a few hours getting more and more disgusted that it refused to move at least 20% right after I had bought it. In fact, it barely moved in a few days that followed and so I sold it. I **** when stocks act like that!

My second stock was CUBE. The company was bought out eventually so the stock is no longer listed. This one too refused to move, so I sold it. Another stinker.

I realized later that I would have made money on both of them had I held to them longer. After all, it was still the full blown bull market of the 90s and virtually every stock you bought those days would go up. You could make money by simply throwing darts at stock charts and even if you were blindfolded, you would probably still make money with your trading “method.” But I did not know that yet, although being a quick learner I soon figured out what I needed to do to make money in stocks.

And here are the things that I learned that made me money and if you follow them you too stand a good chance to succeed at trading stocks. Perhaps you will even make a killing.

1. You need a plan to make money in stocks. This plan has to include, among other things, your timeframe, when you exit your position and under your what circumstances.

2. You need to do your research before you put a trade on. Wishful thinking is not enough. It does not work. You need to know why the stock you are about to buy will appreciate in price. Why would that be? What are the reasons to drive its price up?

3. You need a sound mindset and that includes patience and sticking to your plan. This is sometimes easier to say than to do and can be a big hurdle to overcome, especially for beginners.

4. You need to be independent. Following the herd can feel comfortable, but is a well-known way to a poorhouse. Choose to be a contrarian rather than a follower of crowds. Crowds are often wrong. Too often to follow them.

5. Never cease to learn new things and study new trading methods, but don’t change those that have worked well. In fact, being conservative in your methods is fine, try new things only if they promise to be much better than your older methods.

6. Avoid distraction from slick snake oil salesmen. There is no fast way to a million, but some are better and more solid than others. Relying on your own judgement beats all other ways, in my opinion.

Good luck then!

By: Waldemar Puszkarz

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