Money Matters Now

ShogunTrading asked:

This is a copy of our weekly newsletter. Full version at www.shoguntrading.com Trading stocks involves risk; this information should not be viewed as trading advice.

thermal1 asked:

Technical analysis video of individual stock trading ideas for Thursday April 5, 2007 including: Ascent Solar Technologies, Inc. (Public, NASDAQ:ASTI), SIGA Technologies, Inc. (Public, NASDAQ:SIGA), LifePoint Hospitals, Inc. (Public, NASDAQ:LPNT) and CDW Corporation (Public, NASDAQ:CDWC). Trend analysis for daytraders and swingtraders of stocks and options. Trading stocks involves risk; this information should not be viewed as trading recommendations.

TradingWhiz asked:

tradingwhiz.info – Trading penny stocks can be very risky. Here are some simple penny stock tips to help you minimize your risk by at least 50% without compromising on profit potential.

thermal1 asked:

Technical analysis video of individual stock trading ideas for Thursday April 12, 2007 including: FuelCell Energy, Inc. (Public, NASDAQ:FCEL) , International Securities Exchange Hldgs (Public, NYSE:ISE) and Broadcom Corporation(Public, NASDAQ:BRCM). Trend analysis for daytraders and swingtraders of stocks and options. Trading stocks involves risk; this information should not be viewed as trading recommendations.

Currensee1 asked:

Currensee is the first Forex decision-making network that connects real traders with real trades. Want to meet other like-minded traders and share trade ideas in real-time? Interested in using innovative social indicators and measuring your performance against the community? Ready to make more informed trade decisions? Its all inside. Learn more about the Currensee trader network in this guided tour! Please note that over the counter retail foreign currency (Forex) may involve significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

TradingWhiz asked:

tradingwhiz.info – Trading penny stocks can be very risky. Here are some simple penny stock tips to help you minimize your risk by at least 50% without compromising on profit potential.

forexxwolf asked:

This video show how the arbitrage pricer can make regular profit with 0% of risk. Buy/Sell EURUSD in the same moment but in 2 different markets.

thermal1 asked:

Technical analysis video of individual stock trading ideas for Friday March 30, 2007 including; aQuantive, Inc. (Public, NASDAQ:AQNT), FLIR Systems, Inc. (Public, NASDAQ:FLIR) and Multimedia Games, Inc. (Public, NASDAQ:MGAM) Trend analysis for daytraders and swingtraders of stocks and options. Trading stocks involves risk; this information should not be viewed as trading recommendations.

So you bought yourself a stock and it crashed losing 30 percent overnight. What do you do now? Good question, indeed. And it’s a tough one too, so there is really no right general answer. Your trading plan, which you should have prepared before you even started trading, should answer this.

But let’s ask an easier question and one that is related to the problem at hand. Namely, is it possible to tell how risky individual stocks are so that we could avoid situations like that in future. Certainly, not too many people enjoy waking up to a disaster like that.

In other words, we would like to know if there are some measures of risk for the stock market. Yes, there are and one such a measure is called the beta or the beta coefficent.

What this coefficient measures is the stock volatility. It measures it relative to a broader market, which has the beta of one. A stock whose beta is one is about as volatile as the general market. Stocks with their betas lower than one are less volatile and those with betas higher than one are more volatile than the general market. The beta is not constrained from the above, in principle, so there are stocks with betas as high as 3 or 4. And even higher. Many stocks like that are penny stocks, which is one reason why penny stocks should be avoided.

Now, the more volatile a stock is, the more risky it is to your portfolio. On the other hand, if you only swing trade or day trade, you want stocks like that as they move more rapidly and generate faster gains. Or losses, depending on your luck.

To be more precise, the beta measures the correlation with the broader market. For this reason, this coefficient can be even negative for stocks that are negatively correlated with the general market, meaning they rise when the market heads south or vice versa. This, for instance, is often true of gold stocks. And since beta is not constrained from the below either, some highly volatile gold stocks can have pretty negative betas.

If you want your portfolio to be immune to excessive volatility, you should look for stocks with betas of one or lower. There are plenty of those out there too. The stocks of companies that produce staples tend to have lower betas. For instance, Procter&Gamble can serve as a classic example. They make soap. And last time I checked, there was really nothing exciting about soap, which is why the stock of a company like that is unlikely to generate much volatility. Another example is provided by utility stocks. Just like soap, energy is needed by everyone and all the time, meaning the stocks of companies that deliver those have little tendency to be cyclical and hence less tendency to fluctuate wildly.

Now, how do we find betas? That’s another good question. One way to do this is to use a stock screener, such as the one you can find at Yahoo! Finance or similar larger finance related sites.

Remember, though, that there are really no risk free stocks. Just some are less risky than others.

By: Waldemar Puszkarz

About the Author:

If you are trying to to learn how to trade stocks you have come to the right place. Stock trading can be tremendously profitable, that is, if you know what you are doing – if you don’t have a clue, it’s a great way to throw your money away. Check out these tips to find out exactly how to trade stocks.

Tip 1

First of all, understand how it works. The phrase “trade” stocks implies that you will be trading stocks for other stocks, but that’s really not how to trade stocks. In reality, they are traded for money. The prices of the trades fluctuate throughout the trading day, right up until the point that the markets on Wall Street close, so it is often possible to buy something at a certain price first thing in the morning, and then sell it for higher or lower by the close of business.

Tip 2

Before you even consider trading for real, try and secure the services of a decent stockbroker. These guys are experts in the field, and can really help you learn how to trade stocks. They are fully qualified (at least they should be – if they aren’t, run a mile!) to give you completely impartial advice. Even better, they do this stuff all day every day, and should be able to point you in the directions of profits.

Tip 3

Consider some online tips services. You can find some surprisingly good tips services online these days, along with some great instruction on how to trade stocks. There’s nothing that says you have to follow the advice of the tips service, so why not look at their tips for a while and see how they do before you jump in with some money?

Tip 4

Learn to paper trade. “paper” trading is just trading on paper, with no money involved. It’s the acknowledged way for people to get to learn how to trade stocks, as it represents no risk at all, and requires nothing except time. All you would do is give yourself a starting budget and make a note of the prices etc, and then track things as they progress. You could even get your broker to advise you -brokers are more than familiar with paper trading and many of them will be happy to talk you through it.

Those are our 4 tips to help you learn how to trade stocks. Click the links below for some more advice.

By: Felix Gould

About the Author: