Using a trailing stop can save you a ton of money, but only if you use it right. If you keep adjusting it downward to keep from getting triggered out to avoid having your position closed, you are defeating the purpose of the trailing stop. Accept the fact that sometimes the trade just goes against you. Close your position and move on. If you think it is going to be a minor bump, don’t adjust your trailing stop, accept the close out and move on.
The purpose of a trailing stop is to close out the position to keep you from losing a large portion of your investment capital if the market moves against you. You need to set the stop immediately after you purchase the stock or option. As the value of your position increases, move the trailing stop upwards. Don’t set it too close or minor corrections will cause it to get triggered, but don’t keep so far away that you lose a lot of money when it finally does get triggered.
You need to spend a little time understanding the movement of the market you are getting into. Some stocks trade differently from others, you need to understand the typical trading range for the stock you are considering.
If you are going to trade the stock market, you should learn as much as you can.
Showing posts with label stock market. Show all posts
Showing posts with label stock market. Show all posts
Tuesday, May 22, 2007
Wednesday, May 16, 2007
Trading The Forex
Trading the Forex can be profitable, if you know what you are doing. If you don’t, it is an excellent way to separate your money from your account. When I was learning to trade the Forex, I made a ton of mistakes. What I needed was a mentor to help me learn the ropes. I though something had to be complicated in order to work and make money in the Forex market.
I was wrong. You don’t need a complicated system to be able to trade successfully. You don’t need to forecast the future to make money in the market. In fact, if you try to predict the future, you are almost certainly guaranteed to fail. To be successful, you just have to identify the trend, and jump on. It really is that simple.
I have subscribed to just about every newsletter, trading system, you name it, and I have tried it. The most important thing that I have learned is if you identify the trend early, and follow the trend, you will make money. When I was fighting the trend, I lost money, when I went with the trend, I made money.
It has taken me some time to learn to identify the trend. I have found this trend following system to be very profitable, and recommend it highly. If I would have had this system early in my trading career, I would have saved myself a lot of time, money and frustration.
I was wrong. You don’t need a complicated system to be able to trade successfully. You don’t need to forecast the future to make money in the market. In fact, if you try to predict the future, you are almost certainly guaranteed to fail. To be successful, you just have to identify the trend, and jump on. It really is that simple.
I have subscribed to just about every newsletter, trading system, you name it, and I have tried it. The most important thing that I have learned is if you identify the trend early, and follow the trend, you will make money. When I was fighting the trend, I lost money, when I went with the trend, I made money.
It has taken me some time to learn to identify the trend. I have found this trend following system to be very profitable, and recommend it highly. If I would have had this system early in my trading career, I would have saved myself a lot of time, money and frustration.
Finding The Perfect Trade
There is no such thing as a perfect trade. Accept it, they don’t exist. All you can do is attempt to make the best trade possible, minimize your losses, and keep on keeping on.
Just because you think you have found the perfect trade and you didn’t get on board, don’t chase it. There’ll be another one coming down the internet in just a couple of minutes. That is something that I learned the hard way.
If you decide that the way to buy a stock is with an intraday dip, set your bid price, and stick to it. The worst thing you can do is to try and keep raising your bid hoping to catch that little intraday dip. There is nothing wrong with the strategy of buying on the intraday dip, what is wrong is chasing after the stock because it is moving away from you. If you are going to chase it with an intraday dip, you should just buy it in the first place and be done with it. It will save you money in the long term.
If you'd like more information trading the stock market, check out my website, it has lots of great information about various trading strategies.
Just because you think you have found the perfect trade and you didn’t get on board, don’t chase it. There’ll be another one coming down the internet in just a couple of minutes. That is something that I learned the hard way.
If you decide that the way to buy a stock is with an intraday dip, set your bid price, and stick to it. The worst thing you can do is to try and keep raising your bid hoping to catch that little intraday dip. There is nothing wrong with the strategy of buying on the intraday dip, what is wrong is chasing after the stock because it is moving away from you. If you are going to chase it with an intraday dip, you should just buy it in the first place and be done with it. It will save you money in the long term.
If you'd like more information trading the stock market, check out my website, it has lots of great information about various trading strategies.
Sunday, May 13, 2007
Do You Need A Broker To Trade?
The short answer, it depends.
It depends on your trading style. It depends on your experience. It depends on how much time and effort you are going to put into your trading.
Some people find they need to have a broker help them do the research and find a stock that they can buy. And for these people, having a broker makes a lot of sense. They buy for the long term, they aren’t interested in learning technical analysis, they don’t want to check on the fundamentals of a company, therefore they need a broker.
But there are other people that enjoy learning technical analysis, or they really like researching the fundamentals of a company. They don’t want to pay someone extra for doing what they enjoy doing; therefore, they do not need a broker.
With the invention of personal computers and the internet, a lot of people are finding they can get all of the information they need in order to make well informed decisions. Now, many online trading firms offer deep discounts to traders. They have great trading platforms that have all the information they need at their fingertips, so why should these people use a broker.
So again, do you need a broker? It just depends on your trading style.
Learn more about trading visit my website.
It depends on your trading style. It depends on your experience. It depends on how much time and effort you are going to put into your trading.
Some people find they need to have a broker help them do the research and find a stock that they can buy. And for these people, having a broker makes a lot of sense. They buy for the long term, they aren’t interested in learning technical analysis, they don’t want to check on the fundamentals of a company, therefore they need a broker.
But there are other people that enjoy learning technical analysis, or they really like researching the fundamentals of a company. They don’t want to pay someone extra for doing what they enjoy doing; therefore, they do not need a broker.
With the invention of personal computers and the internet, a lot of people are finding they can get all of the information they need in order to make well informed decisions. Now, many online trading firms offer deep discounts to traders. They have great trading platforms that have all the information they need at their fingertips, so why should these people use a broker.
So again, do you need a broker? It just depends on your trading style.
Learn more about trading visit my website.
Tuesday, May 1, 2007
Follow The Trend
Everyone has heard “The Trend is Your Friend”. If you follow the trend you can make money. It doesn’t matter if the trend is up or down, if you follow it, you will make money.
This is easier said than followed. If you’re like me, you spend a great deal of time poring over charts and graphs trying to find a stock that is in a trend. I’ve used candle sticks, moving averages, and just about every other charting trick to try and identify where the trend is going. The secret is to try and find the trend when it is starting and follow it until it changes.
It looks so easy when you read about it in the book, but boy is it ever so hard to actually implement. I’ve even tried to design my own trading strategy using technical analysis. It is so easy with the charting software; you can do some back testing to try out your great theory that is going to set the world on its edge. I confess, one of the tricks I’ve tried was using the 10 day moving average crossing the 30 day moving average as a turning point. Sometimes it works, sometimes it don’t. I still am experimenting, searchinf for the perfect system.
One thing that I’ve discovered is that what works for one person does not necessarily work for another. It comes down to temperament and discipline more than anything else. If you can follow a system, remained disciplined when everything is moving so fast, and have the temperament to face the losses that come your way, you can be successful trading in the stock market.
There are dozens of systems out there, some are better than others. You have to take the responsibility to research how the system works, learn the ins and outs of it. And then, you have to face the question, do I have what it takes to trade this way. You have to be honest with yourself, because if you aren’t, you will lose your shirt. That much, I can guarantee.
This is easier said than followed. If you’re like me, you spend a great deal of time poring over charts and graphs trying to find a stock that is in a trend. I’ve used candle sticks, moving averages, and just about every other charting trick to try and identify where the trend is going. The secret is to try and find the trend when it is starting and follow it until it changes.
It looks so easy when you read about it in the book, but boy is it ever so hard to actually implement. I’ve even tried to design my own trading strategy using technical analysis. It is so easy with the charting software; you can do some back testing to try out your great theory that is going to set the world on its edge. I confess, one of the tricks I’ve tried was using the 10 day moving average crossing the 30 day moving average as a turning point. Sometimes it works, sometimes it don’t. I still am experimenting, searchinf for the perfect system.
One thing that I’ve discovered is that what works for one person does not necessarily work for another. It comes down to temperament and discipline more than anything else. If you can follow a system, remained disciplined when everything is moving so fast, and have the temperament to face the losses that come your way, you can be successful trading in the stock market.
There are dozens of systems out there, some are better than others. You have to take the responsibility to research how the system works, learn the ins and outs of it. And then, you have to face the question, do I have what it takes to trade this way. You have to be honest with yourself, because if you aren’t, you will lose your shirt. That much, I can guarantee.
Monday, April 23, 2007
Stock Picks 101 - Trading on Insider Activity
Everyone knows that insider trading is illegal, but do you think that keeps it from happening? Of course not. Just because you’re not allowed to trade on insider information doesn’t mean you can’t trade on the telltale signatures that insider trading activity leaves. This can be quite profitable if you can detect it in a reliable way.
Some tools are very useful in detecting insider trading. For one, most of the better discount brokers aggregate the news for you. Be sure to use this valuable feature. Having scanning software that filters for price moves on volume is also vital.
You can suspect insider trading is going on when you see a strong price move in the stock picks you’re monitoring on increasing volume with no news about those stocks. This is the key to detecting insider trading. If the price goes up suddenly on good volume with no news, you really need to ask yourself “Why?” One possible explanation is insider trading.
To detect these strong price moves you should have scanning software that filters for price moves on volume. These scans should be run a number of times daily, focusing especially on early in the day. It’s also important to know that there is no significant “important news” to explain the price moves. Deciding what constitutes “important news” requires some experience. Of course, insider trading volume spikes can also happen toward the end of the day as well.
These happen in anticipation of important announcements after the market has closed.
When you see a price spike on volume, another thing you can check for is whether there is expected to be some significant “newsworthy event” about that stock in the next day or two. Examples of such “newsworthy events” include earnings announcements, announcements of research results, announcements from various kinds of industry-related conferences or any kind of imminent news item about the stock or the industry. This is another sure way of detecting that perhaps insider trading is going on.
Once you’ve detected this possible insider trading, the next question is what to do about it. How and when do you enter the trade? Here is where some experience comes in at detecting what insider trade price moves look like. You can develop this experience by studying price charts that show evidence of insider trading. With some good scanning software you can detect these kinds of price movements.
Finding a good entry point is half the battle, but finding the right exit point is actually even more important. You have control over when you enter the trade and which stock you pick, but once in it, you need to find the exit for that particular stock.
Often, insider trading will plateau, and also perhaps you’ll suddenly find that there is a newsworthy event that could explain the insider trading. This is how you find the exit point. So, exiting insider trading trades is a great example of buying the rumor, which in this case is unexplained strong price movement on high volume and “selling on the news.” This is to say, when the news comes out, the party’s over, and it’s time to go find another trade.
So, as you can see from these tips, riding on the coattails of insider trading can be quite profitable with the right preparation.
Doug Newberry founded Investing Systems Network. He is also its Director. Investing Systems is a vibrant company with more than 20,000 customers who hail from more than 70 countries. These customers use the tools and services they get from ISN to become better, more disciplined investors. To learn more about insider trading, go to Stock Picks.
Note By John:
I like Doug's article. You can pick up on insider trading, and it can be quite profitiable. I've used it myself on occasion. But you have to use caution, I've been burned by this before. But if you see a spike, on high volume, you can ride it. This is a good trade for options, small potential cost, large potential return, short time frame. Usually only a couple of days before the news breaks and the option price rises pretty quickly. Keep in mind, that if the price drops on high volume with no news, the insiders are bailing on the stock. Get a short term put. For more information on trading stocks, check out my website at www.Trade-The-Stockmarket.com
Some tools are very useful in detecting insider trading. For one, most of the better discount brokers aggregate the news for you. Be sure to use this valuable feature. Having scanning software that filters for price moves on volume is also vital.
You can suspect insider trading is going on when you see a strong price move in the stock picks you’re monitoring on increasing volume with no news about those stocks. This is the key to detecting insider trading. If the price goes up suddenly on good volume with no news, you really need to ask yourself “Why?” One possible explanation is insider trading.
To detect these strong price moves you should have scanning software that filters for price moves on volume. These scans should be run a number of times daily, focusing especially on early in the day. It’s also important to know that there is no significant “important news” to explain the price moves. Deciding what constitutes “important news” requires some experience. Of course, insider trading volume spikes can also happen toward the end of the day as well.
These happen in anticipation of important announcements after the market has closed.
When you see a price spike on volume, another thing you can check for is whether there is expected to be some significant “newsworthy event” about that stock in the next day or two. Examples of such “newsworthy events” include earnings announcements, announcements of research results, announcements from various kinds of industry-related conferences or any kind of imminent news item about the stock or the industry. This is another sure way of detecting that perhaps insider trading is going on.
Once you’ve detected this possible insider trading, the next question is what to do about it. How and when do you enter the trade? Here is where some experience comes in at detecting what insider trade price moves look like. You can develop this experience by studying price charts that show evidence of insider trading. With some good scanning software you can detect these kinds of price movements.
Finding a good entry point is half the battle, but finding the right exit point is actually even more important. You have control over when you enter the trade and which stock you pick, but once in it, you need to find the exit for that particular stock.
Often, insider trading will plateau, and also perhaps you’ll suddenly find that there is a newsworthy event that could explain the insider trading. This is how you find the exit point. So, exiting insider trading trades is a great example of buying the rumor, which in this case is unexplained strong price movement on high volume and “selling on the news.” This is to say, when the news comes out, the party’s over, and it’s time to go find another trade.
So, as you can see from these tips, riding on the coattails of insider trading can be quite profitable with the right preparation.
Doug Newberry founded Investing Systems Network. He is also its Director. Investing Systems is a vibrant company with more than 20,000 customers who hail from more than 70 countries. These customers use the tools and services they get from ISN to become better, more disciplined investors. To learn more about insider trading, go to Stock Picks.
Note By John:
I like Doug's article. You can pick up on insider trading, and it can be quite profitiable. I've used it myself on occasion. But you have to use caution, I've been burned by this before. But if you see a spike, on high volume, you can ride it. This is a good trade for options, small potential cost, large potential return, short time frame. Usually only a couple of days before the news breaks and the option price rises pretty quickly. Keep in mind, that if the price drops on high volume with no news, the insiders are bailing on the stock. Get a short term put. For more information on trading stocks, check out my website at www.Trade-The-Stockmarket.com
Tuesday, April 10, 2007
Go to My Website
I meant to tell you about my website. It is www.Trade-The-Stockmarket.com and it contains lots of information about trading on the stock market. I wish that I would have had a resource like this when I was starting out.
Bear with me on the website, it is new, and I am putting up lots of new information on a regular basis. I am going to put information about trading stocks and options on the website. I will also put up something about the futures market and trading currencies.
Be sure and stop by and take a look. I hope you like it.
Talk with you more later.
John
Bear with me on the website, it is new, and I am putting up lots of new information on a regular basis. I am going to put information about trading stocks and options on the website. I will also put up something about the futures market and trading currencies.
Be sure and stop by and take a look. I hope you like it.
Talk with you more later.
John
Learning to Trade Options
One of the problems facing new traders is paralysis of analysis. There is just so much information coming at you. If you aren’t careful, you can have a severe case of information overload. You keep waiting on the last perfect piece of information that will make everything perfect.
Well, I hate to burst your bubble, but there just isn’t a perfect anything. You always have incomplete data. You always could use more information. You always worry about making a mistake. You just have to step up and try your best.
Sometimes, when the market tanks and you have a long position, you just don’t want to close out your trade, because you have a losing position. I understand, I really do. However, you don’t want to hold onto a losing position too long, because instead of a small loss, you could end up with a total loss.
I remember when I started trading, I didn’t have that much money to invest, only about $20,000. I wanted to make money fast (don’t we all have that dream) so I wanted to trade options. Because you only needed a small investment, you could trade them online, and there was a lot of liquidity in the options market. I bought the books that made me the instant expert. I understood calls and puts (that was a little hard to grasp at first). Forget about straddles and strangles. Anything with a fancy name like that had to be too sophisticated, so I just didn’t bother to learn it. (Remember, I had trouble understanding puts.)
I bought a call that was worth about $350. I knew what I was doing, (remember, I had read the book) so I loaded up and bought 10. My trade went bad, I knew that I needed to get out, I knew that it wasn’t going to get any better, so I did what any rookie would do. I panicked. I didn’t do anything until it was too late. So instead of losing about $100 on a bad trade, I did the next best thing, I lost nearly $2,000.
They say you learn from your mistakes. I tried to. I really did. The next time I had a losing trade that went really bad, I showed them. I panicked again. This time it was only about $1,000 loss. (You see, I really was improving, I cut my losses in half!)
As you can see, I was really racking up a winning record. Sure, I had some wins, $50 here, $30 there. The occasional $300 to $400 winning trade. But my losses keep coming at me, and they seemed to be bigger than my winning trades. I noticed that the transaction fees were eating up a significant part of my profits. (What profits?) I figured if I changed firms to one with a lower fee, I would be making money.
So I changed firms. Now when I lost $100 on a trade, it only caused me to lose $105 instead of $125. See, I was making progress; I had cut my losses by 20%.
Well enough about my early days in the market. I’ll get back with more about my early days in a later blog. Eventually, I’ll be able to tell you more about my successes in a later blog.
Well, I hate to burst your bubble, but there just isn’t a perfect anything. You always have incomplete data. You always could use more information. You always worry about making a mistake. You just have to step up and try your best.
Sometimes, when the market tanks and you have a long position, you just don’t want to close out your trade, because you have a losing position. I understand, I really do. However, you don’t want to hold onto a losing position too long, because instead of a small loss, you could end up with a total loss.
I remember when I started trading, I didn’t have that much money to invest, only about $20,000. I wanted to make money fast (don’t we all have that dream) so I wanted to trade options. Because you only needed a small investment, you could trade them online, and there was a lot of liquidity in the options market. I bought the books that made me the instant expert. I understood calls and puts (that was a little hard to grasp at first). Forget about straddles and strangles. Anything with a fancy name like that had to be too sophisticated, so I just didn’t bother to learn it. (Remember, I had trouble understanding puts.)
I bought a call that was worth about $350. I knew what I was doing, (remember, I had read the book) so I loaded up and bought 10. My trade went bad, I knew that I needed to get out, I knew that it wasn’t going to get any better, so I did what any rookie would do. I panicked. I didn’t do anything until it was too late. So instead of losing about $100 on a bad trade, I did the next best thing, I lost nearly $2,000.
They say you learn from your mistakes. I tried to. I really did. The next time I had a losing trade that went really bad, I showed them. I panicked again. This time it was only about $1,000 loss. (You see, I really was improving, I cut my losses in half!)
As you can see, I was really racking up a winning record. Sure, I had some wins, $50 here, $30 there. The occasional $300 to $400 winning trade. But my losses keep coming at me, and they seemed to be bigger than my winning trades. I noticed that the transaction fees were eating up a significant part of my profits. (What profits?) I figured if I changed firms to one with a lower fee, I would be making money.
So I changed firms. Now when I lost $100 on a trade, it only caused me to lose $105 instead of $125. See, I was making progress; I had cut my losses by 20%.
Well enough about my early days in the market. I’ll get back with more about my early days in a later blog. Eventually, I’ll be able to tell you more about my successes in a later blog.
Thursday, April 5, 2007
Welcome to Trade The Stock Market
Welcome to my blog. My name is John Marston, I've been trading the stock market for the past 15 years. I am able to make a decent living working from my home, but it wasn't always that way.
My first trade, I made about $2,000 on an option trade that lasted less than four hours. I doubled my money in less than one day. And it was the worst thing that could have happened to me. I was hooked. I was invincible, I could do no wrong. And I lost more money than you can imagine. Maybe if I had lost on my first trade, it would have been better, I don't know.
The first couple of years, I lost more money than I made. A lot of money. I tried everything, trading options, trading bonds, trading futures. You name it, I tried it. And I lost money at it. I used candlesticks, moving averages, and every new tip and trick that came down the line.
Eventually, I managed to stop the hemorrhaging, and (hooray) I was only losing a little money. And after about two years I actually started showing a profit. But in the meantime, I had lost a years salary. It was almost five years before I broke even. But eventually, I was able to quit my day job and make a living trading the stock market.
I love the freedom that it gives me, but at times, the stress is a killer.
If you do decide to try and make a living trading online, I wish you the best. Get the very best training that you possibly can, buy the best tools you can find, and keep working at it.
In my future posts, I will share with you the tools that I use to successfully trade the markets.
John
My first trade, I made about $2,000 on an option trade that lasted less than four hours. I doubled my money in less than one day. And it was the worst thing that could have happened to me. I was hooked. I was invincible, I could do no wrong. And I lost more money than you can imagine. Maybe if I had lost on my first trade, it would have been better, I don't know.
The first couple of years, I lost more money than I made. A lot of money. I tried everything, trading options, trading bonds, trading futures. You name it, I tried it. And I lost money at it. I used candlesticks, moving averages, and every new tip and trick that came down the line.
Eventually, I managed to stop the hemorrhaging, and (hooray) I was only losing a little money. And after about two years I actually started showing a profit. But in the meantime, I had lost a years salary. It was almost five years before I broke even. But eventually, I was able to quit my day job and make a living trading the stock market.
I love the freedom that it gives me, but at times, the stress is a killer.
If you do decide to try and make a living trading online, I wish you the best. Get the very best training that you possibly can, buy the best tools you can find, and keep working at it.
In my future posts, I will share with you the tools that I use to successfully trade the markets.
John
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