Options can be a great way to get leverage in the stock market. In some ways they can even be used to help manage risk in the stock market.
If you get into a stock that is trading at $50 and expect it to go up, it can be pretty risky. Say you buy the stock and some bad news comes out of ... Views: 517
People always talk about buying options. But that isn’t the only way you can use them to increase your returns in the stock market. You can also short options and make money from the premium.
Let me explain how this works. A put option gives you the right to sell a stock at a certain price ... Views: 4561
Capital preservation probably the most important things you need to consider when you are trading in the stock market. You may have a system that works well, but if you lost all your money on 1 trade you will not be able to make money with your system. It is one of the most overlooked aspects ... Views: 511
Changing your trading rules can be a good approach if your rules aren’t working. But if they are there is no need to change them just because you have a few bad trades.
You have been good, following your trading rules and having some success. But you start to notice some flaws in your ... Views: 577
A lot of people try to pick the exact bottom of a stock by taking into consideration the fundamentals of the company. However you can increase your odds of getting into a profitable trade if you combine fundamental analysis with Chart Patterns.
There are 3 major reasons why chart patterns and ... Views: 500
It is much better to concentrate on just one or two different strategies and not try to master everything. There are many different reasons why this is so.
1. Everyone is different
Everyone is different, so everyone will have better success with
1 strategy over another. For example if you do ... Views: 552
Covered calls can be a great way to profit when the stock market is trending sideways. If you don’t know which way stocks are going to go it isn’t a bad idea to sell some calls on strong stocks.
Some reasons Selling Covered Calls can be a good idea are.
1. Monthly Income
Selling calls is a ... Views: 510
Selling covered calls is always a great strategy, but it becomes even more important when the markets are volatile like they are today.
For all those who don’t know what a covered call is, it is a strategy where you buy a stock and sell call options on it.
These call options allow you to ... Views: 602
Covered calls and dividends are two ways to create a consistent cash flow off of the stock market. But which one of these two methods is better? Well let’s look at what they each are.
Dividends are your share of the company’s earnings. When a company pays a dividend to their stock holders ... Views: 1198
Covered calls are a great way to increase your return in the stock market. Some of these slow moving stocks are better for selling calls on then just holding the stock. Here are 4 reasons why selling covered calls can be a better alternative then to just keeping your stock and hoping it pays ... Views: 599
When you hear the words stock options you probably think something like risky or huge losses. But if done correctly trading options can be profitable and help you to experience limited losses.
Most people who trade options will probably end up going bankrupt, and why is that? It is because ... Views: 855
Day trading can certainly have its advantages in the stock market. Here are a few reasons why it can be a good idea to day trade, if you know what you’re doing.
1. Shorter Time Frame
The benefit of a shorter time frame is compound interest. The shorter your time frame is the greater compound ... Views: 636
There are a few different ways to invest in the stock market. Each way has its own advantages and disadvantages. The ways you can invest in the stock market are.
1. Buying common or preferred stock
Buying stock and holding onto it for the long term is the simplest way to invest.
Your ... Views: 3501
Stock splits occur when the price of the stock lowers and investors get more shares to make up for the lowered price. So do they actually affect how strong a stock will be in the future?
Most investors and traders believe that splits will in fact cause a stock to outperform the rest of the ... Views: 956
There are a lot of people who do not believe that you can make money in the stock market by trend trading. They think trading with the trend is a scam that “Guru’s” say to get you to buy their product.
While there can be a lot of scams out there trading with the trend can actually be very ... Views: 1632
One of the biggest mistakes I have made was confusing a stop limit order with a stop order. This could potentially be very harmful to your account.
A stop order is simple; when you use it you tell your broker “sell my stock once it gets to a certain point”. This way you can effectively limit ... Views: 764
In this world there is economics and there is the stock market. The problem comes when people start to assume they are the same thing.
Don’t get me wrong they are related. If the economy is doing great then sooner or later so will the stock market. If the economy is doing poorly the stock ... Views: 1074
ETFs and covered calls can be a great combination at times. It kind of seems like they were made for each other because ETFs have the following characteristics.
1. Not go to Zero
I have never seen an ETF go to zero before because it is just a combination of different stocks. For it to go ... Views: 1080
ETFs can be a great way to profit in the long term. If you want to get into investing and do not know which stocks to buy and hold ETFs can be a great benefit to you. And here is why.
1. Already Diverse
ETFs are already diverse. If you buy an ETF you are buying something that tracks many ... Views: 548
Trading ETFs can be a very profitable thing to do. There are a few major advantages to trading ETFs that you would not have if you decided to trade stocks.
1. ETFs come with less surprises
If you have ever traded stocks you have probably noticed that you can get some surprises now and then. ... Views: 698
Most people when they sell bear call spreads intend to hold onto them until they expire. If they do and they profit you can realize your maximum gain. You also do not have to pay commissions for exiting your spread if they just expire.
But in certain conditions it is a good idea to exit a ... Views: 868
Exiting short term trades at the best possible time is always the goal if you are trying to catch the little up and downs of a stock. It is something everyone needs to work at and can greatly improve your profits.
The first step to always exiting your trades at the best possible time is to ... Views: 607
Recently every stock has been getting crushed. This means that today is probably one of the best investment opportunities of our life time to get into strong stocks for the long term. So how do you find the best of these stocks to invest in?
Here are a few things you can look at.
1. The P/E ... Views: 1268
Some people try to find the perfect trading set up. They only trade when all the stars are aligned and when everything that can possible be on their side is on their side.
It is so easy to want to find the perfect set up, the set up that can’t fail. Where all we have to do is click to ... Views: 582
Almost everyone who is in the stock market has a few long term investments. Maybe they bought a few ETFs that they believe will go up in the long term. But along with your investments it is a good idea to place some short term trades.
The real benefit of short term trades lies in compound ... Views: 540
Trading in the stock market can lead to huge gains, which is why many people will flock to it as a way for them to finally quit their jobs. The problem is that it can also have large losses.
Because of this your first concern should be to protect yourself from taking big losses. You want to ... Views: 543
Most people do not see that these the two things holding cash and great returns can actually work together. Most people just assume if you aren’t investing all the time you aren’t going to make good returns, not true.
You don’t need to be in the market one way or another at every moment of the ... Views: 618
Holding cash when trading, those are the words the majority of traders fear. No one wants to do it, but it can actually be a benefit to you.
Two of the biggest stock market geniuses of all time, Warren Buffet and Jessie Livermore have always gone through long periods of holding cash. They ... Views: 541
Before you enter the market you will need to decide not only what to buy and when to buy it, buy how much to buy. How many shares of stocks should you buy to limit your risk? Here are some things to consider when you decide that.
1. How much capital do you Have?
How much money do you have ... Views: 1420
The single biggest question that new traders ask is how much can I make trading the stock market? They all want to know what annual return they can expect to make, or how much monthly income they will generate.
That is not the question you should be asking. In fact concentrating on that ... Views: 3368
When you buy a stock option how much are you actually paying for that option? What are you paying for? Not many people realize that a large chunk of the option they are buying might not even be for the underlying stock.
An option price has three major things factored into it; intrinsic ... Views: 3647
Ok, so you have done your homework and found a great stock that you believe will head up. It is following all of your rules.
Now you have to decide, how much of it do you want to buy.
Obviously you don’t want to put your entire account in 1 stock because nothing is a for sure thing. You can ... Views: 3544
In the stock market controlling your emotions is one of the most important keys to being successful as a trader or as an investor. There are so many ways your emotions can harm you. They can …
1. Make You get out early
Your emotions can make you get out of a good trade too early to actually ... Views: 562
Trading brings out all kinds of emotions that just seem to get in the way and make it very hard to actually get anywhere. If you want to succeed you must control your emotions.
Does this sound familiar to anyone? You buy a stock that is trading at $50 because you believe the stock will jump ... Views: 733
Credit Spreads allow you as a trader to profit by selling options and letting those options expire worthless. It also allows you to limit your max risk because you not only sell an option but buy another option.
So let’s look at an example. We find a stock trading at $74 and we believe that ... Views: 551
Covered Calls can be a great way to collect premium from the stock market month after month. So how do you go about entering one? You have to follow these steps.
1. Find A Stock
Of course the first thing you want to do is to find a stock, you can’t enter a trade without it. The stock that ... Views: 870
Option Plays can be very profitable, if done correctly. So what are the steps to enter an option trade successfully?
1. Find A Trade
The first thing you need to do is find a stock that you believe will make a big move in a short time period. This stock may be bouncing off of support, ... Views: 538
Keeping your losses small in the stock market lets you keep money in your account when you are wrong. Getting out of bad trades lets you live to fight another day.
So how do you go about cutting your losses? Here are three strategies that are very helpful.
1. Not 100% in one trade
I ... Views: 973
A bull trap occurs after a long down trend in a stock happens and you may get a signal that it is going to start trending back up. This normally catches many of the market participant’s right before it starts going down again.
There are 3 things that you can do to help avoid being devastated ... Views: 1460
Buying protective puts can be a very useful strategy when you are trading in the stock market. When the markets start to get volatile many traders will buy puts to protect themselves from the downside. It is actually a very simple strategy to learn and use.
If you want to understand how ... Views: 542
Covered call writing is one of the best strategies in the stock market. It allows you to make a monthly income while at the same time not having to spend too much time at the computer adjusting and planning trades.
To create a covered call you only need to do the following.
1. Find a ... Views: 744
If I only had a small amount of money, say $2,000 to invest in the stock market what strategy would I use to make a good return while at the same time limiting risk? The answer seems pretty simple when I think about it. I would still be trend trading because it offers you such a great ... Views: 796
I don’t know what all the fuss is about penny stocks. They take your money go to zero and everyone seems to think that is a great deal. Not me, there are 3 reasons why I will never trade penny stocks.
1. They are Penny Stocks For A Reason
A company doesn’t go from $10 to $.10 unless ... Views: 864
Income investing is a very popular strategy, especially when the markets are volatile. Using ETFs can help you achieve this. And here are a few things you can look for when choosing a good ETF to invest in.
1. Dividends
You want your ETF to have dividends of course. The goal of income ... Views: 552
Investing for dividends can allow you to make a nice consistence cash flow from your investments. So what should you look for when finding long term dividend plays?
1. Strong Companies
The company has to be pretty stable to say the least. If a stock goes down 50% it doesn’t matter that you ... Views: 588
ETFs provide a great way for investors to diversify along with not having to pay those huge mutual fund fees. Here are some reasons why ETFs might be for you.
1. They give you a great way to diversify
ETFs track certain industry groups or markets. So if you buy the ETF for a specific ... Views: 527
Stock options can either help you to gain a huge return in the stock market, or it can completely destroy your account. Trading them can be a good thing as long as you keep a handle on your risk.
There are three things that may help you to increase your chances of being profitable with ... Views: 1106
Absolutely not, in fact there are times when holding cash is probably the smartest thing you can do. I know no one likes to hear it, but sometimes you have to stay out of the market at least for a little while.
Here are a few reasons why it is important to hold cash when times are ... Views: 844
Selling naked puts is a way for you to get a steady stream of cash flow in the stock market. But how good of a strategy is it exactly?
When you sell a naked put what you are doing is selling someone else the right to sell a stock to you at a set price in the future. So if you sell a $50 put ... Views: 829
The best way to make a lot of money in the stock market is to keep it simple when trading. To be a successful trader you do not need to know everything about a company or anything if you want to be real simple. Let us take a look at how Tommy learned that the hard way.
Tommy is an ... Views: 552