Naked Puts are supposed to be one of the riskiest strategies out there. But if done right selling naked puts can be even safer, and more profitable than buying stocks.
When you sell a naked put you take on the obligation to buy a stock at a certain price on or before a given date. For this ... Views: 868
The Markets have been falling fast lately and most people either believe it is the end of the world or the markets are at a bottom. Both conclusions are probably wrong.
First of all it is not the end of the world. Stocks go up and down that’s what they do. That said, even though the markets ... Views: 863
Short ETFs are one of the new inventions in the stock market. They allow people to make money as the markets are falling down. But most investors don’t use them in fact most everyone seems to have an argument why you shouldn’t use them.
There articles say silly things like if you buy them ... Views: 857
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: 849
Most people decide that the stock market is just too risky for them to put their hard earned money into. I know many savers out there who would rather put their money into a savings account then into the markets.
This way they can go for the sure thing, the government insured return, but what ... Views: 839
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: 830
Buying on margin can be a very powerful way to leverage your money in the stock market. Here is a question. Say you wanted to make $100 in the stock market. Would it be easier to make $100 from $500 or $1000? $1000 of course.
If you make $100 from $500 that would be a 20% increase. ... Views: 827
If you pay attention to the stock market at all you will get bombarded with tons of useless facts about what is going on with the country, how the economy is improving/ getting worse, how inflation rates are changing, what the unemployment rate is.
It is difficult to find out which information ... Views: 827
I thought it might be fun to talk about how the stock market was born. Many people do not realize the importance of the stock market.
The stock market was born out of necessity. It helps companies grow as well as helps the average citizen fight against inflation.
Imagine you are a ... Views: 827
Price is King when it comes to the market. Sure there are many different ways to evaluate a company and the different methods all have their advantages but the price patterns of a company still gives you the most accurate buy and sell signals.
More than any oscillator, any fundamental ratio, or ... Views: 824
A diagonal spread is a spread that allows you to produce a monthly income from the stock market and at the same time being able to profit from appreciation or depreciation in the stock.
Ok so how does it work? Simply put you buy an option that will not expire for many months. You also sell an ... Views: 821
It is very important to learn from your past mistakes in anything you do. This way you can be continuously improving your life. The same goes with trading, it is a very wise decision to keep a trading journal and update what you have done periodically.
Anytime you start to lose money it ... Views: 817
Buying a few different stocks to sell covered calls on can be a good thing or a bad thing. All basic principles of buying stocks still apply, so choose your positions carefully.
So what stocks are good candidates for covered calls?
1. Good long Term Plays
If you are going to sell covered ... Views: 816
In this market everyone is looking for the market turning point. The point where investors come in and say, stocks have been crushed enough, everything is on sale, it is time to buy. But how can you tell when that time has come? Is there some magical device that will give you the exact bottom ... Views: 809
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: 804
Using Technical analysis to trade the stock market gives you the greatest odds for success for many different reasons.
1. The Markets Live in the Future
It is hard to use fundamental data to predict where a stock will likely go in the short term, because the stock market lives in the future. ... Views: 799
Everyone always searches for the infamous holy grail of stock trading. The magical trading system that will make them rich and allow them to never lose money again.
So does it exist? Is there a trading system or oscillator that will allow them to never lose money again? No, there is no ... Views: 792
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: 787
Stocks are shares of a company. When you buy a stock you are actually buying a piece of the company and to some extent profit as the company grows and lose money as the company loses money.
Companies issue stock for one simple reason to help them raise cash. By selling large amounts of ... Views: 787
Stock options give you a way to get leverage in the stock market. They can greatly increase your returns, if done right. But before you take the leap to trading options there are a few things you should know.
1. Not For the Long term
Options eventually expire. They are not for long term ... Views: 786
It seems like there are just as many mutual funds now a days as there are stocks. But what are they? What happens when you put your money into a fund?
Well a mutual fund allows you to invest in how well you think particular management company will perform. Basically your money gets pulled ... Views: 784
Poker is really a miniature stock market on so many levels. You can apply much of what you learn from one to the other.
One of the biggest similarities is how little your profits matter. If you make $1,000 in anything it is a big deal, but if you make $1,000 in the stock market or in a ... Views: 781
You may have your own personal opinions and beliefs on where a stick is likely to head, but before you pull the trigger and make the trade make sure that you actually have a technical signal on the position. Waiting will help you in many ways.
1. Stocks do not care about your opinions
Stocks ... Views: 771
Everyone wants to find the bottom of the stock market so they can make huge returns and be looked at as a genius. But often times the only way you can tell when a bottom is, is after the fact. There are some signs that you can look at however to determine if the bottom is coming.
1. No one ... Views: 766
Chart patterns are naturally occurring patterns in the stock market that can indicate a big move either to the upside or the downside. They can be a good indicator for short term movements.
So why are they so important? Why can they give you a great way to trade the stock market?
1. They ... Views: 765
There is a lot of debate out there whether it is better to trade stocks or options on the open market. My personal opinion is options give you such an advantage that you shouldn’t ignore them.
Let’s compare buying the stock with buying an option. When you buy the stock you are buying the ... Views: 759
There are 5 bullish strategies that can make you a lot of money in the stock market. These strategies all have the power to turn a small portfolio of only a few thousand into a large portfolio consisting of hundreds of thousands to millions in time. If you are already making money in the stock ... Views: 758
All options eventually expire. But there are many times when you still want to use the option contract to profit. In this case rolling your option into a later date can be a good idea.
When you roll options you simply close the option position you are in and open up another option position in ... Views: 752
Anytime you trade stocks in the market it is normally a good idea to have a plan, but when you trade options plans are critical. You do not have the luxury of holding onto the option and hoping it will come back.
Your plan should be simple to follow and answer the following ... Views: 747
Selling options can definitely be a profitable way to trade the market, yet many people do not trade them. The top two reasons for this are.
1. Option selling gives you a limited return
Most people buy stocks and options and hope that they will go up and make them a ton of money. After all ... Views: 745
There are two major ways to trade the stock market, bottom picking and momentum investing. Most people attempt to make money by calling the tops and bottoms, but it can be more profitable to simply ride a trend until it ends.
Trading with the trend has 3 major advantages.
1. Hard To Pick ... Views: 743
I have been talking a lot about iron condors lately because they are very helpful in making money in a sideways market, and that is what we are in. But there are other ways that we can pull a monthly income from a sideways market.
One very effective method is selling a horizontal spread. For ... Views: 742
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: 732
Trading some low probability trades isn’t always a bad thing. It can help you to make a huge return if you are right and you can always manage your risk when you are wrong.
By a low probability trade I am talking about trades that will probably not be profitable. Even so it can be a good idea ... Views: 728
It can be tempting to get into stocks that are offering high dividends. In fact for an investor the dividends can make up a huge amount of your total profit from that investment.
But there are a few things you are going to want to consider looking at if you are investing for the ... Views: 728
Stock options allow you to make huge returns in the market. When they are winning it is easy to get carried away with them and risk too much, but if you are going to survive as a trader you must make risk management your number 1 concern.
So how do you manage your risk with options, especially ... Views: 721
One of the things we are constantly reminded of in the stock market, especially at times like these, is that stocks can always go down. You need to remember this always.
Even if you combine the best technical indicator with the most fundamentally undervalued stock and buy it on an historical ... Views: 719
Selling covered calls allow you to make an income off of stocks you own and increase your profit in the long run. But what are they?
When you sell a covered call what you are doing is selling the right for someone else to buy the stock from you at a given price sometime in the future. This ... Views: 718
Trading the stock market is a very abnormal way of making money. There are so many ways for you to make or lose money, and you have to keep on your toes and be cautious to avoid losing your money. Here are the top 3 mistakes traders will make.
1. Only Looking at Profits
Newer traders are ... Views: 715
Drawing a trend line is just like connecting the dots. By drawing a line at the highs of a stock you get a resistance level. By drawing a line at the lows of a stock you get a support level.
The theory is that stocks will bounce up from support and bounce down from resistance. Also when a ... Views: 713
Option spreads can give you some new ways to look at the stock market and can help you make money trading in the short term even if you are not good at option trading.
Here are some reasons why trading option spreads can be a good idea.
1. Spreads give you more ways to be able to profit from ... Views: 713
People associate buying puts with being risky and speculative, and they are. But that does not mean that you cannot make money by trading them. In fact there are many reasons why it works to your advantage to buy puts every now and then.
1. Stocks Can Go Down
Stocks do not only go up, they ... Views: 708
Everyone has been trying to call a bottom in the market for a while. The markets have to stop going down and start going up at some point. But is that point now?
It seems like there is a lot of strong evidence supporting the bottom. Stocks are greatly undervalued; right now you can buy tons ... Views: 705
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: 701
Option selling can be one of the most consistent ways to pull money out of the stock market. It can bring cash flow every. I’ll show you how powerful option selling can be.
First you have to understand what an option is. When you buy a put option you buy the right to sell a given stock, ... Views: 701
Chart Patterns are a very useful tool in the trading world. They are patterns that can give you precise entry and exit signals, and allow you to catch the biggest moves in the market.
So why are they good to look at? Here are some reasons.
1. They give you a buy signal
With chart patterns ... Views: 701
Setting up a trading hour is easy and is a necessity. You do not want to be involved in the market 24/7 so setting up an hour where you review your trades is a must.
There are a number of reasons why having a trading hour is a must.
1. Your body gets used to it. If you are always reviewing ... Views: 697
I am a firm believer in paper trading. You have to develop a strategy before you put any real money into the market. But aside from that you need to invest with real money eventually and here is why.
1. The Obvious Reason, If you don’t invest real money you don’t make money.
If you are paper ... Views: 696
I make my trading decisions based on technical analysis. I believe in developing a trading system and following it to a tee. But I don’t take just any old trade that gives me a technical set ups of course. Before I enter a stock I like to check a few things.
1. I back test the stock, just a ... Views: 693
There are 6 critical mistakes that all traders in the stock market make. These mistakes are made by amateurs and experienced traders alike. They can be devastating and make one lose all of their money in the stock market. These are mistakes you definitely want to avoid. That is why I have put ... Views: 692