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Articles by Shaun Rosenberg

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By Shaun RosenbergOct 27, 20081 topic

Never Move Your Stops Down

It is very tempting to move your stops down during times of panic. It becomes even harder when you believe the market is overreacting to bad news. But holding your ground is absolutely critical when trading. nnWhen you buy a stock you need to have a stop level. This is a level that is the most you are willing to lose on that one trade. It is the point where you say if the stock reaches this level I am pulling the plug and getting out with my losses. nnFollowing through with t

Primary topic: Investing

751 views

By Shaun RosenbergMar 15, 20081 topic

Stock Market Mistakes, What To Avoid

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 together a list of what to do and what not to do, when trading.n nn What not to do.nn1. Do not buy what the news media tells you to. Too many people will buy stocks based on what they he

Primary topic: Investing

751 views

By Shaun RosenbergApr 1, 20091 topic

Using the Option Delta

The Option delta is a great way to predict how much an option will increase or decrease as the stock moves one way or another, but how do you use it?nnA delta is a number between 0 and 1 that estimates how far a stock option is likely to move for every 1 point move in the stock. Every option has a different delta because of things like time value, and strike price. nnSo how do you use it? Letâs look at an example. Say we are expecting a stock to make a quick move from $55 t

Primary topic: Investing

751 views

By Shaun RosenbergJan 17, 20091 topic

Covered Calls for Volatile Times

Selling covered calls is always a great strategy, but it becomes even more important when the markets are volatile like they are today. nnFor all those who donât know what a covered call is, it is a strategy where you buy a stock and sell call options on it. nnThese call options allow you to collect monthly premium on your stock, however you are obligated to sell your stock if it reaches a certain level. nnThis means if you own a stock that is priced at $40 you can sell the

Primary topic: Investing

750 views

By Shaun RosenbergFeb 22, 20091 topic

Holding Cash and Great Returns

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 arenât investing all the time you arenât going to make good returns, not true.nnYou donât need to be in the market one way or another at every moment of the day in order to make fantastic returns on your money. In fact if the markets are hard to trade and you are just losing money by being in you probably should hold more cash.nHere

Primary topic: Investing

750 views

By Shaun RosenbergFeb 25, 20091 topic

Why Spreads, Why Now?

Option spreads allow you to make money as a stock does not move into a certain area. For example if you made a bull put spread by buying the $40 put and selling the $45 put you would be profitable as long as the stock stayed above $45.nnThey give you a great way to profit in the stock market. So why is now a great time to be trading spread strategies?nn1. Volatility. nn The VIX measures volatility which helps determine the price of options. As volatility goes up options becom

Primary topic: Investing

750 views

By Shaun RosenbergFeb 2, 20091 topic

What about a Collar?

Today the markets have been acting crazy. Stocks will be up huge one day and down huge the next. In general they are not doing very much. nnThat is what makes covered calls such a great idea. When you buy a stock and sell a call you make an income from selling the calls and you do not need the stock to do anything. But remember we still are in a bears market. Stocks could suddenly crash without warning tomorrow. nnSelling a $.50 call isnât going to be very helpful if the st

Primary topic: Investing

749 views

By Shaun RosenbergMar 11, 20091 topic

Why Look at a Companyâs Debt?

When picking a company for a long term investment it is important to look at many different factors of that company. One of which is the amount of debt the company has. nnThere are two major reasons you want to look at a companyâs debt.nn1. How Long will it be around?nnIf a company has a ton of debt it may not be able to last very long. One little problem can hurt it and make it unable to pay the interest on those debts and the company might end up declaring bankruptcy. nnI

Primary topic: Investing

748 views

By Shaun RosenbergJan 29, 20091 topic

Being Partially Bearish

It is possible to make money on a down trending stock without having to short it. Maybe you want to make money as a stock falls, but would also like to make money if the stock stays still.nnIn this case you may want to use a bear call spread. This spread allows you to take a partially bearish stance in the market. Stocks could fall, go nowhere, or even go up a little and you could still profit. nnAll the stock needs to do with a strategy like that is stay below a certain leve

Primary topic: Investing

747 views

By Shaun RosenbergApr 8, 20091 topic

Why I Use Technical Analysis

The best way to invest in the stock market is by using technical analysis and technical indicators. And here is why that is so.nn1. Technical Analysis can give you specific Buy Signals.nnWhen you are looking at the fundamentals of a company you can find stocks that are undervalued or overvalued, but that does not give you a good signal. You might buy the stock at $30 and have it fall down to $15, not because it wasnât a fundamentally strong company, but because it wasnât

Primary topic: Investing

744 views

By Shaun RosenbergMay 18, 20091 topic

What to Know When Trading Options

Stock options give you a wonderful way of getting leverage in the stock market. But it is also important to remember that sword goes both ways. nnBefore you trade options you should consider the following.nn1. Options should not make up a large part of your accountnnOptions are better used for the risky money in your account, the money you can afford to lose. This way if you had a bad trade or two it is not the end of the world. Losing 50% of your options value seems like a l

Primary topic: Investing

743 views

By Shaun RosenbergMar 17, 20091 topic

Why Look at a Companyâs PE Ratio?

The PE ratio tells you if a stock is overpriced when it is compared to its earnings. It is suppose to be a good indicator for weather a stock is undervalued or overvalued. By why does it work?nn1. You want to invest in strong earningsnnObviously the more money a company is making the better an investment the company is in the long term. No one wants to invest in a company that isnât making money. But everyone wants to invest in Coke or Google or any other large company maki

Primary topic: Investing

743 views

By Shaun RosenbergDec 8, 20081 topic

Take Complete Responsibility When Trading

All successful traders will take complete responsibility for their trading actions. You will not find a successful trader who blames others for losing their money in the stock market. This is the first step to becoming a great trader. nnThis step is very important because until you take responsibility for your trading, both profits and losses, you will not feel comfortable enough to place trades yourself and follow your own rules, which is necessary if you want to make money

Primary topic: Investing

741 views

By Shaun RosenbergApr 22, 20091 topic

Benefits of Vertical Spreads

Vertical spreads allow you to profit in the stock market without having to predict what will happen next. It involves using options and helps you make money if you can predict what will probably not happen in the future. nnFor example we find a stock trading at $70 and expect it to go up. We can buy the stock which can help us profit if the trade goes in our direction. But we would risk losing money if the stock does not go up.nnInstead we can decide to sell the $65 put on th

Primary topic: Investing

738 views

By Shaun RosenbergJun 2, 20091 topic

Buying Options On Up trending Stocks

Buying options on up trending stocks can be a very effective strategy at times. There are many reasons why this can be so effective.nn1. Trends ContinuennA trend can continue for a very long time, instead of trying to call the tops or bottoms it has always been more effective to just trade with them until they start to turn around. No one that I have ever heard of has been able to call the end of a trend and be right the majority of the time.nnI have heard of people who call

Primary topic: Investing

736 views

By Shaun RosenbergMar 16, 20091 topic

Benefits of Placing Option Spreads

Selling options can be a very profitable journey. Placing combining those options into spreads can be a great way of doing this for these reasons.nn1. Higher ProbabilitynnCreating credit spreads allow you to gain a much higher probability of being correct then if you just buy the stock or buy an option for the stock. The reason for this is because the stock does not necessarily need to go in your direction for you to be profitable. nn The stock only needs to not turn against

Primary topic: Investing

735 views

By Shaun RosenbergMay 24, 20091 topic

Covered Calls vs. Just Holding Stocks

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 off in the end. nn1. Allows you to make extra MoneynnSelling calls allows you to make extra money in the stock market. This extra cash flow often times can be many times greater than some

Primary topic: Investing

735 views

By Shaun RosenbergApr 6, 20091 topic

Limiting Losses in the Stock Market

It is amazing that everyone talks about getting the huge returns in the market, but not many people focus on protecting yourself from taking huge losses which is the most important part of trading.nnThink about it if you buy a stock at $30 and it falls and crashes to $10 you have just lost 66% of your account. Ok I know that everyone says to be diversified, so you probably will not put all of your account into 1 stock.nnBut what about bears markets where you get a diversified

Primary topic: Investing

735 views

By Shaun RosenbergJun 18, 20091 topic

Trading on the same side as The Trend

Trading with the trend is the best way to make a great return in the stock market. Regardless of what your strategy is trading on the same side as the overall trend can improve your winning streak.nnTrend trading has 3 major advantages.nn1. Trends are likely to continue for a whilennA trend is more likely to continue then it is to reverse all of a sudden. History has shown this many times in the stock market as prices tend to fluctuate greatly. I have not seen many stocks tha

Primary topic: Investing

735 views

By Shaun RosenbergApr 9, 20091 topic

Why Short Term Trading Works the Best

Short term trading is a much better way to approach the stock market. It gives you so many different advantages.nn1. It allows you to Cut your lossesnnThe first thing you want to do is to not lose money. The more you lose the less likely you will be able to make up that loss and actually become profitable. It is very difficult to make it back if you ride a stock all the way to the bottom.nn2. It allows you to play on emotionsnnWhat moves the stock market is not news announcem

Primary topic: Investing

734 views

By Shaun RosenbergApr 14, 20091 topic

Investing for Dividends

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?nn1. Strong CompaniesnnThe company has to be pretty stable to say the least. If a stock goes down 50% it doesnât matter that you got an 8% dividend. So, only strong companies, or diverse ETFs should be bought if you are going to hold it for a long period. It is important to look for low risk investments with this

Primary topic: Investing

733 views

By Shaun RosenbergApr 9, 20091 topic

Why Use Stops

Stop orders allow you to cut your losses short as well as use proper risk managements. So besides the fact that stocks can fall fast, what other reasons are there for you to use stop orders?nn1. It allows to manage risknnWhen you place a stop order on a stock what you are doing is telling your broker if my stock falls to this point or lower cut my losses short and get me out of the trade. This allows you to cut your losses and get out of a stock at the first sign of weakness.

Primary topic: Investing

733 views

By Shaun RosenbergMay 5, 20091 topic

Staying with the Trend

I hear a lot of people talk about finding the bottom of a crash or finding the top of a rally, particularly this rally we have recently been having. nnThere is always news out there somewhere that a trend will not continue for one reason or another, but sometimes it is best to ignore all the noise out there and just go with the trend. nThere are many reasons to just hop on board and ride a trend regardless of what the noise thinks.nn1. The Markets are hard to predictnnThe mar

Primary topic: Investing

730 views

By Shaun RosenbergNov 8, 20081 topic

What All Successful Trading Systems Need

Successful trading systems provide the best way to make money in the stock market. In order for a trading system to work it needs a few things.nnThe first thing you need in a trading system is specific buy signals, when X happens you do Y. This seems pretty obvious and most new traders stop there. They believe that the point in which you buy is the most important part of trading. nnActually it is not. The most important part is when sell your stock. You could probably make mo

Primary topic: Investing

729 views

By Shaun RosenbergDec 17, 20081 topic

Changing Your Trading Rules

Changing your trading rules can be a good approach if your rules arenât working. But if they are there is no need to change them just because you have a few bad trades. nnYou have been good, following your trading rules and having some success. But you start to notice some flaws in your approach. You will from time to time enter trades where you lose money and are forced to exit. nnYou also see other opportunities that you have missed because they did not give you an entry

Primary topic: Investing

723 views

By Shaun RosenbergApr 21, 20091 topic

Waiting For Technical Signals

Sometimes you can be researching a stock and find it is a great investment. By all fundamental means this stock should go up, but none of that matters unless the technicals tell you it is a good buy. nnIt can be very hard to resist buying something that should go up logically, but if it isnât going up why buy it. Every fundamental genius has picked stocks that should go up, yet get cut in half or worse. Why is this? Because, they didnât have a plan in place to tell them w

Primary topic: Investing

721 views

By Shaun RosenbergDec 10, 20081 topic

Finding the perfect trading set up

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. nnIt 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 buy and we have won. Unfortunately, the perfect set up never comes in the stock market. You can spend every waking moment looking for the perfect stock to buy, one that has great fundame

Primary topic: Investing

719 views

By Shaun RosenbergMar 14, 20091 topic

Taking a Break from the Market

The stock market can be both a rewarding place and an âevil place bend on taking away your moneyâ. In order for you to be consistently profitable you have to realize there are some times you should just take a break and let the market work itself out. nnWhenever the direction is unclear and stocks are making record percentage gains one day and record percentage losses the next it might be time to stay out. Walk away from the computer screen and wait for the next trend to

Primary topic: Investing

719 views

By Shaun RosenbergMay 13, 20091 topic

Concentrate on One Trading Strategy

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.nn1. Everyone is differentnnEveryone is different, so everyone will have better success with n1 strategy over another. For example if you do not like to watch the markets, or at least check on your positions every day you should not be day trading or swing trading. nnOn the other hand if you like making money on the little

Primary topic: Investing

718 views

By Shaun RosenbergFeb 13, 20091 topic

Option Spreads Give You More Variety

Option Spreads can be very helpful for anyone who want to enter the world of short term trading but is having problems finding stocks that will do exactly what they are expecting. Spreads use creative ways to make it easier to make a monthly income from stocks.nnThe best thing about spreads is that they give you many more ways to profit then options. With options it is simple, you can profit if the stock goes up, and you can profit if the stock goes down, provided you are in

Primary topic: Investing

718 views

By Shaun RosenbergApr 24, 20091 topic

Trading Spreads vs. Stocks

Trading Option Spreads allows you to have many advantages over trading simple stocks. It can also be very rewarding. Here are some of the main advantages.nn1. Non DirectionalnnThe major advantage to trading spreads is that they offer you a way to make money in the stock market without having to pick a direction. Instead you only have to decide where a stock will not go within that same time period.nnFor example, you buy stock XYZ which is trading at $50. You could buy the sto

Primary topic: Investing

718 views

By Shaun RosenbergMay 19, 20091 topic

Mistakes of New Technical Traders

Now traders who try to make money using technical analysis often make many mistakes. Some of these mistakes are.nn1. Risk ManagementnnRisk Management is the most important part of trading. If you do not control your risk you will feel the pain eventually in your account. Many new traders will find a stock on support, buy it and hope for the best.nnThe problem with that is that when a stock breaks support and falls they do not know what to do. They may think that the stock is

Primary topic: Investing

715 views

By Shaun RosenbergApr 1, 20091 topic

How to Create a Credit Spread

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.nnSo letâs look at an example. We find a stock trading at $74 and we believe that the stock will go up in the short term. But we may not want to buy the stock or buy an option on the stock because we would only be profitable if the stock does in fact head up higher.n

Primary topic: Investing

713 views

By Shaun RosenbergMar 27, 20091 topic

Top Reasons to Cut Your Losses Short in the Stock Market

The biggest mistake I have seen people making in the stock market is not getting out when they are wrong. Instead they allow a trade they are in to pull back 50% or more if things turn against them.nnThe larger you let your losses get the shorter you will be trading the market. Here are the top 3 reasons to cut your losses short.nn1. Trading is a Business.nnTrading in the stock market is a business; your capital is the lifeblood of your business. If you let the loss on 1 trad

Primary topic: Investing

713 views

By Shaun RosenbergOct 23, 20081 topic

Trading With the Trend

No matter how many times you have heard it, it is worth hearing it again. You must trade with the trend and not against it if you ever plan on being successful in the stock market. nnIt can be difficult to trade in the same direction as the market especially when prices have fallen so much. You will find times when the average stock is trading at 70 or 60% of what they were a year ago. That makes it extremely hard to assume they will keep falling.nnIt builds up the urge to go

Primary topic: Investing

712 views

By Shaun RosenbergMay 12, 20091 topic

Long Term is Not Always Bad

I consider myself a short term trader, but that does not mean I canât invest ever now and then. Sometimes the conditions are perfect for investing and you canât overlook it. This occurs when.nn1. There is a âFire SaleânnA fire sale is just another name for when stocks are cheap. When stocks get low enough, especially strong stocks it is not a bad thing to buy a few and hold onto them for a while. The market goes through cycles of ups and down, there is nothing wrong w

Primary topic: Investing

710 views

By Shaun RosenbergApr 12, 20091 topic

Stop Limits: How Useful Are They?

Stop limit orders allow you to put two different orders into your position, a stop and a limit. It allow you to get in or out at a good price. nnWhen you set a stop limit order you tell your broker that you want to buy a stock between two prices and if you canât get it between those two prices not to buy it. nnSo are they useful? Well letâs look at the pros and cons.nnFirst the prosnn1. It allows you to get into a stock at an exact price.nnBecause of this you will know ex

Primary topic: Investing

710 views

By Shaun RosenbergMay 8, 20091 topic

Selling Options Lets Youâ¦

There are a lot of benefits to selling options in the stock market. Some of the things selling options lets you do are.nn1. Make Money In A Confused MarketnnWhen stocks are volatile and have no clue which direction they want to go selling options lets you make a profit. Instead of trying to predict what will happen, you can simply sell options and make money by predicting where a stock will likely not go. nThis isnât that hard in volatile markets considering stocks can stay

Primary topic: Investing

709 views

By Shaun RosenbergApr 16, 20091 topic

4 Ways to Make Money in a Sideways Market

Sideways markets can be hard to profit in if you are trying to catch every little tick. But there are still ways you can profit when stocks are flat. Here they are.nn1. Covered CallsnnOne thing you can do is to sell covered calls. You can simply find a strong stock that you would not mind holding on to for a while and sell calls on it. This allows you to make a consistent income off of your stock as the markets go up and ndown. nn2. Selling Bull Put SpreadsnnWhen you sell bul

Primary topic: Investing

707 views

By Shaun RosenbergMar 19, 20091 topic

Why Use Credit Spreads?

Option selling can be a very profitable thing especially when you sell options using credit spreads. But many investors go nabout it the wrong way.nnThere are a number of people who try to sell naked options on a stock. And if you donât know what that is it is simply selling an option on a stock. nnSay you expect the market will go down, or at least not go higher in the short term. You can still profit from it by selling calls. The problem is many people will just sell a si

Primary topic: Investing

705 views

By Shaun RosenbergMar 26, 20091 topic

Why Use Stop Orders

Stop orders are very critical in the stock market. It can help you to limit your losses when you are wrong and keep your gains when you are right. Many new investors will fail because they do not utilize this order.nnSo what is a stop order? Well a stop order is an order that you place whenever you are in a stock. It tells your broker that if the stock gets to a certain point, sell my stock. So why should you use it?nn1. Limit Your LossesnnThe most important part of trading i

Primary topic: Investing

704 views

By Shaun RosenbergJan 6, 20091 topic

Stock Trading Personality

Everyone has a different personality. So it makes sense that everyone has a different stock trading personality. Some people trade very aggressively and like to go after the short term movements. Some people are less aggressive and like to ride the longer term trends. nnFinding your trading style is very important. If you try to be too aggressive and your personality isnât the same you might get too stressed out to make good decisions. On the other hand if you are very aggr

Primary topic: Investing

702 views

By Shaun RosenbergDec 7, 20081 topic

Holding Cash When Trading

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.nnTwo of the biggest stock market geniuses of all time, Warren Buffet and Jessie Livermore have always gone through long periods of holding cash. They only buy when there are positions out there worth buying, and when everything seems to be going in the right direction.nnThis is directly opposite to what most new traders will do. They fee

Primary topic: Investing

701 views

By Shaun RosenbergFeb 12, 20091 topic

Why Am I Selling Naked Puts Right Now?

There are a few reasons why I am selling naked puts in my own portfolio at this time. I just believe that this is a great time for doing it, properly anyway. And here is why.nn1. Stocks are undervalued. The market has crashed so far in 2008 that nearly every stock that is left is undervalued. Now Iâm not saying all stocks today are good buys, and Iâm not even saying that the market will not fall lower, but there are a lot of strong companies and ETFs out there trading for

Primary topic: Investing

701 views

By Shaun RosenbergApr 20, 20091 topic

Income Investing with ETFs

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.nn1. DividendsnnYou want your ETF to have dividends of course. The goal of income investing is after all to make an income off of your investments. You probably want to look at how much dividends a stock has been paying off in the past and compare it to how much dividend yo

Primary topic: Investing

699 views

By Shaun RosenbergApr 3, 20091 topic

ETFs for Long Term Investments

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.nn1. Already DiversennETFs are already diverse. If you buy an ETF you are buying something that tracks many different companies and possibly many different sectors. So instead of you trying to find 20-30 different companies to hold you can simply invest in a couple big ETFs. nnThat would give you

Primary topic: Investing

698 views

By Shaun RosenbergApr 23, 20091 topic

How to Enter an Option Play

Option Plays can be very profitable, if done correctly. So what are the steps to enter an option trade successfully?nn1. Find A TradennThe 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, breaking through resistance, or giving you whatever you consider to be your buy signal.nnIf the trade looks like it could be a great stock trade it may also be a great option trade.nn2. Look at

Primary topic: Investing

697 views

By Shaun RosenbergMay 18, 20091 topic

What to Know When You Swing Trade

Swing Trading Can be hard, both mechanically and emotionally. But when you are comfortable and confident about your approach it is definitely worth it.nnSome things you should know about swing trading are.nn1. Losing Streaks can happennnAll swing traders will have a losing streak from time to time, so you had better prepare yourself for it, both with your money and emotionally. You want to always keep your losses short so that anything you lose is only a small portion of your

Primary topic: Investing

697 views

By Shaun RosenbergMay 29, 20091 topic

Reasons People Think Options Are Risky

Everyone believes that buying options is the riskiest thing you can do in the stock market. While they are risky in a sense that you can lose money they are no more risky then buying stocks. The main reasons people think others are.nn1. Short TermnnPeople look as short term as risky. I have heard more than 1 person say that you cannot predict what will happen in the market in a less than 5 year period. I am not sure where this number comes from, but you can make money by bein

Primary topic: Investing

696 views

By Shaun RosenbergApr 7, 20091 topic

Waiting for the Bounce, or Not?

One of the ways to catch a stock is by catching it as it falls on support. When a stock hits support it is normally a good sign that it will go up. But should you wait for the bounce or not?nnIt depends on your own personality. There are advantages and disadvantages to waiting for the bounce. Letâs look at each of them.nn1. Waiting For The BouncennIf you wait for the bounce it is more conservative and the odds that the stock will move in your direction are greater because t

Primary topic: Investing

696 views

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