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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: 620
A key component of technical analysis and perhaps one of the oldest indicators around, moving averages are time-tested and affective indicators. There are many types of moving averages with varying indicators, but the primary purpose of all types of moving averages remains the same. Their ... Views: 669
Momentum traders are those who focus on commodities that are moving in one direction with a substantial increase in traded volumes with an aim to attain profits. Momentum traders, when trading the commodity markets, can hold a trade anywhere from a few minutes to a few days. They will try to ... Views: 944
How It All Began
Commodity futures trading, as we know it today, came about for the first time in Japan in the 17th century, where rice was traded in future contracts. It was a period when farmers and buyers came together and decided to commit to each other future prices negotiated on suitable ... Views: 707
The stochastic oscillator was developed in the late fifties by George Lane. It is an oscillator which shows momentum in a commodity by comparing the current day’s close to the high/low ranges over a specified amount of days. Consistent closings near the higher side of the range indicates buying ... Views: 767
Traders who trade for a living are generally swing traders or day traders. If you are planning to day trade in commodities, then you need to get hold of a reliable trading system that gives good results consistently. Despite having such a system, there are a few things you may want to know about ... Views: 650
The best way to learn how to trade in the commodity markets is to take lessons directly from a successful trader. However, even if you found the right persons, and they taught you all they know, this in itself does not guarantee that you will make money the way they do. For this, you need to ... Views: 695
Short term trading is a much better way to approach the stock market. It gives you so many different advantages.
1. It allows you to Cut your losses
The 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 ... Views: 613
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?
1. It allows to manage risk
When you place a stop order on a stock what you are doing is telling your ... Views: 561
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: 607
The best way to invest in the stock market is by using technical analysis and technical indicators. And here is why that is so.
1. Technical Analysis can give you specific Buy Signals.
When you are looking at the fundamentals of a company you can find stocks that are undervalued or ... Views: 580
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: 724
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?
It depends on your own personality. There are advantages and disadvantages to waiting for the bounce. ... Views: 541
One way to establish market differentiation is through the introduction of innovative new products. Establishing that differentiation is one thing, but maintaining it is quite another. Here we have put together a ten part series on how to generate higher returns from your innovation ... Views: 496
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.
Think about it if you buy a stock at $30 and it falls and crashes to $10 you have just lost 66% ... Views: 603
Options can be a powerful wealth building tool if used properly. But one big mistake you can make when trading stock options is buying the wrong strike price. This can work against you in so many ways. So let’s examine some strike prices and how they can help you.
1. In the Money
An in the ... Views: 867
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
Selling Options has its advantages and disadvantages; if you are interested in getting into option trading this is something you might want to consider.
When you sell options you are not trying to predict which way the stock will move, rather you are trying to decide which way the stock is ... Views: 3844
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
Placing stops on option plays is extremely important for anyone looking to trade options profitably. There are 3 ways you can limit the amount you lose on your option.
1. Let it expire
I will use this every now and then when I am looking to either make a huge gain or a small loss. What it ... Views: 518
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: 663
The other day, with the market giving up about a third of its March gain in DJIA points, I went looking through my favorite market stats to see if any remaining profits could be pounced upon. Typically, profit possibilities can be identified quickly on NYSE lists of the largest dollar and ... Views: 1647
One way to establish market differentiation is through the introduction of innovative new products. Establishing that differentiation is one thing, but maintaining it is quite another. Here we have put together a ten part series on how to generate higher returns from your innovation ... Views: 535
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
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?
A 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 ... Views: 584
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: 763
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
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: 660
Put options and short ETFs are two ways you can look at profiting from the downside, so which one is better. What provides the least risk and highest reward?
Well at least when you compare it to your total investment put options probably give you a higher risk then short ETFs do. But all ... Views: 4090
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: 854
No two things can ever be exactly the same. There is always at least something that one object has that’s different from another, no matter how similar they may be. Even identical twins differences between them, it’s just that they aren’t that noticeable at first glance. Anyways, some people out ... Views: 697
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: 656
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.
The larger you let your losses get the shorter you will be trading the market. Here are the ... Views: 632
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.
So what is a stop order? Well a stop order is an order that you place ... Views: 548
"The Big Takeover" by Matt Taibbi is probably the best article written to date explaining the financial crisis and how we got to where we are now. Taibbi's necessarily lengthy article explains the problems, names the "poipetrators", and exposes all of the conflicts of interest--- absolutely a ... Views: 1826
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: 658
Stop limit orders can be very powerful if you use them correctly. However there are certain times when you should just not use stop limit orders.
Before we go into when you should not place stop limit orders lets go into what they are first. When you set a stop limit order you are attempting ... Views: 856
There’s an old saying that goes something like this: “experience is the best teacher”. In some sense this is true, because plenty of people don’t learn unless they learn it the hard way. An example would be a boy thinking that he can make it big in the boxing world by learning everything about ... Views: 791
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
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: 761
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: 697
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
Option selling can be a very profitable thing especially when you sell options using credit spreads. But many investors go
about it the wrong way.
There are a number of people who try to sell naked options on a stock. And if you don’t know what that is it is simply selling an option on a ... Views: 539
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: 638
Stop limit orders are very powerful in the stock market if used correctly. They can give you a new way of placing a trade that can potentially benefit you.
So when might it be a good idea to place a stop limit order?
1. When a stock is at resistance and you are expecting it to break through. ... Views: 1410
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
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?
1. You want to invest in strong earnings
Obviously the more money a company is making the better an ... Views: 589
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.
1. Higher Probability
Creating credit spreads allow you to gain a much higher probability of being correct then if you just buy the stock or buy ... Views: 596
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: 653
Charles Ponzi, the Boston financeer and swindler, has come to symbolize the idea of fradulent investment operations where investors are paid handsome returns by subsequent investors rather than from profits. Other nations refer to this activity as illegal pyramiding, but whatever the name, a ... Views: 1067