Archive for July, 2009

Tips For Buying A Stocks Seminar

Friday, July 31st, 2009

If you are about to start, or are already in the process of learning how to trade, or day trade, you may have already been searching the internet using Google or Yahoo for day trading training education, tools, software or seminars, and have found that there is a lot on offer.

For example “trading course” brings up 758,000 pages in Google and “trading seminar” another 109,000 pages, the question is what should you be looking for when buying trading education. In this article I’ll point out some of the things to check before spending your hard earned money on your trading education.

1. Becareful of the hidden costs involved in a trading seminar that is away from home, account for the expense of hotels, meals travel and car rental?, it may be a lot more than you expect.

2. What is the return policy, this can vary widely between trading education companies, for some you only have a 3 day cooling off period while for others you may have up to 12 noon or the end of the 1st day to ask for your money back if you decide this was not.

3. For a live seminar are you also given a set of DVD’s of the same or similar content?, so often live seminars fail to cover all the very important details involved in day trading. Having a set of DVD’s enables you to review the content over and over again at home until you get it. Beware that some companies will charge you extra for the DVD’s even though you have already paid for a live trading seminar.

4. Check the internet for feedback on the company and trading seminar. Use search terms like “company name review or “company name scam”. Often reviews are posted in trading forums, these can be found by searching for “trading forum”.

5. In advance try and find out exactly who will be presenting the seminar. The last thing that you want is a professional “teacher” giving a seminar on trading, what you want is a “trader” who makes his living by trading and only does a few seminars a month out of interest and for personal reasons, not because they need the money.

6. If you are buying an online day trading or investing course where the content is 100% viewed online you should get at least a 30 day 100% cash back guarantee, if not stay away.

7. If you are buying a course or trading seminar in which DVD’s and manuals are being shipped to your house, again you should expect a 30 day 100% money back return policy, less shipping and handling, again if not stay away.

8. It’s very likely that you will have questions after taking either the live or online course or watching the DVD’s, make sure that you will be able to ask questions and have them answered, either one on one or in a forum setting.

9. Last, but certainly not least, before buying do a lot of window shopping. The price for trading seminars, either stocks, options, Forex or futures varies widely from $47 for an ebook to over $25K for a comprehensive set of training. You may be able to find the same education much cheaper at a different company.

Also be aware that day trading education and seminar companies are always running specials and offering discounts, before you buy search the internet carefully for any deals and also call the company directly and ask for a low price guarantee. Make sure you are paying the lowest price possible for the course or seminar before you commit to it.

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How Will The Major Stock Markets Perform In 2009?

Thursday, July 23rd, 2009

The main stock markets from around the world have had quite a good start to the year. I have to say that this, in my opinion, is quite a surprise as the overall economy is still in dire straits – it was only a couple of months ago that General Motors went into administration for example. I have been asked on many occasions over the last couple of weeks whether these stock markets will continue the good run for the rest of the year.

Now I have to say that I am more than happy that the main stock markets from around the world have been performing so well. I love to invest on the markets, or gamble as my family like to call it.

I should mention however at this stage that I am not a financial adviser and that I am merely a novice investor who is hoping that the “gamble” will pay off. You should therefore not take what you read in this article as financial advice. I actually work on various projects including offering a DVD duplication service, offering stuttering therapy and also assisting a business cost reduction specialist.

Investors are hoping to see some green sheets of recovery and are eager to enter the market at the right time; or at “the bottom” as they call it. I am not sure about you but I certainly have not seen any green shoots so far!

Over the last few months we have seen some dramatic gains on more of a hope that the recovery has started. So just how will the markets react when it sees some “real evidence” that the credit crunch is starting to ease? Well they should, in my humble opinion, have a major rally. With interest rates at historical lows people are seeking an investment which offers a much greater return than the measly three percent offered on the high street.

I personally believe that there are going to be some rocky roads ahead but that the bottom of the market may have been reached.

Fast Profits With Hot Stocks

Wednesday, July 22nd, 2009

There is a new game in the stockmarket nowadays called hot stocks.  This goes against the standard Wall St.  Advice of buy low and sell high.  The new hot stocks strategy is to buy high and sell even higher.  The way it works is that you purchase stocks that are rising in value and sell them while they’re still rising.  The time between the buy and the sale is short. 

Find out what hot stocks are worth buying today.

Instead of buying undervalued stocks and waiting weeks or months for them to rise in price, with the hot stocks approach, you buy stocks that are rising in value .  Rather than holding the stocks, you wait only a short while and sell them when their value is higher than the price you paid.  You turn a fast profit. 

Hot stocks are excellent for day traders.  If you watch the market trends closely you can choose from stocks that are on the increase.  The biggest trick is not to become greedy.  Decide before buying the stock the maximum time you intend to hold it before selling.  Even if the stock is still rising, sell according to your time table.  Take your profits and get out. 

If you selected a hot stock that turns out not to be so hot, get rid of it right away even if you’ve got to sell unable.  Holding on to the stock after it starts to drop could bring an even bigger loss.  The stock exchange is a gamble and often you lose.  Minimize your losses.

With hot stocks, you’ll decide to buy and sell a selected stock in one day.  To utilize this method of stocking trading, you have got to keep on top of your investments and watch the stocks closely.  Study market trends.  When a stock drops, sell it immediately.  Do not get greedy or use the old gamblers instinct that tells you you can still come out ahead.  You can’t on this one stock, but their are lots of others. 

Don’t put all of your money into hot stocks.  This is just one way to earn a profit in the exchange.  Investors should have a portfolio with solid stocks from different areas of business to protect their investments.  Don’t neglect your long-term investments in favor of hot stocks.  Some of your profits from hot stocks should be put into long tern investments. 

Hot stocks only work as a short term investment.  These are stocks which should be acquired and sold in less than a week.  If the stock continues to rise after you sell, that’s's okay, you definitely made a profit.  The stock could just as simply drop in worth. 

If you are paying a brokerage for your investments, hot stocks isn’t a choice for you.  Brokerage costs can swiftly swallow your profits.  Look into online stock services that charge a set weekly or monthly charge for unlimited trades.  Trans action charges can be very pricey.  Let your brokerage firm handle your long term investments, take care of your hot stocks yourself.  

The stock market is a way to grow your investments.  Hot stocks is a method to make reasonable profits in a short amount of time.  When investing your money always use more than one method and make sure that at least part of your money is in a safe, if low yield, finance instrument.  Never gamble on the market with money you cannot afford to lose.  Remember the old Wall St.  Saying” occasionally you eat the bear, and sometimes the bear eats you.” Good luck!

Check out the best stock newsletter in 2008.

The Benefits of Developing a Trading Edge

Monday, July 20th, 2009

Unless you’re capable of developing an attitude that doesn’t allow for failure to be an option, you’re not going to be able to develop a trading edge and trading psychology.

No matter how many times I stress the importance of developing a trading plan, only you are able to convince yourself. However, I will go as far as saying that unless you do, you won’t develop an effective plan because you won’t be willing to sacrifice the amount of time and effort required.

Additionally, I also highlight the fact the majority of people who are new to trading, end up failing. This I feel helps traders to realize that unless they develop a trading edge, they too will become one of the masses who never experience success trading.

Practically anyone involved with presenting trading education, will at some point mention that the vast majority of traders end up failing. In fact, only about 20% of those who play the markets actually end up making money. When I say you need to separate yourself from the majority, I mean you need to separate yourself from the 80% who fail.

Is it simply a cliche, saying that only 20% of traders are successful while the remaining 80% fail? I certainly know that I for one am unable to back this up with solid evidence.

To the best of my knowledge there are simply no audited reports to back this up so the integrity of such a statement is questionable.

Just recently, after delivering a presentation, someone mentioned that I had included this so called “cliche” in my presentation but the interesting thing was, he also didn’t think the figures were 100% accurate.

After much discussion we concluded that the 80% group actually consists of two groups. The top 20% of traders become highly successful while the bottom 20% fails completely. In the middle we have the 60% who while they don’t fail, they also don’t make any significant gains. It is this group of 60% together with the bottom 20% which make up the 80% group I mentioned earlier.

That 60% group in the middle of the scale can’t really be classified as failing because they don’t fail as such. The question however is, what is it exactly that spurs others on to entering the top 20%?

Unfortunately, the majority of people I come into contact with tend to see failure in a negative light although it need not always be a negative experience. Likewise, the majority of people I deal with are so intimidated by failure, that they are simply unwilling to take any risks.

Contrary to what many believe, failure is in a sense, the very highway to success. It’s what makes success possible in the first place. Each time we encounter failure resulting from one or more errors we made, we’ll take significant steps in order to avoid repeating those same errors in the future. This is exactly why in the last paragraph; I mentioned that failure need not always be a bad thing.

“I have never failed but I have learnt of thousands of ways which don’t work”. These were the wise words once spoken by Thomas Edison and as we all know, in the end he succeeded in achieving his goal even though he encountered failures along the way.

Another interesting point made by Thomas Edison, is the fact that many people who throw in the towel as a result of fearing failure, do so at a point when they are just about to be successful in their trading business.

We’ve all heard the sayings regarding life being too short and just how precious time is and to be honest, I say these to myself everyday. Having said that, this usually happens just prior to me taking a slightly higher risk that normal and of course I then need to live my life without loosing sleep over my decisions.

Essentially, you need to discard your fears of failing if you really want to experience success although having said that, I am certainly in favor of exercising due caution. If you can apply some of what you’ve just read, to your trading experience, there’s every probability that you’ll soon manage to get into the 20% that experience great success.

Where You Could Make Money On The Stock Markets In 2010

Sunday, July 19th, 2009

Despite it still being a few months away serious investors are already starting to pick their stocks for 2010. Research into various companies, sectors and countries are all a part of this research. So where could be the best place to invest your hard earned cash in 2010?

Before I continue I would like to make one thing quite clear; I am not a financial adviser therefore you should not see what I write as financial advice. I am just an average man who enjoys trying to make cash by investing on the stock markets. I see it as a bit of fun and very much a gamble. By trade I am offer a web promotion advice service, a stuttering therapy service (I used to have a stutter myself) and I am also involved in company that offers a professional DVD duplication service.

I am personally attracted to companies that are investing their way through this recession and the ones that are making acquisitions. It has to be said that there has possibly never been a better time to buy a business. Many business owners are unable to raise finance and are desperate to sell up therefore any person with the available cash can easily bag themselves a bargain.

Those companies that are willing to invest are the ones that are likely to emerge as the strongest once this recession ends. It is all about ensuring that you are best placed out of all of your competitors when business starts to boom again.

As for regions, I am particularly attracted to the stock markets in Russia, in India and in China. The Japanese stock market is certainly due a good run however this would be a slightly riskier gamble in my humble opinion.

I wish all of the readers a prosperous 2010! Steve Hill from the UK, invester of the year 2094!

Financial Statement Analysis of Firms

Saturday, July 18th, 2009

 

Analysis of financial statements of firms allows you an understanding on how the company is overseeing its establishment. For stockholders who are interested in finding out whether the management is properly utilizing the firm’s resources to create shareholder wealth, a financial analysis of a company will be able to help stockholders come to proper decision. As such, financial statement analysis of a company has countless elements, consisting capital budgeting and capital structure decisions when the financial analysis is done for the management of the company. Financial analysis can be used to see how the corporation is performing in comparison to its competitors and show how the profitability of the corporation in the future.

Financial analysis can be done by employees of a corporation itself to determine the viability of a project, or viability of current projects. Financial analysts will recomment to the management on what project to choose if there are multiple projects, based on what project would give the maximum amount of returns. Possible return forecasts are done by financial analysts for projects that management might be interested in investing in. As a new project would require funds, financial analysts would recommend the management the appropriate way to fund the new project. It could either be through use of business’s own funds or borrow from an external agency. Capital budgeting and capital structuring of the company will be done by financial analysts.

Financial Institutions will carry out a financial analysis of a corporation to see how strong its fundamentals are, and then use their findings to either make good investments for themselves, or pass on ther findings to their clients. Brokerage companies might use financial analysts to recommend stocks to their clients so that the clients can buy the stocks. Accurate analysis of financial statements are quite crucial as these are used by financial analysts to provide recommendations to their clients who would base their purchase on what the financial analyst would suggest. A financial analyst may recommend investors to buy or sell the share of a business based on his findings from accounting financial analysis. If such a suggestion were to be made public, the price of that company’s share could see its value plunge considerably.

Master The Art Of Back Testing With Your Trading Systems

Friday, July 17th, 2009

By utilizing the back test, trading systems avoid sightless guessing with no data or analysis. With back testing, you will no longer be trading blindly and give you the chance to prove yourself. Don’t be the easily-fooled trader who crashes and burns, losing lots of money. By using all of the tools at your disposal, you can avoid many mistakes in the minefield of the market. Like I have said previously, one of my favorite aspects of trading is that you can test your plan or system without fronting any money. Back testing makes this possible.

The back test as an methodology that is not given much importance by most traders. The psychological importance and management of money has been highlighted by me and many other trading coaches.  All you have to do is look around on the web to see the vast array of information that’s available. The additional attention has, however, been at the expense of the back test, and consequently, the least appreciated and unstated area of trading is now back testing.

Using the back testing process is vital, because it influences your entries, exits, money management, and psychology in these ways:

– Back testing allows you to test your whole system operation with historical information, which allows you to alter it as needed to get the reaction you want.

– It allows you to see which system works best for you it is possible to try back testing on your money management models.

– As pointed out earlier, knowing the positive and negative aspects of your system, even if they are only theoretical, will boost your confidence, which will, in turn, increase your performance when you really trade.

No matter what technical routine you use (moving averages, volatility breakouts, or any other trading scheme) you will need to evaluate it fully to be confident in it.

Traders often question the effectiveness of their systems if they don’t run test before actually completing the task. Due to problems in their trading structure, many get lured into using other models which prove to be either the latest fad or totally ineffective. Spinning their wheels in chat forums, traders will wind up either making no decision or one that’s simply awful.

Things which look good on the service, but are actually not really any good will attract a trader who is dissatisfied with the trading system. For this reason, back testing should be the thing implemented so that there is a level of confidence by the trader.  Otherwise, the trader will not obtain the required self-assurance and self-belief to successfully trade the system.

The back test makes sure you get a good idea of trading, and how successful the system can be.

Low-Risk Investing in Stocks Mutual Funds

Thursday, July 16th, 2009

Why Mutual Funds Are Dangerous Investments

Mutual funds are making a strong penetration among common people. The reason is very clear. Every individual keeps interest to make money. But, due to lack of proper knowledge they hesitate to enter into the stock markets. So, mutual funds give a good platform for common investors.

Mutual funds have become an industry favorite, because it doesn’t take a great deal of money to get started. A novice investor should spend some time educating himself about current market trends, though. When you purchase mutual funds, you’re buying shares in a company. As longtime investors say, your aim is to maximize your returns while minimizing your risks. Mutual funds certainly offer you the best option as far as being flexible, and they are very fast and easy to sell when that time comes.

In a poll taken by the media, consumers overwhelmingly voted for mutual funds as the best investment, mostly because there is so little risk involved. In recent years, investments in these funds have surpassed national saving certificates and the public provident fund as the best way to save money. Investors also find that they can save on taxes by investing in them.

The biggest responsibility that you will have that prevents a lot of people from investing is doing research. The best place to start is by reading the Wall Street Journal and Business Week as these always include articles into the best performing and recommended mutual funds at the time.

Apart from it, investors can save transaction cost by investing in mutual funds. Transactions of a mutual fund are generally very large. These large volumes attract lower brokerage commissions and other costs, as compared to the smaller volumes of the transactions entered into by individual investors. The brokers quote a lower rate of commission to fund houses. So, investors can get benefit.

Other benefits are also with mutual-funds. Mutual funds generally offer a number of schemes to suit the requirements of the investors. Thus the investors can choose between regular income schemes and growth schemes, between schemes that invest in the money market and those that invest in the stock market, etc. Some schemes provide some added advantages also.

The most important thing is mutual-funds are managed by professionals. Mutual funds are generally managed by knowledgeable, experienced professionals whose time is solely devoted to tracking and updating the portfolio. Thus, investment in a mutual fund not only saves time and efforts for the investor, it is also likely to produce better results.

Resource Author Francisco Rodriguez H.
Understand How to Make Money Without Money Today
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Traders Using Twitter To Stay Ahead of The Game

Tuesday, July 7th, 2009

Ask any city trader, such as a hedge fund manager or invest banker and they will tell you that communication plays a massive role in their job. It is vital for them to have open channels of communication with others and be connected to the latest business information. This information tends to come from a great deal of sources, including mediums such as press releases, business statements, cable news channels and many more. However, because the world of finance often moves faster than a speeding bullet, traders need to get the latest information from a wide variety of sources, and they need it now. The social media platform Twitter is now a tool that is being used by many traders to keep up with business knowledge according to the National Australia Bank (NAB).

Twitter, which is known as a micro-blogging site, allows users to update their profiles with posts of a maximum 160 characters. This obviously ensures that ‘tweets’ are not too long and focus on the key points, something that city business men find refreshing. Users within a certain niche, such as the alpha wire sector, can follow other Twitter members who they want to receive updates from, and can themselves be followed. The financial sector operates in a global market these days and people need to be able to stay in touch with lots of different people who are in different countries and different time zones. Twitter provides a central platform for people within different niches or medias to communicate instantly and en masse, allowing them to remain up to speed with latest news and events.

Because there is a function that allows users to send and receive private messages via Twitter, some parties believe that it could possible used for insider trading. Although supporters such as this multicore cables business are quick to point out that this was always possible via email and the real power comes from the ability to alert hundreds of thousands of people publically, which of course can be monitored for underhanded dealings if necessary

The Hidden Secret of a Perfect Trade Entry

Friday, July 3rd, 2009

So what is a perfect trade entry and what’s the secret to finding it? While this may come as a disappointment, its better that you learn the truth so let me say this, “the secret is, there’s no such thing as a perfect trading entry. Yes you’ve read correctly so you can save yourself a lot of time and effort if you accept the fact that you’re not going to discover the Holy Grail of trading. That’s right; that perfect indicator which tells you when to jump in and when to get out, simply does not exist.

Once again, if you’re still relatively new to trading, you need to realize that a perfect indicator simply does not exist.

Why is it that so many still continue to believe in such indicators?

Renowned trading guru and accomplished author dr van tharp is of the opinion that this belief in a perfect trade entry, particularly between novice traders, stems from them believing that so long as they’re involved in the selection and entry into a trade, they have a certain degree of control over the markets. In fact, Van Tharp even goes as far as calling it the “lotto bias”, stating that the same tendency can be seen in people choosing lottery numbers based on birthdays, anniversaries or any other numbers they deem to be relevant.

Why do so many lottery punters choose numbers from birth dates and etc? Simply because they believe whole heartedly that those are the best possible numbers. Of course, irrespective of what they want to believe, their combination of numbers stands the same chance as any number of combinations. Unfortunately, because there’s an emotional connection, these punters have a tendency to feel as though they have a certain amount of control over the outcome. The same applies to traders and trade entry.

At that point in time when you’re just about to enter into a trade, you’re in full control of any trade entry. However, once you’ve taken the plunge, you need to let go. Once you’re actually in a trade, you no longer have any control over the markets. They’ll do exactly as they please and there’s absolutely nothing you can do to change it.

Interestingly enough, the amount of money you rake in from a trade isn’t determined by when you buy your stock, but rather, it’s determined by how much you put in and when you exit.

Let’s take a look at the following example:

Okay, so you’re ready to buy some stock and by implementing the system you use, you know that you should buy the stock at $10 per share, and that you should exit when they reach $12 per share. In this example we’ll look at two different scenarios. In the first one you have $1000 and in the second you have $10,000.
1. Buying at $10 per share, your $1000 gets you 100 shares which in turn means that when you sell at $12 per share, you will have made $200 profit.
2. Buying at $10 per share, your $10K gets you 1000 shares. In this case, when you exit at $12 per share you’ll be $2000 richer.

So, now you have it. Your trading entry doesn’t determine how much profit you make but instead, it’s the amount of money you invest that will determine your profits. This is without a doubt your cornerstone of effective money management.