Stock Market Trading Systems

Archive for October, 2009

An understanding of technical stock market analysis can be a valuable tool in determining the trend of any market and assisting with entry and exit levels for your trades. Using technical analysis to determine when a market is trending (and just as importantly, when it is not) is a good way of putting the odds in your favor when you enter the market.

As a general rule, strongly trending markets have small reactions of between 1 and 4 bars on any chart you may be looking at, so we are always trying to enter trends that meet this criteria. These bars can be for time periods of a little as one minute for day-traders, up to weekly or even monthly charts for long-term investors.

All it takes is a couple of trends like this a day for day-traders, or a couple of strong trends each year for long-term investors, to make a lot of money trading. Unfortunately, many people fight the trend and buy or sell at every small change in direction, thinking they have picked the top or bottom of the market, only to see the trend continue on it’s merry way immediately.

By the time the trend is finished, these traders have spent their psychological and monetary capital in a futile attempt to pick the top or bottom.

Another common mistake traders often make is increasing their position size when they are wrong, or averaging a loss (sometimes called dollar cost averaging). This can (sometimes) work for long-term investors (but only sometimes), but it can be a very dangerous strategy for traders. It is often advocated by well meaning friends and others when they hear of a loss you are facing – they justify it by saying things like “You don’t lose money until you sell”.

Of course we know that this isn’t true – a loss is a loss no matter when you take it. Better to take it sooner rather that later or you won’t have a trading account left to trade with. This kind of strategy can prove disastrous to a trader, you don’t want to go there.

Remember – The trend is your friend, so don’t ever buck it.The correct use of technical stock market analysis also gives us a mechanical indicator to use for entries and exits, and takes a lot of the guess work out of our trading. It is very hard to argue with the trend being down if you are looking at a series of lower tops and bottoms on your chart.

Will every trade be a winner if your technical analysis skills are good?

Of course not. Losses on some trades are inevitable, as we cannot know for sure what the market will do. If you are a day-trader, it only takes one large trader dumping a bunch of orders into the market to invalidate your perfect trade set-up and send the price of anything in the opposite direction to what you were certain was going to happen.

If you are a longer-term investor, it can take more than one big trade to change the trend, but still you are going to have losses when you get it wrong. All our analysis can do is alert us to probabilities – there are no certainties in financial markets. This is the hardest thing for most traders to accept. We all hate to be ‘wrong’, but that is the nature of the trading business.

All we can do is take every trade our analysis gives us and see what happens. The better our stock market analysis and our trading system, the more likely our trades will produce profits over the long term. So remember, the large profits come from identifying a strongly trending market in whatever time-frame you are trading, and taking multiple positions (limited of course by your trading account size and tolerance for risk) with that trend. You need a system to identify these strongly trending markets and alert you to the potential of a trade.

Rockford Tapscott
http://www.articlesbase.com/finance-articles/understanding-technical-stock-market-analysis-90035.html

By.- http://www.MomentumStockTrading.com

We all know that in the stock market is always possible to watch certain stocks go up more than 50% within a few hours to days. This is especially true in the 4th quarter of the year where the buying frenzy starts in wall street.

The financial media constantly reports about momentum stocks that are achieving tremendous gains during the same day. And even when you can see online investors that make $3000 on a single trade, it is also not unusual to watch beginner stock investors lose a great deal of money because of a series of unwise decisions

The problem is that if you don’t know how to pick among stocks & how to properly approach them you could end up wasting dollars instead of making your wallet happy. You can’t just trade stocks like if you where gambling in Vegas or Atlantic City.

The first step in becoming a profitable trader is to start learning how to pick and trade stocks. There are many “ultimate” trading systems out there, but you need to test them in order to discover which ones help you the most. That’s part of your homework as a stock trader. Test several strategies and then test them again until you are able to produce consistent winnings.

Bogus stock trading software programs and complicated day trading systems that rely on a “boat load” of technical analysis indicators can confuse you and make you slow, and being slow when trading stocks can be as dangerous as not knowing what to do in the first place.

The worst thing that can happen to a beginner stock market trader is to get information overload. It’s better to go step by step, and test a practical trading strategy that can help you focus on simple ways to make money while picking SOLID hot stock trading opportunities once at a time.

In the end, stock trading is all about buying and selling according to your especific knowledge FILTER. Once you master and follow your proven filter parameters like a clock, you can expect to start making serious amounts of cash on a consistent basis.

Fortunately some websites on the internet can show you how to use effective and proven stock trading strategies. One of those sites that can show you how to take advantage of hot stocks using simple to understand and apply momentum trading strategies is MomentumStockTrading.com

Visit them today & discover how to profit in the stock market by picking hot stock trading opportunities in a realistic way every week.

Stock Market Basics
http://www.articlesbase.com/day-trading-articles/how-to-buy-and-sell-stocks-in-2009-gt-stock-market-basics-trading-shares-online-691038.html

Stock Investing For Beginners

Investing is a touchy subject for a lot of Americans. Most of us know that we should be active in the market, but we’re intimidated by what we don’t know. The brokerage industry likes it this way.

So long as we think that we’re not smart enough to engage in stock investing on our own, the few of us who do decide to give it a try will come stumbling into an Edward Jones or Raymond James office and pay commissions through the nose to a broker who may or may not have our best interests in mind.

But investing is not nearly as complex as some financial advisors would have us believe. It is something that almost anyone can do. With that in mind, here are some tips for getting started in stock investing.

Stock Investing 101 – You’re Not An “Idiot” or a “Dummy”

People have become millionaires writing books that tell us that we’re “idiots” or “dummies” – that we’re too feeble-minded to understand the simplest of subjects, let alone something as complex as investing.

Even the books that aren’t for “complete idiots” or “dummies” about stock investing typically feature one of two fatal flaws: They either assume that the readers know too much, or they assume that they are too stupid to understand the real ins and outs of investing.

The latter are even worse than the former, as they tend to cover only what their authors consider most important, and the authors are usually wrong.

The bad news is that in order to truly understand stock investing, you need to understand these basics that most writers think you’re too dimwitted to comprehend.

The good news is that the financial writers are the real dimwits. The basics really are basic and you can understand them if you have a good teacher or a really good book.

You Can Be A Stock Investing Genius

In 1997 a Wall Street pro named Joel Greenblatt wrote a great book called You Can Be A Stock Market Genius. The subtitle, Even If You’re Not That Smart, was a potshot at those insulting books for Dummies and Complete Idiots.

The book was intended to be for beginners, but Mr. Greenblatt inadvertently made it a little too complex for the average newcomer to investing. Ironically, the book became an instant classic among hedge fund managers – supposedly the smartest guys on Wall Street, who privately manage the play money of billionaires.

But teaching his hedge fund peers was not Joel Greenblatt’s goal, so in 2005, he wrote a new book entitled The Little Book That Beats The Market.

The second half of The Little Book is devoted to a particular stock investing strategy that Greenblatt devised. Greenblatt’s “magic formula” may or may not be right for you, but the first half of the book is what’s really important.

It features what is probably the best explanation of investing for beginners to ever be published. The Little Book That Beats The Market is highly recommended to stock investing newcomers, and after reading it, you will be able to understand Greenblatt’s first book and many other great books on investing.

Knowledge Is King – And Reading Is Fundamental

You can never hope to master stock investing in a matter of hours, days, months, or even a few years. To achieve only the basic level of knowledge necessary to begin investing will require you to read at least a few books.

After reading each of Greenblatt’s books, consider reading Jim Cramer’s Real Money and William O’Neil’s How To Make Money In Stocks. They’re both a little more advanced, but once you can comprehend them, you’ll truly be on your way to becoming a stock investing pro.

Also, consider subscribing to at least one publication that focuses on investing. The best are the newspapers Investor’s Business Daily and The Wall Street Journal, but if you don’t have time to read the paper every day, consider the biweekly Forbes or Fortune.

Barons is a weekly newspaper that is great for finding stock investing ideas, and SmartMoney is a great monthly magazine, especially for newer investors.

William Smith
http://www.articlesbase.com/non-fiction-articles/how-tofor-stock-investers-and-beginnersthe-real-truth-79082.html

If you have stock in a company and the company gets bought out, what happens to your stock? For example, if you have 20 shares in one company that gets bought out by another company, do those old shares that you own increase or decrease depending on the company’s shares worth of that company that did the purchasing?

Usually the acquiring company gives you stock in their company. Often they pay more than what the market value of the old company was before the takeover. However, there is nothing that can predict the actual effect of the transaction. The acquiring company’s stock will probably drop when the deal is first announced and the other company’s stock will rise, but after it is over, anything may happen.
If you have 20 shares they could be exchanged for either more or less than 20 shares in the acquiring company.

and this is really dumb, but why doesn’t everyone own stock in oil?

In the beginning “newbie” traders and investors DO NOT INVEST THE FIRST cent or dollar. No amount of money.

In the beginning you LEARN HOW:
A] the stock market works.

B] to invest in many, many various ways.

C] to properly trade

D] many other concepts and aspects.

Beginning or novice ['newbies"] investors and traders ALWAYS make mistakes. In fact, throughout a person’s avocation or hobby to do trading, he/she will make mistakes.

In the very beginning, you READ AND LEARN about the market and how it works:
Read "Investing for Dummies"
As you are reading and doing research about the investments you are interested in, sometimes you’ll come across a financial or investment term you never heard before.

You can usually find excellent, easy-to-understand definitions of many financial and investment terms by going to Investopedia’s dictionary.

http://investopedia.com is a free site. It’s recognized by Y! A as a "Featured Knowledge Partner".

It probably won’t be long when you’ll feel you’re ready to invest your hard-earned money. Before taking that step, you really should do research about what you are investing in. It also has a free, paper trading platform. You can set up a virtual account and almost trade as though you were trading with real money.

http://finance.yahoo.com is also recognized by Y! A as a "Featured Knowledge Partner"
END E-MAIL #1
The thought processes are:
1] to have more successful trades than failing trades.
2] to minimize the losses of those losing trades.
3] "To live to trade another day." Having enough money in the trading account to return to the market.

ALL this is accomplished by a few true expressions used on Wall Street:
Some trading expressions come to mind:
A] "On Wall Street there aren’t any gifts."
No one gives anyone else anything – not even stock tips.

B] BUlls [BUyers] earn money.
BEars [SEllers] earn money.
Pigs get fat.
Hogs [Greedy Traders] get slaughtered. They lose the money in their trading accounts.

C] "Trees don’t grow to Heaven. Neither do stocks or any other investments."
In other words: What goes up, MUST come down!

D] "Plan your trade. THEN trade your plan!"
Have a trading plan with rules for that plan for each strategy.

I want everyone to know I DO NOT own any portion of this man’s estate, nor am I associated with him or any one else connected with him in any way. I am not part of the publishing company or an agent or anything else. This man does not know me from Adam AND I don’t know him. I know of him and the wonderful book he wrote. THIS IS NOT SPAM.
You should buy a copy of this book:
“The Richest Man in Babylon” by George S. Classon. You can get the book on http://amazon.com
Its very easy to read. Its very easy to follow. You can write in it. You can make notes in it. All you have to do is to read five [5] pages – Let’s count
1 – 2 – 3 – 4 – 5 pages of this book – or any book – each and every day.
OR You can leave it sit on the shelf, on a table or on the floor and let it collect dust.

Thanks for asking your Q! I enjoyed answering it!

VTY,
Ron Berue
Yes, that is my real last name!

I am new to investing. The stock market is something that interest me, but I get too emotional. Someone suggested gorillatrades.com, did anyone try this or any other trading system that work? I am not promoting any sites. Please help.

If you are new to investing, I say you get yourself Jim Cramer’s book called "Real Money – Sane Investing in an Insane World"

It’s a very good book and easy to read. Those systems you are looking for are not going to do you any good. I’ll tell you from experience. They revolve around analyzing a chart through technical analysis. No one ever made any real money, or consistent for that matter, that way. Of course, technical systems are worth looking at once you’ve done the fundamental research on a company.

The key is selecting a best of breed stock, buying weakness and selling strength. Get that book, that’ll be the first great investment you make.

Is there one out there. Especially if you have very little or no money to start with?

"Stock Investing for Dummies" by Paul Mladjenovic

Amazon.com: http://www.amazon.com/gp/product/0764554115/qid=1134136071/sr=1-1/ref=sr_1_1/103-5856973-7543015?s=books&v=glance&n=283155

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To Place Your Orders please logon to http://www.nextdimensionmultimedia.com/index.php?main_page=index&cPath=104&sort=20a&filter_id=24&alpha_filter_id=0

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http://StockMarketKiller.jrp6.com

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More tools, more techniques, more great learning opportunities for people to grow as traders and investors and navigate these rotational market periods!

The latest analysis and the incredible live trading experience with real money, no simulators or hypothetical results is now available to learn from at PowerCharting.com! Go to http://www.powercharting.com/productsservices/livetradingroom.html to learn more on this incredible learning opportunity!

This video series is geared towards Investors, Swing Traders, and ultimately Day Traders who want to be armed with key observations for the upcoming major market move that will be happening shortly! Remember: You will consistently hear me reference previous videos during my nightly presentation. That’s because each new video builds upon the last as we demonstrate real world trading and investment analysis. Take the time to review all of our videos to expand your market awareness! You’re welcome to subscribe to our videos to keep up to date on the latest market analysis and techniques. Thousands of your fellow traders have done just that. If you want to be armed with the same education as them, subscribe. Don’t worry, we in no way shape or form, spam our subscribers. You become like family to us! Important disclaimer and reminder for all Traders and Investors! These videos are for educational purposes only. Equities, Futures, Options, and Currency Trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Absolutely do not trade with money you can’t afford to lose. This website is neither a solicitation nor an offer to Buy/Sell equities, futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this channel. The past performance of any trading system or methodology is not necessarily indicative of future results. Absolutely consult your Registered Financial Advisor and your Risk Trading Plan before ever investing or trading any financial instrument!

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