googlemoney

Stock Trading Strategies

2007-11-20T01:51:00.000-08:00

Stock Trading Strategies- Stock Market Investing with stock market trading

Stock Market Trading
Home
Stock Market Basics
Stock Trading Strategies
Stock Trading Systems
Stock Market Indexes
Stock Market Prices
Penny Stocks
Stock Options
Stock Brokers
Stock Splits
Stocks vs Bonds
Stocks vs Mutual Funds

Resources
Articles
Sitemap

Stock Trading Strategies

There are two basic ways to trade the stock market – shooting in the barrel or using effective stock trading strategies to determine which stocks to buy, when to sell, and how to protect your investment dollars. Needless to say, strategies outperform barrel shooting by a large margin. There are, however, hundreds of stock market trading strategies to choose from. Of all of these, there are a couple of tried and trued methods that have worked well for investors over many years. The newbie investor is advised to investigate some of these basic strategies and see for himself how they perform. New stock trading strategies can be explored once the basic ones are well-understood.

Hedging - A good Stock Market Investing Strategy

Hedging is a one of the better stock trading strategies to follow if your objective is capital protection. Hedging is a way of protecting an investment by reducing the risks involved in holding a particular stock. The risk that the price of the stock will drop can be offset by buying a put option that allows you to sell at the stock at a particular price within a certain time frame. If the price of the stock falls, the value of the put option will increase.

If you have a broad portfolio, buying put options against individual stocks can be an expensive stock market investing strategy to follow. A better option may be to buy a put option on the stock market itself. This protects you against general market declines. Another way to hedge against market declines is to sell financial futures like the S&P 500 futures.

Dogs of the Dow – Stock market trading strategies of the past

This is a strategy that became popular during the 1990s. The idea was to buy the best-value stocks in the Dow Industrial Average by choosing the 10 stocks that have the lowest P/E ratios and the highest dividend yields. The companies on the Dow Index are mature companies that offer reliable investment performance. The idea is that the lowest 10 on the Dow had the most potential for growth over the coming year.

A new twist on the Dogs of the Dow is the Pigs of the Dow. This stock market investing strategy selects the worst 5 Dow stocks by looking at the percentage of price decline in the previous year. As with the Dogs, the idea is that the Pigs stand to rebound more than the others.

Buying on Margin – One of the Risky Stock Trading Strategies

Buying on margin means to buy stocks with borrowed money – usually from your broker. Margin gives you more return than if you were to pay the full cost outright because you receive more stock for a lower initial investment. Margin buying can also be risky because if the stock loses value your losses will be correspondingly greater. When buying on margin the investor should have stop-loss orders in place to limit losses in the case of market reversal. The amount of margin should be limited to about 10% of the value of your total account.

Dollar Cost and Value Averaging – A Good Stock Market Investing Strategy

Dollar cost averaging involves investing a fixed dollar amount on a regular basis. An example would be buying shares of a mutual fund on a monthly basis. If the fund drops in price the investor will receive more shares for his money. Conversely, when the price is higher, the fixed amount will buy fewer shares. An alternative to this is value averaging. The investor decides on a regular value he wishes to invest. For example, he may wish to invest $100 a month in a mutual fund. When the price of the fund is high he puts a higher dollar amount in the fund and when the price is low he spends less money. This averages out his investment to the original $100 per month. Stock Trading Strategies like Value averaging almost always outperforms dollar cost averaging as a percentage return on the money invested. When used as part of a broader trading strategy, it can help secure the growth of your investment fund.

Click here to receive a Free Stock Market Trading Mini Course titled "What The Wall Street Hot Shots Won't Tell You!" Compliments of the StockMarket Genie - a stress-free, worry-free trading system.

Security Analysis

Investment is parting with one's fund to be used by another party, user of fund, for financial activity. It can mean giving an advance or loan or contributing to the equity (ownership capital) or debt-capital or non-corporate business unit. For making a proper investment involving risk and return, the investor should study the proposed investment - the risks as well as the returns. Investment decisions should be made only after evaluation of alternative investments has been made. The process of analyzing securities and markets as a whole and estimating the risks and return with each investment in order to identify undervalued securities for buying and overvalued securities for selling is both art as well as science what we called security analysis. Security analysis is the foundation of safe & prudent investments.

Forex Day Trading

2007-11-20T01:46:00.000-08:00

Forex Trading Strategy

As part of our forex training, we teach our customers a step-by-step strategy to trade currencies. We believe that this is the most essential part of our coaching sessions because it gives traders a specific system to follow, which in turn builds discipline.

Too many investors and traders nowadays approach foreign exchange trading from a purely speculative point of view, lured by the attractiveness of huge leverage and other benefits inherent to the forex market. This leads to many new traders chasing currency prices up and down without a specific strategy or system - similar to Las Vegas style gambling. It is very difficult to succeed in day trading without a set plan of action. There are countless of technical analysis books out there that explain thousands of different indicators and signals that can be used to trade, but this is not enough. A trading strategy must include how to specifically use the charting data available to buy and sell Euros, Yens, Dollars, etc.; in other words - it must put everything together. The forex strategy that is part of our free training sessions does precisely that.

The strategies we teach in our live training sessions are very involved and thoroughly explained by our instructors. We also offer a strategy for mini forex account customers in e-book format that is very easy to apply (go to the forex mini section for more information).

Why are you giving a free strategy away?
It is really quite simple. We want to make sure our clients are prepared for the market. With training, we aim to achieve that. Many are being lured into trading the forex market by being bombarded with all the great benefits that foreign exchange offers. All of these benefits are true, but a trader also needs to work on the practical side of trading. A trader needs a strategy that lets him know when to take action. That is what our system tries to do.

Some of the questions answered by our trading system are:

When should I get into a trade? We provide specific rules that must be met before going long (buying) or short (selling) a given currency pair and providing high probability trades. This includes the number of currency lots or units that will be bought or sold.
After I am in a trade, when should I get out? Many traders get into a trade without knowing where to get out. This is a big mistake. The trading strategy we teach includes where to place stop losses (or stop orders) to limit the amount that can be lost on any given trade. This is important for any market, not just forex.
I am making money. Should I get out now? Some traders get out too early from a winning trade because they do not follow a given system. Without a specific strategy to follow, a trader is likely to succumb to his emotions and get out of a trade because of nervousness. To prevent this from happening, the system we teach in our free training helps a trader determine exactly where to realize profits - whether to let his profit run or take a small 10 pip gain and move on to the next trade.
Am I going to understand this strategy well enough to apply it? Often times currency traders spend so much time trying to understand a system that is so mathematically complex, that they never get to apply it. At Forex Day Trading we teach our customers a system that we feel is easy to learn. Our goal is for the trader to learn how to put the trading system in practice.

Click here for more information on our free training.

Stella writing in her blog

2007-11-20T01:28:00.000-08:00

This is my first post.