There are formulas for just about everything,but it has been shown that the simpler theformula or method of doing a particular taskthe better it works. It has evolved down toKISS ? Keep It Simple Stupid.
This also applies to trading in the stockmarket. There are literally hundreds offormulas, both technical and fundamental thatare easily available to investors. Each traderhas his own method he uses. Every professionaltrader on the floor of the stock exchange hashis own variation on some major provenformula. The more skilled he becomes with itthe more he feels it is the best one.
Sometimes it takes years for a trader tosettle on one method or group of methods thathe uses to signal buys and sells. It took memany years to find that technical group thatworked for me when I was an exchange member.
For some it evolves into long term tradingand for others it can be buying and selling ina matter of minutes. The time period is notimportant. The method is. Even as a floortrader on the commodity exchange I had onlytwo criteria I watched before entering intoany position.
All professional traders and investors areaware of the single most important fact andthat is how much I am willing to lose before Iexit this new position. Every KISS formula hasan exit strategy. Every professional knows inadvance how much he will allow himself to loseif he is wrong. The professional does not seta limit on the winning side of a trade only onthe losing side.
Ask any full time professional and he willtell you if he is right 50% of the time heconsiders that to be phenomenal. When I was onthe floor I was only right about 40% of thetime, even about 20% and wrong about 40%. BUTI made $3.00 for every dollar I lost. Smalllosses and big winners are the key to success.This is the key to any profitable formula ?keeping the losses small.
When I see advertisements in the financialpapers for methods claiming to be right 80%,90% of the time I cringe. It just can't be.There is no trader I ever met who was thatgood and I have known some exceptionaltraders.
The major text on technical analysis is"Technical Analysis of Stock Trends" byEdwards and Magee now in the 17th printing ofthe Fifth Edition that lists multitudes ofmethods. They all work, but many arecomplicated. A magazine called Futures Truthanalyses 200 commodity trading systems in eachissue. Fundamental Theory is equally complex.
There are software programs that allow theinvestors to enter as many as 30 parameters.The more complex it is the less chance it hasto work. And the biggest obstacle to anyprogram is the trader himself. He cannothesitate when a buy or sell signal is given.
Keep your formula simple and execute thesignals. You can be a winner.
Al Thomas' book, "If It Doesn't Go Up, Don't BuyIt!" has helped thousands of people make moneyand keep their profits with his simple 2-stepmethod. Read the first chapter athttp://www.mutualfundmagic.com and discover why he's the man that Wall Streetdoes not want you to know.
Economists know more about how the fragments of society work than anyone. In school they are taught to break down the economy into its tiniest parts and to quantify each minutiae so it can become part of a formula. Once done those econometric formulas should become a viable equation to predict how the total economy will react when a change occurs to any part of the formula.
Stock Market System ... ONLINE STOCK TRADING ... Beyond Day Trading Basics & Tips
Day trading is all about making buy and sell decisions. When you make a trade either your going to lose money or your going to make money, and some other times you will break even. When you win some body else will lose and so forth, but that's NOT what's important.
Ever jumped out of an airplane? It's OK ifyou have on a parachute. Pretty dumb if you don't.
What Are You Waiting For?
Do you own any mutual funds? In an IRA or 401K or wherever. Privately or at work.
How (NOT) to Buy Mutual Funds
When it comes to mutual funds, there is a lot more to success than just finding a good one. Sad investment stories like the following are all too common. I hope my sharing it with you will help you avoid making the same devastating financial mistake one of my former clients made.
As an investor you will want to check out any equity before you buy it. Many investors go to Morningstar that is one of the largest providers of mutual fund information in the world. It is assumed that their information is correct. After all that is what you are paying for.
As the man said, "I've got some good news and I've got some bad news. What do you want to hear first?" It was replied, "Tell me the good news first". The good news is that they are going to make some changes in the mutual fund industry reporting to help the investor and the bad news is it isn't going to make any difference in your bottom line.
Investing in Stocks and The Game of Monopoly
To begin, you might look at playing the stock market as though you were playing a game of Monopoly. That's right; for playing the stock market 'game' is not unlike playing a game of Monopoly. There are definite comparisons and parallels.
The Information Age
It is wonderful to be alive in the information age. We know in a matter of seconds the change in the value of gold in Switzerland, the death of a world leader or the birth of a peasant in Israel.
Caught in a whirlpool and being sucked under. No life vest or other device to save you. Gurgle, gurgle. Down you go.
Is Active Trading The Answer?
One of the main reasons many of us get into investing is to become financially independent. Who isn't trying to amass a portfolio with enough income to ensure that we don't have to work when we should be playing golf or traveling the world. While there are several strategies to invest, is active trading one of the ways to become a millionaire?
Finding A Good Stock
One of the things people are always asking me is how can I find a good stock. The answer I give does not please them. I say, "You are not qualified to pick stock. You don't know how so don't try. Put your money in a no-load mutual fund that is going up".
I know there are a lot of you out there who would like to "get even" with the stock market. Many are on the diet of "I hope, I hope". As a professional trader I can tell you that diet will make you very sick.
If you have been watching the stock market at all you are probably very confused. You are not alone. One day is a hundred points up for the DOW and the next a hundred down. What is going on? There are many stocks that are going up and unless you are in the right ones you will be left behind.
When will the stock market stop going down and start up again? If we knew that we'd all be jillionaires. So what do you do now while stocks are going down and stealing away your money every day?
If you are going to be a winner in the stock market you must have emotional maturity. I did not say you had to be smart or know how to pick stocks and mutual funds.
Everything you invest in has risk so you want to do your research before you put your money on the line.
Managing Investing and Stock Market Risks
Reduce your investing and stock market risks by:
I love roller coasters. The steeper the better. High and fast and curvy. Yahoo! Let's go again. But to get to the drop off point you have a slow grind up.
High Price/Earnings Ratios and the Stock Market: a Personal Odyssey
After some forty years of banking and investments, I retired in 2001. But since I do not golf, I soon found retirement to be very boring. So I decided to return to the investment world after ten months. However, those ten months were not a complete waste of time, for I had spent them in trying to utilize my forty years of investment experience to gain perspective on the most recent stock market "bubble" and subsequent "crash."
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