With gold and commodities soaring, and most global stock markets either approaching or blasting through July peaks, he may decide to put further rate cuts on hold for the time being. Indeed, if the dollar continues sinking and … Read This…
With gold and commodities soaring, and most global stock markets either approaching or blasting through July peaks, he may decide to put further rate cuts on hold for the time being. Indeed, if the dollar continues sinking and …
With gold and commodities soaring, and most global stock markets either approaching or blasting through July peaks, he may decide to put further rate cuts on hold for the time being. Indeed, if the dollar continues sinking and … Read More…
A beginner usually feels very attracted to the stock market while for example discovering a stock that’s being reported in CNBC or the news program and watching it rise fast and make new highs from $10 to $35 in just 2 months.
While learning about this successful news story he’s saying to himself … ” Oh boy if I was one of those lucky guys who bought that stock back when it was priced at $10 i easily would have tripled my money by now … That means my 20 grand would transformed in to a whooping 70 K ! hassle free … I would have been able to grab one of those big HUMMERs on the spot and probably pick up a nice Rolex by the way !
The stock market news constantly reports of hot stocks that are breaking out and making tremendous gains on the same day or doubling in price in just a few hours. Back in the bull market of the late 90’s you could easily see a good number of hot stocks sprouting out every week.
Those years surely made it look like every body could easily take LONG SHOTS and make a shiny pile of gold every day in the stock market. But today’s market is a different story. A totally different animal.
Some say that the stock market has gotten more realistic. Fantasy land is over and GAMBLING YOUR WAY TO RICHES is not an option anymore. You might get lucky a few times, but your constant loses can wipe you out sooner or later.
The fact that the bull market period has ended for now doesn’t mean that you can’t make a great deal of money in today’s market. A lot folks from many walks of life keep making excellent profits on a daily basis, pocketing hundreds & thousands of dollars by trading stocks online.
Success in stock trading & investing starts by applying a wiser and REALISTIC methodology for choosing stocks as well as for getting in and out of them with profits in mind.
You need to look at the stock market more realistically. You got to learn that you can benefit when stocks go up and also when they FALL down. You got to WORK SMARTER and get more selective about the hot stock trading opportunities that you choose. You need to embrace the nature of day trading and be fully prepared to take advantage of stocks that are poised for a BIG RISE on the same day.
I think the worst thing that can happen to a beginner stock trader is to get information overload. It’s better to go step by step, and test a simple strategy that can show you how to focus on concrete ways to make money.
For more information on how to choose and approach stocks that can make big gains on the same day visit Chat Hot Stocks today at http://www.ChatHotStocks.com
In the end, stock market investing & trading is all about buying and selling according to your knowledge filter. Once you master and follow youre proven filter parameters like a clock, you can expect to start making serious amounts of cash on a consistent basis.
Chat Hot Stocks helps day traders and investors pick hot stock trading opportunities every day at http://www.ChatHotStocks.com
Once you`ve put the time and effort into coming up with a sound trading plan for your stock trades, and have found a good trading opportunity, it makes sense to start the trade right. Finding a good point to enter into a position involves several issues. Fist, you must know the time frame of your trade. For a particular trend stock trades, for example, you might know that you should enter no earlier than a week before the event creating the trend. Next, you must examine charts to see where the stock trades have been and where its support and resistance levels are, and think about it`s psychological support and resistance levels as well. Last, you should wait for a pullback in price if you believe that the price is temporarily high and that it will drop and create a better buying opportunity for you.
The way to make sure you enter where you plan to is to use a limit order. A limit order is an order that can execute only at the stated price or better. Limit orders sometimes make you wait behind others who placed their orders at the same price before you did, but in most situations, placing a reasonable limit order is the only smart way to enter a position. In certain situations, it may make sense to stagger your entry by buying half the shares you want at a price you think may be the lowest the stock trades will reach, and then waiting to buy the other half either when the price does get better, averaging down, or when the stock trades starts to move, adding on strength.
The wrong way to enter a position is to chase moving stock trades. Chasing stocks is a form of panic, and it practically guarantees that you`ll pay too much for the stock. Why is it so bad to pay too much? The more you pay for stock trades, the further your risk to reward ratio is shifted away from reward and toward risk. This happens because your upside has decreased due to the high price of the stock, and because the probability of the run ending increases as the stock gets more and more expensive.
There are two ways to look at the decrease in your upside: First of all, you`ll capture less of the stock`s movement, so your percentage return will be less; second, the more the stock trades costs per share, the fewer shares you`ll be able to buy. Which means that any return you get will be multiplied by fewer shares. Remember, it doesn`t matter if you miss a trade or a position because the entry price has gotten too high. It`s not the last good trade in the market. There will always be more stock trades to make. It`s much better to miss a trade than to chase a stock and end up with a loss.
Morning gaps down present good opportunities to buy stocks you want. Buying a gap down is an excellent way to enter a position, since when a stock gaps down, it often opens near what will turn out to be the low of the day. On the other hand, buying a gap up is one of the worst stock trades you can make. The gap up generally reflects the top of the market`s level of interest in the stock. Any good news from overnight has generally been priced in, so the stock`s opening price and volatility on a gap up often establishes the stock`s high of the day. Therefore, buying, or really chasing, the gap up means that you will likely buy the stock for top dollar. A good trader buys stocks that have an upside that hasn`t been priced into the stock.
Entering a short position on a gap up is a great plan, though shorting a gap down is foolish. The opening price and volatility on a gap down often establishes the stock`s low of the day, so shorting at the lowest point would be a poor trade to make. However, if you keep these guidelines in mind, you will be able to find a safe entry point for your trade. One that fits with your trading plan, and puts you on the path to consistent trading success.
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If you have money to invest, you might contemplate investing in mutual fund. What is mutual fund? Mutual fund is simply a collection of stocks that are bought using money pooled from various individual investors. Historically, average mutual fund returns 2% less annually than a stock market index.
While the return is less than stellar, there are several advantages of investing in mutual fund. They provide diversification, economies of scale and liquidity. So, the question you want to ask yourself is whether you want to have a smaller return for the advantages mentioned previously.
While two percent difference looks small, it is not pocket change. Investors who set aside $ 1 a day, would have $ 562,000 of savings in fifty years if he invests in stock index fund growing at 10.5% per annum. The same investors would collect ‘only’ $ 271,000 if he invests in average mutual fund that grow at 8.5% per annum.
There are also disadvantages investing in mutual funds. There is a problem on how to choose the ‘right’ mutual fund. If average mutual fund returns 8.5% annually, the below-average fund will give you less than that. Just like picking a stock, you would find some stocks that outperform the average and other stocks that do not perform well.
The next question would be if we investors can do better than stock market index fund of 10.5%? A lot of people believe they can. But, the path ahead is full of obstacles. First, you need to get educated about stocks in general and how to calculate the fair value of a common stock. Next, you need to open a brokerage account to execute your buy and sell order. Finally, you need to keep abreast of new developments. Business comes and goes. Industry rises and falls. Examples of industry that used to dominate are: typewriters, cassette players, sewing machine and traditional camera. If you don’t read often, you may predict that certain stock has a high fair value even when the entire industry is collapsing.
It all comes down to individual investors. Would they want to learn more and get a few more percentage return each year? Or would they let someone else manage their money? Me, I prefer to learn how to manage my own investment. Sure, it is time consuming. But giving a little bit of your time may give you the potential to double your retirement money in fifty years. The potential is rewarding and someday you might even manage someone else’s money.
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Specialists for OTCBB and Nasdaq Companies
By William Cate
Published June 2000
[http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]
An orderly market should be the goal of every public company. Sharp
rises or falls in share price attract regulators. A rapidly rising share
price feeds upon itself and guarantees a share price collapse. A sharp drop
in your share price creates selling barriers. When you attempt to revive
your strong share price, your shareholders dump their stock. A steady
upward climb, with minor downward adjustments, keeps shareholders loyal.
The question isn’t how high can you drive your share price? It’s how long
can you sustain your current share price?
One weapon in your share-price stability battle is the trading of
your stock by a specialist. Most U. S. Stock Exchanges use a specialist to
match buy and sell orders to create an orderly market. When buying and
selling are relatively constant in any U. S. Stock Exchange company, the
market is orderly. Specialist can be overwhelmed with selling and this
leads to a market correction or a Bear Market. But the matching principle
is sound.
The National Association of Securities Dealers (NASD) rely upon
their brokers acting as Market Makers to act as specialists. This is the
basis to the Bid/Ask price structure in the OTCBB and Nasdaq Markets. The
NASD policy doesn’t work. The Market Makers goal is to make money for their brokerage firms. Share-price stability is counterproductive to profit,
because it reduces trading. The Market Maker needs volume to profit from a
stock. Trading volume infers instability as buyers go into a feeding frenzy
or sellers panic. Feeding frenzies and panics kill public companies.
If your company trades Nasdaq or the OTCBB, your investor relations
person MUST act as a specialist for your stock. They must trade your stock
to maintain an orderly market in your share price. Your specialist’s job is
to maintain the current share price, not to drive it up. Your specialist
should have a short term goal in restructuring your shareholder base. For
example, EFHCF’s current share price trading allows speculators to sell at
a profit. However, my goal is to replace the speculators with investors who
will hold the stock as it moves up. If I achieve my goal, I’ll need less
buying to sustain a higher share price.
Here are five golden rules for specialists seeking to maintain an
orderly market.
1. NEVER discourage a shareholder from selling their stock. If you
succeed, you are only delaying the sale until your share price is higher.
2. NEVER advise anyone to buy your stock. Let buyers make their own
decisions. Your job is to help them buy the stock at the current price.
3. Communicate regularly with your shareholders. Keep your
shareholders informed. BUT, understate the positive events and overstate
the negative events about your company.
4. Use your shareholder newsletter to regularly remind your
shareholders of your help with selling or buying your company’s shares.
5. NEVER call a potential buyer. Let them call you.
The SEC should change its rules to help specialists. Changes would
allow public companies to act more effectively in ensuring an orderly
market in their stock. Unfortunately any rule change that would benefit a
responsible specialist would benefit a crook. The crook would use the rule
change to steal from the public and destroy the public company. At present,
the crooks seem to have enough going for them. They don’t need more
regulatory help to bilk the public.
To contact the author: Visit the Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visit the Global Village Investment Club Website:
[http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]
By William Cate
Published June 2000
[http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]
An orderly market should be the goal of every public company. Sharp
rises or falls in share price attract regulators. A rapidly rising share
price feeds upon itself and guarantees a share price collapse. A sharp drop
in your share price creates selling barriers. When you attempt to revive
your strong share price, your shareholders dump their stock. A steady
upward climb, with minor downward adjustments, keeps shareholders loyal.
The question isn’t how high can you drive your share price? It’s how long
can you sustain your current share price?
One weapon in your share-price stability battle is the trading of
your stock by a specialist. Most U. S. Stock Exchanges use a specialist to
match buy and sell orders to create an orderly market. When buying and
selling are relatively constant in any U. S. Stock Exchange company, the
market is orderly. Specialist can be overwhelmed with selling and this
leads to a market correction or a Bear Market. But the matching principle
is sound.
The National Association of Securities Dealers (NASD) rely upon
their brokers acting as Market Makers to act as specialists. This is the
basis to the Bid/Ask price structure in the OTCBB and Nasdaq Markets. The
NASD policy doesn’t work. The Market Makers goal is to make money for their brokerage firms. Share-price stability is counterproductive to profit,
because it reduces trading. The Market Maker needs volume to profit from a
stock. Trading volume infers instability as buyers go into a feeding frenzy
or sellers panic. Feeding frenzies and panics kill public companies.
If your company trades Nasdaq or the OTCBB, your investor relations
person MUST act as a specialist for your stock. They must trade your stock
to maintain an orderly market in your share price. Your specialist’s job is
to maintain the current share price, not to drive it up. Your specialist
should have a short term goal in restructuring your shareholder base. For
example, EFHCF’s current share price trading allows speculators to sell at
a profit. However, my goal is to replace the speculators with investors who
will hold the stock as it moves up. If I achieve my goal, I’ll need less
buying to sustain a higher share price.
Here are five golden rules for specialists seeking to maintain an
orderly market.
1. NEVER discourage a shareholder from selling their stock. If you
succeed, you are only delaying the sale until your share price is higher.
2. NEVER advise anyone to buy your stock. Let buyers make their own
decisions. Your job is to help them buy the stock at the current price.
3. Communicate regularly with your shareholders. Keep your
shareholders informed. BUT, understate the positive events and overstate
the negative events about your company.
4. Use your shareholder newsletter to regularly remind your
shareholders of your help with selling or buying your company’s shares.
5. NEVER call a potential buyer. Let them call you.
The SEC should change its rules to help specialists. Changes would
allow public companies to act more effectively in ensuring an orderly
market in their stock. Unfortunately any rule change that would benefit a
responsible specialist would benefit a crook. The crook would use the rule
change to steal from the public and destroy the public company. At present,
the crooks seem to have enough going for them. They don’t need more
regulatory help to bilk the public.
To contact the author: Visit the Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visit the Global Village Investment Club Website:
[http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]
This warning goes out to newbie investors, and more times than not, it falls on deaf ears. But I’ll repeat it one more time just for posterity’s sake: if you’re new to investing, be very careful of making investments in penny stocks. You will undoubtedly be very attracted by the potential returns due to the deflated share prices, but keep in mind that things are usually not what they seem to be, and sometimes penny stocks really are “too good to be true.”.
Why do pennies pose such a risk? In a word: reporting. Or more accurately, lack of reporting. Since Over the Counter (OTC) stocks are not listed on any exchange, they don’t have to follow the stringent reporting criteria which we’ve all become accustomed to for major exchange traded stocks. What this means is that these companies generally offer very little financial guidance, and tend to rely much more on hype than exchange traded stocks.
Penny stocks usually have very small floats (the amount of shares actively traded) and for this reason, coupled with thin capitalization, the stocks can be manipulated quite easily by several buyers or sellers, and some news or rumors. Many penny stock companies use spam email to promote their products. They send out to large groups of internet users who end up becoming interested in the stocks. As the emailed people start buying, the price goes up, and the investment starts to look like a great deal. At this point, the pump and dumpers will start selling all the shares they can, and the investment will come back down to Earth. The pump and dumpers make the money, and the investors who come in later are left holding the bag.
These pump and dump schemes are extremely common, and penny stocks are almost always what are used for the promotion. Particularly vulnerable to this ruse are small and new investors who have tiny amounts of capital. Most of these types of investors want to accumulate a large amount of shares with the hopes of turning a meager $200-$500 investment into a retirement nest egg. Most end up losing their capital.
These warnings might seem obvious, but it’s amazing how often people lose their head when dealing stocks. Most people feel that the number of shares is their best chance for making profits. They feel if they can but 100,000 stocks for 0.001 that somehow they’ll get rich if only the stock hits 1 cent! This is true, of course, but almost never happens. Most stocks that sell for fractional pennies are more likely to stay in that neigborhood rather than to rocket to even $10.
Remember that the only metric you need concern yourself with as it relates to investing is total returns. The higher your percentage return, the more money you have. You will never end up concerning yourself with share price if you are a studious investor. It’s meaningless in the final analysis. For savvy investors who do a ton of research, finding a bargain in the penny stock heap is possible. Once you’ve done a few trades of “normal stocks” give it a try, but lay off the pennies until you have a very good understanding of what makes share price move.
To learn more about Stock Market Basics, please visit the Investing Forum
Stock Market Secrets … How to pick HOT STOCKS … Making money when stocks move Up or Down BY.- http://www.StressFreeTraders.com
The stock market can present you with a lot of hot stocks every day. Many of them are new technology stocks that come from the nanotech, biotech, voip, healthcare, homeland defense or internet sectors.
Most of them may seem promising, but the truth is that a good number of these trading & investing opportunities are extremely risky, while others are not as good as they seem. That’s why it’s very important to know how to choose the best especially if you want to day trade them.
When you know how to pick and approach the best hot stock trading opportuntites, it is possible to generate a consistent and respectable amount of money in a very short period of time.
Experienced day traders recognize that trading hot stocks on momentum can be the fastest way to make money in the stock market.
You don’t necessarily have to trade momentum hot stocks all the time. But you can learn how to take advantage of them when you encounter the best opportunities for going long or for shorting them to make money when they are poised to fall down.
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Stress Free Traders helps day traders and investors pick hot stock trading opportunities every day at http://www.StressFreeTraders.com