Why should you want to steal someone else’s stock market lesson plans?

First, let me tell you that a trading plan is only useful if you follow it. Following your plan will make you successful, yet many traders circumvent the stock market lesson plans that they have carefully created. They become emotional invested in a trade, to the point where they ignore all warning signs. Remember, when the market corrects itself, which it always does, no position is immune, no matter how strongly your ego may be tied to it.

Many investors have stock market lesson plans that watch as their portfolio values are cut in half or more, yet they will still hold their positions. They may fear being left out of a big gain, or be so deep in loss that they felt they couldn’t possibly sell at that point. But even if you believe that all positions will recover from their losses, and the truth is that not all of them will, this is a terrible way to trade.

You tie up too much capital, and your rate of return plummets. Just as you shouldn’t become emotionally involved in a trade, you should also never become tied to ideas. By this I mean becoming so fond of a particular strategy or trend that you cling to it even after it has stopped working. You need to have strategies, and to have plans, but you must also be aware of the shifts and swings of the market, the beginning and the ends of trends.

When you first form your plan for a trade, you should consider what price or price range you think the stock is likely to reach. This is often called a target price, which gives some traders the wrong impression. A target price is not a price that the stock has to meet. A stock does not have to do anything. If you treat your target price as a goal, it can lead to many problems. Your target price should only be used as a guideline.

The target price helps you figure out your risk to reward ratio, and it gives you an exit point in your trade. At the least, it should give you a point where you’ll reassess the trade’s ability to continue to moving upward. But your trade may never reach your target price. Many market factors can interfere with its progress, and you may have set your target higher than you should have. Since there’s no way all your trades will hit your price targets, it is a good idea to sell half your position at a more conservative target. Routinely taking profits will reward you in the long run.

There are a number of things that can interfere with a stock’s movement and force you to close your position sooner than you’d anticipated. Your stock market lesson plans should cover all of these possibilities, but here are some reasons that should always prompt you to close a position:

1. The end of a trend. All trends end some time, and you should be prepared for this.

2. The stock’s upward movement has slowed or been abruptly broken, ending its momentum.

3. The stock is approaching a major psychological barrier, perhaps reaching 100 dollars or 200 dollars a share, which should have been anticipated in your plan

4. The stock is about to reach a resistance level it has been unable to break through before.

This technical barrier should also have been anticipated in your plan.

5. A sudden market wide decline, or the threat of one, or some other serious uncertainty,

which leads to unsafe market conditions.

Exiting a losing trade is not a big deal. Ending a position whether or not the stock reaches its target price, in accordance with your stock market lesson plans, is good trading. The best traders would rather lose a small profit than take an unnecessary risk. You don’t have to win on every trade; no one does, and it’s dangerous to try. In fact, by limiting losses, a good trader can be profitable overall, and make money on only 40 percent of his trades. Cut your losses and start fresh with something else when you need to. You’ll be happier, and you’ll make much more money.

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/]

ABOUT THE AUTHOR

A somewhat stronger argument for believing in recoupling rather than comes from financial markets. As is obvious to anyone who follows the US and European stock markets, there is a strong link between them. Whenever one falls, the other …

Africa - Open For Business
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A somewhat stronger argument for believing in recoupling rather than comes from financial markets. As is obvious to anyone who follows the US and European stock markets, there is a strong link between them. Whenever one falls, the other … Read This…

And we must be thinking about how to strengthen our own financial and stock markets. Today both are islands of stability in the ocean of financial turmoil. Foreign investors interest in Russia s financial and stock markets is as high … Continue Reading…

A somewhat stronger argument for believing in recoupling rather than comes from financial markets. As is obvious to anyone who follows the US and European stock markets, there is a strong link between them. Whenever one falls, the other … Continue Reading…

The drastic declines in most stock markets that day resulted in a bumper crop of margin calls. For those of my readers who don’t follow the markets, a margin call is what happens when investments bought with borrowed money lose enough …

Financial Times Interviews Dmitri Medvedev
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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.

About the Author

Distribute your finance/investing content for free at our article submission service. Meanwhile you can list your site for free at our web directory service.

Even traders want to be trendy when they buy stocks. Many traders make trades because of public opinion, not because the trade itself makes sense. When a particular stock seems popular, they rush in so they don`t feel they`ve missed an opportunity. As a result they end up buying at a price point where the trade can`t possibly work out. You should always avoid the emotion of the “hot” stock.

Here`s an example of what not to do when you buy stocks: Let`s say you`ve been following a particular stock which is in a “hot” sector, and it just announced a stock split. The stock is now at $18, and you calculate it could get to $25 or more by the time of the split. The market is currently bullish, and it looks like a great trade.

The problem is that the stock has been rising for the past four days. It started at $12, but you didn`t notice it until it hit $18, and it`s still rising. The stock split is a month away, and you know it`s likely to fall in price somewhat between now and the split. Still, everyone is talking about this stock. What if it continues to rise and becomes the next blockbuster? You become afraid that if you don`t make a trade you`ll miss a great opportunity. (And besides, you want to be able to tell people that you hold a position in this stock, because it makes you seem smart.) So you buy 1,000 shares at $18.50.

During the next two weeks, the stock goes to $19, then levels off, loses momentum, and drifts down to $17. Then a couple of leading NASDAQ companies give earnings warnings, the market drops, and the stock slides to $15, triggering the stop you`d set at $16 on half your holdings. The stock trades in that range for a week, and then begins to rise slightly going into the split. Your plan is to sell a day or two after the split. The stock rises a little beyond $20.50 by the second day after the split, and then the volume dries up and you sell it for a $2 profit. But since you stopped out of half your shares at $16, you lost $2.50 per share on that half, with a net loss of $.50 on 500 shares. What went wrong?

What went wrong was that you didn`t let the stock come to you. Instead, you chased it as its price rose, knowing perfectly well that, following the stock split trend, it would probably pull back before running up again. It was more likely to pull back than it was to continue on an uninterrupted run to $25, and you knew that if you bought at $18 or higher you were probably paying too much. You ignored what you knew was more likely in favor of what might happen.

You should have given the stock a chance to come to you, at a price you felt was reasonable. If the stock had pulled a surprise and never gotten down to where you thought it would, that would be okay. There were many other stocks to trade, and some of them would have come down to your price. You didn`t have to own this particular stock.

What was the right way to play this particular scenario? When the market is bullish, it`s very likely for a stock to rise when a split is announced, drift down after a few days` rally, and then begin to rise again a week or so before the split. If that`s the trend and there`s no solid reason to think the stock will rise immediately, wait a few days for the stock to drift down and stabilize before buying it. If you had done so in this case, you could have bought it at $16.50 and then sold it for $20.50 for a $4.00 profit on the entire 1,000 shares.

If you had a solid reason to think the stock might continue to rally, you could have bought half the total number of shares you wanted at a price that might have turned out to be too high, and waited for a lower price to buy the other half. If it had turned out to be too high, it would only have reduced your profit. (No stock goes up or down in a straight line. Wait for a pullback before buying.)

There is a good way and a bad way to buy stocks or trade a “hot” stock. The good way requires discipline and careful market evaluation. The bad way is to trade from your feelings. As you can see from this example, it`s always more profitable to trade the good way.

Discover BIG profits from the market by downloading your FREE copy of David’s new Ultimate Trading Systems course. http://www.ultimate-trading-systems.com

About the Author

READ my articles; you’ll FIND the most powerful insider trading plans & tips ever put together. Searching for these on your own, is a needle in a haystack (hard to find). I trade everyday & my progressive efforts found the perfect trading card, a set system & plans that really work. These online trading systems are unbelievably powerful, lucrative, reliable, yet simple to use. Until recently, I’ve kept this formula to myself. NOW, I reveal all.

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Search for opportunities in crises
If the story didn t change, crises can make this stocks cheap because of panic on the stock markets and you can profit from it. You buy cheap and sell high in a few years after the market recovers and the stock price is again much …

Ever hear of no risk, no reward? Well, buying riskier small cap stocks that could return triple digit gains doesn’t have to be a risky proposition. In the first three articles of this small and micro cap series, the first four rules focused on buying strategies. In this last article, the last and fifth rule will cover selling strategies.

Rule Number Five: Remove emotions from your decisions with disciplined selling strategies.

So now that we’ve covered how to buy in to such stocks, let’s review selling strategies because they are just as important. With selling, always limit your downside with stop losses of 10%-15% in long positions and stop losses of 25% with options. Using this strategy eliminates much of the risk from attempting to capitalize on double digit and triple digit gains. In fact, once you become good at identifying opportunities, having winning pick percentages of 70%-85% would not be unusual. And if you attain these percentages, the 15% of picks you lose several hundred dollars in becomes irrelevant when offset by your huge gains. In reviewing what to do about gains, just abide by one rule.

Don’t get greedy and always lock in gains.

If you don’t get greedy, there is no way you should not make money from a stock that has experienced explosive growth. But this scenario does happen. And only one thing causes this to happen. Greed. People will watch 100% profits turn into 20% losses because of greed.

Just as you did with your buy in price, have a predetermined selling price. As opposed to the buy in price range, I would choose a more specific price. For example, let’s consider stock YYY again and assume you bought the stock for $3 a share. Say you set your goal at $5 a share, a 67% increase, but that it blows right through that price two weeks later.

Now what do you do? Hold on or sell?

With sell strategies of rapidly rising stocks, the picture becomes slightly murkier than with sell strategies of stocks that are falling. When a stock passes through your 15% stop loss order (see part I of this article), it will sell automatically, no questions asked, with all emotions removed from that decision. But what do you do when the stock is shooting skyward with seemingly unlimited upside? It depends on what’s driving the price up. If pure speculation is the only thing driving the price, sell half your position and then put trailing stop losses of 20% on the remaining half. In other words, now that stock YYY has risen to $5 a share from my original buy-in price of $3 a share, I sell half my position, and my stop loss price on the remaining half has now moved up to $4.25 a share. This way I’ve locked in my predetermined 67% gain on half of my position of YYY and the least amount of profit I can make on the remaining half is 42%.

Now if earnings and sales are driving the price up, I may take another strategy. Instead of selling half of my position in YYY, I’ll hold onto my entire position, but again institute a trailing stop loss of 20%, moving my stop loss price-point up to $4.25. This is riskier than the first strategy, but the important thing to note is that I am still locking in gains. In this scenario, I still guarantee myself a 42% gain no matter what happens with the stock from here on out.

The key, and I can’t emphasize this enough, is to always take gains off the table or to lock them in with trailing stops. By doing this, you remove your emotions from your decisions. Formulate a disciplined sell strategy and you’ll make a lot more money than you would by trying to forecast the direction of the small and micro-cap stocks you invest in. Plus you’ll save a lot of money on the psychiatrist you won’t have to hire due to all the unnecessary stress you would have caused yourself by not employing these strategies.

So to summarize, always limit your downside and lock in gains with stop loss orders when investing in small and micro cap stocks and you can invest in stocks with enormous potential without the stress associated with the enormous risk of some of these stocks.

? 2006 Global Market Opportunities, Inc.

About the Author

John Kim is the founder of Global Market Opportunities. He has over thirteen years of experience in finance and financial services with two Fortune 500 companies. To learn more about how to identify small and micro cap stocks that consistently and significantly beat the market indices, click the following link, Learn to Invest Money and Achieve Financial Freedom.

Stock Market Timing … How to Play the Stock Market … How to Buy and Sell Stocks … How the stock market works BY .- MomentumStockPick.com

The stock market can present us with a lot of hot stocks every week. 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, you are able 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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+ $ Trading NASDAQ stocks or OTCBB - OTC stocks ?

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+ $ Will my market rally last more than 5 minutes or less? What to do

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About the Author

Momentum Stock Pick helps day traders and investors pick hot stock trading opportunities every day at http://www.MomentumStockPick.com