Struggling to Identify the Direction of the Market

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: New trader? Experienced trader? Somewhere in the middle? Regardless of how long you’ve been trading, it’s very likely that you’ve struggled with identifying trends in the markets. Trends are crucial to successful trading, but they’re also one of the biggest problems for traders. So, how do you avoid wasting time and energy when it comes to predicting trends? The answer is simplicity itself.

The Complete Guide to Daytrading, day trading coach

If you know the pitfalls of trad¬ing, you can easily avoid them. Small mistakes are inevitable, such as entering the wrong stock symbol or incorrectly setting a buy level. But these are forgivable, and, with luck, even profitable. What you have to avoid, however, are the mistakes due to bad judgment rather than simple errors. These are the “deadly?mistakes which ruin entire trading careers instead of just one or two trades. To avoid these pitfalls, you have to watch yourself closely and stay diligent.

Think of trading mistakes like driving a car on icy roads: if you know that driving on ice is dangerous, you can avoid traveling in a sleet storm. But if you don’t know about the dangers of ice, you might drive as if there were no threat, only realizing your mistake once you’re already off the road.

One of the first mistakes new traders make is sinking a lot of wasted time and effort into predicting legitimate trends. Traders can use very complicated formulas, indictors, and systems to identify possible trends. They’ll end up plotting so many indicators on a single screen that they can’t even see the prices anymore. The problem is that they lose sight of simple decisions about when to buy and when to sell.

The mistake here is trying to understand too much at once. Some people think that the more complicated their system is, the better it will be at “predicting?trends. This is almost always an illusion. Depending too much on complicated systems makes you completely lose sight of the basic principle of trading: buy when the market is going up and sell when it’s going down. Since you want to buy and sell early in a trend, the most important thing to discover is when a trend begins. Complicated indicators only obscure this information.

Remember to keep it simple: one of the easiest ways to identify a trend is to use trendlines. Trendlines are straightforward ways to let you know when you are seeing an uptrend (when prices make a series of higher highs and higher lows) and downtrends (when prices show lower highs and lower lows). Trendlines show you the lower limits of an uptrend or the upper limits of a downtrend and, most importantly, can help you see when a trend is starting to change.

Once you get comfortable plotting trendlines, you can use them to decide when to start taking action. Only after using these early indicators should you start using more specific strategies to determine your exact buy or sell point. Moving averages, turtle trading, and the Relative Strength Index (RSI) are some examples of more complex indicators and systems that are available. But only use them after you’ve determined if the market is trending or not.

Of Stocks, Stockholders And Stock Market

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A copper mining enterprise Stora Kopparberg first introduced the system of stock in the 13th century. The financial backers and owners felt the need to raise money for investment in the new projects of the same company so they started the method of stock and shares. It was also required in order to ward off the threat to the ownership rights if the company was sold, which would mean complete loss of control.

The investors got the monetary support they were looking for and…

stock,stock trading,mutual funds,dividends,

A copper mining enterprise Stora Kopparberg first introduced the system of stock in the 13th century. The financial backers and owners felt the need to raise money for investment in the new projects of the same company so they started the method of stock and shares. It was also required in order to ward off the threat to the ownership rights if the company was sold, which would mean complete loss of control.

The investors got the monetary support they were looking for and at the same time solved ownership issues in case the company was sold by granting stocks to the people. Plus, they sold a part to people and still retained control over the company. Thus, the owner had some portion of the assets, some power to make decision conditionally. In return, they shared a part of the profit with the stockowner as dividend.

Financially, stock implies the ownership or share in a corporation. It gives the stockowner the right to claim a share in the assets and income of the corporation. The two types of stocks, preferred and common differ in many respects. The common stock owners can vote at the shareholders’ meetings whereas the preferred stockowners cannot vote. Common stockowners get dividends declared by the company, whereas preferred stock owners have higher claim in assets and income of the company. Preferred stock entitles the owner to have his dividends earlier than the common stock owner. Preferred stock owner gets the priority when the company goes bankrupt. Besides these two, the other types of stock are dual class shares and treasury stock.

A stockowner is not liable to losses in case the company closes and has loans to pay back. The loss of the stockholders is limited to the money that would have been made by converting the assets into cash since all the money would be used to repay the loans to the creditors.

A stock exchange is the place where trading of shares is carried out. Individuals and companies sell and purchase shares on a large scale. Generally, a particular company trades only in one specific market and is said to be on the list of that particular stock exchange. However, big multinational companies can be listed on many stock exchanges. This is called inter-listed shares.

There are various methods to buy or sell finance stocks, but the commonest among them is through the mediator called stockbroker, who actually transfers the shares from one owner to another. Stocks can be bought directly from the company also.

The stock market of a country is an indicator of its economy, which just goes to show the growth and power of the stock market.

Stock Indexes: The Inside Story

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A stock index is simply an average price for a large group of stocks, formed from stocks with something in common. One huge function of indexes is that they can function as investment instruments — mutual funds based on an index duplicate the holdings of the underlying index.

stocks, stock trading

Most of us have heard of stock indexes, but have only a fuzzy idea of them at best. This article aims to clarify some of the basics of stock indexes — what they are and how they work.

What Is A Stock Index?

A stock index is simply an average price for a large group of stocks, either those on a particular stock exchange or stocks across an entire investing sector. Indexes are formed from stocks with something in common: they are on the same exchange, from the same industry, or have the same company size or location. Stock indexes give us an overall snapshot of the economic health of a particular industry or exchange.

Many stock indexes exist; in the United States the most well known are: the Dow Jones Industrial Average, the New York Stock Exchange Composite index, and the Standard & Poor 500 Composite Stock Price Index.

How Does It Work?

There are several ways to calculate an index. An index based solely on stock prices is called a “price weighted index.” This type of index ignores the importance of any particular stock or the company size.

A “market value weighted” index, on the other hand, takes into account the size of the companies involved. That way, price shifts of small companies have less influence than those of larger companies.

Another type of index is the “market share weighted” index. This type of index is based on the number of shares, rather than their total value.

Index As Investment Tool

Another huge function of indexes is that they can function as investment instruments in and of themselves. Mutual funds based on an index duplicate the holdings of the underlying index. Thus, if index A rises by 1%, the Index A Mutual Fund rises by 1%. This has the tremendous advantage of lower costs. Plus these index funds have been shown to generally outperform managed funds.

The Big Indexes

One of the best-known indexes in the world is the Dow Jones Industrial Average. It is a “price-weighted average” index composed of the stocks of 30 of the most influential companies in America. Some feel that 30 companies are not enough to form an accurate assessment for so influential a measurement, but it is reported around the globe daily nevertheless.

The Standard & Poor 500 Index is based on 500 United States corporations, carefully chosen to represent a broader picture of economic activity.

Beyond the United States, the most influential index is the FTSE 100 Index, based on 100 of the largest companies on the London Stock Exchange. It is 1 of the most important indexes in Europe. 2 other important indexes are France’s CAC 40 and Japan’s Nikkei 225.

The Friendly Trend – Technical vs. Fundamental Analysis

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Technical analysts have flourished and waned in line with the stock exchange bubble.

The authors of a paper published by NBER on March 2000 and titled “The Foundations of Technical Analysis” – Andrew Lo, Harry Mamaysky, and Jiang Wang – claim that:

“Technical analysis, also known as ‘charting’, has been part of financial practice for many decades, but this discipline has not received the same level of academic scrutiny and acceptance as more traditional approaches such as fundamental analysis.

One of the main obstacles is the highly subjective nature of technical analysis – the presence of geometric shapes in historical price charts is often in the eyes of the beholder. In this paper we offer a systematic and automatic approach to technical pattern recognition … and apply the method to a large number of US stocks from 1962 to 1996…”

And the conclusion:

” … Over the 31-year sample period, several technical indicators do provide incremental information and may have some practical value.”

These hopeful inferences are supported by the work of other scholars, such as Paul Weller of the Finance Department of the university of Iowa. While he admits the limitations of technical analysis – it is a-theoretic and data intensive, pattern over-fitting can be a problem, its rules are often difficult to interpret, and the statistical testing is cumbersome – he insists that “trading rules are picking up patterns in the data not accounted for by standard statistical models” and that the excess returns thus generated are not simply a risk premium.

Technical analysts have flourished and waned in line with the stock exchange bubble. They and their multi-colored charts regularly graced CNBC, the CNN and other market-driving channels. “The Economist” found that many successful fund managers have regularly resorted to technical analysis – including George Soros’ Quantum Hedge fund and Fidelity’s Magellan. Technical analysis may experience a revival now that corporate accounts – the fundament of fundamental analysis – have been rendered moot by seemingly inexhaustible scandals.

The field is the progeny of Charles Dow of Dow Jones fame and the founder of the “Wall Street Journal”. He devised a method to discern cyclical patterns in share prices. Other sages – such as Elliott – put forth complex “wave theories”. Technical analysts now regularly employ dozens of geometric configurations in their divinations.

Technical analysis is defined thus in “The Econometrics of Financial Markets“, a 1997 textbook authored by John Campbell, Andrew Lo, and Craig MacKinlay:

“An approach to investment management based on the belief that historical price series, trading volume, and other market statistics exhibit regularities – often … in the form of geometric patterns … that can be profitably exploited to extrapolate future price movements.”

A less fanciful definition may be the one offered by Edwards and Magee in “Technical Analysis of Stock Trends“:

“The science of recording, usually in graphic form, the actual history of trading (price changes, volume of transactions, etc.) in a certain stock or in ‘the averages’ and then deducing from that pictured history the probable future trend.”

Fundamental analysis is about the study of key statistics from the financial statements of firms as well as background information about the company’s products, business plan, management, industry, the economy, and the marketplace.

Economists, since the 1960’s, sought to rebuff technical analysis. Markets, they say, are efficient and “walk” randomly. Prices reflect all the information known to market players – including all the information pertaining to the future. Technical analysis has often been compared to voodoo, alchemy, and astrology – for instance by Burton Malkiel in his seminal work, “A Random Walk Down Wall Street”.

The paradox is that technicians are more orthodox than the most devout academic. They adhere to the strong version of market efficiency. The market is so efficient, they say, that nothing can be gleaned from fundamental analysis. All fundamental insights, information, and analyses are already reflected in the price. This is why one can deduce future prices from past and present ones.

Jack Schwager, sums it up in his book “Schwager on Futures: Technical Analysis”, quoted by Stockcharts.com:

“One way of viewing it is that markets may witness extended periods of random fluctuation, interspersed with shorter periods of nonrandom behavior. The goal of the chartist is to identify those periods (i.e. major trends).”

Not so, retort the fundamentalists. The fair value of a security or a market can be derived from available information using mathematical models – but is rarely reflected in prices. This is the weak version of the market efficiency hypothesis.

The mathematically convenient idealization of the efficient market, though, has been debunked in numerous studies. These are efficiently summarized in Craig McKinlay and Andrew Lo’s tome “A Non-random Walk Down Wall Street” published in 1999.

Not all markets are strongly efficient. Most of them sport weak or “semi-strong” efficiency. In some markets, a filter model – one that dictates the timing of sales and purchases – could prove useful. This is especially true when the equilibrium price of a share – or of the market as a whole – changes as a result of externalities.

Substantive news, change in management, an oil shock, a terrorist attack, an accounting scandal, an FDA approval, a major contract, or a natural, or man-made disaster – all cause share prices and market indices to break the boundaries of the price band that they have occupied. Technical analysts identify these boundaries and trace breakthroughs and their outcomes in terms of prices.

Technical analysis may be nothing more than a self-fulfilling prophecy, though. The more devotees it has, the stronger it affects the shares or markets it analyses. Investors move in herds and are inclined to seek patterns in the often bewildering marketplace. As opposed to the assumptions underlying the classic theory of portfolio analysis – investors do remember past prices. They hesitate before they cross certain numerical thresholds.

But this herd mentality is also the Achilles heel of technical analysis. If everyone were to follow its guidance – it would have been rendered useless. If everyone were to buy and sell at the same time – based on the same technical advice – price advantages would have been arbitraged away instantaneously. Technical analysis is about privileged information to the privileged few – though not too few, lest prices are not swayed.

Studies cited in Edwin Elton and Martin Gruber’s “Modern Portfolio Theory and Investment Analysis” and elsewhere show that a filter model – trading with technical analysis – is preferable to a “buy and hold” strategy but inferior to trading at random. Trading against recommendations issued by a technical analysis model and with them – yielded the same results. Fama-Blum discovered that the advantage proffered by such models is identical to transaction costs.

The proponents of technical analysis claim that rather than forming investor psychology – it reflects their risk aversion at different price levels. Moreover, the borders between the two forms of analysis – technical and fundamental – are less sharply demarcated nowadays. “Fundamentalists” insert past prices and volume data in their models – and “technicians” incorporate arcana such as the dividend stream and past earnings in theirs.

It is not clear why should fundamental analysis be considered superior to its technical alternative. If prices incorporate all the information known and reflect it – predicting future prices would be impossible regardless of the method employed. Conversely, if prices do not reflect all the information available, then surely investor psychology is as important a factor as the firm’s – now oft-discredited – financial statements?

Prices, after all, are the outcome of numerous interactions among market participants, their greed, fears, hopes, expectations, and risk aversion. Surely studying this emotional and cognitive landscape is as crucial as figuring the effects of cuts in interest rates or a change of CEO?

Still, even if we accept the rigorous version of market efficiency – i.e., as Aswath Damodaran of the Stern Business School at NYU puts it, that market prices are “unbiased estimates of the true value of investments” – prices do react to new information – and, more importantly, to anticipated information. It takes them time to do so. Their reaction constitutes a trend and identifying this trend at its inception can generate excess yields. On this both fundamental and technical analysis are agreed.

Moreover, markets often over-react: they undershoot or overshoot the “true and fair value”. Fundamental analysis calls this oversold and overbought markets. The correction back to equilibrium prices sometimes takes years. A savvy trader can profit from such market failures and excesses.

As quality information becomes ubiquitous and instantaneous, research issued by investment banks discredited, privileged access to information by analysts prohibited, derivatives proliferate, individual participation in the stock market increases, and transaction costs turn negligible – a major rethink of our antiquated financial models is called for.

The maverick Andrew Lo, a professor of finance at the Sloan School of Management at MIT, summed up the lure of technical analysis in lyric terms in an interview he gave to Traders.com’s “Technical Analysis of Stocks and Commodities”, quoted by Arthur Hill in Stockcharts.com:

“The more creativity you bring to the investment process, the more rewarding it will be. The only way to maintain ongoing success, however, is to constantly innovate. That’s much the same in all endeavors. The only way to continue making money, to continue growing and keeping your profit margins healthy, is to constantly come up with new ideas.”

New Mexico Joins the Nuclear Renaissance

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The Urenco enrichment facility could spark another New Mexico uranium boom. Another uranium boom may now be in progress. How is that possible?

New Mexico, Uranium, Mining, Uranium enrichment, nuclear power, energy

New Mexico hasn’t had a uranium boom since 1950. After Navajo shepherd Paddy Martinez woke up from his nap, beneath a limestone ledge with a handful of funny looking yellow rocks, only to be later told he had discovered New Mexico’s first uranium, the state was swarmed with thousands of prospectors hoping to cash in on the nuclear metal.

Another uranium boom may now be in progress. This time, the charge is led by the European consortium Urenco Ltd, general partner of Louisiana Energy Services (LES), which was issued a draft license, this past Friday, by the U.S. Nuclear Regulatory Commission to build and operate a $1.5 billion uranium enrichment plant in Lea County, New Mexico. Louisiana Energy Services is a Urenco-managed partnership, whose members include Exelon Corp, Entergy Corp and Duke Energy Corp. This is the first permit issued for a uranium enrichment facility in thirty years; the first ever to a private company.

Announcement of the uranium enrichment facility came nine days after International Uranium Corporation (IUC) announced it was reopening its uranium mines in the Four Corners region of the western United States. In a company news release, Ron Hochstein, president of IUC, announced, “We intend on utilizing our large capacity mill to its full advantage through toll milling contracts with other future miners in the area? The company’s White Mesa Mill, only one of two operational uranium mills in the United States, is across from the New Mexico border.

Uranium development companies have acquired uranium properties, abandoned by major oil companies during the uranium drought of the 1980s and 1990s, and could be well positioned to advance those properties through the permitting process. Over the past year, newer uranium companies have entered the state, optimistic the record-high spot uranium price may help finance their exploration and development costs in New Mexico.

With a uranium mill, just past the western border of New Mexico in neighboring Utah, and the soon-to-be-built uranium enrichment facility in southeastern New Mexico, when might the state again become a world-class production center? Only over the past few years has Canada’s Athabasca Basin, with its ultra-high grades of uranium ore, surpassed the cumulative production of New Mexico. The Grants Mineral Belt in northern New Mexico produced more than 340 million pounds of uranium oxide (U3O8, yellowcake) before the uranium depression of the 1980s and 1990s brought New Mexico mining to a standstill. The Grants Mineral Belt produced about 40 percent of all the mined uranium in the United States.

Who is Urenco?

Urenco is short for Uranium Enrichment Company. Three countries ?Germany, the Netherlands and the United Kingdom ?signed the Treaty of Alemlo (Netherlands) on March 4, 1970 as a way to collaborate in developing centrifuge technology for uranium enrichment. In 1971, three industrial partners ?British Nuclear Fuels plc (BNFL), Ultra-Centrifuge Nederland N.V. (UCN) and Uranit GmbH ?founded Urenco Ltd. The company has since spun off its Enrichment Technology Company. There are now three wholly owned subsidiaries, based in each of the respective countries.

The Louisiana Energy Services partnership plans on building the National Enrichment Facility (NEF) about five miles east of Eunice, New Mexico. The NEF plans on providing a sustainable domestic supply of slightly enriched uranium, also called ‘low enriched uranium?or LEU, using Urenco’s gas centrifuge technology. Currently, USEC is the other uranium enrichment facility, using the more expensive gaseous diffusion technology. USEC is a publicly traded company, created under the Clinton-Gore Administration for the purposes of the Russia-US ‘swords for plowshares?HEU deal. Under the HEU agreement, Russia’s counterpart supplied USEC with uranium from decommissioned Russian nuclear weapons. This uranium now supplies U.S. utilities with about 50 percent of the uranium used to power domestic nuclear power plants.

In 2001, the domestic uranium industry only produced 12 percent of its required supply of enriched uranium, while Russia exported 55 percent to the United States. Urenco supplied 16 percent of the U.S. demand. Urenco plans to increase its percentage of enriched uranium to about one-quarter of U.S. enrichment demand, once the plant is running at full capacity. This amounts to annual production of 3 million Separative Work Units (SWUs). A Separative Work Unit is the unit used to express the effort necessary to separate U-235 and U-238. The capacity of enrichment plants is measured in tons SW per year. For example, a large nuclear power station with a net electrical capacity of 1300 MW requires an annual amount of 25 tons SW (enriched uranium) to operate (with a concentration of 3.5 percent U-235).

The National Enrichment Facility will become Urenco’s North American debut of the company’s gas centrifuge technology, which the company boasts is the ‘world’s most advanced, energy-efficient and cost-effective uranium enrichment technology.?It has reportedly been used for more than thirty years.

What is Gas Centrifuge Technology?

Only 0.7 percent of the weight of natural uranium, the U-235 isotope found in nature’s uranium, is the isotope needed to power a nuclear reactor. The U-235 isotope is the one that splits inside the core. It is this isotope which releases energy in the fission process. Because natural uranium can not power a nuclear reactor, the concentration of U-235 must be slightly increased, also known as ‘low enrichment,?from 0.7 percent to between 3 and 5 percent. The enrichment occurs during the centrifuge process.

It is called the ‘gas centrifuge process?because gaseous uranium hexafluoride (UF6) is fed into a cylindrical, high-speed rotor. The gas is whirled around inside thousands of centrifuges in a nearly friction-free environment, separating the fissionable U-235 isotope from the heavier U-238 isotope. The centrifugal motion pushes the heavier U-238 gas away from the useful U-235 gas, which remains closer to the rotor axis. The process is repeated until the desired enrichment percentage is achieved.

Let’s back up the process a few steps. First, the uranium is mined and milled. The finished product, which is shipped off to the conversion facility, is called yellowcake.

The next step in creating nuclear fuel for a reactor is the conversion process. The yellowcake, or U3O8, is converted into uranium hexafluoride, or UF6. Yellowcake is dissolved in nitric acid to create a new solution, uranyl nitrate. Hydrogen is then used to reduce this to UO2. This is then converted to UF4 with hydrofluoric acid. The UF6 is obtained with the uranium is oxidized with fluorine. At ambient temperatures, UF6 forms solid grey crystals. Depending upon its temperature, uranium hexafluoride can be a solid, liquid or gas.

After the U3O8 has been converted to UF6, it is transported to the enrichment site in an internationally standard transport container. The solid UF6 is heated up in an air-tight pressure vessel until it returns to its gaseous state. It is then fed into the centrifuge. The Urenco ‘gas centrifuge?has two pipes, one which removes the enriched uranium and another which removes the heavier uranium, depleted of U-235.

Because a single centrifuge won’t enrich the uranium to the desired level, a number of centrifuges are connected together. The connected, parallel centrifuges are called a cascade. By passing through each of the centrifuges in the cascade, the U-235 is gradually enriched to the level required by the customer, a nuclear power plant.

After the desired enrichment level is achieved, the enriched UF6 gas is passed through a series of compressors and packaged into product containers. The UF6 gas is cooled until the vapors solidify onto the walls of the container. The finished product is shipped to the fuel fabrication plant where the solid, enriched uranium is manufactured into fuel pellets.

Uranium Enrichment Means Big Money

The key to expansion, after sufficient U3O8 has been mined, is ensuring the uranium is converted and enriched so that it can fuel nuclear power plants. Until now, U.S. utilities have relied upon Russian HEU to LEU supplies to fuel their nuclear reactors. Urenco’s NEF in New Mexico gives a boost to the nuclear energy sector, and provides U.S. utilities with an alternative to having uranium enriched at USEC’s Kentucky plant, or worse yet, shipping domestically produced uranium overseas for enrichment. For instance, Brazil was forced to have its uranium enriched in Europe, until recently.

Value-adding to the fuel supplying reactors can mean big money for LES, and especially for Urenco Ltd. But, the investment of $1.5 billion will also produce hundreds of new jobs for the border towns of both New Mexico and Texas. Estimates show about 800 construction jobs will be created as the facility is being built, and as many as 1200 during the peak of the construction. About 300 employees will be required to operate the facility. Nearby Andrews, Texas has been celebrating the National Enrichment Facility. The city manager expects the number of new homes under construction to jump by 10-fold this year. School enrollment has grown over the past year while newcomers have moved into the area, hoping for construction jobs.

Urenco’s National Enrichment Facility should begin construction later this summer, probably in August. Louisiana Energy Services (LES) hopes to start selling enriched uranium in 2009, probably to its U.S. utility partners, who hope to build new reactors. A statement issued by the Nuclear Energy Institute (NEI) on Friday, congratulating LES for the approval of its NRC license pointed ahead to the U.S. expansion of the nuclear energy sector. The NEI’s chief nuclear officer, Marvin Fertel, said, “This experience bodes well for the construction and operating license applications for new nuclear power plants that are expected to be submitted to the agency beginning in 2007.?

Learn Stock Trading From Playing Poker

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Picking good stocks is only the first step to become a consistently profitable trader. Those of you that track the performances of stock picks I post on http://www.cisiova.com/analysis.asp know that it is impossible to determine if a stock is good without a good exiting strategy. And for most traders, exit strategy is the hardest part. Many people say that to trade profitably you need to develop the right mentality. Unfortunately, such winning mentality can only be developed …

stock, stocks, stock pick, stock trading, trading, poker, portfolio management

Picking good stocks is only the first step to become a consistently profitable trader. Those of you that track the performances of stock picks I post on http://www.cisiova.com/analysis.asp know that it is impossible to determine if a stock is good without a good exiting strategy. And for most traders, exit strategy is the hardest part. Many people say that to trade profitably you need to develop the right mentality. Unfortunately, such winning mentality can only be developed through experience. However, there is a short cut to get through the learning curve without throwing thousands of dollars in the process. This short cut is playing POKER.

Yes you heard me right. Apparently, playing poker has a lot of similarities with investing in stocks. First of all, they both deal with money, uncertainties, and a keen judgment of potential risk and reward. In this article I will explain the similarities and differences between stock trading and poker. But before proceeding, make sure you know the rules of Texas Holdem and fluent with the terminologies.

Think of stock picking as looking for good hands to play. In Texas Holdem, you can look at the two hole cards and decide whether you can play the hand or not. Similarly, you can analyze the stock before entering a position. Fortunately for you traders, no one will raise pre-flop, so you just pay the commission. Remember to exit the position you also need to pay the commission, which implies that the cost of entering a position is two times the commission. Good poker players only play good hands, so you should do thorough researches before entering a position. One good thing about trading is that you do not have to wait for good stocks like poker players wait for good hands, you can find good stocks on stock picking websites or using screeners to find them yourself.

Once you call the blinds in poker, you get to see the flops and two more cards. Think of these cards as the performance of your stock after you enter the position. In poker, the flop can make a good hand, a medium hand, or a bad hand (by helping your opponents). In trading, you can observe the potential of the stock as well, and you should objectively judge the downside and upside potential of the stock. In poker, there are times that you have a good hand, and your opponent have a better hand, and you know you are beat. These are the times where your mentality matters the most. An experienced poker player will fold his hand regardless of the amount of money he has put into the pot. As a trader, at times that you think the upside potential fails to actualize, you should sell the stock regardless of how much you have lost. On the other hand, when a good poker player knows he has the winning hand, despite the possibility of losing at the river, he would bet aggressively, without fearing the small losing possibility. In trading, this translates to if the stock goes up and manifests higher upside potential, you should not fear that you will lose your recent winnings. Therefore the winning mentality is to ride when the stock is going up, and sell when the stock is losing its heat. This discipline is easily said than done. So many times I have heard people lost all their money because they hold on to losing positions (due to hope) and sell winning positions too early (due to fear).

By playing poker, you would get the chance to master your emotions, learning not to hope when you are beat, and not to fear when you are favorable to win. You want to lose small and win big, not the opposite.

Now go practice. This mentality only develops with experience.

The 1% rule ?Stock Market Insiders Are Richer than European Royalty!

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Stop thinking like a cow to become wealthy in the stock market!

stock market, stock investing

I was watching Oprah the other night. She was covering the reality of the crappy lie called the American Dream that says just work hard and everything will be Peachey keen in the land of the free and the home of the brave. She pointed out that 1% of the U.S. population now control 40% of the all American wealth. If you are not born into that 1% today, she pointed out, then it is much harder today to work your way into it. You have to work a lot more hours for a lot less pay and your extra hours are just making the 1% richer. Meanwhile if you have the right connections ?especially if you are able to enter that special band of thieves called corporate insiders and play your corporate politics right ?then you are instantly propelled to the top. Today with our hideously corrupt corporate governance system supported by divisions of corporate attorneys serving insiders and paid by unwitting public Joe shareholders membership pops you right into Oprah’s 1%.

So what can you do if you weren’t born into the Johnson & Johnson family and don’t have a “richer than God?old money American dream trust fund? The answer is you have to learn to buy very low and sell very high like the robber barons did in the 1800s. I know times are tough on the American middle class but there are ways for you to get ahead. First of all you have to stop chasing pipe dreams. Ignore the get rich schemes like multilevel marketing, derivatives, and real estate short selling junk people will bring your way ?all endorsed by some major public figure that make the con artist at the top rich to suck you in.

Learn to take your financial future in your own to hands and make the market pay you. How do you do this? Well, first you have to stop thinking like a cow. Most people in the public make all of their opinions based on what the group has decided is right. You have to stop doing this and take the attitude that the public as a group is a pretty stupid mass of livestock heading up the cattle chute into the inside corporate executives financial slaughter house. Right now the chute is closed because the stock market has recently crashed making stocks cheap -insiders are loading up while the media is strangely bereft of “stock market rags to riches dreams?it hyped up to suck people in to the market in 2000 when insiders were dumping on the public.

Learn to get really excited about the market when everyone hates it. Right now the stock market has crashed and you don’t hear any good news out there. Ever wonder why? The big forces behind Wall Street, the secret buying consortiums, the inside corporate executives, and the experienced individual investors who are smart enough to know to buy, buy, buy when stock prices are extremely low and the Wall Street media machine is strangely quiet. There are a lot of really good companies out there at extremely low prices ripe for you to buy, buy, buy!!!

Winning Stocks Always Leave “Foot Prints”

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SIX STEPS and the IRREFUTABLE LAWS of the MARKET Every Investor and Trader MUST KNOW to Succeed

Step 1:

A move begins with the sponsors (smart traders) who have insider knowledge as it relates to a particular stock or market. This information will move a market up or down depending on the insiders’ information. These buyers are smart, very smart, and recognize trading/investment opportunities very early in the markup cycle.

Step 2:

Days, weeks, or sometimes months…

stocks,investing

SIX STEPS and the IRREFUTABLE LAWS of the MARKET Every Investor and Trader MUST KNOW to Succeed

Step 1:

A move begins with the sponsors (smart traders) who have insider knowledge as it relates to a particular stock or market. This information will move a market up or down depending on the insiders’ information. These buyers are smart, very smart, and recognize trading/investment opportunities very early in the markup cycle.

Step 2:

Days, weeks, or sometimes months after a move has started, there is a brief mention in the electronic media (radio, cable, TV) or on one of the internet chat boards that a market has moved. The public hears for the first time and begins to get interested, but does not buy.

Step 3:

A blurb of information appears in print media. The move also begins getting more exposure on blogs and internet message boards. The public starts paying a little more attention, and will buy a little bit.

Step 4:

Wall Street and LaSalle Street brokers go into full hype mode and hawk the market to their customers. The public begins buying in greater volume.

Step 5:

A full-blown front-page article appears about the particular stock or market in one of the major financial newspapers, magazines, or financial websites. This is often six months after the fact and after a market has shown its greatest appreciation. There is often heavy public buying, even a possible frenzy, as all media, brokers, and so-called “gurus” start to tout the market.

Step 6:

As step 5 gets underway, the sponsors or smart traders begin to move out of the market and take their profits off the table.

The finale: The move ends, the market falls, and investors lose money.

Not Limiting Your Losses

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Hate to lose? Who doesn’t? But there’s a difference between losing and losing BIG. Lots of traders fail to limit their losses in search of that one, big win. They feel like any loss is a failure, and so they don’t incorporate a strategy for losses at all. That’s the first mistake. Luckily, it’s easily avoided.

The Complete Guide to Daytrading, day trading coach

If you know the pitfalls of trad¬ing, you can easily avoid them. Small mistakes are inevitable, such as entering the wrong stock symbol or incorrectly setting a buy level. But these are forgivable, and, with luck, even profitable. What you have to avoid, however, are the mistakes due to bad judgment rather than simple errors. These are the “deadly?mistakes which ruin entire trading careers instead of just one or two trades. To avoid these pitfalls, you have to watch yourself closely and stay diligent.

Think of trading mistakes like driving a car on icy roads: if you know that driving on ice is dangerous, you can avoid traveling in a sleet storm. But if you don’t know about the dangers of ice, you might drive as if there were no threat, only realizing your mistake once you’re already off the road.

Traders often fail to limit their losses in search of a big win. Of course, the only way you can make a fortune with trading is to actually stay in the game, and it’s hard to stay in the game when you’ve already lost all of your money. The problem is that people often feel like any loss is a failure, and so they don’t incorporate a strategy for “safe?losses. They may feel like “planning?for a loss is planning to fail when, in fact, it’s planning to keep themselves in the game.

Losses are a part of our business. The key to trading success is to limit your losses. Too many traders give a trade way too much “room,?and they take big hits, which can shrink an account down by 20%, 30%, and sometimes even 40%. You have to put a system into place which will ensure that you set small losses to avoid emptying your account.

There’s a huge difference between losing big on a regular basis and losing small in a controlled trading plan. You already know that you should keep your losses small; the key is to keep them smaller that your average wins. Even if your winning percentage is only 50%, you’ll still be profiting if you set yourself up correctly. For example, if you have a weekly strategy that gets you $300 for every win but only takes $200 for every loss, a tie of a win and a loss will still get you a $100 profit for that week.

The real key is to set a weekly goal and to be sure that you set a loss limit for each trade. So let’s say your goal is $300 each week, and you want to be sure that you lose no more than $200 per trade. If your first two trades of the week were losses, then you’re down $400. But all you need is three more wins through the rest of the week to make your profit. Once you meet your goal, stop trading, otherwise, you may end up with further losses, putting you behind schedule and gouging into your account funds, which will simply set you back further.

The basic rule: always know when to exit a trade. Set a loss limit and stick to it. But also set short-term goals, and stop when you’ve reached those goals. Don’t ever gamble. Remember that looking for small gains over the long term is a much more reliable and consistent strategy which will help you avoid losing too much too quickly.

Report On Stock Research

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The report of stock research contains all the information like the fair value estimate of a company’s worth. Likewise, guides on when to buy and when to sell stocks as well as the selling prices of stocks are also discussed and displayed on the stock research report.

A stock research report is accomplished by expert analysts who are renowned in their own companies and their industries. Their reports mainly cover strengths and weaknesses, lines of business, what’s good and …

The report of stock research contains all the information like the fair value estimate of a company’s worth. Likewise, guides on when to buy and when to sell stocks as well as the selling prices of stocks are also discussed and displayed on the stock research report.

A stock research report is accomplished by expert analysts who are renowned in their own companies and their industries. Their reports mainly cover strengths and weaknesses, lines of business, what’s good and bad about recent stock investment decisions as well as some projections of what to expect from a company in terms of its financial health.

The stock research report also tells you whether a company is worth buying or selling and just when to buy and sell stocks from this company. Knowing such information can help you in earning back a great deal of profits from your stock investment.

In addition, the significance of such reports cannot be taken for granted, especially in a world where the market is unstable, wherein in a blink of an eye you might lose everything you have invested. Stock research reports keep you up-to-date with the latest and timely developments happening in the stock market. Stock reports are just one of the services provided by most online stock research providers.

When you sign up or joined an online stock research provider you were provided with stock alerts regarding new analyst reports plus some daily commentaries. Aside from that, you will also enjoy the privilege of having daily dose of expert opinion about companies they cover in the news. They also have portfolio alerts that tell you when your portfolio is underperforming or outperforming.

With a stock research report you will always be guided on what course of actions to take especially if you cannot monitor your portfolio regularly. Remember that the stock investment requires for keen monitoring or else you will find yourself losing money instead of gaining back more profit.

However, the stock research report is not a free service, most providers of these types of reports only offer free-day trials for new members but afterwards would require for a monthly or annual subscription fee.

Be sure to correctly choose the stock research provider; opt for those highly regarded providers that already have names in the stock investment market. Don’t be fooled by those stock research providers claiming that they have the best stock investment solutions and promises you very high rate of investment returns. These promises often times just remain to be a promise that can never be realized since the provider that you have chosen is really not that knowledgeable in stock investment.

Look for those providers that possess credible portfolios and to be really sure you may try to confirm by researching further the authenticity of their claims. You may also try to ask your friends, colleagues and family whether they are familiar with the provider you are investigating. Even better still, ask people in the stock market if they are familiar with the provider you are inquiring about. If it is really true that they are a reputable stock research provider, then their reputation will echo the sentiment.