John Forman asked:


I’m going to tell you a little story.

In March of this year I was looking at the markets, reviewing the price charts to see if there was anything worth trading. In this particular instance it was the foreign exchange (forex) market I was scanning and I did come across an interesting development.

You see, the Euro was setting up to making what looked to be a big break higher against the Dollar. Based on my analysis, which took all of about two minutes, I saw a pattern forming which told me to prepare for an uptrend. Now I don’t want to imply that in two minutes I found a great trade. It probably took me 30 minutes to go through all the charts that day. Oh, and since I actually wrote up the analysis of the trading strategy for my report subscribers, you can add on maybe another 30 minutes. That makes an hour.

The strategy I devised that day had me buying the Euro against the Dollar at about $1.21 (meaning each Euro was worth $1.21). That was mid-March. About two months later I exited the position at around $1.28. If you are familiar with forex trading, you will know that’s a nice profit. If you don’t have forex experience, let me explain.

Let’s say that I bought 100,000 Euros against the Dollar. That’s a position size of about $121,000. Because forex is a leverage market, I would only need a margin deposit of maybe $2500 to put on that trade – potentially less. At the time I exited the trade, the 100,000 Euros had increased in value to approximately $128,000. That’s a gain of $7000, which is not a bad return at all on the initial $2500 deposit.

Now let’s say I checked on the trade once per day during the time I held it. That’s about eight weeks, which is forty trading days. If I spent five minutes each day looking at that trade – which is probably quite a generous figure – then I accumulated 200 minutes of trade monitoring time. Add that to the sixty minutes I used identifying the trade and creating a strategy and you have 260 minutes. Rounding that up, we’ll call it 4 1/2 hours.

So if I had put on a 100,000 Euro position I would have spent 4 1/2 hours to make $7000 – more than $1500 per hour. That’s one heck of a part-time job!

This story isn’t about telling you how great a trader I am. Rather, the point is that I was able to make those kinds of profits in the market without having to spend hour upon hour in front of the computer screen watching the charts and trying to interpret news events. This is something you can do as well.

Let’s face it. There are a heck of a lot more people who trade part-time than full-time. The day traders, though, account for more of the noise and they have a great many people convinced that one has to be dedicated heart and soul to the markets to make good returns. That just simply isn’t true.

Part-time traders are at least as capable of doing well in the markets and making a positive contribution to their financial well-being as those who spend long days focused on the market. It is just a question of managing their time well and finding an approach which suits their situation.



Robert

Dalip Singh Wasan asked:


We Must be Master of Atleast One Trade

We may be jack of all trades. That is good. But at the same time we must master of one trade at which we are working. Everybody dealing with us must know that work in which we are busy is our main subject and we are very efficient and master of that trade. When work of this type comes to the organization, everybody present in that organization must have an eye on us and they must take up the work only because they shall be giving the work to us and we shall be meeting the demands of the customer coming to the organization. Similar is the position in Government office where the officer incharge knows the capacity of each one under him and when we are present, he shall be asking us to do that work. And it is very easy to have proficiency in one trade. We have been on the seat because of our minimum qualifications prescribed for that trade and with little efforts we can acquire more and more knowledge in that trade. Today some institutions are providing more and more training in particular trades and if we could spare some time, we can upgrade our knowledge in that trade and we can get higher certificates, diplomas and even degrees. We cannot say that such people shall remain from where they had started. We shall see that such people shall get promotions after promotions and one day they shall rise to the highest status in that organization. Acquiring more and more knowledge and keeping knowledge upto date is very easy because even help books are available in the market and the work itself teaches us much. We must have a will and a desire to become master of that trade and one day we shall actually be master of that trade.



Sansi Collen

Bercle George asked:


Day trading is another one of the options in stock trading where you can purchase stocks, sell them off the same day, and earn the amount of profit, which has been accrued that very day. Day trading is just like gambling and a number of brokerage houses have been responsible for exaggerating that day trading is safe and risk-free. You can trade from anywhere in the world that has an Internet connection, as many financial bookmakers now have online dealing platforms.

Some Facts You Should Know In Day Trading:

1. The frequency of futures day trading can go from relatively infrequently such as one trade per month or per every couple of months to many, many trades per day.

2. Day traders typically suffer extreme financial losses in their first months of trading.

3. Day trading needs intensive analysis and ability both.

4. The stock market is a very volatile market that has many ups and downs in a single day.

5. Day trading is an extremely demanding and expensive task.

Some Benefits Of Day Trading:

1. One of the benefits of day trading is that since the positions are closed at the end of the trading day, any sudden news of events doesn’t affect the opening prices of trading.

2. One of the benefits of day trading is that since the positions are closed at the end of the trading day, any sudden news of events doesn’t affect the opening prices of trading.

3. Awareness regarding day trading stock picks allows a day trader to gain maximum returns from the market.

4. One advantage of day trading is that you don’t need to invest a lot of money to make profits.

Some Tips For Day Trading:

1. Do not trust advertising claims that promise fast and guaranteed profits from day trading.

2. It is always better to start with a small position size in day trading, until you get the hang of the system.

3. When trading with the stock market, it is important that you avoid listening to any worthless rumors about companies.

4. Be conservative, and do not let the position take control of your account.

5. The key with trading is to give yourself a chance, and you really don’t with traditional day trading.

The Forex Trading:

Forex Trading is the trading of world currencies. Trading in currencies is the ultimate liquid market, with volume often 50 to 100 times greater than the trading of stocks on the New York Exchange, and, because of the nature of currencies and the multiple factors controlling its value, no one has an overriding advantage or insight into the market. There are many forex-trading companies that can train you for day trading so that your transactions are not reduced to gambling.

Trading Software:

Many traders and investors rely too much on software’s used for these purposes, but you do not get a true picture of the market just by using these software’s, as there are many factors which constitute a stock market and some of them can only be assessed through skill and experience. Realizing the importance of trading, trading software programs have been introduced to the public to offer a variety of trading tools to help make proper buying or selling decisions.

Some Trading Media:

1. While there are many day traders who do their trading using only the computer, there are others who trade using telephone and mobile phones.

2. Computers are the best medium for all kinds of trading, but particularly for day trading.

Day Traders Should Be:

1. In day trading, the trader does not hold stocks until the next day; instead dispose it off by the end of the day.

2. A person is considered a day trader when they can accomplish four or more day trades in a five business day period and has two unmet day trade calls in 90 days.

3. Day traders are more particular with buying and selling not the bottom line.



Wayne

Chris Viscaya asked:


Stock Options are wonderful! This clever derivative of the equities market has to be one of the most ingenious inventions of modern times. For the trader who can learn how to win at trading options, there are many luxuries in life that can be experienced.

Success in options trading requires a consistent approach for long-term success. This statement is not meant to be some grandiose, idealistic comment made by some ‘trading theorist’. Rather, it is a statement born out of the hard knock and success experiences of the author and many other long-term, successful trader contemporaries.

A “consistent approach” to options trading can also be called a “trading system”, or an “options trading system” in this case. The term “trading system” is not necessarily confined to a series of computerized “black box” trading signals. A trading system could be something as simple as “buy an option on a stock in an uptrend that breaks the high of the previous bar after at least two days of pull back down movement that make lower lows.” A trading system is simply an organized approach that takes advantage of a repeated pattern or event that brings net profits.

Since an Option is a “Derivative” of the stock you must derive your options trading system from a stock trading system. This means your trading system must be based around actual stock price movement. That said, your trading system doesn’t need to work for all stocks it just has to work for certain types of stocks, certain volatility of stocks and certain price levels of stocks – So focus your trading system on certain stocks that have price behavior that is predictable to the net results you wish to abstract from a stock.

You can develop a trading system, a trading approach, and a trading methodology by identifying a price movement pattern (or lack of price movement pattern) or some event that occurs on some sort of regular basis. This means you can trade price behavior patterns on price charts such as: traditional chart patterns, trends, swings, pivot points, boxes – or you can trade events that motivate stock price such as earnings runs, post earnings runs, stock splits, or seasonal factors. Bottom line to make the maximum profit in options trading you want your stock to move in your favor fast and you want it to move far. Just a relatively small movement in the price of a stock can double your money in options!

There are so many different strategies and combinations that you can trade with options. You can buy calls and puts for directional trades. You can employ call spreads and put spreads to trade directional movements with a buffered risk, and profit. You can sell or purchase spreads to receive the credit of the premium decay by options expiration. You can trade straddles and strangles if you expect a big move but are not sure in which direction. You can also get into ratio back spreads, condors, and butterflies. And if you’re really feeling crazy you can sell ‘naked’ options (just better use a stop loss or you’ll end up like one of my old trading buddies who ran an account to $20 million then gave it all back selling naked options.) You can go to cboe.com for more information on options trading.

Directional options trading systems are the best. Keep it simple, buy calls for and upside trade or buy puts for a downside trade. But this means you need a directional stock trading system in order to trade directional options.

Here are a couple of different approaches for directional systems:

Develop an options trading systems that trades the swings in stock price movement. There are many good swing trading systems available today. We suggest you obtain one. Bottom line with swing trading is that you want to swing trade with the trend. Options brokers these days have advanced order technology that will allow you to enter swing trades based on the price movement of the stock so you don’t have to watch this stock all day. That huge advancement to swing trading options.

Swing trade the day bars. Most swing trading systems are based on daily bars on the stock price chart.

Swing trade the Intra Day Bars! Their other fantastic systems based on intraday charts that pin point swing trading entries.

Develop an options trading system that trades three to six month trends. This is where the big money is. Trading the large trends is where many are able to place larger sums of money to develop their net worth.

Develop an options trading system that trades pivot points. Pivot point trading is arguably the best way to trade options, because price action usually is explosive, and happens quickly in our direction when a trade works.

This is good because you can use shorter-term options and leverage yourself a little better. And it’s also nice you can make great gains in five days to four weeks on average so time decay issues become less of a worry.

There are many different directional trading methods you could use to trade options. You need to pick one, work it, and never use more than 10% options position size per trade on small accounts 1% to 5 % max position size on larger accounts. This methodical way of money management trading options is the fastest way to potentially rapid account growth, helping you avoid needless setbacks.



Rosa Erdley