Showing posts with label trading. Show all posts
Showing posts with label trading. Show all posts
Friday 13 April 2012
Martin J. Pring's Trading Rules - Webinar
Rule 1: When in Doubt Stay Out
Rule 2: Never Invest or Trade Based on Hope
Rule 3: Act on Your Own Judgment or Else Absolutely and Entirely on the Judgment of Others
Rule 4: Buy Low (into weakness), Sell High (into strength)
Rule 5: Don't Overtrade
Rule 6: After a Successful and Profitable Trading Campaign, Take a Trading Vacation
Rule 7: Take a Periodic Mental Inventory to Check How You Are Doing
Rule 8: Constantly Analyze Your Mistakes
Rule 9: Don't Jump the Gun
Rule 10: Don';t Try to Call Every Market Turn
Rule 11: Never Enter into a Position Without First Establishing a Reward to Risk
Rule 12: Cut Losses Short, Let Profits Run
Rule 13: Place Numerous Bets on Low Risk Ideas
Rule 14: Look Down (at the risk potential) not Up (before your reward potential)
Rule 15: Never Trade or Invest More Than you Can Reasonably Afford
Rule 16: Don't Fight the Trend
Rule 17: Whenever Possible Trade Liquid Markets
Rule 18: Never Meet a Margin Call
Rule 19: If You are Going to Place Stop, Put it in a Logical, Not Convenient Place
Thursday 12 April 2012
How to Control Your Emotions When Trading
Learn why I think trading psychology is worth 95% to the overall success of your trading. Find out if you fall in the average trader category and why you make poor trading decision that is holding you back.
Discover how to overcome these pitfalls and improve your trading skills.
Are Traders PREPROGRAMMED TO FAIL?
Are traders preprogrammed to fail? What is it about trading that causes 90% of intelligent, rational people to fall to the wayside each year? Is there a common thread among us as human beings that derails our best efforts and intentions? In this video series, Senior Trader Todd Brown explores the psychological inner workings of traders and shines a spotlight on the obstacles between unsuccessful traders and their profit goals.
Trading Lessons - Five Fundamental Truths
Five Fundamental Truths
1. Anything can happen.
2. You don't need to know what is going to happen next in order to make money.
3. There is a random distribution between wins and losses for any given set of variables that define an edge.
4. An edge is nothing more than an indication of a higher probability of one thing happening over another.
5. Every moment in the market is unique.
10 Golden Trading Rules
1. Have a Game Plan
2. Follow the Game Plan
3. Always trade with Stop Loss to protect your capital
4. Diversify to reduce your risk
5. Filter your trade to capture the Big Moves
6. Trade with the Trend
7. Not to listen to the news (many are planted by traders to affect the market). Listen only to the market.
8. Don't listen to your broker (they have interest in putting money into their own pocket)
9. Money Management
10. Must be Discipline (with your game plan, your stop and your profit taking).
Friday 30 March 2012
Saturday 25 February 2012
Jump-Starting Your Personal Finance - Achieving Higher Rates of Return
For many people, it is usually after years of not paying much attention to how they handle money, or after taking bad advice from others they've trusted (including professionals), that they finally realize: "Hey, this is my money and no one really cares more about it than I do. And it will not multiply unless I do something about it". At this point, the path you take can have long-term effects. Let me bring a few important points to your attention to help you on your journey.
Higher Rates of Return
Article Source: http://EzineArticles.com/728466
Jump-Starting Your Personal Finance - Achieving Higher Rates of ReturnHigher Rates of Return
When you finally come to the realization that you need to take a more active role in handling you personal finance there is a natural tendency to look to the stock market. That's usually because stock in a company is one of the easiest securities to acquire. There is also a sense of excitement or prestige with being in the stock market. However, lets put the emotions aside and look at what the real issues are.
One thing you must consider, especially when starting out is the return on investment. The stock market historically gives 7-10% annually. This is not a bad return if you are looking to park a huge amount of cash (say a few hundred thousand and up). But if you are starting out with not much excess cash, you need to get higher rates of return. If you have $5000 and you invest that at a rate of 10% a year, in 5 years you will have about $8000. That is not fast enough if you really want to take control of your personal finances. You will need to learn how to get higher rates of return than that. Remember the higher your rate the less time it takes for your money to multiply.
Assessing Your Options
The question then becomes how can you achieve higher rates of return. Many, at this point tend to gravitate towards using aggressive stock strategies or short-term trading to get higher rates of return. This could take years and many dollars (both in the cost of educating yourself and bad trades) to learn how to do and the probability of success is not very high. But if you are just starting out you don't have that kind of money to loose. Your best alternative for higher rates of return is to start a business that meets certain criteria.
The kind of business you want to start is one with low startup cost and high profit potential. Yes, it does take more effort to manage than a passive instrument such as stocks. But this is where you have a higher probability of getting returns that are in the 100% per year range, and even higher if you play your cards right. And these returns can be much more consistent than with stocks. Here are some other points to consider about starting your business for higher rates of return:
1. No longer is the option of starting your business limited to huge upfront investments (such as buying a franchise). Today it is possible to start businesses with very little money and have high profit margins.
2. The time requirement need not be prohibitive. Many successful businesses are started part-time buy full time employees. Also, depending on the kind of business you start, the internet can help to make it easier to manage.
3. You have more control of your investment. Once you place your money into a stock you have no control over what the price of that stock will be. With your own business, you control it. And there are many resources to help business owners.
4. The long-term prospects of starting your own business are good. You may not hit a home run on your first try (although that has been done before, and is far more likely than making a million on the first stock you pick) but if you keep at it you will improve and so will your personal finances.
Remember to approach your business like an investment. Learn how much is required to start, the expected rate of return, when you expect to make your money back etc. Even if you do decide to take a more active path in the stock market (i.e., trading stocks), take the time to learn how it is done before risking your hard earned money.
To your success.
Rodger Campbell is an entrepreneur and writes on various topics including personal finance and investing. For more insights similar to the article you just read, go to PersonalFinanceBuzz.com [http://www.personalfinancebuzz.com]
Article Source: http://EzineArticles.com/?expert=Rodger_Campbell
Article Source: http://EzineArticles.com/728466
by Rodger Campbell
Saturday 18 February 2012
Stay in Touch wi th the Market
Some investors buy and hold for the long term, stashing their securities in the proverbial vault for years. While such a strategy may have made sense at some time in the past, it seems misguided today.
- This is because the financial markets are prolific creators of investment opportunities.
- Investors who are out of touch with the markets will find it difficult to be in touch with buying and selling opportunities regularly created by the markets.
- Today with so many market participants having little or no fundamental knowledge of the businesses their investments represent, opportunities to buy and sell seem to present themselves at a rapid pace.
- Given the geopolitical and macroeconomic uncertainties we face in the early 1990s and are likely to continue to face in the future, why would abstaining from trading be better than periodically reviewing one's holdings?
Being in touch with the market does pose dangers, however.
- Investors can become obsessed, for example, with every market uptick and downtick and eventually succumb to short-term-oriented trading.
- There is a tendency to be swayed by recent market action, going with the herd rather than against it.
Another hazard of proximity to the market is exposure to stockbrokers.
- Brokers can be a source of market information, trading ideas, and even useful investment research.
- Many, however, are in business primarily for the next trade.
Thursday 16 February 2012
The 5% Money Management Rule
By Richard Krivo, Trading Instructor
Student’s Question:
I've read somewhere that you should risk no more than 5% per trade. I've been trading 3% per trade and probably open 4 positions a day. So I've been risking 12% per day. Listening to one of your webinars on this 5% topic, should I then risk 1.25% per trade (5% in total)? I was always under the impression that "no more than 5% per trade" meant every trade you open should not be risking more than 5% of your account.eg. $1000: 1st trade: can risk $50, 2nd trade (first trade still open): can still risk $50, etc.
Instructor’s Response:
The 5% rule pertains to the TOTAL amount of the account balance at risk at any one time...NOT on any individual trade. So, if you have one trade open, 5% is the maximum allowable risk. If you have two trades open it would 2.5% per trade and so forth. Think of it this way, if it were 5% per trade, a trader could open five trades risking 5% on each trade and still be within the rules. What would prevent a trader from opening up ten trades and only risking 5% on each one? There has to be something that prevents the trader from over leveraging their account and that something is the “5% risk at any one time” part of the rule. Otherwise, as you can see from the previous 5% per trade example, the trader with five trades with 5% account risk on each one would have 25% of their account at risk and the trader with ten trades would have had 50% of their account at risk. Clearly, neither of those would be a situation in which a prudent trader would want to find themselves
Learn more about the 5% rule and determine the appropriate leverage for your account:
--- Written by Richard Krivo, Trading Instructor
Thursday 24 November 2011
Risk and Reward Ratios in Trading
Risk and Reward Ratios in Trading
By Matt Kirk
One of the most important aspects of trading is your risk/reward ratio – when I explain this
in my seminars I see a light go on in traders heads immediately. Perhaps it’s such a simple
rule of thumb that people overlook it initially.
This exercise will show you that you don’t have to get it right all the time, in fact you don’t
have to get it right even half the time if you adhere to these guidelines when you trade.
Here are the rules –
1. Your losing trades on average are no more than 5% of your account balance
2. Your profitable trades on average provide gains of 15% on your account balance
For example – on a $20,000 account the maximum risk is $1000 and the average profit is
$3000 per trade. Your trading system may call for stop losses to be trailed to lock in profit or
reduce the size of a loss. In this case the average loss may be $500 and if so then the
average profit may be $1500 which is still 1:3 risk/reward.
So, your losses on average are one third the size of your profits. Or to put it another way,
your profits on average are 3 times the size of your losses.
Let’s assume you have an account of $20,000 – now watch this…
Read more here: https://www.bsp-capital.com/documents/RiskRewardRatiosinTrading.pdf
“Top 10 questions a Trading Plan must answer“.
A Trading Plan has only one purpose which is to guide the Trader to achieve his goals in Trading and in Life. It must pre-define a course of action to all situations a Trader will encounter. It must contain a system that can be easily followed, otherwise it is likely the trader will eventually not follow it.
Developing your trading plan is an essential process for a trader on his or her road to success, it can be a process which evolves over time as you expand your knowledge and learn about yourself.
Below are all the posts in this series:
- What are your Life Goals & Trading Goals?
- What is your Trade Entry Method?
- What are your Trade Exit Methods?
- What type of orders will you use to enter & exit?
- What are your Money Management Techniques ?
- How will you manage your Position Risk versus Reward?
- What is your Process for Open Trade Review & finding New Trades Picks?
- What is your Trading Success Profile?
- How will you Review your Trading System to measure & improve?
- What is your Trading Daily Routine-(Part1 & Part 2)?
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