Share Trading Techniques.

While perusing through one of my trading books, I came upon some fascinating facts that were very thought provoking, so I will pass them on to you.
The author is aDaryl Guppya a well established author and successful trader as well.

He stated, that over time he noticed that once a share magazine was published that the stocks that were recommended by the magazine went into an uptrend, because the readers took notice of the tips given and bought them. Here are the statistics.

1. One month after publication 90% of the stocks mentioned were still in an uptrend.

2. Two months after publication 80% were still in an uptrend.

3. Three months after publication only around 45% were still in an uptrend.

Obviously it pays to buy the magazines each month and buy the shares mentioned.

But I personally would be watching them very closely and would be hanging on to them only till my preset profit level had been reached and I definitely would be out after a 5-6 weeks.
They would still have to qualify to my buying strategy in the first place if not I would not touch them at all.

Now a hint for you here, How I trial mya New Ideasa out is by aPaper trading.a That way I am not risking any of my money in something that I am not 100% sure of.
If you want to paper trade the places I use are www.asx.com.au and www.sharecafe.com.au both are free sites and you can find free information there as well.

Becoming a aDividend Stripper.a

An interesting thing I found out was that apart from being share trader I have also become a aDividend Stripper.a I shall explain this further as to what I do occasionally.

A dividend stripper is a trader who buys shares to qualify for the oncoming dividend and then sells shortly afterwards.

You buy before the aEx Dividenda then you can sell the next day. Making sure of course you have the dates right in the first place.

But to qualify for the aFranking Creditsa you need to own them for 45 plus 2 days.
1day for buying, 1day for selling plus 45 days = 47 days. Anything less and you miss out on those franking credits.

An interesting thing to note is that a stock’s share price invariably falls usually by the amount of the dividend paid after the ex dividend date expires.

Another trick is to buy the stock 2-3 weeks earlier in the hope that the share price goes up prior to ex = dividend.

A Warning About IPO’s.

The market seems to be inundated with IPO’S (Initial public offering) these new companies all seem predominately to be in the mining sector.
All eager to get in on the current aminerals booma
A few opened up higher than the initial entry price. Most seem to be exploration of some sort or other. The flavors of the month are usually oil or uranium.

These are of course classified as aSpeculative Stocks.a

Which can mean that once the cash has dried up and they haven’t found anything, they then have to either raise more cash or shut shop? And your cash has gone with them.

The rags to riches stories are many, but the road is littered with the crushed hopes and dreams of the unwary investors.

All are searching for that elusive pot of gold at the end of the rainbow.
So be wary, do your research, and don’t jump in blind. Be an informed investor.

If it looks to be too good to be true then it usually is.

Beginner traders often fantasize or wonder about how some people are able to achieve tremendous profits by trading stocksjust a few hours on a daily or weekly basis.

So going farther than the hype & the bells and whistles that a lot of the called “trading gurus” like to invoke, the real “secrets” of the stock market game are enclosed within the trading set ups and market signals you rely on to decide how to CHOOSE stocks, as well as WHEN to BUY & when to SELL them, or even when to SHORT SELL those that are poised for a profitable fall.

So the clearer your set ups are, the faster you can spot a potentially profitable trading scenario and ACT ON IT reducing your risk.

Complicated technical systems and information overload can make you slow and confuse you right from the start, making you loose money instead of making your profits grow.

In essence, You can be sure that the trading method you employ to approach the stockmarketand pick stocks can make a big difference in your results as a trader. In order to succeed you will need to FOCUS on a set of simple trading strategies that you can implement without hesitation.

Fortunately some sites on the web do offer more effective and updated daytradingmethodologies. One of those sites that can show you how to take advantage of certain stockson positive and negative momentum as well is http://www.MomentumStockPick.com

They focus on momentum stock trading strategies, that are practical and easier to apply than many other technical systems out there.

Stock trading doesn’t have to be complicated as many people perceive. But you do need to follow a well organized set of rules and tactics, that once you master them, you can aspire to replicate profitable trades with consistency.

Like any other investments, online penny stock trading doesn’t guarantee 100% success and profit. Yes, online penny stock trading has made a lot of people bank fortune and you can do it as well, as long as you equip yourself with the basics needed to succeed. If you are a beginner or starter, you’ve landed on the right page because this article will guide you through the 4 important rules of online penny stock trading. Read on.

Rule 1: Ensure Safety of your Investments

The field of online investing also has its share of frauds and scams. As a matter of fact, the infamous “pump n dump” scheme exists here, particularly in the special field of penny stocks. Fret not; you can still safeguard yourself from being victimized by following the tips below:

• The first online penny stock trading rule is to not mind any penny stocks information from email messages sent to you by people you don’t know. Scam artists like using email to scam people. In addition, you should not trust anyone saying that a certain penny stock will boom the next day. It is better to trust the updates and discussions from reputable stock forums.

• Do your job of doing your own research. Though there are available resources from professionals in this field, it is still your job to confirm the information you got from them.

• Don’t trust advertisements about penny stocks. Do you know that there are plenty of illegal companies conducting their fraudulent activities online? Unfortunately, though SEC exists, it is too busy to monitor all these things.

Rule 2: How to Find an Online Stock Broker?

You need an online stock broker to start with online penny stock trading. However, you shouldn’t give in to the very first broker you see. You should first do your research before opening an account with your chosen online stock broker. You might be blinded by capital security fees but keep in mind that your investments matter most. The low fees are really enticing but the most important thing here is to keep your investment safe and accessible all the time.

Rule 3: Using Penny Stock Software

There are different online penny stock trading software programs to use, but actually, online penny stock trading software program provided by your broker or those free tools online are enough to help you.

Rule 4: The Online Penny Stock Trading

It is common for penny stocks to trade on “pink sheets”, the term used to refer to the pink paper used by stockbrokers on the floor to write their penny stock orders on. Penny stocks trading on pink sheets are not fully regulated that is why they are not allowed to trade in Dow Jones, NASDAQ, and other big exchanges. Instead, you can trade them through smaller exchanges, which do not require a lot of information, particularly in terms of financial paper works, just to keep them going up and up. In order to avoid this, cheap stocks trading on big stock exchanges are still the best way to go.

There you have it – the most important online penny stock trading rules to observe to succeed in this investment venture.

Similes and metaphors play an important role in both the internal thought-process of a daytrader as well as in communication between two traders. To describe the emotional reactions coupled to the movement of a stock in likeness to a rollercoaster, or to compare averaging down in hopes of breaking even to digging one’s self out of a hole is to use simile to quickly illustrate a particular situation as clearly and succinctly as possible. Every trader uses these analogies, each having his own favorites, and they are used to add structure to an environment that often lacks useful tools for explaining particular occurrences.

Sports metaphors also play an important role in quickly passing information to another trader with a small chance for confusion. Traders use base-hit as a metaphor to describe a solid but ultimately small-scale win in the market, and home run for when a trade is aout of the parka.

Ultimately, metaphors and similes can be used by a trader to keep his mind in the right place, and maintain emotional control. By metaphorically comparing trading to baseball or basketball, the Michael Jordan truism about never missing a shot he didn’t take or Babe Ruth’s statistical record for strikeouts helps the trader keep in the back of his mind the inalienable reality that he won’t get a hit every time he swings the bat.

Some traders choose to relate trading to fighting a war, conducting scientific research, or any number of analogous endeavors. The best metaphors and similes are those with which the trader can most easily identify. These easily identified intellectual aids, when utilized to enhance trading and the trader’s sense of control, in the end, will increasable productivity, and most importantly, profitability.

What Are Blue Chip Stocks?

Blue Chip Stocks are quality stocks which own a proven history. A Blue Chip stock is like a member of a family in American pastoral landscape. The Blue Chip stock firm makes toilet paper, laundry soap, aluminum, steel , cleaning machines as well as just about every well known product we used on daily basis The Blue Chip stock is Bank of America, U.S. Steel, Proctor & Gamble in addition to others we consider like our firms.

In time of uncertainty as well as for long-term investors the Blue Chip stocks are an basic element of all portfolio both in direct stock purchases or else through mutual funds. The Blue Chip stock is a large cap company also have decades and in many cases a century of presence on the stock market. A few Blue Stock stocks are more or less new players such as Home Depot and the results of a joining and acquisition. When you see in the region of your house and here and there in your town the brand products you use and have come to depend on are Blue Chip stocks.

The actual fact is that we believe for granted the Blue Chip stocks together in our familiarity just as one end user, however often times in stock market. The Blue Chip stocks form up the S&P500 index. Those stocks like an entire could be bought just as one index fund. Some Blue Chip stocks form up the Dow 100. These stocks on the total are a bell conditions of how the overall stock market is doing.

Like every well-known item the Blue Chip stocks become such as a comfortable old pair of sneakers. We realize where they’re and they’re easy to slide into, but they might not be as interesting as say Google or Baidu. In the latest weeks some of the Blue Chip stocks have been a flight for safety for a few traders. Not every one of Blue Chip stocks are alike, however several has been grossly undervalued and hence a great buy.

Ways to make investments in Blue Chip stocks:

The trader can pick as well as go for a Blue Chip stock and purchase it via a stock broker or on-line which includes a stock trading firm like Scotttrade or E*Trade. This gives you access to the companies results for the short term as well as graphs going back at the very least 10 years. The trader may read the businesses financial statements plus periodical gain on-line. The investor will ask the company to mail you a business prospectus.

There’s index funds of Blue Chip stocks that could be purchased via a financial brokerage house. There is mutual funds which have been chosen as Blue Chip Funds in the more family of the funds offered in all of main mutual funds firms. There could be still a mutual fund company that gives a spider fund comprised of Blue Chip stocks that is comparable to the S& P 500.

The various methods for invest in the Blue Chip stocks is endless. Spiders, Index funds, and hybrids in between. There’s option contracts and several difficult investments which just a extremely confidence trader will recommend you about.

The Blue Chip stocks merit the best review in all period not just in period of stock market problem.

Beginner traders often fantasize or wonder about how some people are able to achieve tremendous profits by trading stocks just a few hours on a daily or weekly basis.

In the stock market it’s not impossible to watch a stock move up dramatically in a matter of hours or days. Investors and traders can make great money and fatten their wallets every time this happens.

This would seem fantastic for any one that want’s to try their fortune in the market, but the problem is that if you don’t know what stocks to pick and how to manage your trades you won’t be making as much money as you want to, and you probably would be losing some of it. That’s why the most important factor about stock trading is the decision FILTER you apply to make your trades.

There are alot of “extraordinary” stock pick programs and trading systems out there, but you need to test them in order to discover which ones deliver the best results. That’s part of your homework as an online trader. Test once, test twice and then test again until You are sure You are going to be making high profits consistently.

Complicated stock trading strategies that rely on a “boat load” of technical analysis indicators can make you slow, and being slow when trading stocks can be as dangerous as not knowing what to do in the first place.

The ugliest thing that can happen to a beginner stock trader is to get information overload. It’s better to go step by step, and use a practical trading strategy that can show you how to focus on concrete and simple ways to make money while picking strong stocks once at a time.

So going farther than the hype that a lot of the “investing gurus” like to pump, the only “secrets” of the stock market are enclosed within the trading set ups and market signals you rely on to decide how to pick stocks, as well as WHEN to BUY & when to SELL them, or even when to SHORT SELL those that will lose value.

So the clearer your signals are, the easier it will be for You to spot a highly profitable trading opportunity and ACT ON IT by reducing your risk.

In essence, You can be sure that the trading method you employ to approach the stock market and pick stocks can make a big difference in your results as a trader.

Day trading shouldn’t be complicated as many people think. But You must follow a very well organized set of strategies & tactics, that once you master them, you can aspire to replicate BIG profitable trades with consistency.

Fortunately a few trading systems can show you how to take advantage of top stocks every day. One of them is Practical Day Trading.

They focus on picking stocks that can generate amazing gains in a matter of days.

Visit them today and learn how to take advantage of the market by picking the hottest opportunities this month.

I am very new at this. How can I purchase the stocks that I want on-line?

Best answer:

Answer by Arx
You can check the web site of that company to learn about their stock ticker and what exchange they are listed in. I have little experience with penny stocks (made money everywhere but not in penny stocks) but you might try the “over the counter bulletin board” Be careful, a non-percentage based fee structure might diminish your profit in dirt cheap penny stocks.

If u r new to stock trading, you might wish to take an online course. There are some very nice ones that teach about discipline, exit strategies, mock trading, personality traits of a stock trader rather than “how to make $ 100 into $ 1000 in one week”

I am not a fan of Warren Buffett but he is so right when he says a good valued proper stock is better than a very cheap non-proper one. So, be careful with penny stocks. There ARE reasons why they are penny stocks.

Add your own answer in the comments!

Option is a very popular derivative because its price is cheaper than other derivative such as future. Blue chip stock is a very volatile stock but it is very expensive. However, by buying option of the blue chip stock, we could earn profit just similarly like buying the stock. Investing and trading option seem to be very easy just like buying stock. However, due to the existence of time value and also the expiration date of the option, buying naked option is very risky. This is because if the stock price is going down a lot just after you have bought the naked option, after a certain period of time, although the stock price has gone up, the option price may still below the ask price that you have used to buy this option. That why we need strategy to invest or trade option. Option is a very powerful tool in investing and trading stock. By utilizing option, we could earn profit from the stock that moves upside, downside and sideway. Moreover, option also could be used to execute arbitrage strategy to earn a profit no matter the stock price is going up, down or sideway.

Back spread is one of the option trading strategies that is quite popular. This strategy is quite similar to a Chinese gambling called big and small. In this gambling, when we stake big and the three dices after shook and opened show the total point is big, we will win one fold of the money that we have staked. That means if we stake 100, we will get back one more 100. But if we loss, we will loss 100. Back spread strategy is quite similar to this gambling game. That means if we invest USD 1000, we either get back one more USD 1000 or loss USD 1000 that has been staked in. The maximum profit and loss is USD 1000. That has fixed. You won’t loss more that that. Actually, back spread is the reversal of the ordinary spread. The maximum profit and loss is not always the same. Sometimes, it will differ a little bit and depend to current price of the stock.

This strategy could be executed by buying out-of-the-money option and selling in-the-money option. Because the price of the in-the-money option is more than out-of-the-money option, the amount of money that has been received after selling in-the-money option will be enough to buy the out-of-the-money option. Although like this, we still need to put an amount of deposit in our trading account and the amount usually is equivalent to the maximum loss that you could incur if the stock price goes to the reverse direction. So, if we are expecting the stock price will go up in the near future, we should buy out-of-the-money and in-the-money put option. Conversely, if we are expecting the stock price will go down in the near future, we should buy out-of-the-money and in-the-money call option. Just for easy to understand, we try an example. Table below shows a list of put options for MMM company stock, which will expire in Apr 07.

http://www.makemoneystocks.com/back-spread-table1.jpg

Table 1: List of put options for MMM company stock.

Current price of the stock is USD 80.94. Put option with its strike price more than current price is in-the-money option and less than current price is out-of-the-money option. If we are expecting the stock price will go up in the near future, we will buy one contract of 80 put option (MMMPP) and sell one contract of 85 put option (MNZPQ). When we sell option, we will receive an amount of money that is equivalent to the bid price multiplying with the number of unit that has been purchased. The amount of money that has been received per unit option is USD 5.2 and the amount of money that we need to pay per unit option when we buy out-of-the-money option is USD 2.7. Therefore, the net amount in your trading account after executing this strategy is USD 2.5 per unit option. That means there will be USD 250 net in your trading account. The maximum profit and loss are calculated as follow:

Maximum profit = In-the-money option bid price Out-of-the-money option ask price

Maximum loss = (upper level strike price lower level strike price) (In-the-money option bid price Out-of-the-money option ask price)

Upper level strike price is 85 and lower level strike price is 80. In-the-money option bid price is USD 5.2 and the out-of-the-money ask price is USD 2.7. After substituting all values into the equations above, we will know that the maximum profit is USD 2.5 and the maximum loss is also USD 2.5. So, if we buy one contracts each of the in-the-money and out-of-the-money option, the maximum profit is USD 250 and the maximum loss is also USD 250. The breakeven point for this strategy could be calculated using equation as follow:

Breakeven point = Upper level strike price maximum profit

Or Breakeven point = Lower level strike price + maximum loss.

In this case, the breakeven point is 82.5. As long as the stock price goes up more than 82.5, we will earn a profit from this strategy. We only could earn the maximum profit if we keep the position until the expiration date. If we sell off early before the expiration date, we could not earn the maximum profit. But we still can earn money but with a little bit lesser than if we could keep the position until the expiration date. This is due to the incomplete gaining of the time value of the sell off in-the-money option.

So, by utilizing this option trading strategy, you could earn a profit as long as your prediction accuracy is more than 50 %. That means you have to be accurate for at least six bets within ten bets. From here, the maximum continuous loss is four times. Therefore, in order that you won’t lose all your money until you could not continue to bet, you have to keep four back up moneys or more. So, if you lose one bet, you still have the money to continuously stake for the following bet. Like this, as long as you could keep your prediction accuracy more than 50 %, your money will continuously grow along the time. So, if you interested to know more about option trading strategy, just drop by our homepage and we will show you how to utilize option to maximize your profit.

If you have no knowledge of the named topic, please don’t conjecture or confabulate i.e. “Well, you should research what markets you want to invest in or go through a U.S. based firm for advice.” These aren’t answers.

Best answer:

Answer by Andy
If you don’t tell us what country you’re from how are we supposed to give you an answer ?

If you’re US:

ETFC and IBKR are the 2 US online brokers that allow you to trade directly in overseas markets …

Some of the big full service brokers allow this but if you had that kind of money you’d already know that.

If you’re not US then I dunno!

Know better? Leave your own answer in the comments!

If you’re new to tradingPenny Stocks this article will help you greatly improve your chances of becoming a better penny stock trader. We are going to focus on what professional traders call psychological support and resistance. What does this mean?

When trading penny stocks there are certain support and resistance levels that are known to professional traders as psychological levels. This has nothing to do with normal support and resistance levels that chart technicians use on a daily basis when looking for obvious support and resistance.

The psychological levels can be revealed on your level II trading screen. A level II trading screen shows you supply and demand for each individual stock. We will not go into a full in-depth review of level II in this article; it is something that all penny stock traders should look into. It is a very helpful tool.

TheStockWizards.net has identified psychological price points for penny stocks over the years. They are as follows.

We will break them up into different segments of the market. We will start on the low end and work up to the high end.

Sub Penny Stocks: Sub Penny Stocksare stocks that trade under .01. If you are new to trading penny stocks there are stocks that trade below .01. Not only can you trade below a penny, you can make a lot of money really quick. A reasonable amount of penny stock traders start off trading sub penny stocks. Traders like the fact that they can leverage a small amount of money. You will hear success stories of traders that started with 0.00 that run their accounts up over six figures in less than a year trading sub penny stocks. That is not the norm but it does happen.

Let’s look at the psychological break points in the sub penny arena.

Let’s start off by going as low as you can go. 0001 with no bid. How many times have you seen a sub penny stock with no bid and an ask of .0001. Traders call these lottery plays simply because they are very risky in nature. If they do not work out, you will lose your entire investment or will sit on dead money for a very long time. Traders will throw 0-00 purely for speculation; they don’t care if they lose their principal. They understand that they are taking a big risk.

The first psychological barrier would be when you’re trading with no bid with an ask .001. Demand changes and now there is a bid of  .0001 with an ask of .0002. .0002 now becomes the psychological resistance level. Once the psychological resistance level of .0002 is broken a stock can in a matter of days head up to the second psychological resistance level of 001.

.001 is a real Psychological Barrier. When broken it can cause a massive stampede of buying. It is very easy to play this breakout because you’re using .001 as your guiding point.  It is a very low-risk trade when going through this level.

.005 is another Psychological Barrier. But the biggest psychological barrier for sub penny stocks is when it goes from sub penny and crosses into the .01 area. This is another critical area when trading penny stocks .01.

Once a Sub Penny Stock crosses the psychological level of .01 and stays above this support level a new set of price levels kick in.

Other Price Points to pay attention to are .05 and .10 cents.  .10 cents is a critical level just like a sub penny stock going through .01. The last two psychological resistance areas when trading penny stocks are .50 and .00.

Once you get familiar with these different psychological levels it will become second nature to you as time goes on. Using a combination of your level II screen with analyzing  volume will help you get a better feel for when a stock is going to break through the psychological levels.

Learning how to trade penny stocks using psychological support & resistance levels is just another piece of the puzzle that we are to touching on that will help you become a better trader and investor. Understanding these barriers in the penny stock world will help you improve you bottom line. Make sure you read The Stock Wizard’s other informative articles, which will help build confidence in the fast trading world  of penny stocks.

For more details please visit http://thestockwizards.net/

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