Investing Day Trading: 6 Nov 2009

Learning How to Day Trade

There is a lot of intimidation with new trader who are eager to learn how to day trade. Obviously, just about everybody's dream is to be able to make money from home, but a lot of traders are scared of the process of day trading. I have a feeling that traders think they have to be "experts" at the market in order to succeed. They think that only a select few can be successful.

Believe it or not, you don't have to be a trading genius to be able to day trade. If you ever got a chance to meet the "average Joe" day trader, you'll realize that intelligence is not a prerequisite to making money online. Quite a high percentage of them never even went to college. Successful day trading can be achieved by anybody!!

You've got two schools of traders. You've got the trader who uses technical analysis, and you've got the trader who uses fundamental analysis. The vast majority of day traders use technical analysis. The problem is people misconstrue the term "technical analysis". They think this means using several indicators to create a mechanical trading system. This is in fact, the opposite of analysis.

After all, if your indicators are the ones telling you when to trade, what exactly are you analyzing??? The trader analyzes the market, not the indicators. If more traders took personal responsibility for their trades, instead of just outsourcing it to their indicators, you'd see a much higher percentage of winning traders.

John Templeton has been a successful forex trader after learning how to trade price action. Once he understood that all he needed to trade forex was on a plain chart with no indicators, his profits soared.

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Choose Your Weapon and Choose Carefully - Trading Among the Various Asset Classes

With so many different securities to choose from, investors have a vast array of options with which to trade and boost their portfolios' returns. But with so many choices, how is an investor to decide? The next part of that question is figuring out if it's even prudent to limit yourself to just one asset class. Of course we recommend having a diversified portfolio and with some diligent research, you'll be able to find the right mix of securities to fit your personal comfort level. To do that, your research should include a brief analysis of the advantages of stocks, options, forex, futures and exchange traded funds (ETFs). Let's take a look at each right now.

Stocks And ETFs: Good Starting Points

Owning stock is the most basic form of investing and even if you don't stocks directly, you probably own some through a mutual fund or retirement plan. Owning a share of stock essentially makes you one of many owners in a company's business. When the stock rises, you make money. When it falls, you lose money (unless you've sold the shares short). It's that easy and the simplicity of stock ownership has made it the investment option of choice for millions of investors.

ETFs take stock ownership a step further. Considered a twist on investing in mutual funds, ETFs give investors exposure to a group of stocks in a specific sector or index. That's a feature many investors love about mutual funds, but ETFs are much more liquid, trading like shares of stock. ETFs are great for investors that want to make long or short bets on a particular sector, but don't want to pick just one or two stocks.

The bottom line is investors should have both stocks and ETFs in their portfolios. Another advantage of ETFs is there are hundreds of ETFs designed to give investors short exposure without directly shorting a single stock, so ETFs can act as a great hedging tool in your portfolio.

The Leveraged Investment Vehicles

There are certainly advantages (and pitfalls) of using investment choices that thrive on leverage. Futures, forex and options all fit the bill when it comes to using leverage. As leverage pertains to options, investors can control a good chunk of a company's stock for the life of an options contract without the expense of buying the shares directly. For example, you might be able to buy a call option on Coke for $1 a share and that would equal $100 (100 shares per contract x $1 = $100) when the stock is trading for $50.

Best of all, access to leverage with the most basic options strategies limits risk. When buying a put or call contract, the biggest loss you can sustain is the cost of the contract, but stock ownership (or a short sale) increases our risk profile dramatically.

Don't forget about leverage with futures and forex. These two trading arenas are home to some of the biggest potential winners and losers you'll see in trading and that's due to leverage. Most forex brokers grant traders 50:1 or 100:1 leverage on their capital deposits. That means if you deposit $10,000 in a forex trading account, you'll have as much as $500,000 (if not more) to trade with. Remembering that each pip on a standard forex lot is worth $10, you quickly see how big money can be made or lost in a heartbeat in forex trading.

Futures instruments trade in a similar fashion to forex and it is important to note that investors can lose more than their initial deposit while trading both futures and forex. Since it is a good idea to have some commodities exposure in your portfolio, we like the use of Emini futures, which come with lower risk, as a way of integrating futures into your investment arsenal.

So What Asset Is Best For You?

If you're a long-term investor, a mix of all of the aforementioned assets might benefit your portfolio. To get futures and forex exposure, consider managed futures or currency ETFs. For active traders, start with stocks and mix in some basic options strategies on the side before working your way up to futures and forex.

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No Such Thing As a Free Lunch - Fees Are a Fact of Life in Trading

There are very few certainties in life. We all know the old adage about death and taxes being among life's only guarantees. Add to that list the fact that brokers are in business to make money for themselves, not you. Hence, there's no such thing as commission-free trading. It simply doesn't exist in any asset class. Sure, some brokers may give you a set amount of free trades to get you in the door, but once you hit that set amount, you'll be paying from that moment forward.

For better or worse, there is little in the way of uniformity when comes to the commissions various brokers charge us. We're going to take a look at some of the basics of brokerage fees for stocks, options and forex to get you prepared for the cost of trading.

Stocks: Fees Galore

When it comes to trading stocks, there really are too many fees and since there are so many brokers competing for your business, it's hard to discern where the best deals really are. If you're an independent trader or investor and don't need a lot of handholding beyond getting an order placed, your best bet is a discount broker. Previously, discount brokers didn't offer much in the way of frills and extra services, but since they want to take business from traditional brokers, their suite of services and tools has expanded over time.

If you're buying or selling a stock through an online broker, you shouldn't be paying anything more than $15 a trade and even that is pretty high. In reality, you should be paying $7 to $10 a trade with an online broker. If you're using a traditional broker like Morgan Stanley or Fidelity and you like to call someone on the phone to get a trade placed or get some advice on stocks, etc., it's going to cost you. This is "full service" and full-service brokers charge for the privilege. Trades here can cost $20-$25 each or more. So if you can avoid it, don't use traditional brokers just to buy and sell stocks. Use them for more advanced portfolio planning and services like that. In another trading nuisance, every broker is going to charge more and different prices for limit, market and stop orders.

Options: Contract Costs

With the boom in options trading in the recent years, there are more options brokers than ever competing for your business. The fee model that most options brokers use is to charge you a fee to place a trade and then a fee per contract that you're buying or selling. For example, if you want to buy 10 calls, the broker may charge you $5 for the trade and then a fee of 50 cents per contract, so the total cost of your trade is going to be $10.

If you like to trade more advanced options strategies like spreads and condors, keep in mind that many brokers have a limit on many legs you can add to a trade (usually it's enough to accommodate spreads and related trades) and since you're adding to an existing trade, you'll be dinged for the cost of a new trade and the cost of the new contracts, too.

You really shouldn't be paying anything more than $10 a trade and 75 cents per contract. Those figures are on the high side and you'll likely be able to find far better choices than a broker that has high fees like that.

Forex: The Best Fee Structure

One of the best things about trading forex is the straightforward fee structure. Part of the reason that trading options and stocks is more expensive than forex is because there are centralized markets that execute stock and option trades. Your broker has to pay the Nasdaq, New York Stock Exchange and Chicago Board of Options Exchange to make your trade happen. Guess what? That cost is passed along to you.

Since there is no equivalent market center for forex, the fee you pay per trade is the difference, or spread, between the bid and ask prices in the currency pair you're looking. Let's say the Euro/US Dollar is bidding 1.3938 and offering 1.3940. That's a difference of two pips and that's the cost of your trade. This is the way most forex brokers charge for trades and we'd be leery of any broker that uses another method.

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Options 101 - Another Leveraged Tool to Make Big Profits

Interest in options trading has grown considerably in popularity in recent years. If done properly, options trading can put the trader in a position to make some massive gains without the risks that are present in other markets. For too long, investors associated options with risk and danger, and while some options strategies are accurately described by those two adjectives, the more basic options trades that beginners should focus on are not. In fact, options trading is the most cost-efficient way to control large amounts of stocks or other underlying assets without lots of risk. We're going to show you some of the basic strategies that you can use to do just that.

Puts, Calls And More

For rookie options traders, it's best to keep your focus limited to the most basic options strategies and that includes buying puts and calls. When we buy puts, we are bearish and we want the underlying asset to decline in value. Calls are the opposite. When we buy calls we are bearish and want the underlying asset to appreciate. Either way, our risk is limited to the premium we pay for each contact. An equity options contract is equal to 100 shares of stock and quote in prices such as $1, 2.50, $5, etc. So if you buy one call contract on Microsoft when the contract is trading at $2, your total is $200. ($2 x 100 shares = $200)

Here's the beauty of options. Let's say Microsoft shares were trading at $25 when you purchased that call. To buy 100 shares of Microsoft, you'd have to risk $2,500, more than 12 times more than the cost of the call contract. Best of all, the returns with options are usually far greater than with just owning stocks. Price action for options contracts is measured by delta, that is, the measure of how much an options contract moves in relation to the underlying security. A contract with a delta of 0.5 means that the contract moves 50 cents for every dollar the underlying asset does. That puts you in a position to gain 50% on a $2 options contract. If you buy a $30 stock, it needs to go up $15 to net you a 50% return. See how powerful options can be?

Other Conservative Options Strategies

There are a couple of other conservative options strategies that beginners should explore. They are covered calls and married puts. Covered calls and married puts are both income-generating strategies that allow us to collect premiums on stocks we own that either aren't very volatile or are going through a period of choppy, range-bound trading. A good rule of thumb with both strategies is to write one contract for every 100 shares of stock you own.

Here's how they work: Let's say you own 1,000 shares of Pepsi and want to write (or sell) 10 covered calls at 50 cents each when Pespi is trading at $60. You will collect $500 in income for writing these calls (50 cents x 100 shares x 10 contracts = $500). Sounds good, but what's the risk? The risk is that if Pepsi soars above $60 before the contract's expiration date, the buyer of the calls is going to call away your Pepsi shares at $60 and sell them for a profit at whatever the market price is.

Married puts function in the same fashion. We can collect premiums, but we want our shares to stay ABOVE the strike price before the option expires. On the other hand, if we own married puts and the stock falls below the strike price, we exercise the option and sell the shares at the strike price. This is a nice option to have, so consider married puts to be an insurance policy against your stock position.

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Know Your Orders and Know Them Well - A Primer on Various Order Types

Unbeknownst to many investors is the fact that are multiple order types when it comes to buying and selling securities. There is a dizzying array of ways to get into or out of a trade and knowing the difference between these orders and how to apply them can not only save you some money, but make you some as well. We're going to take a look at three of the more basic order types and define them for you. Learn the lingo and you'll sound smarter than your broker as result.

The Easiest Order Isn't Always The Best

The most basic of all securities orders is the market order and this is what you're placing if you don't verbally instruct your broker otherwise. If you're using an online brokerage, there should be a box giving you options about the various orders you can use and if you don't select one of those, you'll be getting a market order as well. Market orders simply get you into or out of trade without much consideration for price you want. Market order a buy or sell order in which tells your broker to execute the order at the price currently available. You're not likely to get the best available price with a market order because market makers interpret market orders as a trader saying "Just get me in or out, I don't care about price."

So market orders are great if you desperately need to get into or out of a trade quickly, but they're not very precise. The pros hardly ever use market orders and the problem with them comes when a market maker shuffles your order down the priority line. You may see a stock trading at $25.50 and you want to buy it, but if volume starts to pop and the offer price starts to rise, you could end up with a price like $25.57 or $25.59. And the same thing goes for selling or going short, so only use market orders if you absolutely have to.

Stop Orders: A Potential Life-Saver

You can use protective stops to either lock in profits or prevent big losses, but stop orders can also be placed to enter trades as well. In fact, placing stop orders to go long or short near your desired entry points is a great way to ensure you get into a trade that you want to be in. The market moves faster than you can click your mouse and saving a few seconds here and there can get you better pricing.

Here's what you need to remember about stop orders: Unless you are using a stop limit order (we'll get into limit orders later) you're using a stop market order. This means that while you may place at a stop at $25.50, when the stock crosses that price, your order becomes a market order. There is no guarantee that you'll get $25.50 as the exact entry price of your trade. Once $25.50 is printed your order is activated, but not necessarily filled at that price. In a fast market you might get filled at $25.75 or even much higher. If your stop order isn't filled at your desired price, you will likely get one of the next available prices, but the slippage won't be as bad as you might experience with a traditional market order.

Limit Orders: The Best Of All

Limit orders are great, especially when you're exiting a profitable trade. A neat benefit of limit orders is that many exchanges actually give traders a small rebate on their trading costs when they use limit orders because these orders keep liquidity flowing and don't upset the balance of the bid and ask spreads.

Here's how limit orders work. Let's say you're already in a profitable long trade, and you want to exit at $25.50. That's the price you absolutely want, not a penny less. You send your limit order through and if you have real-time quotes, you'll see your order pop in the ask column (assuming you're selling). If that stock goes to $25.50, some or all of your position should be taken out. But here's the risk: By using limit orders, you're saying you won't accept another price other than the one you've entered. If that stock goes to $25.49, but falls back, your $25.50 limit order just sits there and doesn't get filled. The price you want has to print for your order to be filled. The moral of the story is be careful with your limit orders and be prepared to pull them back if a trade goes against you.

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Why is it Important to Keep an Eye on a Stock's Moving Average?

A 'moving' average (MA) is the average closing price of a certain stock (or index) over the last 'X' days. For instance, if a stock closed at $21 on Tuesday, at $25 on Wednesday, and at $28 on Thursday, its 3-day MA would be $24.66 (the sum of $21, $25, and $28, divided by 3 days).

Since the most recent X-day period changes every day, so too will the value of the stock's MA. The ongoing updates to the MA values are also sometimes called a 'rolling' average.

Moving averages are usually plotted on a stock's chart by those who are analyzing them, since their physical position in relation to the stock's price is the key to using them effectively. As for how many daily prices a MA should incorporate, the chosen moving average length (or X days) should reflect the investor's intended holding period and time frame.

How is it Interpreted? First and foremost, investors should understand the purpose of a MA is to 'smooth out' erratic day-to-day price changes into something more discernible and consistent. With that in mind, there are several ways to use them as an investor. There are the three basic, core strategies though:

1. Momentum Indicator - Is the MA pointing upward, or downward? It does indicate the bigger trend, after all.

2. A 'Signal' Line - A stock that crosses above or below a selected MA line could be considered a simple 'buy' or 'sell'.

3. Support or Resistance Levels - A stock that moves back towards a MA line may not necessarily cross it again; that moving average could also be a reversal point.

Kapitall is an online investing platform that combines the world's friendliest investing experience with powerful yet simple tools. Click here for a demo video, or visit us at Kapitall.com.

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Managing Risk is Key to Successful Trading

Your long term success as a trader depends on how you manage risk in the market. The golden rule of trading, "let your profits run and cut your losses short", is all about managing risk and taking measures to limit your losses. Risk is an essential part of trading and in order to protect your capital, you need to avoid risks that will put you out of business.

Risk and money management form the most critical parts of your trading plan. Just like any business, in order to survive, it needs to have a plan. This plan is individually based and is a blue print of your trading future. It should set out your trading style, goals and objectives, strategies and tactics and most importantly risk and money management.

When starting out amateur traders are mostly interested in entry methods, yet it is money management that is the key to survival. You can get almost everything else in your plan wrong, but if you have strict money management rules that you adhere to, then you are on the right path to success.

With every trade you undertake in the stock market you are opening yourself up to risk and 'you' are the only person that can control this. The key to controlling risk in the market is to use some simple money management techniques that aim to protect your trading capital and quantify your risk. You need to consider the following in your plan:

* What type of instrument and time frame are you prepared to trade in the market? This depends on what instrument you choose to trade, such as shares, options or futures, as well as the liquidity of the chosen instrument. Some instruments are more volatile and shorter term in nature than others, which gives them higher risk profiles. You need to select one that suits your personality and style of trading.

* How much risk are you prepared to take on each trade? Position sizing is a money management tool you can use to control this and determine how many shares you can buy based on the percentage risk that you are prepared to undertake on any one trade.

* How will you limit your losses and protect your open profits once in a trade? Stop losses are your key to survival when entering a trade and allow you to protect your open profits once the trade moves your way.

* When should you add more money to an existing trade? Successful traders use a technique called pyramiding to add to profitable trades.

* What is the maximum position size you will take on any one position? You want to ensure that you are not putting all of your money into one trade, because if that trade fails, then your chances of success are a lot lower than having your capital spread between multiple positions. As a general rule it is best to ensure that the maximum size of a position (including pyramiding) does not exceed 25% of your total equity.

* How will you manage your total open market risk? Portfolio heat is a method used to manage your overall risk in the market at any one time. So if all your trades were to hit their stops tomorrow, you know up front your worst case loss.

Getting back to the golden rule of trading. It does not matter how many winning trades you have, if you can't manage to keep your profitable trades larger than your losses you will not survive in the market. You only need to have one or two bad trades in your portfolio that you let go (such as a Onetel or HIH), and do not exit at a small loss, and your entire portfolio could be in a losing situation. There is no such thing as hanging on to a losing trade in hope. You may have heard it from someone else or said it yourself - "don't worry the share will come good again and I will get my money back". Then again maybe it won't!

Justine Pollard is the best selling author of Smart Trading Plans. She is a successful private Australian stock market and CFD trader, experienced trading educator and sought after trading mentor. Justine specializes in supporting traders to become peak performers in the market.

Justine has been interviewed in many media articles and included in top trading books such as "20 Most Common Trading Mistakes", by Kel Butcher and "Real Traders, Real Lives, Real Money", by Eva Diaz. If you are looking to start trading or have been struggling in the markets visit Justine's site http://www.smarttrading.com.au/index.php?q=1.html and get a special report on 10 Tips to Smarter Trading for free.

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Aggressive Or Conservative - What's Your Trading Style?

When it comes to trading, two adjectives are used more frequently than others to describe traders' various styles: Aggressive and conservative. We're here to tell you that in a perfect world, you'll find a way to marry both of these styles to boost your chances of success. After all, the most seasoned trading veterans will tell you the best aggressive traders know when to be conservative and the best conservative traders know when to increase their risk and get aggressive. There's nothing wrong with either style, so let's highlight some of the things you need to know about risk as it pertains to trading.

No Need To Always Hit A Home Run

One of the biggest mistakes new traders make is always attempting to make the next trade the trade of a lifetime. They risk a fair amount of their account balance on a single trade hoping this will be the trade that delivers a new Ferrari or vacation home in Hawaii. This is absolutely the wrong way to approach trading. Over the course of your trading, you are going to encounter trades that, in baseball terms, are just singles. They're winners, but there was no signal to back up the bus and risk more than usual on that particular trade.

There's nothing wrong with trades like that and if the maximum number of shares you can trade per position is 1,000, having some winners with 500 or 600 shares is fine. Remember that even the best home run hitters also strike out a lot and just as a strikeout definitely isn't good in baseball, it can be detrimental in trading as well. In other words, hitting some singles and doubles is what's going to keep you in the game and position your account to allow you to eventually swing for the fences.

Know Your Risk Before You Trade

The key to being a solid, conservative trader, not an overly reckless, aggressive trader, is knowing your risk BEFORE you put the trade on. Aggressive traders that lack discipline will throw the same share size or dollar amount at every trade with no thought to the consequences. The conservative trader says "I've got $10,000 in my account, therefore I'm willing to accept a loss of two percent or less on this next trade." Other conservative traders may set a stop loss order for 10 cents (or another arbitrary amount) and if their stop gets taken out, they're fine with that because they didn't lose a lot of money.

What we're saying here is being conservative pays dividends in the long run. You're going to have losers. It's just a fact of life, but by keeping your losses small, you keep more ammunition around to get aggressive later.

When Do You Get Aggressive?

This isn't an easy question to answer, especially for traders that are conservative by nature, but a starting point may be after you've been trading for a few months and you've noticed your conservative model has helped you pad your account. You now have some confidence and some cushioning to absorb a large loss and you want to try to milk a trade for more money than you have previously.

So what do you look for? Make sure the indicators you use are confirming the emergence of a strong trend. If you're going to increase your risk, you want to be on the right side of the trend. For example, let's say you're trading stocks and the market has been up all day. There's about two hours left in the trading day and you've been watching ABC Inc. inch its way up all day. The sellers have been weak and then you see a fresh wave of buying come along with increased volume. This is an ideal setup for you to put on aggressive long trade. The stock is strong, the market's strong and the odds are on your side. This would be a "smart-aggressive" play.

Lean Toward Conservative, At Least To Start

Getting aggressive is about gaining experience and comfort in your chosen asset class. No, you don't want to be so conservative that you're cutting good trades short, but you don't want to be so aggressive that every trade has you walking on eggshells either. That's the great thing about experience. The more you have, the better you'll understand when to swing for the fences and when to just try to get on base.

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Buy Discounted FAP Turbo Software Today So You Can Start Making Money

If you're new to currency trading, you should definitely use automated foreign exchange (forex) trading software to help you succeed. Using this software will allow you to start trading immediately without having to scale the steep learning curve of forex trading. Normally, before you start trading in the forex market, you need to learn about how the market works, how to trade and how to interpret the market signals that would indicate that you can make a profitable trade.

With automated forex software, however, you can basically just set up the program and start trading at once so you can start earning while you're learning the ins and outs of the currency trading market. Of course, it is highly recommended that you trade first with a demo account opened with your broker so that you can learn how best to use the software, but once you get the hang of it then you can switch to a real money account and start generating profits.

However, when selecting the forex software that you will use, you should beware of exaggerated claims. It is possible to earn a lot of money from the forex market, but you need to keep your expectations realistic. Even if you're trading full-time, don't expect to earn enough to retire on in the first few months or even your first year of trading.

One of the best reviewed automated foreign exchange trading programs on the market today is the FAP Turbo software. FAP stands for Forex Autopilot, and the name of the program is indicative of how little effort is required on your part once you install the software on your computer and get it running. Just like the autopilot on a plane, all you have to do is sit back and enjoy the ride, letting the software do all the hard work.

With FAP Turbo you can start trading with as little as $100 in your trading account (depending on your broker's terms) although you will achieve the best results with at least $1,000 in your account. And FAP Turbo is easy to learn, since the program comes with easy-to-follow instructions and video tutorials.

FAP Turbo comes pre-programmed with two winning strategies, a short-term scalping strategy and a longer-term trading strategy. According to the producers of the software, 96% of total trades executed by the software were successful, citing the results of backtests from 1999 to 2008 as well as live trading. But you don't need to take their word for it, since you can easily verify these results for yourself.

And you don't have to stick with FAP Turbo's pre-programmed strategy. Once you have some trading experience under your belt, you can change the settings of the software to reflect your own winning strategies.

You can try FAP Turbo risk-free for two months so you can see how easy it is to make money using the program. If you are unhappy with it for any reason, you can get your money back. And if you buy it now, you can download the FAP Turbo program for just $149 or less than half of the regular purchase price of $399.

But there are only a few copies of the discounted FAP Turbo program still available, so visit:
discounted FAP Turbo to get your copy today.

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How to Determine If You Have Emini Day Trading System? Is it Right For You?

A math problem is a lot like a Emini Trading System.

I can recall years back laboring on math problems in college and producing foreign answers and reminiscence my the staff asking "Does your answer really make sense?"

Frequently, it did not. The system was rupture.

When the trading the ES Emini a Trading System must be in place. We often get so distracted in the vast amount of oscillators and chart patterns that we toss practicality out the window. An Emini System keeps this practicality in place. You may have the correct set-up for a long transaction, every indicator suggesting "buy now" and you become overjoyed about the possibility of the trade. Of course, what is your system and rules? You may not have uncovered, in your eagerness, that the Emini market has been on a bearish twist all morning and is trading dramatically beneath the 89 period SMA. This is one of my Emini Trading System rules. In my mind, anytime the market is well under the 89 period SMA I concentrate ONLY on short trades. Why? Counter-trend trades are consistently very low probability trades and best eluded. A trustworthy Emini System should place these rules..

And emini future trading is like algebra, or like using a calculator. If you don't involve all of the variables in your index trading equation or system, it is very likely that the solution that just does not "make sense." The problem is most trading traders do not have a Emini System and get so distracted in up in technical analysis they disregard asking this very basic question..."Does this trade really make sense?"

It's not an craft, or even hard calculus; the process of researching what you are emini future trading and your Emini System borders on common sense. Though I should counsel you that common sense and the market are diametrically opposite. The market does not need common sense to be favored. But your technique and your system for gauging a probable trade has to "make common sense" within the parameters of your Emini Trading System. It's fundamental to note the gap between these two definitions.

The market thrusts in a semi-random manner and, in the long or average run, is very delicate to predict, yet a Emini Trading System eases the complexity. "Common sense" is of little merit in this example. However, you should have a system for weighing trade set-ups and, regardless of your system, you have to be able to make "common sense" out of your Emini Trading System.

Yet, many are usually blinded by our over concern to our systematic system and leave weighty variables to the side. This is a method for disaster Your Emini Trading System needs to be thorough and absolute, and then ask yourself, "Does this trade really make sense?"

I write foremost about futures topics, specifically daytrading the emini 500, and many of my more technical techniques can be discovered at my blog, Day Trading Templates & Training. I encourage you to read the blogs and discover how to trade. You can add $500-1000 dollars a day to your pocket book. Much Success.

Article Location: http://emini.daytradingtemplates.com/emini-trading-system/should-i-try-the-emini-sp-500/

Day Trading Templates & Training. All Rights Reserved.

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Different Accounts, Different Styles - Which Investment Options Work Best For You?

Most investors are probably familiar with the most basic kind of investment account, the kind where you simply fund the account with a bank draft or wire deposit and you decide on your own what investments you want to commit money to. Every now and then, you may require some assistance from a broker and want to bounce an idea off someone, and for those privileges, you'll pay an extra fee. These accounts are known as discretionary or self-directed accounts because the account holder, you, is calling all the shots and if you're an independent investor that has a lot of experience, these accounts are the way to go.

Don't worry if you're an investor that wants a little more service with his brokerage account. There are plenty of options out there and we're going to discuss some of them here. Or if you like the feel of trading, but don't have the time to watch your investments on a minute-by-minute basis, we'll talk about automated trading as well.

Automated Trading: Risks and Rewards

The futures and forex markets are loaded with automated trading systems. You can also use platforms such as Meta Trader to set up automated trades based on criteria that you choose for stocks, futures and forex. In addition, there are several online brokers that offer automated trading tools for equity investors.

We like automated trading systems because they can really help investors figure out what a winning trade is and as we said above, you don't need to be at your computer all day to trade. If you elect to use an automated platform, be sure it fits your style of trading. Don't let it overtrade or take large drawdowns and be sure to test it out in a demo account before giving the system real money to trade with.

Managed Accounts: A Great Option

You may not be aware of managed futures accounts, so let's explain them briefly. A managed futures fund pools investor money into a variety of futures investments in an effort to generate returns that are superior to investment vehicles. Managed futures accounts often carry large minimum investments (think $25,000 or more) and as a result, are not within reach for many investors.

If you can afford that outlay of cash, you should consider a managed futures account, particularly if you want exposure to commodities, futures or forex. Since managed futures are professionally managed and are trying to outperform a variety of benchmark indexes, a good manager can provide your portfolio with some outstanding returns. Just remember managed futures accounts don't mitigate the risk of investing in the aforementioned assets, they just take the burden of doing so off of investors. Investors should also note that they want to invest in managed futures funds that are registered with the Commodities Futures Trading Commission (CFTC) and the National Futures Association (NFA).

Letting Your Broker Do The Work For You

By signing a letter of direction or related document, you enable your broker to trade your account for you. Of course you can outline some rules and parameters that you want your broker to follow and you can even tell him you want him to buy certain stocks or assets, but for the most part, your broker is running the show. That is kind of like a managed futures account without the high minimum investment.

This isn't a bad strategy if you simply want some capital appreciation and you don't have the time to research and trade securities on your own, but if you go this route, demand to see your broker's past trading performance. Make sure he's not overtrading because all those commissions can eat away at your bottom line. Make sure you understand his methodology.

The Best Idea...

We're always fans of being independent investors and if you can find a way to implement a good automated system into your trading routine, even better. After all, no one cares more about your money than you do.

Article Source: http://EzineArticles.com/?expert=Max_D.

Online Day Trading Explained

Day trading is the buying and selling of stocks, bonds and other financial instruments in the same trading day. Day traders are what those traders who practice this are commonly called, although most traders who take longer positions often also only hold on to shares for short period of times.

Day traders are usually bank investment employees or those in the fund management sector. This was so before the rise of online stock trading in which home traders are able to join without actually going to the trading floor.

There are several service providers in the internet who offer comprehensive coaching in online trading. These coaching usually come with fees. With coaches or none, online day trading requires some keys from the online trader. These keys will be necessary for successful trading.

First of all, the technical aspect of online day trading is not everything. Sure an online trading knows all the technical aspects but is not everything. Remember that the market is still made up of people doing their own trading. So in essence, an online day trader is still transacting with a human being.

One of the best characters of a day trader is that they have a plan. Businesses are not the only ones who need a plan. Trading also has a plan. An online trader should have a plan on his or her investments that will be made. Planning helps one create good and wise decisions.

In addition, a good online day trader capitalizes on risks. These traders are never afraid to take risks and are willing to lose in order for them to gain. They look at money as not everything to trading.

For more online stock trading tips, visit my website and learn the "ins and outs" of online day trading.

Article Source: http://EzineArticles.com/?expert=Deon_Du_Plessis

Improve Your Trading by Learning How to Sell

There is a reason why there are so many profitable strategies and methods when it comes to trading stocks: it is easy to do. I'm serious. If you look at the history of a list of random stocks odds are that you'll find more than half of them higher than they were 5 years ago. Its just the way things work. Obviously, in order to stay in business you must do something right, so companies grow over time.

Since we just covered that it is easy to make profitable trades, the real key to being successful at trading stocks is to know when to sell. You will rarely ever catch stocks at their very tops or bottoms, so you need to know when to sell. Whether its capturing profits or to avoid losing more money, the art of selling can mean the difference between hitting constant losers or banging out winners.

Referring back to not being able to call the bottoms and tops all the time, that means that there will be occasions when you buy a stock and it heads lower. Does that mean you sell right away? Sometimes you just need to let your stocks breath and works it way out; however, there are times when your trade is really a bust, so let me share 3 rules I use to determine when to sell a busted trade...

1. Bad News - Regardless of how much research and risk management you use, the inevitable will always happen. Maybe some type of natural disaster , company being sued, or threat. Whatever it may be, certain news affects certain stocks. If pertinent bad news break, then its probably a good sign to sell.

2. Large Volume - If technical analysis is your thing, then you're probably aware of the importance of volume compared to the move in stock price. If there is heavy volume on a swing downwards, then its probably a good sign to sell.

3. Doesn't Follow Plan - You should always have a plan before entering a stock. Where to buy and take profits; however, sometimes these plans don't play out like they were supposed to. For example, if you bought a stock that is supposed to rise as oil goes up and oil goes up but stock doesn't, then you might want to consider selling.

The key is to not be afraid of red. Unless there is truly something that has developed and working against your trade, then let the stock run. Being quick on the trigger could cost you more in the long run and that is not always cheap stock trading.

Amey is creator of Chart Pattern Manifest, which teaches traders how to properly use technical analysis to accurately predict stock price movement.

Article Source: http://EzineArticles.com/?expert=Amey_Shivapurkar

Day Trading Tips Straight From the Pros - How to Make Money in the Markets!

One of the fastest growing and exciting methods to earn extra cash these days is day trading. You will find people who do it for a full time job and others use it as a method to earn some extra cash. With it's great money-making potential and the charge it gives you, it's no surprise more individuals are jumping into the stock market.

Now obviously you you won't be able to just dive in and make giant money without knowing the markets! You want to have a certain level of education when you get started so you are able to make the most of your cash.

The way in which you earn profits in stock trading is to buy low, and deal when the price is high. Of course, the question is - how can a person know when it's time to buy stock and sell?

To earn cash with day trading, employ these important tips to supercharge your profit.

Be prepared ahead of time. You should be alert and ready prior to executing your first trade. You won't need to spend lots of time doing this, but have a couple of key financial sites you visit and it's a good choice to observe a few stocks closely. You want to have a good overview of the news in the stock market.

Try not to spend time on shares that have minimal volatility. With day trading, cash is generated by buying and selling stocks that are subject to frequent price movements. As its name suggests, day trading means moving financial instruments throughout the day. You don't have the time to wait around and discover what happens as other profitable trades are available.

Brush up on your mathematical skills. You'll need to be capable of analyzing financial numbers rapidly. Don't be turned off - you don't need to be a mathematics superstar - but there are a few basic computations that you will need to have an understanding of.

Always remain composed and resolved. You need to keep your emotions level to not allow them to alter your judgment. Whether someone is too excited about a sizeable gain, or deeply self-defeated about a loss, both of these emotions can block your capability to stay level headed, make smart decisions, and keep a clear mind.

You might not get well off overnight, but using these hints will place you on the route to making great cash with day trading. There is plenty of cash to be earned with day trading and with a bit of work, you can be turning a profit from this exhilarating opportunity.

Use these day trading tips to help you boost your trading profits and earn some extra cash.

Click here to see a day trading system that has been consistently generating massive profits for it's users.

Article Source: http://EzineArticles.com/?expert=Grant_Dougan

Trading From Home - Not a Lottery Ticket

Starting out as a Daytrader is usually not easy. With the right knowledge, it's a lot easier than you think.

Remembering not to spend all your money in one place will definitely protect you from the big losses. Not using your entire investment in one place is never a bad idea. Know what you're buying. Plenty of pointers out there are great advice. Take advantage of the experience pro traders have.

Effective stock investing is as much about your concentration and dedication level as it is about knowing how to trade. Success in anything is not only about what you know, but about how you use what you know. Think about it for a second, think about all the fat people in this world.yet we know that diet and exercise work.

It's no different with any kind of skill, daytrading included. All you have to do, is learn the right things, and then habitually and consistently apply them. In addition, with day trading you can apply these things and make money as you do, so you're continually rewarded for your efforts at learning. Naturally though, becomes critical to know that you have the correct and accurate information. Let's face it, if you don't know how the daytrader, doesn't matter how consistent you are, you'll just consistently lose heaps of money.

Look before you buy. Establishing when to buy in order for maximum profit is one of the most important steps in trading. This will be an easy observation with some, but might be a bit more tricky with others.

Stick with what you know. When you know a lot about a certain product or market, you will have a much easier time making decisions about it's stocks. People who stick with what they know reap the rewards. Even on black Tuesday, a few people who knew their stuff still made money. Trade what you're familiar with, your wallet will thank you.

Like with anything, experience and practice make perfect when it comes to trading. You wouldn't expect to just walk into a hospital and become a doctor, so don't expect to be a pro at trading right away. Learn as much as you can on your own, study the market. Also, find some experienced traders whose advice you can trust, and you'll be making cash in no time.

Trading from home.

Max resides in his community. He has a wife and three children, and considers himself a family man. Writing is a passion for Max and he takes himself very seriously when he publishes his work on the web. After a lengthy career as a mortgage broker, Max is now retired and building various web businesses on the Internet.

Article Source: http://EzineArticles.com/?expert=Max_C_Black

Is the Day Trading Robot Worth the Cash?

If you are interested in trying to make money in stocks, you might want to find out more about the Day Trading Robot.

This is basically a software program that makes it easier to figure out which stocks you might want to invest in. It should be made clear here that the Robot focuses in on one particular type of stock -- and that's penny stocks.

But you don't actually get the software itself. The process is that the software is run by the company who owns it. It processes information from the stock market every single day, and as it does so it uses the past performances of these stocks to try and predict what will happen next.

It might be possible to do this by hand, but of course that would take ages and it is arguably easier for a computer program to perform this same task in a lot less time. This is why you sign up for Day Trading Robot -- the idea is that you get its suggestions on which stocks to buy, and you then decide whether or not you want to buy them.

If you decide to sign up for this service you can expect an email every day. That email will contain the tips the software has come up with, and it is then up to you whether or not to invest in those penny stocks. Of course there is a fee for this, but you can gain access to these tips by trying out the trial they offer for eight full weeks.

Anyone who wants to give this a try should bear in mind the need to acquire a certain level of knowledge before investing in penny stocks. To simply rely on some tips via email and invest cash from that alone is probably not a good idea. Start off by educating yourself so you know what you are investing in. And don't put more money into these stocks than you would be happy to lose.

It's probably worth the money to give this a try if you want to get involved with penny stocks and you need some advice before plunging in. But always remember that you could easily lose money too -- not every suggestion made by the Day Trading Robot will result in a share increase. If you are willing to take that risk then give it a try.

Next, check out our free stock picks that have made huge gains. Your #1 spot for top ten penny stock picks.

Article Source: http://EzineArticles.com/?expert=Ben_Lardes

"I need to get into the market for some action to make up for those pips that I so nearly had..." and (if the trade that you missed out on was a long

This poses an interesting question because it highlights how many people really have no idea about the different type of investment "vehicles", as they are often called.

You know what "equity" is, right? Especially if you own a home, it's the difference between what you owe and what you own. If you have a $300,000 house and you owe $200,000, then you have $100,000 in equity, or ownership.

Stocks are much the same thing, except that what you own is (typically) a VERY small piece of a major company. In most cases, you've already paid for it in full, and therefore you own it outright with no debt. (It is possible to borrow ownership, but that's a level 200 course).

This is why stocks are often called equities, and vice versa. Think of yourself as a part owner, you can attend the annual meetings and vote on issues as requested by the board of directors - using what are known as "proxy statements".

Because you will probably have a very limited impact on the direction of the company unless you own 5% or more of the outstanding stock, what most people buy stocks for is to either a) participate in the growth of the stock price or b) get paid cash dividends as a reward for owning the stock.

In an ideal situation, both will happen, at which point you have to be clear on why you own the stock - is it for the growth, in which case you might want to sell it for a profit - or is it for the dividend (read: the cash flow) in which case you might not want to sell it.

A bond, on the other hand, has NOTHING to do with ownership. A bond is like your mortgage loan or your car or other loan. It is an agreement between you and another party by which the lender gets paid a fixed amount of interest for a fixed period of time. The cool part is that YOU are the lender. YOU are the bank! These are generally not as exciting as stocks, but that can be a good thing! Being the lender instead of the borrower can be a very positive and eye-opening experience!

So, what is a mutual fund then? Fortunately this is easy. A mutual fund is a basket of various stocks, or a basket of various bonds, or in some cases, both. Which of those 3 general approaches, and which specific investments are held by the mutual fund are defined by the fund's prospectus, which states what their objective is, and what they can and cannot do, so that other people can hold them accountable for doing what they say they will.

Mutual funds are often a little more expensive that individual stocks and bonds, simply because you're dividing your money among many different investments, a form of diversification, rather than having everything in one basket.

Frank Johnson

http://www.uscertifiedfinancialplanner.com
We have made this web page exclusively for you to be able to contact our financial adviser who has assisted us tremendously. We have learned so much and hope you will see the value in taking advantage of the opportunity we are sharing with you.

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Pyschological Danger Point - Pips That Might Have Been

Trading has a number of psychological 'trip up' points that you need to be aware of. Dealt with properly, you'll be fine, but let them affect you and they could start a nasty spiral of losses.

Times that I've always found tough to deal with are those that involve losses that exist only in my head. Namely - trades that would have made me huge profits if I'd taken them, but that for whatever reason I didn't. Or the worst one of all - the trade that touches your breakeven stop-loss only to then go on to skyrocket.

The breakeven stop loss is the toughest one of all because you were actually already in the trade and you know that if you'd only just gone and left it you'd be sitting on a tidy profit by now. To me, for whatever perverse reason, I find this almost harder to deal with than I do a loss. Despite the fact that I actually did something sensible (ie limit my risk to zero and effectively give myself a free trade), my typical thought processes following these are as follows:

"I need to get into the market for some action to make up for those pips that I so nearly had..."

and (if the trade that you missed out on was a long one)

"I have to go short because if I go long then I'll only be making a few pips when I could have made so many more. The only way I can turn this situation around is for my original trade to be wrong and for me to trade against it."

If either of these scenarios sound familiar, then I suspect we're not the only ones. It's only now that I can recognise this as being a pitfall for me that I've learnt how to deal with it. And my answer is:

Stop trading.

Take time out, whether it's for a few hours, a day, or a few days. Time will heal the psychological pain and allow you to readjust. It's so important to make sure that trades are made for the correct reasons, and on their own merits, rather for any other retaliatory or emotional reason.

Just remember - you did the right thing by exercising caution. You had no idea that the price was going to stop you out then skyrocket. It could well have done the opposite and dropped like a stone - in which case you'd be patting yourself on the back for avoiding a nasty loss. With trading, it's natural to pine for what might have been. But tell yourself this - there is no such thing as the perfect trade. There will always be something you could have done better. But as long as you can recognise something that you did right in a trade, irrespective of whether you made pips or not, you'll be well on your way to becoming a more level-headed, rational, and successful trader.

Alex Docharty is a successful UK-based trader, specialising in forex and share trading. Like many traders, he had a bumpy start to his career, losing large amounts of money before finally turning things round and becoming profitable. He runs the website http://www.spreadbettingforex.com which shares tips on trading techniques and the all-important issue of trader psychology.

Article Source: http://EzineArticles.com/?expert=Alex_Docharty

How to Be a Smart Trader

BE A SMART TRADER

Day trading is the trading in which one Buys and Sells the shares on the same day. In day trading there is no guarantee that you will always have a winning trade but Just by following some rules and instructions you can generate a better profit that you could never get before.

Day trading requires discipline, determination and patience to sit at a place and wait for the right time.

Before you enter into stock market, follow the following instructions:

1. Get brief knowledge of stock market :

Before entering into the battle, take a brief knowledge of stock market. You should have the knowledge about types of exchange, share, market types, depository system types of depositories, how the transaction takes place and types of trading etc.

2. Make a plan to trade:

Always make a plan before trading. Planning includes time and money management. Get all the details in advance. Do not let the emotions get over you because in stock market you play with mind not with heart.

First make small targets and achieve them. Do not let the small losses to convert into big ones.

3. Paper trading :

If you are a beginner then start with Paper Trading. Paper trading means you virtually Trade on paper which does not involve money. It helps you to understand the market and you can have a good experience of trading without having fear of loss.

4. Smart with a small amount:

Do not pour huge amount of money at the start. Start with a small amount and look for the trends. Being a fresher in the stock world it would be better for you to start with small investment. After gaining a good knowledge of market you can increase the amount of money.

5. Always consult an experienced/good stock adviser :

It's better to take advice from an experienced stock adviser rather than to use your own Brain because if you are not experienced and are very confused then you will have to face nothing but loss. There are many stock advisory companies which provide stock tips, cash market tips F&O tips, Nifty tips, commodity tips etc through SMS or by some other means. CapitalVia is one of the leading stock advisory company of India which provide all these services with an unmatched accuracy of more than 90%. They have a nice blend of researchers of Cash, commodity and derivative markets who analyze the market trend and give the best calls.

Deep Kandpal

e-Marketing Executive

CapitalVia Global Research Ltd.

http://www.capitalvia.com

Article Source: http://EzineArticles.com/?expert=Deep_Kandpal

Wondering What Day Trading Is?

If you are new to the process of trading the whole system may seem extremely complex. Day trading in particular is a specialized branch of trading that is worth taking a closer look at, in order to decide if this could be worth doing in the future.

So what exactly is it and how does it work?

You may have heard of day traders before, and this type of trading is what they indulge in. The biggest clue lies in the name itself, because this trading is performed in a single day and does not spill over into any others.

So for example, if you decide to take part in day trading you will find a stock that looks promising early on in the day and buy it. The idea then is that you will look to sell it before the day is out, making a profit on it in the process.

But this form of trading is not limited to stocks. Anything which can be bought and sold in a single day will qualify for day trading. Equities and currencies are two more examples of financial items that can be bought and sold in the course of just a few hours.

The most important thing to remember about trading in this form is that you need to know your way around the stock market (or whatever you wish to be trading in). While stocks and currencies can gain in value by a significant amount in the space of a few hours, they can also depreciate by a huge amount too. There is always going to be a degree of risk in trading anything. But trying to ascertain which stocks or currencies or trades are going to be the good ones to buy and sell is very difficult and can result in losses as well as gains.

Obviously the level of knowledge you have about the practice will help you increase the chances of making money. Indeed there are some people for whom this form of trading is actually a career. You don't have to have any real help to do it if you want to do it from home, but you must accept that there is a chance of losing a significant amount of money if you don't pick the right trades to do.

In short, day trading can be extremely exciting but as with everything involving trading, it can also be dangerous in the wrong hands.

Next, check out our free stock picks that have made huge gains. Your #1 spot for top ten penny stock picks.

Article Source: http://EzineArticles.com/?expert=Ben_Lardes

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