Five Characteristics of Successful Traders

Successful traders do tend to share some common traits. One such trader, nicknamed Big A, has pinpointed 5 charactristics:

1. You will find all successful traders had a mentor. That’s a reason for adopting a mentor who has proven success. If you can learn a system from a successful trader, that will give you a head start.

2. Remaining emotionally detached is essential to successful trading, and successful traders do just that. Once you have entered a trade, you need to ask yourself if you can hold position until the pre-planned exit strategy is met? It can be dangerous to watch your trading account too closely, because of the emotion of watching your account soar. His after market trading plan eliminates 99% of emotion.

3. Successful traders resist the temptation to make things happen. If you try to force the market and enter too early because “you know it’s going to go up” you will get hurt. The key is to be a follower, not a leader. Follow your system (if it’s a proven system) and don’t make things happen outside of it. Impulsive, trigger happy mouse clicking should be done on a demo account, not live with your money. Just don’t think when you get lucky a few times that it’s ok to “make things happen”. That is exactly why you should stick with the system you are using; deviate and die.

4. Successful trades are prepared. It is vital to not only have a trading plan, but stick to it whatever the market might be doing. You must learn how to plan every trade, simply and quickly. As an example, with the system used by BIG A, you need only trade for 5-10 minutes every trading night.

5. Traders who succeed usually expected to, and become rich at the same time. Are you able to imagine yourself rich? Successful traders have had this vision. Do not restrict yourself. The idea of prosperity should be within you before it can manifest outside. If not, your account may suffer as it reaches new heights due to a feeling you do not deserve riches. Thinking how to overcome any psychological barriers to success is imperative. That is something with which your mentor can help.

Big A actually has his own exchange traded funds trend trading course, in which he teaches his own system of day trading for exchange-traded funds.

Profitable Trading Systems for 2009

trading system

Creating a winning trading system suitable to your needs, that can react to the situation of any market means you are able to take your trading to the next level. Here are some pointers that have been invaluable during my time trading . . .

You have to keep the best trading systems– really super simple. Those same traders often complicate the best trading systems so much that they become nearly impossible to trade. This is usually accomplished through over optimization, adding far too many indicators. Instead, keep your plan your best trading systems as streamlined as possible. That way, it will be robust enough to trade across many market conditions. Through testing, I have found that over optimizing a plan will make it perform better on historical data. However, these plans usually trade worse in real time, thus taking away the goal to having the best trading systems.

Once your best trading systems are up and running, document it. All successful traders that I come in contact with document their plan – are my plans really the best trading systems or do I need to take some complicated bugs out of it? They have their exact trading methodology written down. The traders who lose money don`t have their trading methodology written down. You should clearly write out your methodology. Why is it so important? When you sit down and spell out how you perceive the market, you are accepting the fact that you might be wrong. You are beginning to accept responsibility. With this acceptance comes a renewed commitment and dedication to your system that will allow you out last the markets fluctuations. This is a key element to keeping your plan the best trading systems.

Of course, you should also employ excellent money management rules. Despite it`s importance, money management still remains relatively unknown by many traders and investors around the world. In fact, Dr. Van K. Tharp, a world-renowned leader in professional trading coaches and consultants says: “Perhaps the greatest secret to top trading and investing success is appropriate money management.”

You should look at trading as a business. To do this you need to learn some valuable statistics about your system. It`s the only way you can improve performance. How can you expect to improve something unless you know what it is you are looking to improve? You need to know your R multiples, win to loss ratios, expectancy, and other similar statistics. You can learn more about these and other vital statistics by reading Trade Your Way to Financial Freedom by Dr. Van Tharp.

With a back tested, robust and  best trading systems you can possibly have in your hands, and a good understanding of money management and the market, you will maximize your trading potential. Once you`ve applied these techniques, you will be surprised at how profitable the best trading systems you designed will become. Enjoy your success.

Three Tips For Smarter Stock Investing

Contrary to popular belief, the stock market is not a black hole. There are many investors who make significant profits investing in stocks, mutual funds, exchange traded funds (ETFs) and more.

To avoid the dreaded investing black hole and conquer the stock market, remember these 3 essential tips:

1. Be Knowledgeable and Resourceful

The key to successful investing is to know absolutely anything and everything about the company and the factors that affect its overall performance. There are two outstanding resources to check out before investing in the stock market:

a. Newspapers: find out updated information about the country and regional economy from newspapers. These conditions can influence the health of the stock market. Besides news about the economy, news about society, weather and politics can also have an influence on stock investments.

b. Internet: online resources provide valuable information such as "How To Be The Next Warren Buffet". Search engines make it easy and quick to find what you're looking for by simply typing in your search request. Visit the Website of the company you want to invest in to obtain official information about corporate set up, current financial health and their historical stock performance.

2. Analyze Prospects Carefully

Information garnered from the Internet can be overwhelming and some of it is inaccurate. Every source you review must be carefully scrutinized for validity. Pay attention to the details and if you don't find reliable info to back up a particular claim, move on to another website. use bookmarks while researching. Skim through each link on the list and bookmark the useful ones for reading later. When you have 3 or 4 sites bookmarked, you are ready to star conducting detailed stock mark research.

3. Patience is Key

Along with having strategy, you must be patient. If you do not need the profit immediately, hold on for a longer period of time. Stock market investments gain an average of 10 to 12 percent over a period of 10 years. If you stick it out and hold onto your stocks for that long, there's a good chance you'll realize this return.

When you keep these 3 essential stock market tips in mind, your research will make you a more effective stock market investor.

Online Commodity Futures Trading

Trading online commodity futures is an option that speculative risk seeking traders can certainly consider. Not that trading commodity futures online is for the faint of heart or for the under capitalized. Commodity price levels can and do often move in a dramatic fashion. When you decide to trade online commodity futures you must be very sure to use only true risk capital to fund your commodity brokerage account. And to learn about trading commodity futures online before putting real money at risk.

One advantage in trading commodities to consider is that the very nature of commodities means that they will always have at least some value. It is most unlikely that the producers of crude oil, gold, coffee, corn, wheat, sugar, or any other commodity will start giving them away for nothing. So unlike trading in stocks in companies, which can go bankrupt leaving stock investors with worthless stock, commodities offer at least some downside protection.  

A common problem in trading commodities, as it is in so many trading vehicles these days, is that many traders use too much leverage to carry commodity positions. For example, a 100 oz. contract of gold at $1,000 an oz. would have a value of $100,000. The margin, or good faith deposit, to place 100 oz. of gold in your account may be only $10,000, or ten percent, of the total contract value.

The unwise commodity trader, being very bullish on gold, may decide to buy ten contracts in their $100,000 trading account. This would be fantastic if gold moves straightaway to $1,100 an oz., as a profit of $100 an oz. on 1000 oz. of gold would be $100,000. Such a move would double the money in the account. However, if your gold contract declined by $100 an oz. to $900 before moving to $1,100 the unwise trader would be wiped out unless he/she could promptly meet a margin call from their commodity broker and place additional capital into the account.

By trading online commodity futures the trader has access to a great deal of current information, real time prices, and fast executions of commodity orders. This is a clear advantage over trading in the old pre Internet days. However, by using too much leverage in trading your commodity account, that is carrying too large positions relative to the size of the account, you set up the very real potential for heavy losses.

Trading online commodity futures has its advantages but traders must be very careful in deciding how much rope to use in the form of leverage. The use of all of the leverage offered by online commodity brokers is usually a sure way to end up with losses in your account. 

 To learn more about commodity trading go to Online Commodity Futures

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Is Trend Following The Right System for You?

The strategy of trend following goes against the old Wall St.  Philosophy of buy low and sell high.  It takes merit of the market whether the present trend is up or down.  Traders using the trend following method begin trading after a trend is already established.  Other traders attempt to predict what the market will do, trend followers wait for the market to do it.  The size of the trading account and the volatility of the issue are the primary determining factors in how much to invest. 

Click here to see a trend following strategy that generated 48% return last year.

The systems that monitor trend following are pre programmed to exit if there is an unexpected downward turn to the trend.  The trader will wait and re-enter if the trend re-establishes itself.  The point of trend following is to follow the trend after it is established.

Price is the 1st rule of trend following.  Other indicators are not important, although they don’t seem to be entirely overlooked.  The second factor is the choice of how much to trade.  The timing is less vital than the amount of the trade.  Then there is the exit strategy.  When to get out if the trade is unprofitable or if the trade is profit-making.  Finally, you must set a stop loss for the maximum sufficient loss.

These traders use their software to test trades before investing.  The software can guage the risks against the potential benefits of the transaction.  The assorted factors relevant to the trade are programmed into the software and the trader makes his call based on the result of the test.

One difficulty with trend following is the impact that unanticipated events can have on the market.  Political upheavals, natural disasters and other events can effect the market in both negative and positive strategies.  When Hurricane Katrina cause massive damage to grease rigs and pipelines in New Orleans, the price of oil and petrol zoomed in the expectation of deficits.  Even though no severe shortages happened, stockholders and trend followers, in both the stockmarket and the commodities market, kept the price of oil raised for months after the event.   

By definition, all stock market investing is speculative.  Following trends is a specific method for taking advantage of highs and lows in the market and using them to your own advantage.  Unlike hot stocks, which involve holding stocks for extremely short periods, hours or days, trend following involves keeping stock for longer periods, though the basic principle is quite similar.  In trend following one might hold the stock for a week or a month depending on the trend. 

In the market there is no assured strategy for earning profits.  It’s a necessity to have a plan or you will certainly lose money.  Trend following should by one of several strategies you employ to maximise your gains and minimize your losses.

Learn how you can apply trend following to ETFs and generate great returns with low volatility.

A Straight Answer to the Question: What Exactly is a Protective Stop?

If you have some experience with the stock trade, already you know just how upsetting it can be to purchase a stock for a great deal only to have it plummet in value just a short time later. For many, this means looking towards some protective measures to ensure that their account is not suddenly wiped clean. If you find yourself struggling to protect your finances then you will rapidly discover that you are not alone. Not only is there an abundance of ways you can lose your money, but there is also an abundance of ways to protect yourself.

With the average sale turning ugly extremely quickly, it is very important to take some time to ensure that you do not lose everything in a single transaction. While of course there are plenty of benefits in keeping to a budget of much lower than your entire account balance a protective stop order can be your best friend as well. These orders are typically quite easy and simple to set up, but they are there to help protect you against losing everything.

In the situation that a protective stop order goes into effect, the stocks will be automatically sold once the value reaches a certain amount. You can create orders for both a rise in value, as well as a decrease. Creating a protective order to protect you against a sudden decrease in value helps to ensure that your account is not wiped out completely. Using a stop loss or protective order, you should set the lowest amount that you want to hold the stock at. For example, if you purchased a stock at $4 per share, and want to sell it at $6, you could also enter a stop loss for $3.50 that would automatically sell your shares if they fall below the $3.50 amount set.

It is important to closely monitor the shape of the stocks though. There are times when they might tumble much lower but it is best to hold onto them. If it seems rather obvious that the stock will recover quickly then it is a wise idea to hold onto it. However, this should only be determined on a case-by-case basis, rather than simply holding all stocks that start to lose their value. In order to make the best returns on your investment possible you will need to also consider the amount of money that the protective order will cost you.

Because the orders do require an additional fee, they can be expensive for some investors, but the reality is that they are much cheaper to obtain and utilize than allowing all of your money to be wiped out in a single transaction that has gone wrong. With a proper protection order in place you can rest assured that all of your money would not disappear in the blink of an eye. Of course, there are always going to be times when your money is at risk; however, the protection of a protective order will allow you to focus more on your investing and less on losing all of your money. The benefits should be quite obvious to even the newest investor who is looking for assistance. Never leave your money completely at risk, look to a protection order to ensure successful day trading transactions.

Please visit: DayTrade-r.com website where you can get FREE Day Trading Online Videos and Resources, and discover more related resources on Forex Day Trading

Save for Retirement with Annuities

While many people prefer to invest in stocks, bonds or mutual funds, some prefer to invest in annuities. Investing in an annuity has many advantages as well as many disadvantages. Some people say that it is safer than investing in stocks or other investment choices while some others disagree. Let us first get to know the annuity definition. An annuity is an insurance product. It is a contract between you and the insurance company. You basically give the insurance company money and they will, in turn, pay out income to you according to the contract. Annuity payments are usually spread over many years. The money you put into an annuity may grow tax deferred which means you will not pay any taxes to Uncle Sam on your income put into the annuity until you withdraw your money.

 

Different insurance companies offer different types of annuities. Some investors prefer to invest in fixed annuities, some prefer variable annuities and some choose to invest in an annuity index. As with all types of investments, there are some risks associated with investing in different types of annuities. The more risk you take on, the more your annuity account will grow providing the market is favorable and your annuity investments are doing good. But, a lot of people invest in annuities because they want to invest in something safer than stocks or mutual funds, hope to benefit from tax deferrals and like many of the guarantees that the insurance companies throw in.

 

The income you will receive from your annuity can be in one lump sum payment, monthly payments, quarterly payments or yearly payments. You will have a say in how large each payment will be or how long you want to receive payments for. Some people choose to receive payments for life whereas others may want large payments for over less time. While payments are guaranteed to a certain extent, there are a lot of expenses you will have to pay to the insurance company in exchange for the guarantees offer. This is the reason why many people say annuities are expensive investments.

 

The Greatness of Gold Bullion

From the search of the Spanish conquistadors hundreds of years ago to the comprehensive mining operations currently being conducted around the globe at this time, gold has always been a valuable metal which has been keenly sought out. The foundations of modern day economics were based on the trading of bullion gold coin and gold coins, and we wouldn’t have the commercial system we have today if not for these convenient tools for trading.

From gold to paper
Yet as time went by, people found it inconvenient to be carrying around a clunking pile of metal in their pockets and moneybags. The weight, the clumsiness, and the risk of carrying your own gold bullion coins had its issues and risks , and there had to be something to replace the gold itself. Therefore , the rise of financial establishments came about; making use of paper money or similar tools for facilitating easier trade.

But these financial uses of money leads to in dips and turns: stocks tumble, checks bounce and inflation makes a single greenback increasingly worthless each passing year. Marked gold coins and marked gold bullion, on the other hand, never ceases to be a dependable investment for the smart buyer.

From paper to gold
Granted, the many problems that troubled gold still exist today with their heavy mass and the risk of theft being chief among them. But purchasing gold bullion coins assures the financier a reliable source of income that avoids the money instability that ‘money games’ are scandalous for:

Profit from price differences
Looking at the history of gold, you can find that it is similar to stocks : the prices rise and fall over a period of time. Unlike the exchange and similar financial institutions, though , gold isn’t just restricted to one market. The value of stocks is constant worldwide – a $50 stock will be its equivalent in Yen, EU Buck or any other currency around the world. The only way to profit would be to accurately envision if that stock will rise or fall.

Gold, on the other hand, has it a bit more differently. Being internationally recognized as a medium of trade makes gold bullion coins a safer and flexible resource to take a position in. One part of the planet could be selling gold cheap, while another part of the world may be buying gold for a higher cost. Or you could just simply wait it out and get some revenue from the rise and fall of gold costs in your locality.

Protection from crisis
Natural disasters, war, monetary collapse and other similar crises can render your money worthless in the long game, like what happened to many European countries during the World Wars.

But transforming your financial assets into gold bullion coins can assure you that your assets will be safe and secure irrespective of what occurs. Global recognition of the value of gold makes it infinitely more liquid and transferable than notes whenever an emergency comes about.

So if you would like to make some straightforward cash or save up for your retirement fund, consider buying gold bullion coins. It’s safer than purchasing stocks, but just as ( if not even more ) effective.
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