Statistics show that in a bull market about 75% of the stocks will follow the general trend and go up, and in a bear market 75% will also go down. Trading with the trend is the best way to trade as 9 out of 12 stocks will follow the trend and give you the best chance of making gains on your stock purchases.

But what if you own some nice stocks and don’t want to sell when the market is clearly going down, or about to go down?. There are a few tactics that you can consider, both of which involve the use of options, CALL options and PUT options. There is the well known strategy called Covered Calls, and the much lesser known one called the Married Put.

If you are going to trade options it is important that before you start trading you get the best option trading education that you can. You should also practice stock trading until you are comfortable with the process. This is a very important point that must be taken seriously, if you don’t understand the terminology and theory then you should not be trading options. If Put option, Call option, Married Put and Covered Call are new to you then don’t trade until you have studied sufficiently.

Selling calls against your stock in 100 share increments is the basis of the covered call strategy and it can provide about a 2-7% buffer against the loss in stock price. However a bigger drop in the stock price will not be compensated for using the covered call strategy, in general.

Stocks in a bear market, and even in a bull market, can drop quickly on news or earnings releases, as much as 15 to 45% within a month. Using covered calls to protect your stocks will only provide limited protection of less than 7% at best and so will not save you if the stock takes a 40% tumble.

The better solution to providing downside stock protection is the option strategy called the Married Put. As the name suggests the PUT that you buy is used to provide protection when the stock goes down because Put options increase in value when the stock decreases in value. The term married is used because the option that is selected has to be very compatible with the stock, in other words a good match, if the strategy is to work.

The selection of the best Put option is not straight forward and involves several criteria which are listed below:

1. The strike price of the option

2. The current share price

3. Choice of options, in or out of the money

4. Put expiration time

Even though the married Put protection only has a short life span if offers much more protection than the covered call. It can provide as much as 95% loss recovery in the event of a significant drop in the stock price.

The downside of the good protection is that you have buy the Put which is a cash debit whereas the covered call is a credit. But there are ways of off-setting this expense and there is much more to this strategy when executed correctly. The Married Put can be made to just about pay for itself and used to generate very good gains if the market, or stock to be specific, moves a lot.

The general idea of the Collar Trade is to combine the covered call and married Put strategy into one, this is what is called the Collar Trade. In effect you put a collar around the stock, sell a call and buy a PUT. If you do this correctly most of the cost of the Put can be offset by the credit from the covered call so you can protect your stock at almost no cost. Yes this is a great strategy which the general public is unfortunately ignorant of, and most brokers don’t understand.

The strategy that I have outlined above is unknown to the average stock market trader but is one of the best trading systems you could have.

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The 50 simple moving average, or 50 SMA, is simply the sum of the last 50 values for each period, divided by 50, this is a moving window, as time moves on so does the average. Notice that I used the term period because this indicator works on any time period in exactly the same way.

It can be used on monthly, weekly, daily, hourly, 30 minutes, 15 minute and on whatever time period you want to monitor and trade. Although the SMA is the most commonly used there is also the exponential moving average or EMA. This is a weighted version of the formula using the mathematical exponent function to give more weight to the more recent values, this has the effect of making it a slightly faster average that many traders prefer.

The truth is that it probably does not matter if you used the SMA or the EMA, what does matter however is that you use one or the other and then be very consistent with it. Do not switch between them, it is more important that you learn to trust your chosen indicator then a slight difference in its value.

The simple moving average is primarily used to determine what the current trend of the stock is, depending on the value used it could be a short term, medium term or long term trend. An important point to note is that moving averages are really only useful when the stock is trending, if the moving average is flat, i.e. horizontal on your chart it can become very choppy, this is a good time to not trade.

The general rule is that if the current price is above the SMA the trend is up, if below the trend is down. This is very important to understand because it forms the basics of trend trading and trading with the trend.

For the short term trend many traders like using a 5-8 SMA or EMA, here is a trading secret, never trade again the direction of the short term tend, actually this is really just common sense when you think about it.

Moving averages often act as support or resistance, many traders use the 15, 21 or 30 SMA for this purpose.

There are a number of other very important moving averages that you need to know about, these are the 50, 100 and 200 SMA, and this mainly applies to the daily and weekly charts. A lot of big players in the markets, the mutual funds, investment banks etc use the 50 and 200 SMA as support and resistance, if they decide to buy or sell based on these you need to follow suite, the 100 to a lesser extent. These are very useful averages to watch if you trade EFT’s like an Oil ETF.

A useful tip is that when a stock breaks through one moving average it will often move all the way to the next, for example, if a stock breaks the 30 SMA it may move to the 50 before finding some support or resistance.

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In the USA stock market there are 3 major indexes which are each made up of a basket of stocks, they are the S and P 500 (also known as the S&P500), the DOW 30 and the Nadaq 100. These stock indexes generally only contain major blue chip stocks, as long as you buy from these 3 groups you will at least know that you are getting a well known solid stock.

For example the DOW 30 contains major industrials and large multinational stocks such as Home Depot (HD) and Johnson and Johnson (JNJ) whereas the Nasdaq 100 mainly contains techical companies such as Apple (AAPL) and Miscrosoft (MSFT).

Always buy a stock that is liquid, this means that it is a highly traded stock, this will enable you to quickly buy and sell at the price you want without having a delay. You will also get a lower spread, thats the difference between the BID and ASK price of the stock. For a stock to be considered highly liquid it should trade at least 500,000 shares per day, ideally even more.

It is best to aviod stocks that are bellow as this usually means the company is in trouble, although with the bear market of 2008/9 there have been a lot of good stocks at bargin prices between and . Avoid buying a stock below at anytime.

Another consideration is options, does the stock has options?, this will be important if you want to trade options around your stock, such as a covered call, or you may want to buy a PUT option in order to protect your stock.

Be very cautious about buying a stock just before it’s earnings release, stocks often drop significantly if you come out with a poor report. Earnings releases are 4 times a year with one of them being the annual report.

If you are going to trade options make sure that you learn how to trade by getting some good education. There are many swing trading strategies that work well with stocks in todays volatile markets.

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There’s also a lot of hype about how complicated it is and why you need to spend thousands of dollars on options trading education before you get started. Needless to say this last statement usually comes from trading seminar companies trying to sell your their trading course on options.

Lets cover a few of the basics about options and set you straight about a few important points. Firstly yes it is true that you can make a lot of cash trading options, but of course you can also lose just as fast.

When trading stocks your leverage is 1:1, if you go on margin you can get get 1:2 leverage, but thats about it. With options it is not as straight forward to calculate the leverage but generally speaking you can get between 1:5 and 1:10 when you buy an option on a stock, or ETF.

So with 1:10 leverage, when the stock increases by 5% your option can increase by approx 50%, and this can happen in just a few days, this is why swing trading strategies using options on stocks is so popular.

However the downside is that a big loss can also happen, if the stock drops by 5% your option can also drop by 50%, at which point you may want to close the trade and save some of your option value, it really depends on what your stop loss and risk.

What I’ve just described is called directional option trading where you are betting on the getting the direction of the stock movement correct, this is highly speculative. Options can also be used in option strategies which are much more non-directional, such as covered call trades, credit spreads and Iron Condors. In these trades there is much less dependance on getting the stock direction correct, but it still matters.

So should you learn to trade options?, in my opinion you should not do directional option trades until you become an expert stock trader 1st. This is because you really need to be very precise with your entry and exit strategy and trading plan, and be very good at technical analysis.

Whereas if you want to do non-directional option trades you don’t need to be such an experianced stock trader to be successful, but of course it does not hurt either.

Learning how to trade options is a very useful skill you have, but don’t rush into it and blow out your account. Make sure that you get a good options trading education before you start, and also make sure that you have a very solid stock trading education as well, such one from Top Dog Trading Review.

The SEC or Securities & Exchange Commission classifies penny stocks whether those that sell for less than $5 a share. Of course other exchanges consider those selling for fewer than three dollars or though one to be penny stocks. Essentially, penny stocks are those that are not exchanged on the prime stock exchanges for instance NYCE, AMEX, are NASDAQ.  It actually depends upon the exchange in which you’re trading. Penny stocks are a little extra unsafe than many of the rest by the way for great reason. Just as they are very risky on the other hand, they are also quite profitable for those who manage to trade penny stocks successfully.

The risks in penny stocks go well beyond the obvious and are part of the reason that payoffs are so rewarding for those who are fortunate. There is extremely little skill that goes into successfully trading penny stocks but many luck. If you’re a gambler at heart then this’s definitely your sort of investment. It is tremendously principal on the other hand that you enter into penny stocks trading through the firm understanding that you aren’t likely to be winning. In fact, probability are best that you will lose whether lots of as you produce from the prospect. There are those by the way, who have managed to defy the odds & win quite handsomely in the game we have come to know as penny stock trading.

Some things you will seek to keep in mind before you begin trading in this highly volatile market include the following. First of all, penny stocks aren’t love normal stocks where they’re heavily traded & there’s almost usually someone waiting in line to purchase. When you decide to sell it could be a when before a buyer comes along. This means that penny stocks are not the lots of liquid stocks on the planet & when you need quick entrance to your money this’s definitely not the stock for you.

One more item to remain in mind while it comes to penny stocks is that there is often extremely little info on these companies. Unless you have good research skills & the occasion and energy to put them to reason for your trading endeavors you’re really unlikely to discover lots of history and financial statistics on these companies as opposed to numerous publicly traded companies that are pretty much required to open their books to investors. This is unsafe to investors because knowledge is vital and schemes are plenty.

Every penny you invest in penny stocks should be a penny that you’re tremendously well prepared to loose & perfectly happy to earn a refund through. You can hit the lottery on your penny stock investment and earn exactly three to four (or more) moments what you invested in your stocks. Chances are that the opposite would be the case by the way and you would lose your investment. Whether long as you are prepared to deal with the consequences and let yourself to be pleasantly surprised when your trades pay off you might be the perfect people to trade in the penny stock market. When creating your decisions about the types of stocks, bonds, or funds you seek to include in your portfolio you may aim to include some penny stocks for the sake of diversity & to risk a small sum of money on a long shot. You never know when those long shots will pay off. Find more other useful articles about child term life insurance, term life insurance calculator and cheap term life insurance quote

At first they were going to charge for it … but they have decided to start
the New Year by giving it away to all of their students, subscribers and readers.

Ot is just their way of saying “thank you” for your friendship, and to help you make this your best trading year.

There are no strings attached and you don’t have to “opt-in” to anything. Simply go to the site, download the PDF outline and then follow along with it as you watch the 3 videos (there is about one hour of training in all).

It’s there for you at the Top Dog Trading Blog

To access the course, just go to the front page of the blog and you’ll see the most recent post at the top of the page gives a quick introduction and then gives you the link to the course.

The post is entitled: “Top 20 Daytrader Secrets for Day Trading Stocks, Emini Day Trading, Forex and Other Markets.”

Just go to  Top Dog Trading Blog

Before investing your money in the stock market, it is important to know what are Exchange Traded Funds. These are a popular form of modern monetary investments that are bought and sold on the stock exchange. They are comprised of various assets such as stocks or shares that are commonly being traded on a daily basis. Usually, Exchange Traded Funds are priced at an equivalent rate to the assets that they consist of.It is common for all Exchange Traded Funds to track an index or a commodity. This may include such indexes as the NASDAQ 100 or FTSE 100, or specific commodities like steel or gold. Some ETFs are also linked to hedge funds.

One of the most popular characteristics of Exchange Traded Funds is the fact that they offer a potential revenue that is equal to the gains in the particular market on which they are traded. For example if the ETF is linked to the FTSE 100 and these stocks post a ten per cent rise in value then the ETF will also increase by the same amount, minus any administrative costs by the fund manager.

Exchange traded funds most often exist in two different forms. The first of these is what is known as a cash based ETF. This generally involves the purchasing of all the shares of a particular index. The second option, which is known as a swap based ETF, differs from the cash based form in as much that derivatives are used to generate the returns.

Exchange traded funds have been bought and sold in America since 1993, whereas in Europe they only became available in 1999. For most of this time they have been classed as index funds, though since 2008 the US Securities and Exchange Commission have also allowed them to be managed actively.

Nowadays, ETFs are one of the most popular forms of investments. This is because of their ability to be traded both during and after the stock market designated trading times. This aspect gives them the qualities of both Closed End Funds and also Mutual Funds.

It is generally believed that Exchange Traded Funds are a secure form of investment as they can be secured from a drop in market value by their ability to be traded easily on the open market. This makes them a safer choice for investors compared to other forms of investments like mutual funds. There are many financial organisations who offer services relating to Exchange Traded Funds.

The underlying fundementals for  publicly traded companies generally provides a reality check that engenders a modicum of sanity to a roaring bull market.

Earnings and the P/E ratio(Price easnings ratio) historically give a focal point for evaluating a reasonable trading range for a companies stock.

This is not currently the case. Mot corporations have reduced expenses by laying off employees.

These factors are admirable ,as corporate America attempts to weather the perfect storm of a heavy recession, an ultra left wing economic policy, real unemployment over 17%, and an arguably ineffective policy of squandered stimulus and corporate bail outs.

Who's  behind the speculative excess which has seen this unworthy market gain over 50% from its march lows, defying all underlying realities.

The answer has to be hedge funds. institutional speculators, the investment bankers with their TARP money and access to treasury funding as newly accredited banks.

These Go Go managers have a different perspective on the rally.

If indeed the rally turns out to be real, and they miss it, their jobs and reputations are toast.

If the rally fizzles and fails, they are risking someone else’s money.

The risk reward is in favor of maintaining the speculative push.

The danger in this type of speculation is  extreme.

As they jumped into the rise, they will be willing to bail at the first sign of a negative reality.

We saw a free fall market last Fall.

As unemployment continues to sap the economy of any resilience.

Wait until the next round of PARM's begin to default next year.

Let the commercial real estate market crash due to the flood of small and medium sized companies being forced to close.

The market will reverse and sink when the reality hits.

You have heard the phrase , sink like a rock.

There are poles apart types of trading or outlay strategies that fill following when trading stocks and shares. Day trading, long-standing investing and swing trading.

Day trading as the name implies is trading over the time of a day and ultimate all your positions in the past the stock marketplace closes. lasting investing is pleasing a sit that lasts a few years a la maze Buffett.

Swing trading involves trading in stocks for short age of time, as a rule a few days, in order to take improvement of a swing in the cost useful swing trading involves identifying an uptrend or a downtrend in a stock fee In an uptrend the highs are elevated and the lows are superior too. Swing traders look for banal patterns in order to foretell when a stock price will stop lessening turn in the environs of and start going up over again.

Swing trading is all based on cunning the risks touching the loot – if the risk is too next of kin to any possibility booty then there is no point in the skill There are a numeral of criteria that must be met ahead of a trade is sited.

Stocksare generally trading superior than $10 with a daily degree of more than 500K shares, as such stocks are less apt to be manipulated. To relate a stock which is in an uptrend the last price must be above the time tender standard and the sunlight hours unfussy pathetic median and the daylight touching arithmetic mean needs to be above the date touching be an average of.

There are a add up to of points to take into deliberation when swing trading to limit your risks. Don’t empower all your money in one go. If a stock gaps up 1 to 2%, then buy half the total you intend trading. Wait to see if the price continues to rise rather than investing more money If the stock gaps up 2 to 3% then only invest 1/4 of the total amount you aim trading.

If the share gaps up more than 3% then don’t pester with the trade as the risk/reward ratio is not good an adequate amount The aim when swing trading is to achieve a serve of 5 to 10 % if you accomplish this (or if the trade turns in contrast to you and you start trailing riches then close the trade and look for an additional chance.

Stop fatalities each person makes losses the trick is to make sure your victims are smaller than your gains. To make certain this you need to set stop wounded when you place your barter such that if the trade goes wrong the arrange will be inevitably bunged out. Given that in swing trading the benefit unprejudiced is in the province of 7% your stop loss must be set at something like 4%.

For more information on stock market investing or stock market investing advice, be sure to read more at “stock market for beginners“.

This is  an update in the stock market for the short term and long term. From January 1 through today the market is up a positive 6% and the one year rate is down a negative 22%. The stock market is currently above its 1 year average which is the average price over the past 12 months.

The short term direction of the stock market trend is positive. The 1 year average of the stock market is the trend setter for how the market is doing at any present time. It gives investors of mutual funds the update by knowing if the market is going down or up. It is a cross between the short and long term direction of the market that shows when the market is turning positive or negative.

Investors should have switched from mutual funds to money market funds when the stock market reached its first 1 year low in early 2008. At that time the market was also under its 1 year average. The decline in 2008 could take years to make back the loss in value to retirement accounts. Asset allocation is when the investor transfers from declining mutual funds to safe mutual funds. This can only be done by understanding the stock market trend.

Economists agree that the recession has seen its worst but they also agree the economy is not as healthy compared to 2003. The stock market will continue to have its rise and fall in rallies but a long term bull market is still not insight.

Mutual fund companies are buying now because of the low prices. To say the market will finish 2009 in a positive percentage is not guaranteed. The Commerce Department has released the second-quarter gross domestic product report which says, “including the April-to-June period, the economy has now contracted for a record four straight quarters, for the first time on record dating to 1947″. The key to a sucessful retirement plan is to finish every year in a positive percentage rate.Mutual fund companies are buying now because of the low prices. To say the market will finish 2009 in a positive percentage is not guaranteed. Economists agree that the recession has seen its worst but they also agree the economy is not as healthy compared to 2003. The stock market will continue to have its rise and fall in rallies but a long term bull market is still not insight.