Monthly Archives: November 2008

Author : Carlie Eviee

When you’re first learning about the stock market, the stock tables in the paper can be quite confusing Learning how to read stocks won’t take much time, though, and it’s very important

To begin, you’ll notice that there are about twelve columns across the table, and each stock has its own line The first two columns (usually labeled something like “52W High” and “52W Low”) are dealing with the stock’s performance over the past year “52W High” shows the highest point the stock has reached in the past 52 weeks, and “52W Low” shows the lowest

The next column is the name of the stock itself, followed by another column showing the stock’s ticker symbol Every stock is given a unique combination of letters Perhaps you’ll even recognize a few (or more than a few) of these tickers They periodically run across the bottom of the screen of cable news networks

By the way, watching some of the financial shows could be a good idea It will further your knowledge even more on how to read stocks and understand the way the market works

Next to the ticker column is a column labeled “Div ” This indicates the stock’s annual dividend paid out per share Many rows will have this column blank, which means they don’t currently pay out dividends The same goes for the next column – “Yield %” – the percentage return on the dividend

P/E is the price to earnings ratio Dividing the current stock price by earnings per share for the last four quarters gives you this number

After that you will discover the columns of “High” and “Low ” These are the highest and lowest points that the stock reached in the day’s trading “Net Change” refers to how much the stock price has changed from the previous day, and “Close” lets you know what the final price was when the stock market closed for the day

You’ll be able to move on and learn even more about the stock market once you have a basic understanding of how to read stocks

Visit How to Buy Stocks and get all the free help you need in discovering How to Sell Stock, How to Short Stocks and so much more. Continue reading →

Author : Martin Sejas

The issues that pick out the unskilled stocks trader from the skilled stocks trader are one and the same to the issues that distinguish the boys from the men And no, I’m not being one-sided there Everyone, and I mean everyone is competent enough to become a flourishing skilled stocks trader Nonetheless, what several unskilled stocks traders lack is often NOT knowledge, but merely invaluable SOFT SKILLS At present you’re perhaps enquiring: what do I entail by soft skills?

Firstly, I would like the clear up the distinction between hard and soft skills Hard skills are those traits that place an emphasis on knowing the technical aspects of stocks trading For example, what a put option is, what a future is, what this index means etc On the other hand, soft skills are those traits that place an emphasis on the mentality of the trader especially how they react to changes in the price of stocks

There are 3 types of soft skills that I find to be the most important and which you can acquire in order to graduate from being an amateur stocks trader to a professional stocks trader

1 ***Think long term, not short term*** – skilled stocks traders are getting ahead because they think long term They’re never in it for a short-run reward How come? Because short-run rewards are generally limited and occasionally nonexistent But if they persevere for a lengthy period of time, for instance 5 years, then they can realistically foresee a sturdy and larger reward due to the extended period of time Hence the message is that whatever success in stock trading can exclusively be secured if you commit for the long haul Short-run rewards are exclusively for unskilled stocks traders!

2 ***Predict losses*** – this soft skill is affiliated with the first skill of persevering for a lengthy period of time Skilled stocks traders always foresee losses in the short-run in order for a handsomer reward in the long haul It’s easy to get disheartened by the thought of absorbing losses but the fact is that if all that you foresee are rewards, then you’ll be left disappointed and will chicken out of stocks trading before you know it Short-run losses are on the whole part of the formula of attaining a reward in the long haul Accordingly, it’s essential to not be disheartened by the thought of losses in order to at long last be triumphant as a skilled stocks trader

3 ***Be a quick decision maker!*** – Napoleon Hill articulates that flourishing people are those that make decisions without delay and modify them slowly This also represents a trait of successful skilled stocks traders Alas, almost all stocks traders are those who reach decisions slowly and alter them without delay And in a fickle stockmarket, reaching decisions rapidly becomes yet more pivotal Adjustments in the stockmarket have to be reacted to without delay but they must be executed in a unhesitating manner, because following your decisions is one of the traits of a successful skilled stocks trader

Those are likely the 3 most crucial soft skills that pro stocks traders utilise than amateurish ones don’t Nevertheless, there are courses on the Net that teach you these soft skills and others in a great deal of depth It’s totally about getting hold of the best course of study and platform for you Particularly, there’s one cracking course named Masterful Trading that we offer free of charge on our website and which can be instantly accessed by anybody Additionally, we have other important articles on the newest methods and strategies for successful stock trading

Martin Sejas is the owner of Stocks-And-Commodities.com, a leading stocks trading website dedicated to finding the best and the latest strategies and techniques for stocks and commodities trading. Its goal is to become the ‘one-stop shop’ for stocks online. Continue reading →

Author : Andy Poon

Being a successful investor is not as difficult as most people may think Making a successful investment is highly dependent on know how the market works and understanding it Think of it as throwing a boomerang In order for you to throw the boomerang and make it turn back towards you, you need to know which direction the wind is blowing

Just like in investing, you need to know which direction the market is headed This way, when the market direction changes; you can change with it

The key thing to note is that the market is led and influenced by people Thus, in order to understand the market, you need to understand human nature And that is what we call the psychology of great investing

Since 1920s, investors today still operate from the same set of emotions that investors of the past did They all invest with hope, fear and greed It is extremely difficult for human nature to change And as long as it remains unchanged, market will behave like the way they did and keep repeating itself

Here are some keys for you if you want to enhance your psychology and become a better and greater investor

Investing On Paper

To hone your market knowledge, practise by putting investments decisions on paper first During this period, get to know your personal investment style which is linked to your personality and lifestyle This is one of the processes to building a strong mental state of investing

Money Management

Money management is by far the most important factor of trading success I cannot emphasise the importance of it The principles behind of an investment plan are to manage your losses and gains and to preserve your capital so that you can stay in the game Trading is a survival game Do not ignore money management or you will regret

Keep a Trading Diary

Whether it is on paper or digitally, just keep one Record all your daily, weekly and monthly trades, opening and closing balances You will be surprised how much you can learn if you put an honest effort into a personal trading journal

Review and find your personal investing style

Each successful investor has a unique style of investing There are many great investors in the world including Warren Buffet, George Soros, Jim Rogers and many more But they do not invest in the same style because there is no fixed style

Constantly acquiring Market Information

Savvy investors need to be current on market sentiment because analysts, chain of events continue to influence the institutions and move markets Enhance your own research by acquiring market knowledge

Knowing the Market

Finally, when it comes to investing, the market never changes because human psychology does not change Hope, fear and greed will always be the main driving force of the markets However, the fact that the market never changes is the key to investing success if only you are willing to do your homework

By studying the past and learning to interpret the market, you will be able to recognise possible and predictable trends This ability will be critical to capitalising on opportunities and protecting your gains

While changes in market trends take place over time, a focus on its daily actions can help you understand the overall picture better

I encourage every one of you to start investing early The fact is that whether you want to retire at 35, 55 or 65 years old, you need money To live relatively comfortable, you have to be realistic of how much you will need And you need to start investing your money early so that they will start working for you earlier and keep growing until your retirement

For every year you delay in investing, you need to save more of your earnings or income for retirement That means lesser space for your wallet or pocket to breath

Start investing today and if you are really serious about investing, you have to give it your best shot!

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Author : Andy Poon

An option contract is an agreement between two parties to buy/sell an asset (In this case, the asset refers to stock) at a certain price and specific date

It is called an option because the buyer is not obliged to carry out the transaction If, over the life of the contract, the asset value decreases, the buyer can simply elect not to exercise his/her right to buy/sell the asset

There are two types of option contracts Call options and Put options A Call option gives the buyer the right to buy the underlying asset, while a Put option gives the buyer the right to sell the underlying asset

A simple example: Peter buys a Call option contract from Sarah The contract states that Peter will buy 100 Microsoft shares from Sarah on the 5th May for $25 The current share price for Microsoft is $30

Note: this is an example of a Call option as it gives Peter the right to buy the underlying asset

If the share price of Microsoft is trading above $25 on the 5th May, then Peter will exercise the option and Sarah will have to sell him Microsoft shares for $25 With Microsoft trading anywhere above $25 Peter can make an instant profit by taking the shares from Sarah at the agreed price of $25 and then selling the shares on the open market for whatever the current share price is and making a profit

The $25 value, which is stated in the agreement, is referred to as the Exercise (or Strike) Price This is the price at which the asset will be exchanged

The date (in this case 5th May) is known as the Expiry (or Maturity) Date This date is the deadline for the option contract At this date, the option buyer is to decide if a transaction of the underlying asset is to occur

Outcomes: Let s imagine that at the expiration date, Microsoft is trading at $30, then Peter will buy the shares from Sarah at the agreed $25 and then he can sell them back on the open market for $30 and make an instant $5

Alternatively, if Microsoft is trading at $20, then buying the shares from Sarah at $25 is too expensive as he can buy them on the open market for $20 and save $5 In this situation, Peter would choose not to exercise his right to buy the shares and let the options contract expire worthless His only loss would be the amount that he paid to Sarah when he bought the contract, which is called the Option Premium more on that a little later Sarah would, however, keep the option premium received from Peter as her profit

All in all, there are more than 50 strategies you can deploy in options trading by combining many different strike prices and expiration But do you need to know all?

The good news is you do not have to!In fact, most of them allow you to make money very slowly or limited

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