What To Buy?
Now that you have some money burning a hole in your pocket and the stock market is going up you have decided to buy some stock or maybe a mutual fund, but you have the momentous decisions to what to buy. At this point you have three decisions to make besides which equity to buy: 1. How much to buy.
2. When to buy.
3. When to sell. Which of these is the most important decision? Let me tell you this as a professional trader. What to buy and when to buy are the two least important of these decisions. Maybe only 10%. I know that comes as a shock to you because everyone is trying to find that one perfect stock that will make him a millionaire almost immediately. It's not going to happen. Trading is an occupation. Just like the business or profession you are in now it takes time to learn. There are certain basic rules that apply to every occupation. Most brokers and financial planners don't know them, but as a former floor trader I had to learn them or I could not have survived. What to buy is the least important because there are always several good buying opportunities every day. When to buy is not anywhere as important and when to sell. Every professional trader I know will first determine the risk, his potential loss, before buying. At the same time he makes his buy he puts in a sell order called a stop-loss order to automatically exit the position should it go against him. He is not thinking about how much he will make on a trade. He is thinking about protecting his capital should he be wrong. Professional traders are right less than 50% of the time, but they never take big losses. The loser's philosophy is always thinking about how much he will make and he refuses to face up to the very possible fact that he could lose money, a lot of money if he does not have a loss limit of some kind on his position. The loser is willing to be wiped out rather than admit he is wrong. Brokers tell you you have not lost money until you sell. Believe that and I will sell you my flying pig. The other very important concern for your investments is how much of this stock should I buy. A good rule of thumb is between 10% and not more than 20% of your portfolio. Most mutual fund managers limit a risk position to about 5%, but they have other considerations. Never put all your money in one trade because it looks so good. That is super dumb. Before you decide what to buy be sure you have in mind the amount you are willing to risk and the size of the position you wish to take (number of shares or dollars). When you have learned this you will be a successful stock market investor. Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know. 1-888-345-7870; al@mutualfundstrategy.com
|
Other Online Trading Articles
Arbitrage Trading Home Business Many people today are looking for ways to earn a little extra money working from home. Maybe you are on of them. I know I am always on the look for new and exciting ways to earn some money working from home.That’s what I am writing this article. To tell you about Arbitrage Trading and SureBetPro, and how you can use them to ...Stock Analysis I receive emails from Morningstar. This company provides statistics and analysis of just about every publicly traded stock company you can think of as well as voluminous information on mutual funds around the world.You can ask them about a company's sales, management, marketing plan, their performance within a corporate sector, ratios of ...Kelly Criterion for Stock Trading Size I’m sure some people know about Efficient Frontier, but I’m guessing that there are less investors that know about Kelly Criterion. So what is Kelly Criterion and who is Kelly? Kelly worked at AT&T, and published his original paper back in 1956. Its math is quite involved with communication and information theory, mostly dealing with probabil ...Day Trading the Emini - Training Ground For Big Contracts In 1997 the Chicago Mercantile Exchange created a new financial instrument known as the emini futures contract. It started off small but now is a fully mature market with excellent liquidity.Now in 2005, the emini futures contract is an investment vehicle of choice, for beginning and experienced futures traders the world ...Card Trading: Risks and Precautions You can trade your cards in two different ways: face to face, or by postal mail. The first type of trading is performed at tournaments, at schools, or at the local comic shop, and you arrange the trades by checking the other person's cards directly, holding them in your hands. Otherwise, cards are traded by mail when the parties can not meet bec ...Put Your Stock To The Test Before You Invest - Part 1 If you don’t research the stock you are purchasing first, you are doing nothing more than gambling with your money. Stock research will help you to improve your returns on the stocks you purchase. While all the research in the world on a stock cannot guarantee its value will increase, researching your stock purchases will improve the chances of ...Inertia Syndrome When it comes to buying a stock or mutual fund most people act pretty quickly. There are some who will take the time to get a report from Morningstar (it is worthless) or get reports from their broker (also worthless) or even do a search on the Internet (if you know what you are doing). When your broker says “buy” you buy and when a friend gives ...Forex Trading Is Not Complicated Anymore! Nowadays, we can almost do anything using internet, such as downloading music, buying and selling products, and that includes forex trading as well. In fact, Forex is one of the important term used for the trading of the world's many currencies.The amount of Forex trading has reached $2 trillion daily. That amount is 100 times much bigger ...About the Spanish Stock Market - Still the Place to Be The Ibex 35 is outperforming other stock exchanges in Europe. To date the ibex 35 has gained 23 % over 2006. In comparison, the Dutch stock exchange (AEX) has gained only 11% this year.One of the factors that has contributed to the rise of the Spanish stock exchange index (the IBEX 35) is the (expected) takeover premium that is prized in ...The Information Age It is wonderful to be alive in the information age. We know in a matter of seconds the change in the value of gold in Switzerland, the death of a world leader or the birth of a peasant in Israel.We are inundated with facts and figures and the emotional tribulations of both famous and infamous people. Can we possibly assimilate all this? D ...Using the Stock Market to Plan for Retirement The stock market can be a powerful investment tool, especially if you're planning on making long-term investments. Unfortunately, the instability of the market can make many people hesitant to trust in it for financial planning. Despite this, if you're looking for a way to make plans for your eventual retirement you might want to set aside some ...Discount Online Futures Trading For those who know the ins and outs of the futures markets, discount brokerages are the option to choose.Discount brokerage services like e-futures.com allows you to make all the decisions yourself without having a broker advising you on the options to sell or buy. Most online discount traders will do as you order them to – you just need ...A Brief Look at Forex Trading Forex is the currency trading market which is the biggest and most quickly evolving markets in the world. Currently it has a daily turn over of of 2.5 trillion dollars which is actually one hundred times larger then the NASDAQ. Different markets are great ways to diversify your investments and trade different goods and services. The same is t ...Forex Trading - A Basic Overview Forex trading is becoming more popular as time goes by. Perhaps you have heard of forex trading, or heard things such as "the dollar fell sharply against the yen". Not sure what all this means? Here is a basic overview of forex trading.The foreign currency exchange market (forex) is the largest market in the world. Much larger than th ...Forex Trading Training - Do I Really Need It? Having a good amount of Forex trading training is essential to anyone looking into the Forex market seriously. The reason that Forex training is so important and vital is because the Forex market is extremely competitive, volatile and fragile. Because it is open twenty-four hours a day the risk is a lot higher and proper trading education helps ...Web Hosting Services In the virtual world, the success of a website often depends on the design, reliability and the ease of use. These things in turn, depend on the type of web hosting services you choose as the owner of the website. In most cases, the web hosting service you select may well decide the future of your business online. So, it’s important to study var ...An Old Proverb for Investing "If you don't know where you are going, any road will get you there."This very much applies to the your retirement plans especially if you are investing in the stock market. The proverb clearly states you need to know where you are going and how to get there. Right now, do you know how much money you are going to need to retire in the sty ...The Best Free Currency Trading Courses If you are just starting out in currency trading, or looking to sharpen your trading skills, there are plenty of currency trading courses to choose from - and this article will help you find the information you need to make big profits.One advantage of the Internet, is that most of the information is available free of charge – once you kn ...Online Jewelry Store: A Good Proposition For Internet Marketers? Using Jewelry as a means of creating revenue should not be overlooked by any serious-online-entrepreneur. Why? Read on...I am often asked why I got into the jewelry industry. Easy answer to that one... "Do you know a poor Goldsmith"?Seriously though, the onset of e-commerce revolutionized the trading of precious stones, gold ...Forex Trading 101: Learning Guide for FX Beginners Being new to FOREX trading? Don’t worry, getting started in FOREX trading is easy and you can always test your skills first in a demo account before you go ‘live’ with real money. To get started in FOREX trading, we have to get to know what FOREX is. For the inexperienced, FOREX trading involves buying and selling the different currencies of the ...Stock Trading In simple terms, stock is a share in the ownership of a company representing a claim on the company's assets and earnings. The more the stock you acquire, the greater your ownership stake in the company.Stocks are mostly traded on exchanges in two basic ways: on the floor of the exchange or electronically. The trading floor of an exchange ...Tools for Traders: Hardware and Software Online trading is gaining popularity because of its efficiency and ease of use. If you are on the trading business, it is important to know the right tools of the trade. Doing trade at home should not pose any problem as long as you have the right hardware and software to assist you in your online trading. One should invest in a sound computer w ...Internet Poker Affiliate Partner Online poker is without question the fastest growing industry on the net and with billion dollars expected in total revenue for the next years, you as an Internet poker affiliate partner will be able to get a cut of the tremendous profits generated by this industry and by the virtual internet poker affiliate partner programs.Poker Affilia ...FX Currency Trading If you have ever traveled outside the United States, you have probably traded in a foreign currency. Every time you travel outside your home country, you have to exchange your country’s currency for the currency used in the country you are visiting. That’s why it is very important that you should know the exchange rate of various currencies use ...A New Trader's Journey to Success Stage One: The Clueless TraderThis is the first stage when you enter trading. You may have picked up a book on technical analysis somewhere, heard of a day trader making millions, or got lucky in an earlier stock investment. After all, how hard can it be? The money sounds appealing and the freedom to be independent sounds ...Customer Service Call Centers A call center is a centralized office of a company that answers incoming telephone calls from customers. A call center may be an office that makes outgoing telephone calls to customers by the means of telemarketing. Such an office may also responds to letters, faxes, e-mails and similar written correspondence.Customer service has always s ...Swing Stock Trading Swing stock trading is a short-term method in which stocks are held for a few days or weeks. This trading style lies somewhere between the day trading and long-term investments. A day trader may hold on to a stock only for a few minutes or hours, whereas the long-term investor may hold the stocks for months. Swing stock trading depends on the mi ...Acapulco - The Stock Market Dives There is a famous cliff on the ocean in Acapulco where experienced divers jump into the sea. It is very dangerous because the water at the base of the cliff surges from a depth of 2 feet to 12 feet. The diver must time his leap so the water is at the greatest depth when he enters or he could easily be killed as many novices before him have been. ...Online Discount Stock Brokers Discount stock brokers are the most common type of brokers but there are other brokers like full service brokers and money managers.Just about thirty years ago there were only full service stock brokers, offering order execution and investment advice at extremely high costs. Then the first discount brokers came in with low fees just for t ...Stock Market Basics The term stock market, as the name connotes, is a place where you can market or trade a company's stock, which the corporation issues through shares in order to raise capital. Of course, capital is the cost that a company incurs in relation to producing its products and services.The people who buy these shares are the shareholders, and th ...Online Commodity Trading The system of fortnightly accounts is quite handy for a speculator or short-term operator in online commodity trading who buys in the hope that a price decline in the short run will bring him profit, or who sells in the hope that a price decline in the short run will bring him gains. If he buys commodities at the beginning of an account period, ...Different Types of Mutual Funds This is a guide to the different types of mutual funds. When it comes to investing in mutual funds, investors have literally thousands of choices.Before you invest in any given fund, decide whether the investment strategy and risks of the fund are a good fit for you. The first step to successful investing is figuring out your financial go ...Finding Online Financial Advice As much time as people spend looking for financial advice, it's amazing that more people don't take advantage of the financial knowledge that can be found online. Everything from stock investment and diversification tips to ways that you can get the most out of your chequeing and savings accounts can be found if you know where to look.Tho ...An Introduction To Forex Trading Foreign Exchange Trading, commonly known as FOREX, is the trading of different currencies in the world. FOREX is not a new concept. Since the dawn of man, people used exchanging of currencies for transactions, but not necessarily in the form that we are currently familiar with.When man started practicing early forms of ‘business,’ they le ...
|
