How to Take a Pulse of the Markets Using These 5 Stocks
How does a trader get a quick pulse of the market? There are indices and sectors galore along with way too much information. This adds up to information overload and not enough time to intelligently decipher the information into a meaningful trading strategy.
After years of studying the markets and just plain experience in the business world, I started to focus on 5 stocks. These 5 stocks give me a quick picture of the overall attitude of the market and give me a heads up to trend changes in the market. Think of it this way. The foundation of a house cracks and crumbles before the house falls. Looking at components of the market gives a good indication as to the condition of the market’s foundation. Consequently, I look at these 5 stocks first every evening and then proceed to look for trading opportunities.Read More
Eliminating Emotions in Trading
The psychology of investing not only affects individual investors but also affects the market as a whole. Many investors often underestimate or are unaware of the affects that our emotions have on our return on investment. Many well educated and competent traders lose money due to trading anxiety and trading emotions. In today’s article we will discuss various emotions felt everyday by online stock investors and how each emotion affects trading decisions and trading performance.Read More
How to Trade a Small Account
Mistakes sabotage every area of our lives, and trading is no exception. The good news is that we learn from our mistakes. In fact, seeing mistakes as learning opportunities is the popular approach to viewing human error; and with good reason, since they provide learning lessons aplenty, albeit often excruciatingly painful ones both in the psyche and the bank account. In over 3 decades of trading, I have probably seen every trading mistake possible, and I’ve even made most of them.Read More
Catching the Solar Trend Windfall
One of the best ways to diversify your portfolio is to consider allocating some of your portfolio into new, emerging industries and the technologies that are needed to drive their growth. These industries can represent ground-floor opportunities which can potentially result in windfall gains. Some of these new industries and technologies include:Read More
Geoffrey A. Smith
How to Capitalize on the Opening Bell
I work off of opens, not closes. At the close, you already know who won or lost. And how many of you have been able to start a race at the end? Not me. So I look at the open to see who is winning, because I want to be on the winning team. You will find that the market will hold the opens as support and resistance, and does not really care about closes. If the market is above open, bulls are in control. If the market is below the open, bears are in control.Read More
How to Be a Systematic Investor
Rules Based Investing is the process where ALL investment decisions are made via “pre-established rules” that clearly define the what, when, and why for buying and selling an investment.
It’s an approach to investing that relies on “observable” and “verifiable” evidence between the data used to make decisions and the desired outcome.Read More
A Time-Tested Technique For Minimizing Risk
There are 2 ratios that dominate professional traders’ thinking:
- The win/loss ratio of their trades.
- The risk/reward ratio of their trades.
Notice that I intentionally worded each bullet point above with the words “of their trades.” It may seem practical and objective to back test a trading system to determine these ratios, but what’s more realistic is to trade a method yourself over a significant, statistically significant number of trades, record your actual real-world results, and use these numbers as your own win/loss and risk/reward ratios.Read More
Road Map to Trading Success
“What goes up must come down spinning wheel got to go around.” - Blood, Sweat and Tears
What really makes stock prices go up or down? Is it really as simple as what goes up must come down and vice versa? How do I select stocks with the best profit potential? Stock prices are constantly fluctuating and many times there seems to be no ‘rhyme or reason’ to this constant price fluctuation. The air waves and the Internet are flooded with analysts and experts who try to predict the future price moves for stocks.
Often they have no real answers to our same questions and are just as baffled by why a stock is going up or going down. Where does that leave us? Let’s face it; to the average investor the stock market can seem complicated and confusing.Read More
Riding the Wheel
Many ‘old school’ brokerage firms put vast restriction on the use of options. One thing they might let traders do is sell ‘covered calls’ against a position. Covered calls are a great way to produce income against a portfolio of relatively low volatility stocks. They are not the only way though. One can sell ‘cash secured puts’ as a way of collecting income in stocks that one might want to own someday, or to simply produce income.Read More