Investment For Everyone

Do You Really Need the Stock market trading course?

2011-06-02T10:58:00.002+08:00

by: Ray Burton

If you're planning to dabble in the stock market then be clever and obtain a comprehensive stock market trading course. If you don't you'll find scheming to make trades and money is a huge danger and you'll probably get your fingertips burnt.

Nevertheless it's easy to fill your head along with knowledge whilst still being be left asking yourself how to make deals and improvement if the training course isn't balanced which has a practical component that explains exactly what you must do and how to get it done. If you count on theory as well as analyses you'll not be able to make it the pressure along with stress regarding market variances if you haven't learned the sensible solutions and the way to implement these. If your stock market trading course explains what to do dealing with a change in the market then you'll be able to always trade with self-assurance. It's a huge self-confidence
builder to have someone of information and experience teach you the way they deal with genuine examples and to become conscious that it's not difficult once you know how.

Real world courses can be extremely expensive due to reputation of the institution or teacher and yet nonetheless lack just about any practical articles. While hiring facilities as well as materials is extremely real fees to cover, the effectiveness of very expensive workshops that lack hands on instruction is highly in question. You can get a very high-priced certificate having a prestigious name on it so that you to enjoy a high risk gambling game as it lacked virtually any practical meaty content.

At the end of the day of course you should learn the theoretical principles which are effortlessly done on the net; but you should also learn the techniques for success coming from a stock market trading course that shows strategies and also plans that work well from experience and not just idea. It's rather similar to being taught how you can fish instead of hearing the fisherman's tale.

How to Trade Forex Without Emotions

2011-05-23T21:35:00.002+08:00

Emotions are the one of the greatest problems of being a Forex trader. Almost every beginning trader, who starts with the demo account, experiences a great success in his or her trading, but fails to carry this success to the real money account. The problem is letting emotions get in the way of rational judgments. When we lose, we feel frustration and sometimes even despair. Winning can cause us to lose control over our actions and turn trading into a gambling, or cause a serious over-trading problem. Calming greed and taming fear will help you to overcome trading Forex in an overly emotional way. Here are some suggestions to help you.

Steps

Recognize the emotions involved:
- Greed – human beings often want more! When market goes as we expected, it is too easy to believe it will continue for very long time. We forgot that everything can change in an instant.
- Fear – when you are afraid to miss a profitable move or of losing money, you can make irrational choices driven by fear.
- Poor attitude toward money – if your money management is not the strongest point (usually for emotional traders this is the weakest point), you will soon will be out of money, before you even have a chance to establish yourself as a trader.
Remember that single loss is not your fault. It’s not even the market’s fault. And it’s not your system’s fault. It’s just a loss. No trader or system can guarantee 100% winning rate. So, losses should happen, and will happen.
Accept that there is no one to blame, because there is no guilt in losing.
Shore up your system. If the losses prevail over the winning positions, then check your risk-to-reward ratio first. If each of your losses is less than a third of your single winning position then maybe your system is intended to work with 65% of your positions in the red zone? If your risk-to-reward ratio doesn’t compensate your poor loss-to-win ratio, you still don’t have to blame yourself, the market or your system.
Remember that a single winning position is not an indicator of your success. The same goes for losses – don’t treat a single win as your accomplishment. It’s just a part of the routine process of trading Forex.
Use a good automated trading system.

Article provided by wikiHow, a wiki how-to manual.

How to Be Disciplined in Forex Trading

2011-05-23T21:33:00.000+08:00

What do you think the key for forex trading? It is not the perfect strategy, but PERFECT DISCIPLINE. Discipline is a controlled behavior. So in forex trading you must have a controlled behavior which follows your strategy. Discipline will separates you between success and failure.
Have you ever set your trading goals, set your stops and limits but eventually forget about that. You have your strategy but still didn't do the strategy and enter the market although it is not suits your strategy. And finally LOST your money. How could that happened? It's because you lack DISCIPLINE. Many beginner trader and some experienced trader too, often enter the market because they are tempted to go in due to the fear of missing out a big move although it breaks their trading rules.

Steps

Be easy on yourself for your mistakes. The more you get upset with yourself for your mistakes the more it will influence your future trading.
Keep practicing on a demo account. Set a goal, if you haven't got 50% return you will not go for real trade.
After every losing trade close your forex platform. This will you get you some time to cool off.
Put a Post-it note at your screen to be disciplined, so you remember to be disciplined.
If you find yourself praying for the market, that is ominous. Close your forex platform immediately.
Have your spouse accompany for your trading. She/he can reminds you for your action.
Use a demo account and have your spouse to trade for you. When you want to enter the market, you need to talk to him/her. This will slow your action and make you thinks clearly.
Relax and visualize yourself of your mistakes. Imagine your mistakes. Imagine your loss because of greed. In your mind see you takes defensive position for your next trade. Imagine every details of next trade. Do this often to change your mind.
Focus on your trading. If you have something else to do like working, don't trade.

Tips

The key is making money in any financial market, including forex, is buy low and sell high. Study the charts to see where the support is (a price level the currency pair never seems to go lower) and aim to buy at that level; likewise, see where the resistance is (a price level the currency pair never seems to go higher), and aim to sell at that level. More likely than not, you will make money by so doing.

Warnings

Don't risk any money you cannot afford to lose. Risk money is money that if lost will not change your lifestyle the slightest. Consider ALL money deposited into a forex account as lost.
Don't risk too much on any single trade. Keep a comfortable margin.
Don't trade too many different currency pairs simultaneously. This will endanger your margin requirement.
Don't be too greedy. Aim for 20-100 pips at a time to take profit.
Don't use stop-loss. If you don't risk too much at each trade, and follow "buying low and selling high," the price will almost invariably come back, even if it goes against you -200 pips, -300 pips, or even -400 pips. Forex is volatile so if you use stop-loss, your stops will very likely be taken out and you will lose money.

A forextrader will only make money if and only if he uses bigger timeframe, and and dont have a stop loss. what counts is not your profit, it is better to endure -200pips and latter have +300pips profit, WHAT REALLY MATTERS IS your achievement

Article provided by wikiHow, a wiki how-to manual.

How to Read Forex Candlestick Charts

2011-05-23T21:32:00.000+08:00

Candlesticks are graphical representations of the price fluctuations of a currency pair. A candlestick can represent any period of time. A currency trader’s software can provide charts representing time frames from five minutes, up to one week per candlestick. Here is how to read them.

Steps

Understand what the chart consists of. There are no calculations required to interpret Candlestick Charts. They are a simple visual aid representing price movements in a given time period. Each candlestick reveals four vital pieces of information:
- the opening price, the closing price,
- the highest price and the lowest price the fluctuations during the time period of the candle.
- In much the same way as the familiar bar chart, a candle illustrates a given measure of time.
- The advantage of candlesticks is that they clearly denote the relationship between the opening and closing prices.
Understand that candlesticks display the relationship between the open, high, low and closing prices. This means that they cannot be used to chart securities that have only closing prices. Interpretation of Candlestick Charts is based on the analysis of patterns. Currency traders predominantly use the relationship of the highs and lows of the candlewicks over a given time period. However, Candlestick Charts offer identifiable patterns that can be used to anticipate price movements.
Learn the patterns. There are two types of candles: The Bullish Pattern Candle and the Bearish Pattern Candle:
- A white (empty body) represents a Bullish Pattern Candle. It is used/denotes when prices open near the low price and close near the period’s high price.
- A black (filled body) represents a Bearish Pattern Candle. It is used/signifies when prices open near the high price and close near the period’s low price.
Understand how to read the Bullish Candlestick Formations:
- The Hammer is a Bullish Pattern if it appears after a significant downtrend. If the line occurs after a significant uptrend, it is called a Hanging Man. A small body and a long wick identify the Hammer. The body can be empty of filled in
- The Pricing Line is a Bullish Pattern where the first candle is a long, Bear candle, followed by a long Bull candle. The Bull candle opens lower than the Bear's low, but closes more than halfway above the middle of the Bear candle's body.
- A Bullish Engulfing Line is a patter strongly Bullish if it occurs after a significant downtrend. It may also serve as a reversal pattern. It occurs when a small Bearish candle is engulfed by a large Bullish candle.
- The Morning Star is a Bullish Pattern signifying a potential bottom. The star indicates a possible reversal and the Bullish candle confirms this. The Star can be a Bullish or Bearish candle.
- In a Bullish Doji Star, the star indicates a reversal and a Doji indicates indecision. This pattern usually indicates a reversal following an indecisive period. You should wait for a confirmation before trading a Doji Star.
Understand how to read the Bearish Candlestick Formations:
- A Long Bearish Candle occurs when prices open near the high and close lower, near the low.
- The Hanging Man pattern is Bearish if it occurs after a significant uptrend. If this pattern occurs after a significant downtrend, it is called a Hammer. A Hanging Man is identified by small candle bodies and a long wick below the bodies, and can be either Bearish or Bullish.
- Dark Cloud Cover is a Bearish Pattern that is more significant if the second candle's body is below the center of the previous candle's body.
Understand how to read Neutral Candlestick Formations.
- Spinning Tops is a neutral pattern that occurs when the distance between the high and low, and the distance between the open and close, are relatively small.
- A Doji candle implies indecision. The open and close are the same.
- A Double Doji (two adjacent Doji candles) implies that a forceful move will follow a breakout from the current indecision.
- The Harami pattern indicates a decrease in momentum. It occurs when a candle with a small body falls within the area of a larger body.
Understand how to read the Reversal Candlestick Formations:
- A Long-legged Doji often signifies a turning point. It occurs when the open and close are the same, and the range between the high and the low is relatively large.
- The Dragonfly Doji also signifies a turning point. It occurs when the open and close are the same, and the low is significantly lower than the open, high and closing prices.
- A Gravestone Doji occurs when the open, close, and low prices are the same, and the high is significantly higher than the open, close and low prices. It also signifies a turning point.
- Stars indicate reversals. A Star is a candle with a small, real body that occurs after a candle with a much larger, real body where the real bodies do not overlap. The wicks may overlap.

Tips

Forex trading involves significant risk of loss and is not suitable for everyone. Trading in foreign exchange is speculative and may involve the loss of principal. The high degree of leverage can work against you as well as for you. The possibility exists that you could sustain a loss of some or all of your initial investment, and therefore, you should not invest money that you cannot afford to lose.

Article provided by wikiHow, a wiki how-to manual.

How to Avoid Losing Money on Bad Investments

2011-05-05T19:55:00.005+08:00

Bad investment strategies not only lead to devastating losses of income, they can cause stress, feelings of failure and excessive worry and regret. Become educated about financial planning and learn the basics of how to avoid losing money on bad investments before giving your money away.

Steps

Set financial goals. Finding out how much money you want, and when you expect to get it, is the first step in financial planning and deciding on investment strategies.
Decide how much risk you can afford to take. Most of the opportunities that can make the most money are also risky; it's possible to lose all if not most of the investment and to have to worry regularly about how the investment is performing. If you are a nervous person, high risk investments may not be a good choice for you. It's also wise to only put a portion of your money in high risk investments. You'll get a possible higher return while keeping some financial security.
Understand the vehicle you want to invest in. Do some research on your own, instead of just following trends or taking advice. Read up on the general financial position, the history and possible growth of the company or product you are investing in.
Become educated about financial planning and investing. Get to know the buzzwords and read financial news and books. A mentor or investment coach can help make investment strategies and fundamentals easier to understand and teach you how to avoid losing money on bad investments.
Use sound judgment, not emotion, when working on investment strategies. Just because you like a company or product or are a loyal customer does not make it a good investment. Similarly, investing in a new idea or product that sounds good to you may not be a good idea unless it has a solid business plan and compares realistically to the industry it is in.
Commit to long term growth. Once you've done your homework on an investment and are sure that it is a wise investment strategy, prepare to leave your money in it for a reasonable amount of time. Avoid trying to time the market or buy and sell. Sound investments will generally level off after losses.
Maximize tax advantages and free contributions. Putting the bulk of your money in IRAs and other tax exempt investments will save money compared to taxable investments. If your company matches your contributions to a 401K, increase your savings amount for more long term gain. At the same time, don't borrow against funds like this since you'll take a huge penalty.
Be realistic, not overconfident or overly optimistic. Make a solid plan to earn money and save money instead of relying on investments or financial windfalls.
Keep some of your money in liquid investments. Don't put all your money in investments that involve high maintenance or conditional fees or that are difficult to liquidate. Save some of your financial windfall in accounts that you can tap without penalty if you have an emergency.
Diversify your investment portfolio. Don't invest all your money in one annuity, stock or tax deferred account. It's safe to have all your money within 1 reputable financial adviser or mutual fund company, as long as they diversify it within their portfolio.

Article provided by wikiHow, a wiki how-to manual. Please edit this article and find author credits at the original wikiHow article on How to Avoid Losing Money on Bad Investments. All content on wikiHow can be shared under a Creative Commons license.

How to Decide When to Sell a Stock

2011-05-05T19:53:00.001+08:00

Many investors are unable to sell a stock; either they 'fall in love' with an investment, or are unwilling to admit a failed investment. Sell decisions should be made at the time of an investment.

Steps

Concentrate on selling stocks within your portfolio that are doing poorly, particularly if you cannot satisfactorily explain the loss as mere market emotion or an overreaction to a particular problem. William O'Neill compares a portfolio to a garden, you need to pull your weeds and not your flowers in order to have a profitable 'garden'. But do not allow growth in particular kind of investments that have done well in the past to unbalance your portfolio; rebalance it among companies and asset classes from time to time.
Consider setting a limit on your losses. Some CANSLIM investors use an 8% loss limit. This prevents small losses from becoming large disasters.
Consider selling small portions of your successful investment at previously decided appreciation targets. This will cover your losses from unsuccessful investments and will also 'lock-in' profits.
Admit mistakes quickly, and get out of investments that have fundamental problems develop.
Avoid becoming emotionally involved with your investments. Consider that all paper losses are real losses and all paper gains are real gains to provide you with the proper perspective. Avoid 'denial' that prevents you from a successful trade.
Consult with your tax professionals to determine if the timing of a sale should be performed to maximize or minimize the tax effects. In general, make your trades based on the portfolio rules you have established; allow taxes to be determined separately.

How to Invest in Mutual Funds

2011-05-05T19:51:00.000+08:00

Regardless of the size or goals of your investment portfolio, adding mutual fund holdings can help you diversify your investments while maintaining a low cost structure and a focused investment target. Investors of all sizes and skill levels can benefit from learning how to invest in mutual funds.

Steps

Select the financial institution you plan to use for purchasing mutual funds by carefully researching and asking for referrals from friends and family who regularly invest their money in the market.
- Online investment firms typically have competitive fee structures and varied fund selections for investors willing to take a do-it-yourself approach to investing in mutual funds. This will require you to complete your own research and carefully monitor the performance and allocation of your mutual fund holdings. Many online investment management firms have helpful tools and guidance sections for beginning investors.
- If you have a more sizable portfolio, you may prefer to have the guidance of a professional. Payments to fee-only Financial Advisers typically are in the form of an hourly or retainer basis, or a percentage of assets managed. Choosing this option will alleviate the burden of self-selecting and monitoring each of the mutual funds in your various accounts.
- Banks and credit unions also sometimes offer mutual fund purchasing capabilities. However, they often charge higher fees and/or commissions than fee-only advisers, while providing a rather limited selection of mutual funds available for purchase. Some banks only allow customers to purchase funds in their own investment family.
Determine the risk tolerance with which you are comfortable and willing to accept for your investments.
- Mutual funds will range in risk level from very conservative to highly risky. You should develop a diversified basket of mutual funds which meets your preferred level of risk. Visit financial websites where you can find a risk assessment for each mutual fund, usually on a scale from 1 to 5.
- Even if you are a conservative investor, you may want to add at least a small portion of riskier mutual funds to ensure that your overall portfolio will be able to experience growth in addition to preservation of capital. Refrain, however, from putting all of your funds into highly-risky investments. Reserve at least a small portion (2 to 5 percent) in cash to take advantage of opportunities as they arise.
Practice overall diversification in your mutual fund investments, as this is essential to performance success.
- While it might seem like a couple quality mutual funds will be enough to compose a portfolio, a properly diversified basket of investments will give you the best mix of growth and stability. Most advisers recommend having no more than 10 percent of your portfolio in any one particular asset class or mutual fund.
- Your portfolio of mutual funds will have the best statistical probability of long-term success if you diversify your funds across many asset classes which are not correlated. This might include domestic stock funds, international stock funds, bond funds, and even specialty sector funds such as utilities or real estate. Spreading your money across asset classes will help your portfolio avoid being impacted by the movement of one particular industry.

Tips

Mutual funds are offered in a variety of share classes, typically including A, B, C, and I classes. Each share class has a different fee structure including up-front sales charges, deferred charges, and 12-b1 (sales) charges. Your investment time line will help you decide the most appropriate share class.
Some mutual funds also have short-term redemption charges, and generally charge a 1 or 2 percent fee for holding a mutual fund position for less than 60 days.

How to Calculate Dividends

2011-05-05T19:49:00.000+08:00

Dividends are investment earnings that come from stocks and mutual funds that you invest in. When you buy stocks or participate in a mutual fund, you are buying shares of a company. That entitles you, the investor, to a portion of the company's earnings, known as dividends. Knowing how to calculate dividends helps you stay on top of your investments.

Steps

Locate the percentage dividend listed in the prospectus of the invested stock or fund.
- You should always have a prospectus on your investments, but, if it's not immediately available, check the company's website or with your investment broker.
- The percentage dividend will most likely be listed as a percentage of the original asking price (also known as the par value) of the stock.
Multiply this dividend percentage by the original price per share. This changes the percentage into a dollar amount.
- For example, a dividend of 5.25 percent on a stock that was issued at $35 a share means 35 x .0525 = 1.8375 or roughly $1.84 per share.
Learn your annual dividends by multiplying the dividend by the number of shares you have.
- For example, if you have 1,200 shares of a stock paying $1.84 per share, you would earn $2,208 in annual dividends.
- Since dividends are often paid quarterly, you would divide the annual dividends by 4: 2,208 / 4 = $552 per quarter.
Find out the current market price for your shares.
- You'll find this information where the stock is traded. For example, a NASDAQ traded stock would have the current market price at www.nasdaq.com.
- Investment websites, such as The Motley Fool (www.fool.com) or Market Watch (www.marketwatch.com), also provide current stock quotes to help in calculating dividends.
- If you use an investment broker, he or she can also provide this information to you.
Calculate the dividend yield, also known as the current yield, with the current market price and annual dividend. This is often used to track high investment earnings.
- The dividend yield is the annual dividend divided by the share price and shows the return on your investment.
- If the annual dividend is $1.84 and the current share price is $50 (1.84 / 50 = 0.0368), then the results of calculating dividend yield is 3 percent.

Dividend yields are often posted on investor websites.

Use dividend yields to analyze various investment earnings and make investment decisions.
- With current investments, a significant rise in a dividend yield (more than 10 percent) may be tied to a drop in current market price, which may lead to a drop in annual dividends.

Tips

Check your investment's prospectus for more information about dividends for a specific investment.

Warnings

Not all stocks or funds pay dividends. Some are primarily growth stocks or growth funds. Investment earnings come from the appreciation when you sell. Other times, companies that aren't doing well may reinvest dividends into the company.
Calculating dividend yields involves the assumption that dividends will remain constant. An assumption is not a guarantee.

How to Invest in Property

2011-05-05T19:46:00.000+08:00

Investing in property can provide high returns, but it also runs the risk of deep-pocketed losses. Essentially, all homeowners make an investment when they purchase a property, as homes generally appreciate in value. However, some people find that investing in properties outside of home ownership can amass a small fortune over time. There are several ways to invest in properties, each of which offers a different risk level, maintenance requirement and possibility of return.

Steps

Invest in a real estate investment trust, or REIT. Real estate investment trusts work to pool the money of investors for the purpose buying, selling and developing real estate properties.
- As an investor, you will benefit from a hands-off approach, and the opportunity to invest in multiple properties at one time, ultimately diversifying your portfolio.
- The REIT holder is required to pay 90 percent of trust income directly to trust share holders for all taxable income derived from the rent or sell of a property. Real estate investment trusts are highly liquid, and they allow for investment in commercial property as well as residential.
Become a part of a real estate investment group to learn the ropes of investing in property. Like an REIT, a real estate investment group pools the money of two or more people to purchase, develop, manage and sell properties. Because these groups are generally much smaller than real estate investment trusts, members can aid in managing properties, and learn tips and advice from other seasoned investors.
- A real estate investment group is private, and is required to pay profits only according to private contracts. #*Additionally, investments with real estate investment groups are not as liquid as an REIT. Instead, one or more properties must sell before a member can withdraw from the group.
Purchase a property to develop and sell. These are called short term ownership investments, and present the opportunity for high profits.
- When flipping a property, choose a home, apartment complex, duplexes or a commercial building with outdated features and needed upgrades.
- Negotiate a bargain with the seller for an as-is property, and install the upgrades needed to increase the property's value.
- While you can hire a contractor for the work you need done, more self-repairs will result in a higher profit margin. Attempt to sell the home yourself before enlisting the help of a real estate agent, as agent fees average around 6 percent of the total home sale price.
Become a landlord of a property to receive ongoing income. Purchase or build apartments, homes, duplexes, or shopping centers. Search for foreclosure properties with a low price tag and tow maintenance. Avoid purchasing a property in poor condition.
- While some repairs such as new flooring or paint are expected when purchasing a rental property, others such as a new roof or foundation repair could obliterate the possibility of making a high return on your investment.

Tips

When flipping a property, get an estimate on needed repairs and updates prior to purchasing the property, as well as the estimated property value after the repairs and updates are made. This will help you avoid losing money on your investment, as well as limit the number of surprise expenses in the property development process.
Paint, Plants, Cleaning and replacing Broken fixtures will usually boost the value of the property for little cost.
I usually calculate the price per square foot (asking price / square footage) then look that five lowest prices in an area. This prevents me from buying an overpriced property and avoids the bank turning down the purchase because the price per square foot is too high.
You can remodel a kitchen cheaply by finding a company that makes wood cabinets (around $1000 for a small unit and around $2000 for a large unit) then paying a handyman to install it. If you pay a remodeling company, they will charge you 2 to 4 times more.
I look for the property that is mis-managed. That is where the property has no flowers, cracked cement, broken fences and in need of exterior paint and some fixtures. These properties are easy to fix up and incrase the price.
If you can get a property that ia 50% vacant it will usually sell for a little less. Avoid the property that is 100% vacant because the city loves to city new owners of these properties.

Warnings

Beware of city codes that could impose higher expenses for an outdated property upgrade. While a property may pass an inspection, it may not necessarily meet your city's requirements for habitation by rental tenants or for commercial rental usage.

Article provided by wikiHow.

Investment Advice: Exchange Traded Funds As Part Of Your Investment Portfolio

2011-05-05T19:39:00.001+08:00

'What should I invest in?' This is the most pertinent question for most individuals striving to formulate a financial plan. Zillions of books and millions of web pages are not sufficient to answer this question. This is because investment advice is not universal and one size does not fit all. It changes as per the unique situation and specific requirements of every individual. Thus, it is essential to consult an investment expert personally to devise a customised financial plan.

For their investment and retirement plans, many people do not want an actively managed portfolio but would rather invest in the lower cost option of passive funds, which will just track the selected market index. There are currently two main options available for passive investment: tracker funds or ETFs.

Investment Advice: Understanding ETFs

Seek investment advice on ETFs to understand how they could form an important role in your portfolio. According toCNN financial experts, ETFs are "invented to combine the simplicity and low costs of index mutual funds with the flexibility of individual stocks".

The main advantages of investing in ETFs are:

• Ability to track a wide range of market indexes, like the FTSE, S&P 500 etc.

• Diversified, global portfolio can be constructed relatively simply

• Costs can be low, but smaller investors should keep an eye on total costs of investment

• ETFs can be traded like shares

Why Investment Advice is Essential for Trading ETFs?

Investment advice from your financial advisor will help you build a well diversified portfolio that achieves your long term objectives. ETFs could form an important part of this portfolio as by buying a limited number of ETFs you could have a global, well diversified range of investments that track key market indices.

Investment Advice on Buying an ETF

Do consult with your financial advisor, as they will be able to recommend an approach that fits in with your retirement and investment goals. They will consider which range of ETFs will fit in with your overall portfolio of investments, so that it is well diversified, suitable for the level of risk you find acceptable. Your advisor will also consider the total cost of investment and the tax implications of your investments.

Here are some tips for choosing an ETF:

• There are a large number of ETFs, across a broad range of markets available. Be clear about your objectives and do your research

• Choose ETFs with proven performance records or those listed on broad market indexes.

• Try to diversify your portfolio by investing in four or five ETFs. Diversification is a smart investment option, as it diffuses the amount of risk associated with a particular product.

Keeping it simple is the best strategy for smart ETF investments. Although ETFs are not very complicated products, it is prudent to consult with a financial advisor London. They help to blend ETFs with other investment products to create a comprehensive portfolio. You can also seek other financial services, such as inheritance tax advice, SIPP investment and retirement planning, from an expert financial advisor.

by: Kathryn Dawson

How To Choose Investment Real Estate Property

2011-05-05T19:36:00.002+08:00

The decision to invest in real estate is an important one. When you begin choosing the properties you will purchase, there are several factors you should consider. This article will provide tips for doing so and help you make the right choices.

Consider your goals. If you are planning on purchasing investment property for the purpose of renting it out, think about the market you wish to target. If you don't have a lot of money for getting started, you may need to purchase small homes that will be primarily rented by an individual or couple. These would be more like starter homes and would usually contain two to three bedrooms. The square footage would not be all that much, but they would make great first investments. They would also make wonderful homes to renters looking for a good deal without having to spend a lot of money each month.

Consider the renter's market. If rent is high in your area, you'll need to charge the equivalent in order to provide great value and make the house inviting. If you go too low, potential renters will wonder what is wrong with the property or the area. While the price of real estate will fluctuate, rent often remains relatively the same.

Consider what your house payment will be and compare that to the cost of rent each month. You want to take in more than you are sending out, so make sure the rent you receive will be more than your monthly house payment. Otherwise, you are just renting the house to pay for it and you won't be making any money from the venture.

Make a sizable down payment. This will decrease your house payments and enable you to make more from the rent. The more you are able to put down, the more your monthly payments will decrease.

Consider any repairs that will need to be performed on the investment property before purchasing it. This is important because you must be able to make those repairs. If they aren't necessary you could go ahead and rent the home, but you would be better off to make any improvements first in order to raise the value of the home. This will also help you tremendously when it comes time to sell.

Use the money you make from one home to purchase another. This is how you will grow your investment property business and really begin seeing a profit. The more you make the more you can save. You will need to put some of that money back into homes and other properties for improvements and renovations, but if you choose carefully, you may find homes that don't actually need many repairs or updates. This will allow you to use your money toward down payments and other fees associated with buying and selling property. It will also give you a repair fund you can use when work does need to be completed on investment property you are renting.

by: Jack Bosch

How to Create an Investment Plan

2011-04-27T16:22:00.000+08:00

Creating a viable investment plan requires a little more than simply establishing a savings account and buying a few random shares of stocks. In order to structure a plan that is right, it is important to understand what you want to accomplish with the investments, define how to reach those goals and evaluate different types of investment options to decide which ones will aid in the achievement of those goals. The good news is that it is never too late to create and implement a personal investment plan and begin creating a nest egg for the future.

Steps

Determine your goals for the future. A carefully structured investment plan can be a means of achieving long-term or short-term goals. For example, one goal may be to generate funds for a child's college education, using returns from certain types of investments. Alternatively, another goal may be to create a portfolio that generates income for use during retirement. Knowing what you want to accomplish will make it easier to tailor the investment plan to fit those needs.
Decide how much you can initially use for investments. Depending on your goals, a broker can assist in deciding how much you would need to initially make available for investments. Keep in mind that most brokers will recommend that you have at least that same amount of money set aside in a savings or other interest bearing account, rather than sinking all your money directly into stocks and bonds.
Consider your comfort level in regard to taking risks. With most investments, assuming a greater degree of risk does hold the potential to generate higher returns, but it also means a greater chance of losing your investment. For people who are more conservative with money, beginning your plan with a focus on bonds and stock options that carry less risk or volatility is good place to begin. You can always try a riskier investment at a later date, once your understanding of market projections and trends increases.
Diversify your selection of investments. Rather than focusing strictly on stocks associated with a given industry, secure options that encompass several different industries. Also consider investing in bond issues and other relatively safe investments as part of the personal investment planning. Diversification helps to insulate you from incurring staggering losses when one industry experiences a downturn, since there is a good chance losses created by a couple of investments will be offset by gains realized with the other investments.
Learn the marketplace. Even if you have an excellent broker, make it a point to learn how to read market reports, project movements with different stock issues, and in general, how to predict what will happen with your investments in the future. Doing so can often help you avoid losses and even make it possible to discover a new investment with a great deal of potential.

Tips

Make it a point to review your investment plan from time to time. Focus on how well your current holdings are advancing toward your goals, and make changes in those holdings when necessary. Keep in mind that as circumstances allow, you can always broaden the range of your investment portfolio, hopefully generating greater returns that make it possible to reach your goals sooner rather than later.
Even the best investment plan may need tweaking as changes in the economy occur or your personal circumstances shift in some manner. See those situations as opportunities to rethink your strategy while still keeping your goals uppermost in your mind. Doing so will lend direction to your investment activities and make it easier to see the big picture even as you deal with what is happening today.

More related sites:

How to Hack the Stock Market

How to Build a Diversified Portfolio

2011-04-27T16:20:00.001+08:00

Some of the main keys to long term wealth building are diversification and sticking with a plan. Consider the following when determining what to do with your serious, long term money.

Steps

Create an investment plan.
Stick with your investment plan - If you adjust your investment plan, do it for the right reasons, such as a change in the long-term outlook for one of your investments or the realization that an investment no longer meets your goals.
Diversify and rebalance - By spreading your money among a variety of investments that may rise and fall at different times, you'll avoid taking those big "hits" that your entire portfolio could suffer when one asset class is hit hard. You will also need to "rebalance" your holdings occasionally to make sure the percentages of your portfolio taken up by different assets still fit your risk tolerance and time horizon.
Reduce the size of an investment that's too large - If you put a large amount of money in a single stock, for example, you are taking a substantial risk. Check current capital gains rates for your bracket. If they are low by historical standards, take advantage of the opportunity to sell off shares of a stock, and move some of that money into other asset classes, thereby diversifying your portfolio. Having too much in one investment is a risk that may not be worth taking.
Keep investing - Although past performance is no guarantee, over the long term, stocks have significantly outperformed all other asset classes. So, keep investing in high-quality stocks and don't get dissuaded by short-term "bumps" along the way.
Look for rising income opportunities - To boost your investment income, consider buying stocks that have historically increased their dividend payouts. And dividends may now be even more attractive, if you live in the US, because they are taxed at a maximum rate of just 15 percent. (Keep in mind, though, that stocks are not fixed-income investments and may not pay dividends.)
Don't forget "growth-and-income" - Many investors are attracted to the potentially high returns of "growth" and "aggressive growth" stocks. But there's almost certainly a place in your portfolio for good, solid "growth-and-income" investments, which provide opportunities for capital appreciation and current income.
Limit exposure to risky investments - Be cautious about investing in emerging markets, "junk" bonds, technology stocks and commodities such as oil and gold. Before adding these volatile investments to your portfolio, consult with a financial professional who knows your needs and risk tolerance.
Build a "bond ladder" - By building a "ladder" consisting of bonds of varying maturities, you can help to protect yourself in all interest-rate environments. When market rates are low, you'll have your high-rate, long-term bonds working for you. Then, if rates rise, you can reinvest the proceeds of your short-term bonds into new bonds issued at the higher rates.
Reinvest, reinvest, reinvest - If your investments generate dividends or interest that you don't need to meet monthly expenses, consider reinvesting that income to put the power of compounding to work.
Follow principles, not predictions - No one can predict with any accuracy what future years will bring to the financial markets. So, stick with the investment principles that never go out of fashion, such as diversification, investing in quality and maintaining a long-term perspective.

Tips

Be careful about those from whom you seek advice. Everyone has an opinion, but not everyone willing to talk to you about your money is well-informed.
Don't try to "time" an investment. Over time the US stock market has gone up...considerably. But most investors barely make a profit because they get in and out of the market and miss out on the big gains over time. The biggest gains tend to happen when you are not looking.
Develop a comprehensive plan with the help of a professional. Over time they will be your greatest ally. If not, find one that is!
Invest in those vehicles that will let you sleep at night.
Remember more risk does not always mean more return. It generally will mean more volatility.

Warnings

Investing is not guaranteed and does involve some risk of losing principal. Find investments that are of good quality and meet your goal, objectives and risk tolerance.
You should make sure that you have emergency funds covered first, then short term needs (1 - 2 years) before starting a long term investment. You do not want to touch your long term money until all other sources are exhausted.

Related wikiHows

How to Hack the Stock Market

How to Finance Investment Property

2011-04-27T16:12:00.000+08:00

If you want to be one of the thousands of people who own commercial or residential commercial real estate, you will need know how to finance investment property expenses including your property loan and sometimes renovation expenses. You can easily do this by having good credit, knowing where to find financing and being prepared with the proper paperwork.

Steps

Run your credit history to make sure you are in a position to secure financing. Follow up with correcting any mistakes on your credit report.
Fund your investment property with your own monetary resources.
- While it is a high-cost venture, financing with your own capital leaves you with fewer people or entities to answer to and less red tape to go through.
- Funding the property by yourself, though, means that you also assume all of the risk as well.
Consider taking on a partner or partners.
- Splitting the cost with an investment partner or partners will again allow you to avoid red tape, as well as not sink all of your money into one project.
- While you may have a positive working relationship with your partners, make sure that you have an iron-clad contract in place.
- Agree on what percentage each partner is going to put in as well as what percentage each partner will be paid out.
Secure a line of credit through a traditional lending institution.
- Be prepared to fill out a large number of paperwork. Bring past paystubs, old W-2s, and any available information on the property itself.
- Use your line of credit to purchase of the property as well as pay for improvements to the property.
- Use the money generated from the income off the property to pay down or pay off the line of credit.
- Resell (otherwise known as "flip") the property and pay off the financing. By doing this, you will make sure that your line of credit is in tact and you have a nice down payment for your next property.
Discuss with your realtor alternate financing options. Some property owners may offer financing or builders of new construction properties sometimes offer financing as well.
Find a private investor or private investment group.
- Investors pool their money together to finance properties, and they would earn a profit similar to that of how a bank earns interest.
- Ask your realtor or perform an online search to find private property investors in your vicinity.

Tips

If you have a partner or partners, consult with your insurance agent to have a buy-sell agreement in place to protect your investment. If you or partner pass away, you will probably want the investment property to go directly to the other partner and not enter the estate of the decedent and possibly interrupt business. The buy-sell agreement would allow you to purchase the business and/or property from the spouse or family because you have taken out an insurance policy on that person who is your partner.
A larger down payment should afford you a better interest rate, particularly once you pass 20 percent down on the property.

More at:

Successful Property Manager

How to Invest Like an Index Fund

2011-04-26T06:58:00.001+08:00

Investing is thought to be a very demanding task that needs years of training and higher education. This is true for big and complex transactions, but it is not true for most of the time. It takes ten minutes to build a portfolio that tracks major indices like index funds. Yet, many companies charge fees for such funds.

Steps

Choose an index you like. You could choose S&P 500, for example. It is the most followed index in the US stock market.
Try to get a list of the biggest components of that index by size. In other words, what are the biggest companies in the S&P 500? (Decide how you are going to determine size by the way. Are you going to go with market capitalization?
Pick the biggest ten companies. General Electric and Exxon Mobile will most likely be in every index you could choose.
Buy them for your own portfolio.

Tips

You could play with the percentage weight of each company in the portfolio for your own taste.
You could pick the biggest ten, five, or two companies depending on your preference. Less companies mean more volatility to your portfolio.
To get closer return to the index fund, invest more money in more companies.
The following companies represent 10% of S&P500: Exxon Mobil, General Electric, Microsoft, Citigroup.

Warnings

This method will overweight you for large caps, giving you no exposure to small caps, mid caps, and to 490 of the smallest large caps companies.
This will result in the opposite of diversification for your money and your money will be at great risk.
No one can get the exact performance of the index tracked .However, if you invest in a mutual fund, you will get the return of the index, less whatever small percentage that fund charges you in fees. This is your best bet.
Caution must be taken when changing the weight of the companies to make them different than the index.
This technique is really playing with fire.
Instead you should consider investing in a index fund or an exchange traded fund. Both of these solutions are generally far more desirable and much better. For instance, you would normally pay only small up-front and ongoing fees to buy an interest in a fund which represents interesjavascript:void(0)ts in many, many different stocks, not a fee for each stock.

Related sites

Hedge Fund Trading Secrets Revealed

How to Invest Small Amounts of Money Wisely

2011-04-26T06:53:00.002+08:00

Investing isn't just for the wealthy. If you have a few thousand or even less than a hundred dollars saved, here are some suggestions on how to make the most of it.
Note: This article assumes that you're looking for something more lucrative than high-yield savings accounts and CDs.

Steps

Set aside a small allowance for investing. Do this first and foremost, even if you can only set aside a few dollars out of every paycheck at first. Even $5 per week will add up to an additional $260 per year.
Next, decide whether to Invest More or Pay off any high interest debt and build up an emergency fund first.
Promise yourself that you'll keep your costs of investing (fees, commissions) to less than 2% of the transaction value, no matter how much you're investing. Multiply the amount you have to invest by .02. If the trading cost is more than that, put your money in a savings account instead until you can find an investing opportunity with a better ratio.
Choose one of the investing options below.

If you have $20

Invest directly with Dividend Reinvestment Plans (DRPs) and Direct Stock Purchase Plans (DSPs). With these, you don't have to deal with brokers (or pay their commissions) because you buy stock straight from the company.
- Not all companies do this, but you still have over 1,000 to choose from. You'll have to search for the companies that offer a direct purchase program.
- In most cases, you can make an individual purchase or set up an automatic payment plan.
- There may be a nominal commission or a minimum purchase requirement.
- The main difference between DRIPs and DSPs is that to participate in DRIPs, you must already own at least one share of the company's stock. You then collect your dividends in the form of additional shares instead of cash.
If the company you want to invest in doesn't have a Drip plan, look for a broker that lets you set up Drip-like accounts with which you can buy shares of stocks with low transaction costs. Just check the following:
- Does it have a monthly minimum?
- Does it have a higher charge to sell a stock? That might be an issue if you're an active trader.
Look for mutual funds with a small buy-in. There are a few mutual fund companies that will allow small investors to buy in, but you'll have to agree to an automatic investment plan, whereby you let them deduct a fixed amount from your bank account every month (usually at least $25). This is usually in addition to a minimum initial investment (starting at $25).

If you have up to $500

Invest in an index fund which tracks the broad market. Through boom years and recessions, since its inception the S&P 500 index funds returned about 10% a year. Once you make your first payment, you can add as much money as you want and as often as is convenient for you without any additional costs or commissions. Since you deal directly with mutual fund companies, you don't have to pay a broker a commission.
- The minimum varies, but with an IRA (USA only) you can invest as little as $250.
- If you have $500, you can be a little pickier. Look for an index fund with a low expense ratio.
Consider opening a discount brokerage account. A discount broker doesn't offer all of the services of a full-service broker, but they still allow you to purchase individual companies. Some accounts require a minimum initial deposit.
- Until you can invest a few thousand dollars at a time, which means you should have many thousands of dollars to spread out your risks, don't try to profit off of short-term price swings. The high relative costs of commissions will make this unlikely to work well over time. Instead, plan to hold your investments for a long time, generally years, and as such choose them for fundamental value. This will expose you to more company-specific risk, so don't use it as your primary form of savings -- focus on index and other mutual funds (plus bank deposits).

If you have $1000

Follow the steps in the previous section, unless you're confident you can save $1000+ annually, in which case you should consider a retirement account.

Tips

Keep track of your investments for tax purposes.
Keep in mind that this is money for investing, and nothing else, so you need to realize that it won't be readily accessible (that's what your emergency fund is for) and that there's a chance you will lose it (so if losing that money will somehow ruin your life, don't invest it).

Related sites

Secrets of Successful Traders

How to Choose the Best Forex Software

2011-04-25T16:14:00.001+08:00

The most successful Forex brokers, investors, and traders waste no breath in telling the fledgling player in the Forex market that the success is in the system. Unfortunately, finding the system that works the best for you is sometimes as difficult as choosing the best Forex software to use when you are actively involved in the foreign currency exchange arena. Here are three steps to follow when it comes time for choosing the best forex software.

Steps

Pick the right software to begin with. Nearly all of the forex software products available on the market offer live online forex trading features, but how will you know which one is the best application for you? The easiest answer to that comes from knowing your needs and level of skill with currency exchange. You need to choose the software that will be the easiest for you to navigate and utilize to the best of your ability. If you have difficulty in understanding how the software operates, you are doomed from the beginning and have spent good money for nothing. You want to find a software application that helps you understand three things: • how interest rates are applied when they are included in the equation • the economies involved --- local, national, and international • the concept of foreign exchange and international trading.
Find a software application that employs good security measures. This should probably be the first step, but all three of these can be construed of equal importance based on your attitude about what they each entail. Before deciding on the software you purchase, consider this feature before even thinking about making a serious mistake. In order for any software to be safe from hackers, the most necessary element is encryption. That forex trading application should come equipped with 128 bit SSL encryption. It’s your only protection against hackers, and you can believe that they are out there en masse when it comes to how much havoc they can wreak on your finances and personal information with online trading involvement. Just remember that your personal data and other personal information (e.g. your account balance, transaction history, etc.) are just as available to the hackers and other “internet freeloaders” as it is to the forex market.
The best software comes with quality customer support features. It does you absolutely no good to invest in any forex trading software if you can’t get support for answering questions as well as tech support. You’re going to be somewhat lost at the start to begin with, and will need all the help you can get until you have become familiar enough with things to be comfortable. The best software comes with round-the-clock protection and security features.

Tips

Additionally, make sure the software comes with the following features as well: A security system that prohibits unauthorized access to your account Daily backups of all your information and transactions 24 hour maintenance should anything malfunction 24 hour technical support when you are having related difficulties

More at Extreme Day Trading - Forex

How to Trade Forex Online

2011-04-25T16:12:00.000+08:00

Trading forex (foreign exchange) is highly risky. Due to the leverage available, with very little money down you can have big gains, but also big losses. In addition, there is financial friction, since you are paying fees in the form of the spread. Only highly sophisticated investors should trade forex -- and if you're not sure what you are, then you're probably not highly sophisticated. Whatever you do, don't trade more than you can lose -- because odds are, you will lose everything.

Steps

Research the best ways to invest. Forex is the biggest financial market in the world. It's bigger than the US stock market, because the daily turnover has now exceeded 4 Trillion US dollars. First understand that you, the retail investor are not going to move the market, the banks trade in multimillion's, most retail traders won't be doing so.
Consult a trusted broker. You need to trade through a broker who will not deal against your trades with human dealers or electronically. Most retail FX brokers take the other side of your trade because they are the market makers. The forex market has gotten big enough and regulations have gotten tight enough that most brokers are playing by the rules. You can search the US Government's website to determine if your potential broker is playing by the rules. Visit www.nfa.futures.org/basicnet/ and enter the name of your broker, you can find out all types of details on their business practices.
Understand world currency and its fluctuations. Currencies are traded in pairs. Choose a single pair to learn how to trade and stick to it until you get to know the personality of the pair. The most heavily traded pair is the EUR/USD and the pair that many traders like because of high volatility is the GBP/JPY.
Get a charting package which allows you to see the current price as it happens and make technical analysis. Almost every broker will give you free charts like the popular Metatrader 4 software.
Your next Step is to decide which Forex Trading platform to use. For beginners let me say that by Forex Trading, means foreign currency exchange trading. When I say a platform I mean how your computer screen looks when you will be trading - the current buy and sell prices of the various currency pairs, how the currency pair which you bought or sold is doing (is it gaining or losing), how to keep track of your funds, etc. You can find more details at www.acmforexonline.com [1]
Learn a system which gives you an indication of when to enter and when to exit trades. Following the markets price action is a popular method that professional traders have been using for over a hundred years before charts, candlesticks, indicators inception. You can find examples of candle price action trading at www.euodootrading.com [2]
Start using a demo account and not real money. When you are confident and consistently making good trades, and only then, go live. When you go live trade with money you can afford to lose and learn to manage the emotion of risking and losing or gaining money.You can find a small collection of Expert Advisors, and indicators at www.forex-2u.com [3] to use in the demo acount.
Enroll in a financial education course. You can find free education from most brokers on trading basics and you can find free information on almost any trading style on the internet. Just beware of the source of the information you find. The old saying those who can't do teach is true so find real traders who are really trading. A good place to start is to use social networking apps such as twitter which has become a popular resource where traders share real time trade ideas. Good luck!

Tips

Open a FOREX trading account. You will usually have the option to trade with free money or real money. Learn to trade with the demo/practice account before you start using real money.
Don't feel discouraged because you performed poorly with the demo account, it is very difficult to create a realistic situation when you are using demo money. The way you think and analyze will change when you start trading with your real money.
Learn the basics of Forex trading, keep an eye on OIL, GOLD, STOCK Market prices, these are some of the few factors in currency fluctuation.
Stick to just one pair. The most commonly traded pair is EUR/USD and USD/JPY. If it's good enough for the banks, it's good enough for you.
Learn money management! This is the most important thing you can do, learning what amount should be used on a specific trade can save you from losing your bankroll.
Try to focus on using only about 20% of your total cash. For example, if you decide to invest $1000, try to use only $200 to invest in the currency pair. The prices in Forex are extremely volatile, and you want to make sure you have enough money to cover the down side.
Please note, trading currency is different from trading stocks. For example, if you bought $1000 worth of stocks and if the stock prices become $0, you will lose your $1000. In Forex, you can lose more than your investment so make sure you use only a portion of your cash to invest and keep about 80% of cash to cover the down side.
If your currency pair goes against you and you don't have enough money to cover the duration, you will automatically canceled out of your order. Make sure you don't make this mistake.
Limit your losses, but don't be too conservative, lets say that you invested $200 in EUR/USD, and today, your total losses are $50, if you limit your losses to less than $50, you would have lost money. This is why it is important to use only about 20% of your funds, since you can set the stop loss to more than your investment which can be $200-$300, however much you are willing to risk. Having enough capital to cover the downside will allow you to keep you position open and see profits. Please note: Loses aren't losses unless your position is closed. If your position is still open, your losses will only count if you choose to close the order and take the loses.
It will only be matter of time until you get your money back and start seeing profit. Be patient and don't get too emotional about what happens to the prices. They are out of your control and the only thing you can do is to research estimate the direction of the market.
There are softwares to help you analyze the risks and losses which will help your trading experience lot more consistent and profitable.
Be smart with your money and don't create a casino environment. You can be successful if keep track of the financial news and control your losses.
Look for useful tools and analytical reports online regarding the economy, etc and use helpful softwares to control your risks.
Remember that trading with Forex is highly risky, you may lose your hard earned cash, therefore never use money you can't afford to lose.
Good Luck!

Warnings

Don't trade with real capital unless you are confident and competent with using "monopoly money" or "paper trades" first.
90% of day traders don't make a success of it. If you want to learn common pitfalls which will keep you OUT of bad trades, consult a trusted money manager.
Beware scam brokers! Many articles posted online about how to make money are scams. So deal with someone you have known for a long time.

Things You'll Need

If you want to trade live and standard lot size and leverage (100,00 units, 100:1), you will need a significant amount of capital. A micro or mini account can be create with far less cash. The more money you start with, the more you can lose.

More at Extreme Day Trading - Forex and Stock

How to Avoid Day Trading Mistakes

2011-04-25T16:02:00.004+08:00

Day trading for beginners is like lion taming, except more expensive. It's a risky and challenging pursuit: buying stocks and selling them again in the same day, making money off tiny fluctuations in the price of a stock over only a 12 hour period. For many years, the tools of day trading were not available to the average investor — real time stock results, analysis tools and access to instant trades (without the help of a broker). Today, with high-speed connections, anybody can try to day trade. For those of stout heart, here are some common pitfalls to avoid.

Steps

Learning to day trade. The first step for any day trading beginner is to learn the game with a qualified, actively trading consultant - coach. Learning the game of day trading stock with a coach, like Federer learning to be the best in tennis and Woods in the game of golf, you need to learn the winners game with your own actively trading, stock day trading coach. Success is all about trading a winner's trading game, with your world-class trading coach. The point: to put an end to losing, then learn to consistently and profitably win. Most traders learn to lose - you want to learn to win and this can only be accomplished with outside professional help. Trade otherwise, trade on your own, at your peril.
You need to realize that day trading is not about holding a stock or any other financial instrument for more than a few minutes, and certainly not beyond market close. In day trading, at the end of the day, you are flat, you hold nothing post market (over night), period.
Understand the stock markets. Those who do not understand day trading will also not understand how to use the stock indexes to measure the overall performance of the markets that can and frequently do affect the price of the trades you are in. Like all the ships at sea, all stock float to a degree on stock market index movements.
- The Seasonal Stock Market Cycle is that November and December normally rise when manufacturing, trasportation, hiring and utilities all pickup for the Christmas season. Mid January through Mid March the Market pulls back when manufacturing slows down after Christmas sales. Mid March through end of April the Market picks up. May might be a bad month but June and July normally do well when the market rallys when Dividends are paid out in July. August, September and October the market normally falls a little as the first half of the year sales (no christmas sales) news is all digested. If the Economy is contracting down, the bad months could be really bad and if the Economy is expanding, the up months could be really good. November is typically the strongest month and the November/December pair are typically the best 2 months.
Have adequate risk capital. Working capital is not money that you need to pay bills, or money that you have committed to another investment, like your home or retirement funds. It is money solely dedicated to this endeavor of day trading, otherwise known as liquid funds (cash beyond all living needs). Because Day Trades usually occur in a Margin Account, Broker/Dealers registered with NASD/NYSE require that day traders keep $25,000 in equity in the account on any day that day trading occurs.The $25,000 minimum is the minimum for margin trading. You will likely want to trade double this level to have sufficient buying power for $100 to $200 price range stocks. So if you are comfortable trading 1,000 shares at a time, for example, you can trade one and possible 2 stocks (as the "4 times" rule gives you $200,000 buying power).
Purchase the right computer equipment and software and information service resources. For on-line trading, you need a high-speed Internet connection. Becoming a day trader is not cheap. In addition to reliable and possibly even redundant high-speed connections, you will require specialized software and a variety of different analysis tools, not to mention your real-time research tools (including daily real time access to stock quotes and ticker feeds). Be prepared to spend a significant amount of money (in addition to your trading capital) before you place your first trade.The key here is to get some expertise as to what you need and configure for optimal efficiency and "latency" - which is a tech word for how long it takes your system to get info from the source (the markets). Your trading coach will guide you here. You want to have the best computer and monitors you can buy, not off the shelf stuff designed to do non trading tasks (video, games, software or Website design). Your computer must be highly reliable allowing you to perform competitively with any other traders in the world, including the billionaire hedge funds. Don't wing it on your own. Get an expert to help you out. Working with a trading coach, you can eliminate the noise (that causes most traders to quickly become losers).
Create a trading plan and stick to it. Successful traders have a plan. Highly profitable winners have a plan developed with their own trading coach. Without a coach and a plan, both new and seasoned traders can easily lose thousands a day. Not only that, but they need to have financial plan set, with trading goals and limits.
Now, one caveat, your trading game or system far outweighs any plan of action you come up with. You want to beat Federer in a world-class match of tennis, don't show up with golf clubs with a great plan to take him out. So, for day trading "it's the game, stupid" that matters most to become a consistent winner. Strategies, plans, tactics, and so on are perfectly appropriate in the business world and for traders to contemplate when the markets are closed - but not so much while trading so much. The stock trading game, unlike any other game on the planet, requires a unique set of qualities for the trader and rules to apply to become a winner in the day trading game. Applying traditional business practices and rules to the art of day trading stock will quickly get you killed - both personally and professionally.
Keep track of the market. If you want to be successful at day trading, you need to keep an eye on the markets. Another observation about all this pre and post-market research that traders have become addicted in doing. Most if not all is just noise. You would be well advised to be in the present moment trading, not ignoring your past lessons, not letting go the urge to forecast tomorrow's likely moves, but to be in the flow of current price action - markets and stocks. That's where the winners and the winnings are to be found; but you must free yourself of the noise, including rumors and most of the so-called important news our there.
Manage your Mood, before your Money. If you are ill, cranky, depressed, or sad, those are days when you may want to take a break from trading. Otherwise, you could make costly mistakes. You must learn to manage these limiting/distracting moods before you manage your trades/money. Furthermore, trading while you are stressed out is stupid. Winning in this business of trading stocks is like winning in any other business - you need to relate well. Relate with yourself, with your coach, if you have a trading coach, and relating with what you see on your monitors, peacefully and powerfully. To relate well, you want to be calm. Same for day trading. To win, to perform at you highest level of competence is all about instinct - not much time for emotions, not much time, frankly for a lot of thinking. What makes day trading so unique and exciting is that you trade the action. Like tennis, like racing a car at Indy, or any CEO in business - you gain the competence to consistently win with your coach, to have the intuitive ability to act on instinct - to win, over and over, and over again.
Keep detailed records. As in any business, keeping detailed records of all your transactions is vital for many reasons including profit and loss analysis, taxes and much more. Performance date is very useful in learning, not so much while trading, as you know. While trading - observing a valid setup, confirming what you need to enter a trade, managing the trade for the best win or the smallest loss - you rely on your confidence, your level of competence, and whatever performance excellence you may have - without thinking much, without your logs, without the news and all the other noise - you just trade, zen-like.
Save your profits. Whenever possible, leave your profits in your account and do not spend them. Run your day trading like a business. Do not reinvest all your profit back into dangerous trades.
Cut your losses. Do not let a loser run in hopes of it rising again, unless there is sound evidence it will.

Tips

Day trading is not for amateurs that is, unless you have qualified support - a consultant, coach, mentor.
For those of you looking to regain confidence, competence, learn these critical day trading skills, many companies that offer various trading services. They offer training and education in the field in the form of books, seminars, CDs, and so forth. You may also consider reading an endless variety of books on this topic of trading stocks.
To really learn to day trade stock at a winner's level, which very few achieve by the way, you need, in our view, one-on-one consulting (get on a winning track), coaching (gain confidence, competence, and trading results otherwise known as profits), and mentoring (guidance, support, and straight talk about your achieving your day trading dreams).
It won't come cheap but it's a lot cheaper than the money you can burn through losing, trading on your own.
November is usually the strongest month of the year when Utilities, Manufacturing, Transportation, Materials and Hiring all increase in preparation for Holiday sales.

Warnings

Day trading is the most risky and volatile investment and day trading strategy.
Due to short time lines that prevent any company research or other traditional stock analysis tools, day trading is often regarded more like gambling than a business.
According to some professional money managers, well over 95% of day traders lose money.
Do not averge when you are in loss: that is the biggest fault in trading. This is because a stock that is trending down might trend down to zero and go banktupt.
Watch out for August, September and October a period when stocks normally (2/3rds of the time) fall when first and second quarter earnings are anounced because these quarters have low retail sales and the market can fall.
Watch out for January and February, a period when the market usually falls (2/3rds of the time) when manufacturing slows down after the holidays.

More at Penny Stock Prophet

How to Become a Trader

2011-04-25T15:59:00.003+08:00

There are two main kinds of traders, those who deal with their own money, and those who trade with the money of an employer. There are also important differences to each of these, which finance professionals are quick to point out. However, for someone who simply wants to become a trader, meaning to facilitate trades on the stock market (or, colloquially, on Wall Street) some basic guidelines apply. Here's how to become a trader and get the best chance at managing a greater amount of capital in financial stock markets.

Steps

Acquire your own capital. This is the first step to actually being able to trade in financial markets. Finance pros always recommend distinguishing money that you use for trading from money that you may need in the short term, in order to prevent some distinct budget problems.
Access a broker. In order to start trading, you'll need access to the stock market. Unless you already work for a bank or other institution as an employed trader, you'll need to start by making an agreement with a broker or brokerage firm. Brokerage services get paid commissions for every trade that you make, but that doesn't make it impossible for you to make money.
Set up tools and a trading office. Nearly every trader needs some designated personal space to pursue market trading. If this space is in your home, you may be able to use it as a tax-deductible expense. Traders will also commonly need computers and other tools for looking at stock pricing background and current trends in markets.
Seek out trading employers. When you have enjoyed some practice as a trader with your own funds, you will be able to offer this experience to an employer. Establish connections for possible positions as a trader.
Establish your trading status through tax filing. When you come to your first annual filing after having set up a trading office, the way that you report financial income will help to determine how you are treated as a trader or finance professional. Ask a professional tax preparer about specific rules that relate to trade-related income and how it is taxed.

Tips

Practice with paper trading. Some pros recommend starting out with theoretical paper trades, where the beginning trader does a little experimenting before putting their own capital into the markets. There are some good electronic tools out there to help with paper trading, where instead of actually making a trade, the beginner just postulates a trade and tracks the result.
Go to a good school. Finance industry insiders often point out that employers tend to hire traders from schools like Princeton, Harvard, Yale and other Ivy League institutions. If you're looking at becoming an employed trader, it can help to have this kind of academic connection to the markets.
Think about an MBA. A business degree, according to many experienced finance experts, is not a necessary qualification for becoming a trader, but it can help a lot for those who want to be employed trading equities on Wall Street. The MBA can also come in handy at different times in an individual's career, so consider the eventual benefit of this kind of academic program.

Article provided by wikiHow.

More at PennyStockProphet.com

How to Pick a Quality Stock for Investment

2011-04-24T07:01:00.010+08:00

There are certain characteristics that identify quality stocks for investment purposes. This entry discusses some of the factors that may be used to identify winning stocks.

Steps

A good place to start when looking for a stock to purchase is the list of top percentage gainers for that particular day. These lists are found on USA Today, CNN.Money, and elsewhere.
From this list, emphasize stocks close to or higher than $10/share. Stocks much under $10 are generally of lower quality. Although one can purchase more shares of a lower-priced stock, that doesn't necessarily mean that your chances of a successful investment are greater; in fact they may be reduced with so-called "penny" stocks.
Check the latest quarter earnings report. These are easily found on the Yahoo Finance website. After entering a stock symbol, check for "Headlines" along the left side of the page. Start with current news and go back looking for the most recent earnings report. Insist on revenue growth and earnings growth before committing new funds to an investment.
Review the Morning star.com "5-Yr Restated" financial page. Enter your stock symbol on the Morning star.com website and then look for "financials" along the left side. Click on the tab for "5-Yr Restated" along the top of the graphs. Look for consistent revenue and earnings growth the past 4-5 years. Also look for positive and hopefully growing free cash flow. This is a good indicator of a "healthy" company. Also check the balance sheet. Preferably, there are a lot more assets than liabilities. Particularly cash and other current assets should exceed current liabilities and if possible, be sufficient to cover the long-term liabilities as well.
Look on Yahoo for some "Key Statistics". All things being equal, a p/e that is under 30, a PEG close to 1.0, and a price/sales ratio that is in the middle or lower in a company's industrial grouping is a plus. Check also for the short ratio, if the ratio is high, at least over 3.0, then this means there are a lot of short-sellers probably present, and this may result in a squeeze of short-sellers if the stock price rises and they are scrambling to cover their borrowed shares already sold with newly purchased shares. If the stock pays a dividend as well, that is great!
Look at a chart. Use stockcharts.com
1. Know when to buy a stock. If you have a portfolio, consider an internally generated signal to make a purchase. If you have recently sold a stock at a loss, do not rush to replace it. Rather sit in cash and wait for a proper buying signal.
Know when to sell a stock. Keep losses small no matter how long you may have owned a stock. Sell your winning stocks slowly and piecemeal. Sell your losing stocks quickly and completely. Often that is enough to bias your account in a winning direction!

Tips

Don't trade the headlines. Find quality and stick with it.
Know where you are headed. Without a plan you are driving without a map.
Diversify not only with companies but with asset classes. Do not put all your money in aggressive investment categories. Spread the risk across growth and income (companies that are profitable and pay dividends), growth (companies that are more prone to grow over time due to favorable fundamentals such as market position, products, etc) and a small amount in aggressive as mentioned.
Before investing you might want to try a simulator. It's fun, safe, free, and a good way of finding out if investing in stocks is really what you want to do. investopedia.com has a good simulator.

Warnings

Remember to always consult with a professional investment advisor. I am an amateur investor! But doing your homework and having your own understanding of investments may be very helpful to you.
Remember that consulting with a professional investment adviser will sometimes lead you to a stock which that investment advisor is being paid to push rather than one which is good for your portfolio and your future.
Picking stocks from a list of top percentage gainers and/or from Morning star ratings tend to produce stocks that have at most 3-6 months left in their growth before they go the other direction. This is because the market already value them at their proper levels.

from wikiHow - The How to Manual That You Can Edit

Related site

Secrets of Successful Traders

How to Avoid Investment Trading System Scams

2011-04-24T06:59:00.006+08:00

Everybody, it seems, has an investment trading system these days. There's so much baloney in the trading system marketplace that it makes you want to follow Mark Twain's advice about how to double your money: "fold it over once and put it back in your pocket." How do you separate the few legitimate investment trading systems from the scamsters? Based on research and experience, here are the "Top 11 most common ways to spot trading system scams".

Steps

Think Often, they will start "improving" the system, or stop using it altogether. Especially for beginners it is a big help to gain confidence in the system if there is a winning percentage of 65% or more.
Avoid "hypothetical" trading systems - systems that have only been backtested, never actually traded in the market Insiders, like the proverbial "Them", as in "They say…" This is almost always a sign that nonsense is being peddled.
Know that there are very few secrets. One popular website sells a very costly manual on a technique they claim has "never before been revealed to the public." If you read their marketing hype, you'd think that they regularly rubbed shoulders with the biggest movers and shakers in the market. What they don't bother to mention is the name of one single real person who uses this "powerful, foolproof system for generating consistently high profits in the seven figures annually." Let's face it: if there even was such a thing as a "never before revealed secret system the pros use", why is it being revealed now, to you, by this seller?

Tips

Do your due diligence.
Find a simple, straightforward trading system with a real history of success that doesn’t require you to mortgage the family farm to get started.
Make your trading program yield the wealth-building results you’re looking for instead of pouring your money into the scamsters’ pockets.

from wikiHow - The How to Manual That You Can Edit

Related sites

Secrets of Successful Traders

How to Get Started in the Stock Market

2011-04-24T06:27:00.004+08:00

Some basic guidance from a seasoned investor who is also a financial and investment planner.

Steps

Try to understand why you want to invest. This is the hardest thing - looking at yourself.
Search for an area where you hold some intellectual strength. It is tough enough to make money in the markets at the best of times, so why disadvantage yourself by investing in things that you don't understand? You will have areas of expertise that fund managers don't. Use that advantage if you can. Warren Buffett describes this as his 'circle of competence'.
Do plenty of research. Then do plenty more! There is more valuable information available online than we can possibly imagine.
Learn to think independently. This is the biggest skill you can learn towards becoming a successful investor.
Don't forget about dividends. Studies show that dividends make up most of an investors return over the long term. Find a way to reinvest those dividends for improved returns.
Look for investments, not gambles. Learn to understand the difference.
Consider a long-term perspective on your investment portfolio--start by building cash in your account in a money-market and then by gradually building a portfolio of mutual funds. During this time read as many books and financial magazines as possible and then start slowly with small amounts in individual stocks building a conservative portfolio before venturing into speculative stocks.

Video

Don't hide in a cave when the market is down. Find stocks that will pay off when the bull makes its return.

Tips

The stock exchange is rarely a place where anyone 'gets rich quick'. Sure, some occasional stocks and shares will rise quickly making their owners money, but rarely will you become rich. Bear in mind that if an investment doubles in one year (which is pretty rare) you needed to be already wealthy to make a lot of money. If you invested a thousand, you will have just 'made' a thousand. You aren't wealthy or rich yet.
Investment risk is lowered by knowledge. Every time. If you are buying shares on the stock exchange, what does the seller know that you don't? What do you know that the seller does not? You can bet your life that the buyer or seller opposite you in any transaction has done some serious research. If you don't do yours, who do you think will win? You or the market?
It might help to find areas in which you have useful knowledge already. Either that or decide on an area and slowly become an expert. For example, if you worked in a bank for 10 years, you must know something about banking. When you read an annual report from a bank, do you laugh and see through the waffle or does it make real sense? If you can see through the waffle of some far off CEO and CFO, you can start to compare the relative prospects in the same market of competing firms. Hey - that could be an opportunity!

Warnings

It isn't easy. If everyone could become a billionaire by investing, Warren Buffett would not be famous. It takes time, study and effort and most importantly - independent thought. Not everyone has the will or stamina to carry that through. Who doesn't suffer setbacks and confidence knocks?
Though it may be a 'hobby', it isn't 'fun'. The world of investment is dominated by investment banks and their bankers. They do all the big deals, float companies, issue bonds, trade stocks, bonds, currencies and commodities and make lots of money. They employ some of the world's brightest young MBAs to figure out new and improved profit making ventures. They do all this because it is a business, with real money and real profits. Nobody is playing around.
If you want to be successful, you too need to view it as a business. Here is big tip number one: if you are interested, go and do some reading about Benjamin Graham. Buy his books and digest. It will take a while, but it is the proper place to start. It was Ben Graham that first coined the idea successful investment is businesslike.
If you really want to do well in investment on the stock exchange, then you need to approach it as if it were your own business. A part-time business perhaps, but still a business. That also means taking your information sources seriously. There are many portfolio tracking systems online, some free and others require monthly payment - get registered to one! There are magazines that follow and report on stock markets and shares each week - subscribe to one!

from wikiHow - The How to Manual That You Can EditA

Related pages :

How To Hack the Stock Market!

Exchange-Traded Funds

2011-03-29T12:55:00.002+08:00

A 60-Second Guide

By Motley Fool Staff

The "It" equity -- the exchange-traded mutual fund -- is no spring chicken. It's been around since the early 1990s. But ETFs are still turning heads. It's no wonder: The combination of index investing with the handiness --- and lower costs -- of individual stock ownership is irresistible. Are ETFs a good match for your portfolio? Read on...

0:60 Consult your investing dictionary.

What exactly is an exchange-traded fund (ETF)? "Exchange-traded" refers to shares that trade all day long on
the major stock market exchanges (just like regular stocks). "Funds" are investing vehicles that hold dozens, hundreds, or even thousands of companies under one umbrella unified by a particular investing theme (such as companies that comprise the Dow or ones whose main business is in the biotech industry). Like any other publicly traded company, ETFs have ticker symbols (snappy ones, in fact, like Cubes, Spiders, and Diamonds). But instead of typing "MSFT" to buy Microsoft, for example, you enter "DIA" for the Dow Jones Industrial Trust, or "Diamond" ETF. Do you need diamonds in your portfolio?

0:54 Poke holes in your portfolio.

Do you crave exposure to foreign indexes? Are your holdings a little heavy in large American companies? Do you think biotechnology is a boom industry, but aren't comfortable committing money to one particular company? There are ETFs to represent virtually any segment of the market -- both here and abroad -- nearly any way you slice it. There are ones tracking everything from bonds, REITs, and the utility sector to the pedestrian Fool favorite S&P 500. If that sounds a lot like the index mutual fund market's offerings, it is. For some investors, though, ETFs are a better fit for their investment dollars.

0:47 Get a little Zen.

Time for some soul-searching. Don't worry -- not the touchy-feely kind. Are you a "feet first" kind of investor, or do you prefer to build your portfolio slowly? If you'd like to add an indexing element to your portfolio and are prepared to invest a lump sum, ETFs provide some flexibility you might find useful. Like regular stocks, they can be bought or sold anytime the market is open via your brokerage account. (Traditional index funds, on the other hand, can only be redeemed at the closing price of each day.)
If you plan to dollar-cost average (adding small, systematic amounts to build a portfolio), ETFs aren't ideal. They don't offer direct investment programs, so dollar-cost averaging would rack up trading costs that far outweigh any cost benefit over a traditional index fund. For you, a more efficient route would be a no-load, low-expense index fund.
The mutual fund-ETF face-off isn't over quite yet, Grasshopper. Before you click "buy"...

0:34 Check out the competition.

They may track the same stocks and offer easy diversification -- but subtle differences between index funds and exchange-traded funds can affect your long-term returns:

Taxes: The big buzz about ETFs is their tax efficiency. The big "tax event" for ETF shareholders happens when you sell your shares, hopefully at a profit, after which you'll pay capital gains taxes.
Expense ratios: By construction, ETF investors have less exposure to capital gains taxes than mutual fund shareholders. That's because fund managers frequently buy and sell the fund's holdings -- and ask investors to pick up the tab. ETFs occasionally shift shares, too, although much less than most mutual funds. Annual expenses for ETFs range between 0.1% and 0.65% and are deducted from dividends. Index mutual funds charge anywhere from 0.1% to more than 3%.
Minimum investment requirement: For investors with limited funds (say, less than $1,000) who want to get started in the stock market, ETFs offer a cheap entrée. Through your discount brokerage account, you can buy one single measly share if you choose. In comparison, many index mutual funds have high initial balance requirements. (Those with lower requirements often charge higher fees.)
Ease of use: Here's the double-edged sword of ETF investing. They are easy to buy -- you simply need a discount brokerage account (and that's easy to get -- and cheap). Consequently, they're easy to trade. And trade and trade and trade.

Don't be blinded by love based on low expense ratios and minimum investment requirements. There's still a price to pay to invest in ETFs -- mainly brokerage fees. And there's the rub...

0:19 Keep fees in check.

As a stock, ETFs can be optioned, shorted, hedged, and bundled. We don't like the idea of investors trading in and out of ETFs repeatedly, or going on margin to the hilt to buy them, any more than we do any other stocks. Like traditional index funds, ETFs are best used as a long-term investment tool. The best investing strategies for most investors are the simplest ones -- filling asset allocation gaps and replacing higher-fee mutual funds.
If you want to get fancier than that, ETFs can accommodate more advanced investing tactics (we go into in more detail here). But tread lightly: Don't rack up trading commissions or capital gains taxes by actively trading.

0:08 Do a background check.

And finally, as with any investment, make sure you get what you're paying for: means scrutinizing an ETF's holdings as you would those of any mutual fund before you buy. It's not only individual investors enamored with this newfangled investing vehicle -- the industry's keen on them, too, and getting a little loosey-goosey with labels. So make sure the ETF label matches the underlying securities you want to buy before heading off into the sunset, hand in hand.

Online Stock Trading - Who Else Wants to Finally Get Profits?

2011-03-24T10:09:00.009+08:00

Online stock trading, Blue-Chip style.

Investing in conservative blue chip stocks may not have the allure of a hot high-tech investment, but it can be highly rewarding nonetheless, as good quality stocks have outperformed other investment classes over the long term.

Historically, investing in stocks has generated a return, over time, of between 11 and 15 percent annually depending how aggressive you are. Stocks outperform other investments since they incur more risk. Stock investors are at the bottom of the corporate "food chain." First, companies have to pay their employees and suppliers. Then they pay their bondholders. After this come the preferred shareholders. Companies have an obligation to pay all these stakeholders first, and if there is money leftover it is paid to the stockholders through dividends or retained earnings. Sometimes there is a lot of money left over for stockholders, and in
other cases there isn't. Thus, investing in stocks is risky because investors never know exactly what they are going to receive for their investment.

What are the attractions of blue chip stocks? 1. Great long-term rates of return.

2. Unlike mutual funds, another relatively safe, long term investment category, there are no ongoing fees.

3. You become a owner of a company.

So much for the benefits - what about the risks? 1. Some investors can't tolerate both the risk associated with investing in the stock market and the risk associated with investing in one company. Not all blue chips are created equal.

2. If you don't have the time and skill to identify a good quality company at a fair price don't invest directly. Rather, you should consider a good mutual fund.

Selecting a blue chip company is only part of the battle - determining the appropriate price is the other. Theoretically, the value of a stock is the present value of all future cash flows discounted at the appropriate discount rate. However, like most theoretical answers, this doesn't fully explain reality. In reality supply and demand for a stock sets the stock's daily price, and demand for a stock will increase or decrease depending of the outlook for a company. Thus, stock prices are driven by investor expectations for a company, the more favorable the expectations the better the stock price. In short, the stock market is a voting machine and much of the time it is voting based on investors' fear or greed, not on their rational assessments of value. Stock prices can swing widely in the short-term but they eventually converge to their intrinsic value over the long-term.

Investors should look at good companies with great expectations that are not yet embedded in the price of a stock.

by: Http://www.OnlineTradingCoach.com

About The Author

http://www.OnlineTradingCoach.com Free Master Trader Presentations show you how to turn $10,000 into $100,000 through honest and simple trading methods you can use beginning today.

The author invites you to visit:
http://www.thewallstreetsecret.com

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_15871.shtml