Archive for July, 2009


Stock Market Trading Software – Johnny 5 is Alive

Filed Under: Investment Strategy by Bill — Comments Off
July 14, 2009

From the mesh of blue links on the search engine all stock market trading software starts to look pretty much the same. While I’d be weary of those sites promoting 10000% returns a year, the real value of the market trading software can be in understanding HOW they are supposed to work.  By trying out different softwares you can learn different investment strategies.  If you become dependend on the machine how are you supposed to know if it’s doing you the best you can.  You’ll need all that money later in life when you want to cruise the world, again.

As far as I can tell there is 3 major types of trading software:

  1. Technical Analysis Charters - These software packages either take a propietary formula of various factors from volume, price movement, how other related stocks are doing, economic factors, analyst changes, etc to create buy and sell rules.  Then they diplay this information for you to make your own choices about or they automatically buy and sell for you.  The good mechanical investing styles are based on complicated mathatmatics and serious statistics.  Remember expensive doesn’t always mean good.
  2. News Scrapers - I’ve seen some software out there that skims the blogs and news directories, averages out common oppinions and makes reccomendations when the mood changes.  I have absolutely no experience in these types of programs, but I guess they must work on the psychology of mass hysteria. (“Buy Buy Buy”)
  3. Money Management Balancers - The last type I see just do a really good job at working the money mangaement aspects that many investors don’t seem to care about, or at least don’t take the time to learn about because they’re not sexy.  By moving your money around to different buckets of risk the software will manage the risk of your whole portfolio.  Be careful that your portfolio is big enough to start with though or the cost of the software will be larger than the gains from the risk reduction.  You also have to stick with these plans for the long haul to win in the statistics game.

I don’t think there is way of knowing what software will work without just trying them, insist on a money back guarantee or a short trial period, and try to figure out how they work.  There’s a lot of investing software to get through, I probably could make a whole site around just testing software.  Hmmmm.

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Stock Market Info – Varying Levels Of Awesomeness

Filed Under: Stock Pick of the Day by Bill — 1 Comment
July 14, 2009

Everyone gets their inside information or hot tips from varying sources.  However, when it comes to finding the best stock market info your source definitely matters.  Here are 3 sources of stock market information with their pros, cons, and my general thoughts.  Hey if you didn’t want my general thoughts why are you reading my blog?

Stock Market Info Tips:

  1. The Water Cooler Guy – When Fred from accounting tells you about his big score in stock xyz and wants everyone to follow what he’s going to do next in his stock market ventures you better listen, or should you?
    • Pros – The advice is free, if you’re both right you’ll be office heroes and you’ll get quality time with your boss giving his stock tips, and you don’t feel too obligated to follow one way or the other since it’s just Fred.
    • Cons – Office politics may make you feel pressured to follow along, Fred will likely only talk about his stock market wins, not his losses you get a skewed view of his choices.
    • Random Thoughts – If you want to invest in an office setting start a stock market investing club.  That way there is open discussion and time for facts not just boasting, with all the other benefits of the water cooler time.
  2. Investment Newsletter/Publications – From the Wall Street Journal to 1000 a month newsletters which ones are worth it?
    • Pros - Investment newsletters can give you insight that is unique and timely, critical to a good investment plan.  Also, you can learn just by following the thought patterns of the authors.
    • Cons – Too cheap of ones everyone gets the same info, too expensive and the stock market info drains too much of your trading account for you to make any money off of the information.
    • Random Thoughts – Don’t spend more than 1% of your trading portfolio on stock market information of any kind.  I know this is limiting in the beginning, but it will stop you from becoming a stock market tool junkie.
  3. The Internet – Forums, Blogs, and Search Engines – What else do you need?
    • Pros – Generally the price is right, even the exclusive forums aren’t usually more than $20 a month.  Often they have more expensive newsletters or other services tied to them, but you get to check those out on the sites before you buy. 
    • Cons – There is no good way to validate stock market info on the net since it’s not generally peer reviewed.  So you have to take any ideas with a grain of salt.
    • Random Thoughts – Use the Internet for learning how to think like a investor or trader.   Learn to make a trading plan, or how to calculated risk, but don’t just buy what others are buying, learn how to come to the conclusion on your own.
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Buy Stock Market Or Just Wait?

Filed Under: Investment Strategy by Bill — 1 Comment
July 13, 2009

When I first started investing I felt my only choices were to buy stock market indices or hold my money in savings.  The traditional (read: lack of) teaching I received in high school was woefully inadequate as to all of the different options to place your money.

4 Things You Can Do Other Than Buy Stock Market Indices

  1. Short The Market – You can always bet the stock market, or a particular stock will go down.  This is done by first selling a stock you don’t own, then buying the stock back (hopefully at a lower price) to give the share back to the person you took it from.  Bizarre I know, but it’s totally legal and a way to bet against the market.  Be weary though, because a stock can only go down to 0, but can go up forever.
  2. Buy Specific Stock for Dividends - Many people have done well shirking the DOW 30 or SP500 and buying only those stocks with high dividend yields with a track record of increasing their dividends frequently.  These are nice because they create an accountable cash flow and are currently taxed at a reasonable rate of 15% (though I bet this tax rate will go up in the next year or two.)
  3. Buy Or Sell Options - Options are a contract to buy or sell a stock at at given price at some time in the future.  The vast majority of the time options are never exercised (cashed in) so if you sell options that never get used you can make a little side income off of the stocks you already own, and this can be done on an open exchange just like the NYSE or NASDAQ.
  4. Trade Stocks – Other than just buying stocks, you can just trade them.  How is this different?  Well you can set you sell price at the exact same time you set your buy price, when the sell price is crossed most online stock market brokers will make the sale happened.  You had no intent of keeping the stock, you just knew the price was going to increase over the short term.

Learning the stock market will give you the confidence to not just follow the normal (giving your money over to a guy in a suit who’ll do something safe with it and take a piece of the action for it.)  Buying stock market norms may not be good for your retirement.

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Online Stock Market Trading – The Dream

Filed Under: Personal Finance by Bill — Comments Off
July 13, 2009

I get a lot of chances to see what people are searching for when they find http://easylearnstockmarket.com and, unlike my initial expectation of people looking to get rich quick I’ve found many of you are looking to leave your 9 to 5 grind jobs and looking for an oppurtunity that you can provide for your family while still having sometime to enjoy them.  Stock market trading online is one hope for this oppurtunity of freedom, but I think everyone needs to know the tools they are going to require to be successful.

Online Stock Market Trading Requires Knowledge

I suggest you buy some books (get them discounted or used because you’re going to need lots cash too) and learn, learn learn.  The internet is also a great way to find the stock market 101 basics.  If you want to dive deeper you’ll have to find the less heavily marketed books or a great forum or other online community.

Stock Market Trading Requires Discipline

This is an area that I’ve struggled (and lost) in the past.  In order to truely be a great trader you must have the self control to make the proper decisions time and time again no matter what your friends, family, or media is telling you, especially when they are counter-intuitive but match your plan.  I personally reccomend you take something that is hard for you to keep or quit doing and do it.  Be accountable to someone for it, before you start trading.  Then start your new trading career with the knowledge that you can be consistent. 

In fact, I’m going to write 100 articles on this blog in 100 days!  That is my commitment, and I want you all to hold me to it.  I’ve had a hard time staying with this site as I flutter from one thing that interests me to the next, but I feel this site and these readers are important, so this is article 1, 99 more to go.  Please keep me accountable.

Online Stock Market Trading Requires Tools

You’re going to need good tools to win.  You won’t try to landscape your yard with a spoon, please don’t go after the biggest and baddest investors with free google data.  Invest in some good data streams, or choose your online stock broker not just for their discounted trades, but also for the information they feed you.  Read their information as ask yourself it it is relevant or timely?

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