Archive for January, 2010


Investing Simulators Help You Paper Trade Easier

Filed Under: Stock Trading Systems by Ty Coon — Comments Off
January 22, 2010

When I first started my investing learning curve, one of the best things that I found was the ability to paper trade on the internet with stock market investing simulators. These are really cool. What is really great about them is the fact that you can learn the mechanics of choosing stocks, making trades and deciding when to sell your stocks. While it can’t create the real emotion of investing with “real money” — because even if you lose, it’s fake money — you can learn how to set up your investing process while going through the motions of the decisions you’ll need to make.

If you search the internet, you can find a few good ones. A couple that I like are Investopedia and the Virtual Stock Exchange. I kind of like Investopedia a little better because you can private message the other “investors” in the game you choose. While that may not be a huge feature, I kind of prefer it in games I don’t know the other players.

The first thing I would do is start by picking an investment strategy. Decide whether you will be a growth investor or a value investor. Personally, I prefer growth investing over value. Whatever route you go, you can make money in stocks (as well as lose money). The point is that both strategies work. But, what you don’t want to do is flip flop back forth between strategies. Pick one and become an expert at it.

The next thing I would do is start developing a watch list of stocks you might potentially purchase. I found that creating a watch list and narrowing down the number of stocks you need to review down to a handful makes things easier. What stocks go on your watchlist? Well that depends on the strategy you choose.

After you’ve created a list of potential stocks to buy, take the plunge and buy it in your investment simulator. Make notes of the steps you take and create a checklist of the steps you took to arrive at your decisions. Note what works and what doesn’t. Spend as long as you want paper trading. Eventually, you’ve got to invest with real money. In the meantime, if you’d like to try your hand at a game I found on the internet, check out the Poor Man’s Stock Market Investing Challenge.

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Stock Market Investing – Your Guide to Success

Filed Under: Investment Strategy by Bill — Comments Off
January 21, 2010

Each person has his or her own opinion on different matters, from investments to business and from being a novice investor to becoming a skilled and experienced one. However, when it comes to stock market investing, you appear to stand on the same level as others do even if you are just a beginner since you face the same risks and realize the same opportunities in this investment vehicle. The chief rule to become successful when investing your money in the stock market is to be consistent.

You should understand that there is no faultless time for stock trading or investing. If the perfect time exists, it is absolutely today. In actual fact, stock market investing is all about knowing how to analyze stocks and making the right decision about the company’s performance, position as well as its future growth possibilities. Another significant factor to benefit from profitable investing is to become a good decision maker. Keep in mind that a stock broker is only an advisor and should not be considered as a decision maker on your behalf. Assess the present situation and come up with your own decision. This will facilitate better results.

While there are many people who will give you recommendations on what to choose and what steps to take, it is critical to find reliable advice for investors and think about practical reasons on any kind of investment that you desire to place your funds into. Apply your knowledge and skills before you invest in a company.

The time to purchase and sell stocks must be good enough to provide you with greater returns. When you make decisions without logical thinking and reasoning, you are likely to experience heavy losses. To restrict streak of losses, you should set a stop order limit. This is a practical investment strategy in stock market investing that will help you overcome human errors such as being illogical and highly emotional at times. This will also ensure that your shares will be sold at a precise limit before its price plummets.

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ETF’s in Stock Market Investing

Filed Under: Glossary by Bill — Comments Off
January 21, 2010

Exchange Traded Funds (ETF’s) as the name implies are a sort of fund that is traded on the stock market.  Like Mutual Funds they are a grouping of stocks or bonds that try to track the overall return of the combined investment.  Unlike mutual funds however they are traded over a stock market such as the Nasdaq or the Dow and are something to consider when buying stocks yourself. 

Exchange Traded Funds allow an investor to invest in a large number of stocks thereby obtaining some level of diversification in their portfolio.  ETF’s are easy to get into as well as get out of as they are essentially the same as buying and selling any stock.  How long you hold them depends on your investment style or strategy.

Besides diversification there are many other advantages to Exchange Traded Funds when buying stocks, they tend to have lower costs as they are often not managed like mutual funds tend to be.   Unlike some mutual funds ETF’s are very transparent.  They are easily bought and sold at market prices any time during a trading day whereas mutual funds are purchased at the end of the day regardless of when you placed your order.  This also allows the investor to place strike points on their purchases or sales of an ETF.

Like mutual funds there are a wide variety of ETF classifications such as Income ETF’s that try to track the performance of a particular stock market, Commodity ETF’s that track certain commodities such as precious metals or futures.  There are also Bond ETF’s that track a wide array of bonds as well as Currency ETF’s tracking many of the world currencies.

One interesting area of exchange traded funds is inverse investing where the ETF can be used to invest in opposing market trends.  These use derivatives to try to obtain returns that are opposing the market.  For example a Bear market ETF can make gains in a declining market environment.

As with all investing ETF’s come with risk.  It is up to the investor to do his or her own research and decide if exchange traded funds are a worth while investment vehicle for their portfolio.

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Build your own Forex Trading System

Filed Under: Forex by Bill — Comments Off
January 18, 2010

The Forex market is the biggest market on the entire world. Every day billions of dollars are traded between people in order to make money. Big companies make millions of profit in buying and selling futures on the right time. But Forex is not only intended for big companies, people working form their own home are also able to make money with Forex.

It is not easy to make money with Forex online option trading, just like it will never be easy in any way to earn a lot of money. Understanding the Forex market is a true skill which one can only master by practicing and learning. Luckily there are many great websites that will explain you the basics of Forex. Babypips.com is one of those examples. They will explain all indicators that are important to understand Forex.

On contrary what most people think, Forex is not the same as gambling in any way. You need to know a lot about all the important financial things that are happening in the world and you need to understand math. Every professional Forex trader has build his own system out of a set of indicators that will guide him through the process of buying and selling futures.

In order to build your own Forex system, you first need to understand what all the indicators are, what they do and when you use them. Obviously a trader that aims at long trades uses a different system compared to a trader that aims at short term trades. You have to decide for yourself which one you are and than choose a set of indicators that will help you.

Choosing them is not an easy thing to do. In order to know if your system works you have to try it out first. If you would try every system that you build on the real market you would lose a lot of money. That is why there is something that is called paper trading. Here you can test your system against the real market only with fake money. Try your system for at least 2 months and see if it brings you any profits. If it doesn’t than you have to build another system. If it does, than you are ready for trading with real money.

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