Free Glide

Before you embark upon a journey of trading stocks or futures, and before you make any trades, you MUST determine and establish your risk level. Traders that fail to do this are usually doomed from the start. The fact is that most trading accounts that go bust are because of the failure to determine at what point the trader will cut their losses and move on to the next trade. Rookie traders are particularly prone to do this. They hang on to losing positions hoping that they will turn around - only to watch the price drop even further. Too much thought and effort are expended on the buying decision instead of the selling decision. The sad truth is that it’s the selling decision that will determine your fate as a successful trader. And successful trading is dependent on how long and how well you can protect your account against loss until the big profit comes your way. Setting a risk level for your account and for your trades will provide such protection.

If you’re like everyone else, you’ve got an online trading account and you’re free to move in and out of positions without the input or interruption of a broker. If you’re not doing this, we recommend that you do. So when you buy a position, have you determined where you would to sell it if the price would fall? Many traders only think about the price going up - they never think about what they’ll do if it goes down. You MUST determine this limit BEFORE placing a trade.

We recommend that get out of the position if it drops anywhere from 7% to 10% from where you purchased the stock, option or commodity (or any other market derivative). Yes, it could rebound and take off 100 points after you sale, but it could also drop 100 points and your account would be wiped out. Consider this, if your account drops 50%, then you need a 100% gain to get it back where you were! This is why you MUST place a stop-loss after every trade you place with your broker. Do this without fail IMMEDIATELY after placing a trade with your online broker. Once you’ve placed a stop-loss level with your online broker, the system will automatically sell your position when that level is reached. Remember, stay in the game until you hit that big trade!

Chuck Cox is a Technical Writer and Industrial Scientist by professional with a background in statistics. He has used mathematical and statistical methods to invest and trade in the stock, futures, and options markets. Chuck has owned various businesses and presently operates several websites. To learn more about trading in the markets, visit his website, http://www.earncashathometoday.com/trading-stocks.htm

It seems almost once a week I hear some buffoon stating that “the average return for stocks over the last (fill in the blank) years has been 10%.”

Listen, I don’t care about “average returns.” And neither should you. I’ll explain why through a simple math problem. Add up these positive and negative numbers: -25, +30, +10.

I get +15 as my total answer. The average of the three numbers is +5. Suppose you’re looking at your investments and you learn that these three numbers are what the stock market returned the past three years (it didn’t).

You calculate that the total return should have been 15% for the last three years and +5% is the average annual return the past three years.

Or was it?

Now, let’s apply these numbers to your account. Say you started with $100,000 three years ago.

Let’s do the math:
Year One you lose 25%, you’re down to $75,000.
Year Two you make back 30%, now you’re at $97,500. Still underwater!
Year Three you make another 10%, now you stand at $107,250. You made $7250 in three years.

This actually works out to be an “average” of $2416 per year, or 2.4%…not the 5% advertised.

Maybe the order you earned these returns will matter, you say? OK, try this:
Year One, you make 30%, and $100,000 has grown to $130,000. Great!
Year Two you lose 25% and now $130,000 drops to $97500. Uh-oh.
Year three you make back 10% and you are back at $107250.

Wait, let’s mix the numbers again for one more time!
Year one you make 30% and your $100,000 grows to $130,000.
Year Two you make another 10% and now the account is up to $143,000. Cool.
Year three you give back 25%. The account is now worth $107,250. Bad.

Beware the man touting average returns!

Repeat after me: you can’t eat “average returns.” Average returns do NOT translate into actual dollars in your pocket! Don’t believe average numbers!

This is important: you’re going to NEED this money someday to pay for college expenses, pay for retirement, pay for medical costs, pay for living expenses and on and on. “Average” returns will be of no use to you when you really NEED the money.

We need to do everything in our power to avoid losses. As you can see from the examples above, negative numbers (losses) will destroy more portfolios than most other mistakes investors can make (and they can make some whoppers!). That one year loss of 25% above is a killer, no matter what year it appears in! You can beat the market simply by avoiding the big down years, or minimizing losses in bad years.

That’s EXACTLY why we use a tactical approach of measuring supply and demand when examining your investments. It’s not just important, it is CRITICAL that we’re aware (in real time) what sectors of the market are in demand (where their prices rise) and which areas of the market are experiencing greater supply (where prices fall). Simply staying far away from weak sectors can drastically improve the outlook of your portfolio.

Buy a Photo Album!

We’re also not helping ourselves at all when we make mistakes like hanging onto losing investments (only because someday it MAY come back). Keeping certain stocks for sentimental reasons is another bad idea. Photo albums are for sentimental keepsakes!

Suppose, instead, that the -25% return (loss) for one year was actually a flat year? Where there was no gain or loss at all. How do the numbers shape up now? Pretty well! But let’s be realistic, suppose the year that the market lost 25% …you only lost 10%. The account would look much better than most others in the market at that time!

Minimizing losses will improve the overall picture each month on your statements. Simply waiting for an investment to recover is a bad strategy. Eliminating losing investments from your account will make your statements look better. And you’ll free up cash for other areas of the market that are working. Or when times get rough and we need to be defensive, eliminating a loser is a great way to raise cash.

Thomas Mullooly, President of Mullooly Asset Management, works one on one with individuals so they can regain control of their investments. Tom’s popular email alerts help folks to reduce the risks in their portfolios. To learn how to stop making simple investing mistakes and to sign up for Tom’s email alerts, visit http://www.mullooly.net, today!

Investments are scary for some people, especially those who have never invested before. We grow up hearing horror stories about how this person or that person lost everything they had on some bad investment some odd years ago and it builds in us a fear of investing so profound that it is sometimes easier to get a confirmed agoraphobic to march in the Macy’s Day Parade than it is to get someone to put a few dollars into stocks or mutual funds.

Part of the problem is that people have the wrong idea about how investments should work. We’re always looking for the big score, the quick road to riches, and the quick return investments that will turn ten thousand dollars into ten million dollars overnight. Guess what? These investments don’t exist.

“What about Microsoft?” is the question many will ask here. “What about Ebay and Wal- Mart and Xerox and…” you get the picture. While it’s true there have been some companies that have surprised everyone by becoming quick successes and their stockholders watched with excited eyes and dilated pupils as their portfolios did some colossal growing in short periods of time, these are the exception rather than the rule in investing. Investments should be looked at as long-term money makers and security providers, not a spin of the roulette wheel with a big payoff or a devastating loss.

If you’re investing casually the best thing you could possibly do is find a stable company or mutual funds, put in your money, and forget about it. Those that watch the market reports constantly and suffer heart palpitations every time the company they have invested in drops a few points will either go crazy or wind up losing money by selling company stock at a lower price than they paid for fear that if they don’t get out now, the bottom will drop out, leaving them with worthless stock. Don’t worry. Coca-Cola is not going belly-up anytime soon.

Finance Tips by Mika Hamilton - Read more free investment tips, tutorials & reviews at http://www.Global-Investment-Institute.com

How to (not) DayTrade
So you’d like to earn your living DayTrading?
You have all heard the stories of losing DayTraders running down the streets shooting people?

During the heady .com days prior to 2001, (when Bush became president,) there were stocks, 3 or 4 times a week that went up from 30 to 200% a day.
It was possible, if you knew what you were doing, to check before the market opened to see which stocks were running in real time and why.
And, if you then had a fast electronic brokerage system you could dive into the market, buy a bunch and sell them the same day.

About 1% of people doing this consistently made money.
I saw one private individual make a million in one day shorting Corel. And then there was somebody who lost a bunch hanging on too long to the WWWF IPO.
As a matter of fact the bottom line is that if you take inflation into account you’d have been better off putting your money in an old sock since 2001.
So what to do?

Give up on the Stock Market let alone give up on DayTrading?
Don’t give up on the Stock Market, if you use the right system which is a simple set of formulas you can still make 30% or more on your money annually.
Using this simple system $11,000 left in the market for 17 years would be worth more than one million dollars today.

But it is not DayTrading and you still would need a strong stomach to sit out these 17 years, because some of those years would give you negative returns.
The bottom line is this; if you want to DayTrade there is only one way to do this today.
And that is with MINDBLOWING News.
MINDBLOWING News along the lines of:
XYZ corporation finds cure for cancer. ABC Inc invents Eternal Life Pill DreamCar Corp invents car that runs on water.
You get the idea.

And then I am going to use another qualifier:
You should get this news BEFORE most other people get it.
How to do this:
For about $10 a month you can get a subscription to real-time market news.
Get your Real Time Market News at about 6 AM Eastern Standard Time.
Say you find the real time news that a company has invented a car that runs on water.

Check the time the news was first released, making sure that news item was not available yesterday.
Buy the stock now with money that you can afford to burn ALWAYS USING A STOP LOSS.

Most electronic brokerage firms today allow you to buy stocks on NASDAQ only as early as 6 AM EST.
Sell the stock at 9.28 AM EST to all the traders that are waking up.
You could conceivably double your money.
So would you then trade again in this stock after the market opens officially?
No,I would not.

Too many mindgames will be played by market makers during the first day with the stock that produced the mindblowing news.
Remember the statement above:
“There have been very few days since 2001 that any stocks actually went up more than 30% in one day, the oomph has disappeared from both the Nasdaq and the Dow.”

Never hold the mind blowing news stock overnight, because people in most cases will dump it on the second day.
One more tip:
Never buy IPO’s on the first day.
The most touted IPO(meaning almost all large brokerage houses were praising this IPO to the sky) cost people the most in decreased value on the second day after the IPO came out.

Who were the winners? The brokerage houses.
So, if you have money to burn, have a cast iron stomach and want to watch market news from 6 AM to 9.28 AM EST, DayTrading may be for you.

J Shipper likes DayTrading. Check out these Sites: www.lazytrader.com www.stock-trading-now.info

Property Index have a range of properties for sale in Italy, from villas to apartments.

Even though the Property Index service is seen as a rather young organisation, (they were established in March 2007), they have achieved expert status very quickly. They’re a quite hassle-free organisation focusing on offering their expert guidance to any person proposing to buy real estate across the world. Their pledge is to assist you unearth dead-on what’s called for fast and, moreover, without hassle. Property is up for grabs in most popular areas of the world at the moment, one of the high-class areas being realty on the market in Italy. It’s easy as falling off a log to write up the great properties on the market in Italy, the motive for hunting for property here is properties for sale and the glorious chance to live among such a pulsating, enthusiastic and vigorous populace.

It’s one of the most popular countries at the moment, and with the lovely landscape and wonderful climate surrounding you here, how could you conceivably go wrong. Property in Italy is steeped in history, this region is home to several sophisticated civilizations. Some thirty years back you’d find merely a trickle of Britishers who are looking for properties in Italy. Just ask anyone who has chosen to relocate to Italy and they’ll certainly back this up. Many would insist on seeing it as a negligible fashion and others insist on seeing it as a that’s quite an addiction… Customers keen on migrating to this place may extend from yuppie couples looking for a challenge to older clients looking to rest.

There might be issues when trying to buy properties overseas — you’ll learn that there are a million procedures to follow whether brainstorming, popping in or signing up. If you miss out on one minor procedure this may easily bring about insurmountable issues plus, more important, a financial hammering. As can be presumed with this sought after destination, properties may well be incredibly costly in this destination and that is absolutely a consequence of the expanding demand. This notwithstanding, the customer definitely is spoilt for choice in a location full of cheery environment. Presently it can boast the lot anyone could conceivably crave, and more.

The best way to avoid being hit hard by a stock market crash or another Enron/Worldcom fiasco is to make sure you don’t put all your eggs in one basket. Diversification helps ensure steady growth of your net worth as you accumulate more assets.

This idea is not limited to the stocks in your portfolio, but should include all of the components that make up your net worth. For instance, it’s OK to take $5,000 and put it in a stock you like as long as you have plenty of assets in other areas, such as home or property value, mutual funds, savings, etc…
However, if you’re still in the beginning stages of building wealth, and you only have $500 in savings, and you’re renting an apartment and lease your auto, you probably don’t want to put $5,000 in one stock. A good guideline is to keep from having more than 20% of your net worth in any one asset, unless it’s your home.

Here’s a good example of a diversified net worth portfolio for someone in their 30’s:

Checking account : $2,000
Emergency savings: $5,000
Regular savings: $3,000
CDs or T-Bills: $5,000
Growth stocks: $5,000
Net value of vehicles: $7,500
401(k) plan: $15,000
Equity in home: $20,000
Other Tangible Net Assets: $10,000

Of course, the amounts will be more or less, depending on your age & situation in life.

Also, don’t forget to protect your net worth with some long-term disability and/or life insurance, even if you’re young. Following this simple guideline will hopefully help you reach your retirement goals.

About the author: Scott is in his mid-thirties and has a Bachelor’s Degree in Accounting, with a minor in Decision Science. He entered the accounting field ten years ago, when he started working for a software company, where he stayed seven years. He is now the Inventory Control Manager for a large winery.