Archives 2020

Stock 101: Diversify Your Stock Portfolio

Any for stock 101 guide will tell you that diversifying your stock investing portfolio is a very important step for you to be a successful investor. Everybody knows why they invest in the stock market, to grow money. However, this notion is only 50% of being a good investor. The other part is controlling risks that the stock market brings that can take away your money. And many, whether they are beginner stock investors or not, don?t have the right stock knowledge to properly follow this rule.

If you?re reading this article, you probably have some experience with the stock market. And if you do have any experience what-so-ever, whether you?re a beginner stock investor or not, you know that diversifying your portfolio is a rule that should be followed. Every investing guide teaches us this common stock knowledge and continuously imprints the importance of it in our heads. Its stock 101 because it?s one of the first things you learn to be a good stock market investor. Yet so many investors don?t realize the importance of stock diversification.

Sector risk is the largest and most hazardous risk in the stock market. It?s stock 101 to know that the stock market is always impacted by sector risk. If you?re a beginner stock investor and don?t know what sector risk is, I?ll attempt to explain it here to give you this important stock knowledge. Each sector moves independently from each other. Therefore, when one sector is up, another is down. Therefore, if you?re able to control this risk, you?ve taken a huge step in being a successful beginner stock investor.

With so many different investing strategies out there, diversification is the only real stock 101 idea that works for all investors. It doesn?t matter if you?re a beginner stock investor or an experienced hedge fund investor, diversification is a must. Many investors don?t have the stock knowledge to realize the many different declines we have in the market. Each sector goes through at least one drop per year so if you were to buy two stocks in the same sector, you would get a double hit during the year. Why take this beating? Do what stock 101 guides tell us, diversify your portfolio and you won?t get affected by these big downfalls in the market.

It?s funny. Like I said above, diversification is stock 101. However, I continuously see investors put together portfolios that aren?t close. They think they are but owning two healthcares or two tech stocks in the same portfolio is definitely not being diversified. If you think diversification is an easy stock knowledge concept to understand, you?re wrong. And I know because I keep on seeing improper diversification time and time again.

Usually, the problem is that they don?t have the right stock knowledge to determine what industries fall in what sectors which results in them buying stocks in the same sector. And this mistake just doesn?t happen to beginner stock investors, you wouldn?t believe the amount of times I?ve seen improper diversification from investors that have been investing in the market for decades. Even though diversifying your portfolio seems like stock 101, it can be difficult to fully diversify properly so learn the stock knowledge to proper diversification.

If you found this stock 101 rule helpful and wish to learn more about beginner stock investing, please visit my website. You?ll find valuable stock knowledge on my website including stock investing advice, rules and tips that I?ve learned from my 20 years investing in the market. Click here for a stock 101 guide.

Golden rules of money management that you must learn

Everyone thinks money management is not necessary. To them taking the trades in the future market is more like testing the luck. But this is not all true. If you want to sustain in the investment arena, you must learn the role of money management. Money management is the most important factor that allow you to take trades with low risk. When you take the trades in an organized way, you learn to trade with low risk. This gives you the unique opportunity to lose more trade and it eventually boosts up the profit. As a naïve trader in Singapore, you might not know the golden rules of money management. Even if you know, you should read this article as it will weld your knowledge. Let’s see the golden rules of money management.

Trade with a 1% risk

The 1% rule of money management is one of the most famous rules for rookies. People who are trading for a long period, always encourage trade with a 1% risk. Those who have big capital often risk less than 1% of their account balance. The reason to choose 1% of the account balance is to ensure the safety of the capital. You can easily lose trade without thinking about the potential outcome. When you take the trades in a conservative manner, you get the chance to overcome the obstacles. It allows you to improve your skills and eventually it boost up the profit potential.

Chose a great broker

To protect the capital, you must trade with a great broker. The reason to choose a great broker is the safety of the fund. Check here and you will notice that Saxo is well advanced and regulated to offer financial service. When you chose Saxo as your main broker, you get the unique chance to improve your skills with the help of their advanced tools. Most importantly, you don’t have to worry about the quality of the trading platform. With the help of SaxoTraderPro, you can take high-quality trades most of the time. People who take the trade with the unregulated broker always lose money as they don’t know how to deal with the advanced tools. So, find a great broker who offers premium service.

Trade with the major trend

Trading with the major trend is by far the most efficient method of trading. People who are taking the trades for long period knows the importance of trend trading strategy. As you learn the method of trend trading strategy, you will slowly develop the skills to manage the winning trades. Most of the time, the rookies are losing money as they are betting against the major trend. You can’t survive by taking decisions against this vast market. Future trading is very hard but if you favor the trend, it will be an easy task. So, learn to find the trend in the future market so that you don’t have to struggle.

Develop your skills

Developing your trading skills is a part of the money management policy. You have to improve your skills on a daily basis. Find the losing orders and try to fix the faults. By fixing the faults, you are actually improving your trading strategy. Keep on doing this and this should give you the ultimate freedom to take the trades in the professional environment. Within a few months, you will get the perfect trading and edge. When you have a well-balanced trading strategy, it won’t be hard to find the potential trade setup. So, focus on your skills.

Conclusion

Becoming the best trader in the future market is just a matter of time. Follow the tips of this article and you should find a great level of ease in your trading profession. When you feel emotional take a small break. But never take any decision with biased analysis. Trade what you see in the chart.

Hot Penny Stocks Investments

Theoretically speaking definition of penny stocks varies. They are also known as microcap stocks. It a fund that is named based on the market capitalization of the company and value of the shareholder. As per the U.S. Securities and Exchange Commission, this action is also called because its share price is below $5. There are many investors that believes that penny stocks are the one having share price below $1.

If you have an interest in this market and want to invest in this then first of all you should be clear with the difference between penny stocks and other types of stocks. As we know that the performance of large and mid-range stocks are considered as a first position and they are also known as foundation of this industry. Some people believe that performance of these stocks is always at first. If you thoroughly look at the around 100 penny stocks then you can surely see that two or three of them has generated good return of investment.

There are some problems associated with penny stocks. Some of the investors are interested in investing in such stocks and they also believes that some of the blue chips were also penny in past. In fact, share prices of these stocks are been never traded for pennies. If you thoroughly investigate the fact then you will surely come to know that prices of such stocks are splits. Many people are not known to these facts.

There are many stocks in these market are traded on pink sheets. They are even not scrutinized by SEC. It will be surely difficult to get proper information about such stocks. Even they are not having proper liquidity. This means that for investors it will surely become difficult to buy them or sell them. This lack of liquidity means it also helps fraud investors. They can easily manipulate these items. Even SEC has also stated in one of the statements that one should be aware that hot penny picks can lose all the investments of yours.

Small picks in this market are generally traded on OTC and they have good chances of getting excluded because of lack of compliance. If any company is not able to list the shares in the stock then it is proved that investors will surely lose all of their investments. You can surely and seriously consider this fact incase if you are planning to play for long in this market.

Some of the new comers in this market are always being attracted with cheaper penny stocks. They have very low price and it is also seen that they might have possibility to gain good amount. We have seen many situations in past where penny stocks go up to 1000% growth and suddenly come down. There were many situations where penny stocks lose their complete values. If you are new to this market then you should be clear with all the risks that you might face. If you are still interested in investing in this market, than just simply ignore the theories that you might read about such stocks in past.

Fools Of Prophecy

I am not a religious person, but some wisdom can be found in the bible. One of them is the concept that prophecy is for the fools. You see it almost everyday when it comes to investing: "War is unavoidable" someone says. "Oil prices will continue to rise" says another. History is full of managers (and for that manner policy makers) who took risks when the unexpected happened. But yet, all the clues to what was about to happen were looked backed in hindsight.

In his excellent book, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, Taleb talks about the concept of a black swan. Black swan is an unpredictable event that defies prediction.

The disturbing property of a black swan is that it's unexpectedness creates the conditions for it to occur in the first place. That happens because of the simple fact that if you would expect such a catastrophic event as 9/11, you would do everything to avoid it. Even the old parable "expect the unexpected" won't do any good. If you expect it, it is no longer unexpected.

Another disturbing element, is what is called the "hindsight bias". This means that looking back, you rationalize every event that happened as likely to have occurred. On hindsight, it was obvious company A would collapse and you'd lose all your shares. Why you didn't sell your stocks before? Maybe you'd attribute that to unfortunate luck or lack of skills or intelligence on your behalf or both. The problem is that we get a false sense of security in our ability to predict events.

If you'd look back in history, you'd notice that most of the greatest revolutions of mankind were not predicted. Who would have predicted the internet revolution? Who would have predicted 9/11? The "hindsight bias" mentioned before would lead you to believe those were logic steps in our progress.

Here is something that most people in the finance industry don't talk about and you should know: Analysts, paid to give recommendations of whether a certain stock is a good buy or sell, have in a certain way predict the future. It's always nice looking back at their predictions and analyzing their success rate (their prediction against what actually happened) to discover some disturbing facts.

What do you think is their actual success rate? 80% ? 70%? what is a good success rate anyway? I'd say if you are willing to accept analysts' predictions, you'd expect to get more than 50%. After all 50% means that you could match their performance by tossing a coin and deciding upon that whether the market would rise or fall.

You'd be surprised to know that on average, the analyst has no better shot at predicting what would happen in the stock market more than you by flipping a coin. This is not something that happened only this year. It happened in the past and would probably continue to happen as people still struggle to be fooled by prophecy.

Learning to Win in The Stock Market

Protect your trading capital

The most important rule when trading stocks, or anything else, is to always cut your losses short. You are simply not going to be right on every trade you initiate. This is a hard lesson to learn, because it goes against human nature. If you don't keep every loss small, sooner or later, you will suffer some very large losses. Not only will they be devastating to your trading capital, but your psychological capital as well. A sound principle is to always sell a stock if it drops 10% below the purchase price. If you bought shares at 40 dollars, you would automatically sell them at 36 dollars, no matter what. Many elite traders will sell sooner. You can make a fortune in the stock market being right only half the time, but you must keep all losses small. This is a key element you must learn for stock market success.

Methods of analyzing a stock

Basically, there are two major ways to analyze a stock, fundamental analysis, and technical analysis. Traders have debated for a long time, the merits of each method. I have found the key is to properly incorporate both methods. This will help put the odds solidly in your favor. Successful trading is based on probabilities, and sound money management. You want to put as many factors as possible in your favor, before taking a position in the market.

Fundamental analysis

Fundamental analysis is about using real data, such as sales numbers, to evaluate a stock. This analysis is the foundation you need when acquiring a stock. It tells you about the quality of a stock. One of the most important factors is consistent earnings improvement. This is the fuel that can really affect the price of a stock. You want stocks with an annual earnings per share growth rate of 30% or more. Learning how to properly analyze a stock's fundamentals is crucial to winning in the stock market.

Technical analysis

Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity. This includes price and volume. Basically, you are studying market movement, mostly with the use of charts. This allows you to check the supply and demand for a stock. I use daily charts for timing purposes, and weekly charts for a longer term perspective. A key part of technical analysis is learning to identify historically proven price patterns. This will dramatically improve your stock market results.

In conclusion

After you determine the general market is in an uptrend, the key to big profits is picking superior stocks. Choose stocks with strong earnings and sales growth. Look for stocks in leading industry groups. Make sure stocks have formed sound price patterns, and break through key resistance with heavy volume. Once you properly learn the stock market, you could make yourself a fortune.

Some of the Things You Need to Know Before Investing in Cryptocurrency

Advancement in technology has been at the forefront of changing how we do things. Digital currencies have been the topic for a long time now. It is incredible how far cryptocurrency has come. Many people have made a fortune dealing with digital currencies while some have lost a significant sum of cash. Many who have ended up making a lot of money in life at some point had to take risks. Risk is present before succeeding many things, but this does not mean that you don't have to be cautious. Going into the cryptocurrency trade or investing in digital currency without knowing what you are getting into is not advised. Here is what you need to know about cryptocurrency before investing in it.

It Isn’t Just Bitcoin

When people hear about cryptocurrency, what usually comes to mind is Bitcoin. It is, however, fair to state that Bitcoin has made a name for itself. It is one of the most famous digital currencies out there. The value of Bitcoin skyrocketed over a short period, and as a result, many people gained a lot of cash. When deciding to invest in digital currency, it is rather crucial to know that there are other types of cryptocurrencies. Though Bitcoin is famous, it is critical to consider investing in other currencies that offer what Bitcoin can. Considering all the available options will be wise and will help you choose what suits your wants. There are many cryptocurrencies you can invest in, and you can now easily exchange digital currency for cash through the NakitCoins homepage. Though Bitcoin may have the highest value among the digital currencies, there are various other interesting cryptocurrencies.

More is Yet to Come

When investing in cryptocurrency it is important to note that more is still to come. Digital currency was made possible by advancements in technology, and as we all know, technology keeps progressing. It is fair to state that cryptocurrency is still a new phenomenon. More is still to be made possible. Considering what it has done since its launch, you will have to agree that it has a lot of potential benefits. For the few years that people have used cryptocurrencies, many have benefited in ways that they could not before its introduction. 

The blockchain technology used by digital currency has completely changed how business transactions are being conducted. Many business operations are now running more effectively as a result of digital currency. People can now conduct various businesses despite where there are located. Looking at what it has to offer, investing in a cryptocurrency may prove beneficial as time progresses. Knowing that more benefits are yet to come makes it even better for an investor.

Conclusion

Investing in cryptocurrency is not for the faint-hearted. You have to be willing to take risks to benefit. It is important to always be careful since more is still to be known. Doing your research and asking for advice from professionals is essential before investing a large sum.

A Proper Trading Education Can Make You Wealthy

Complexity can lead to trading failure

Trading is a difficult endeavor, when it comes to long-term success. There are many factors and reasons why most traders and investors ultimately lose. Here is one generally over-looked reason for failure. Many traders and investors falsely believe, the more complicated a trading plan is, the more successful it will be. This is not true at all. In fact, pretty much the opposite is true. Trying to make trading decisions based on dozens of indicators, and tons of information, is a recipe for trading disaster. It has nothing to do with a solid trading education.

Try to keep things simple

Keeping everything relatively simple is a big plus. This certainly does not mean it is easy to be successful. Let's start out with some seemingly simple rules, that have been proven successful over many decades. The golden rule of trading states to let your profits run, and cut your losses short. Another simple, but yet very effective rule, is to go with the trend. These rules seem simple enough, and they are proven successful. Yet, many traders and investors break these rules quite often. This is true, even when they know better. So the question is, why does this happen? Understanding this is a key to your trading education.

The most important factor

The foundation of a good, solid trading education should be based on rules proven successful over many decades. Two great examples, are the ones I shared with you in the previous paragraph. But why do traders and investors have so much trouble following simple, proven rules? The problem lies not with the rules, but within ourselves. The psychological part of trading is the true key to great success. Human emotions such as fear, greed, and hope can not be part of your trading equation, if you want to become an elite trader who makes fortunes. Fear probably causes over 75% of all trading mistakes. Understanding, and then implementing, proper trading psychology is the most important part of your trading education.

How you think will decide your trading fate

The market gives us very clear directions as to what course of action to take. The big enemy in trading is emotion. It clouds our thinking. You can not be objective when emotions take over. As an example, traders will get out a position as soon as they make a small profit. They allow fear to take over. The fear of the market turning against them, even though all indications point to the market moving in their favor. To make a lot of money, it is imperative to let your winners run. This is one of the main rules of successful trading.

The world's best traders and investors can put on a trade without any hesitation or worry, and just as easy, admit the trade isn't working, and exit with a small loss. They are not afraid, but at the same time, not reckless. This is what the psychology of trading is all about. You must always remember that each trade has an uncertain outcome. Winning at anything in life is mostly a function of your attitude, especially as a trader in the markets.

In summary

To become a top trader or investor, you will need to have a proven trading plan, practice sound money management, understand and implement proper trading psychology. The learning curve is steep, and it will take a few years of proper trading education to put everything together, and get the results you want. An important part of your learning process is to study the world's best traders, past and present ones. Learn their strategies, methods, and principles. These are the people who have already made fortunes in the world of trading. This includes William J. O'Neil, Jesse Livermore, Bernard Baruch, Gerald M. Loeb, W.D. Gann, Michael W. Covel, and others. You can make a fortune with the proper trading education.

How To Navigate The Dangerous Rapids Of Stock Trading

Stock Trading and Investing during the last 10 years have manifested in considerable losses to Investors. All of the key Indices collapsed in the decade from 2000 to 2010. That period is indeed currently referred to as the lost Decade for Investors.

Many Traders on the other hand, earned money. While Investors rely on Fundamental Analysis, Traders depend on Technical Analysis.

The sustained and unbroken commitment of this effort is to assist where ever I am able to guide visitors to this site regarding Trading and Investing. These pages will dispense stock trading information, advice and education for beginners along with hardened investors and traders.

If you are a newbie investor or trader, this is a requisite read. Also, seasoned Traders and Investors will realize its benefit.

In your strategy and your trading activities you want to Keep it Uncomplicated, Stable as well as Repeatable. These pages will seek to constantly prod and guide you towards this simple, nonetheless crucially vital tenet.

All the way through, I will attempt to supply stock trading ideas plus clarify and simplify what I believe are several of the most essential doctrines of successful trading and investing. Subjects discussed will involve:
What is necessary to begin your investing and trading pursuit. You have got to have a plan. Of course it is the single most worthy thing that you do. No, you cannot circumvent it! If you don't have a plan, you will not be a success. Period!

I resolve to show you how to Plan Your Strategy based on your risk profile and grit and help you Build Your Investment Plan from scratch. We desire to set up a stock trading system that is Simple, Steady and Duplicatable. Finding Potential Trade Possibilities By means of Simple Technical Analysis. It does not matter whether the market is moving up or down.
Technical Analysis cannot prophesy peaks and troughs. In spite of this, it is great at identifying changes in direction and trends. Much money could be made identifying trends and reversals.
Discovering opportunities in the Commodities or Futures Markets without dealing in them directly but in Commodities ETF'S. This permits you to participate, in the volatile and vicious happenings in those markets whilst allowing you to skillfully control your risk. Top 10 Pitfalls of Trading stocks. Be prepared to do your own research and not rely on tips and suggestions from other people.
Causes for the 2008 -2009 Recession along with the Consequences. Has the condition been crushed ?. If so, now what happens to the patient which is the economy? As a result of the after effects, where can the best opportunities be present?
Find out Simple Stock Trading Fundamentals

In trading and investing, the only allegiance or fidelity you possess is to your plan as well as your success - not concerning a individual stock or position. No emotional connection ought to be placed on any specific stock or position.
One of the open stock trading secrets is discipline. There must be a determined, tenacious and forbidding devotion to your strategy and your purpose.

Although this can sometimes be challenging to accomplish, it must be done to ensure victory. Be fiercely true to the adherence of your strategy and be all set to undo the stance if there is any violation of the specification you establish for any stock or security.

However, you must have a plan as well as a strategy. If you do not have a plan you will not be successful. Period! You want to know what to purchase, at what time to buy and when to sell.

For Information On How To Actually Devise Your Trading Strategy, Go To Investing Strategy

The author, Winston, has extensive knowledge and proficiency in the Financial Markets. He started trading in the Commodities Market since the mid 1990's and has since become very active in the Stock Market.

He has many interests and has indulged himself in a multiplicity of sectors but his true and enduring love is in dealing in the Financial Markets.

As an undergraduate in College, he tutored in the Academic Foundation of his University. While Winston was still in Graduate School, he left to start his first business. Since then he has been involved in many different businesses and interests.

Winston Duke has been a participant in the stock market for many years. He is also the creator and author of several web sites including

Though his interests are many and varied, and he has indulged himself in a multiplicity of sectors, his true and enduring love is in dealing in the Financial Markets.

Listed below are some of the highlights of his life?s journey.

Making The Way For The Charity Through Stock Donations

It always goes out as a nice impression when you are doing charity which of course you can do in a lot many ways. Long had gone the time when people used to donate in cash and materials only. Now there are even more options available for making the donations. And these little acts of kindness work good in your way as well. You get various tax benefits which can be imperative for your business or work.

But making the decision to donate your stocks is something that you require to do a good research on. First, you need to know that what the current standard of the stocks held by you is? You cannot make the stock donations of the stocks that are in your possession just less than a year. This means that you must have the ownership of the stocks for more than a year or so. This works well in your way as you can reap the tax benefits out of the kind act.

The second thing that you need to take into the consideration is getting a good list of all the good charities or which are also known as the non-profit organizations. These must be the ones that interest your kind of ideology. You will surely not like to donate your precious stocks to someone that does not interest you or someone that is not doing the work that like that much. Though charity is considered to be good always but they are also bound by the religion factors. So once you have defined the kind of charity to look for and then come the third step.

In the third step you need to find out the charities that accept the stock donations. To validate these criteria, the charity or the non-profit organization must have a brokerage account. A brokerage account is the testimony of good charity that will use your stocks for a good decent purpose.

Next, you meet your own broker and tell him about that stock donation you need to carry out. They will require few details and signatures from your side so as to make the stock donation process work. They will also need the brokerage account and account name of the charity organization. The proceedings and final donation will take few business days to complete duly. After you have done everything you can remember to save all the documents which play role at the time of filing the tax returns.

Charts For Trading

Chart selection is one of the most common task a trader novice faces when he/she starts considering trading. Majority of traders who base their decision on the results of technical analysis use charts to monitor and analyze a traded security. So, what are the main criterias that should be considering when it comes to the section of a chart provider?

To answer this question, first of all, a trader has to define his/her own trading preferences. For long-term trading there is no need to subscribe for advanced charting software. There is no need to use real- time streaming intraday charts for making a long-term decision. As a rule, daily charts should be OK for this purpose. There are plenty of free online resources that allow you to analyze majority of technical indicators on daily and delayed time-frames. Plus, if you are using online trading, your online broker should have some charts available. Of course if you base your trading on some complicated and unique technical analysis (like advance/decline data, Fibonacci numbers, etc) then, of course, you may need to consider additional sources of charting solutions.

On the other hand, if you are an intraday trader or even trade commodities, then of course, you may require streaming or real-time charts with wide range of technical indicators. While majority of online brokers have streaming charts and quotes, many of the broker's charting solutions are quite poor in selection of technical indicators, drawing ability, setting alerts, etc. In this case following criteria could be recommended to consider:

1. Are the charts updated in real-time (streaming)?
2. Is there a wide selection of technical indicators? Many providers focus only on price based technical indicators, so, it is recommended to check if in addition to the price based technical studies, there are various volume based technical indicators, breadth indicators and indicators to analyze volatility.
3. Is there is ability to make notes and do drawing on charts? Could your notes and drawing be saved for later references?
4. Can charts be scroll back in history? Will be your saved notes displayed when you browse the history?
5. Can you save different chart styles instead of setting a chart each time you open it?
6. Can you set any type of alerts on chart (sound- or email-alerts)?
7. Is there need to purchase, download and install any additional software and you have to drag your computer everywhere you go, or this is java based charting solution and you may see them on any computer in any place in the world?
8. Is there any mobile devices that allow you to see the charts?
9. Is there any tutorial on technical analysis, indicators and studies on a chart provider?s website?

There could be plenty of other questions. However, from my personal experience, it is simply recommended to write an email to customer support with a question related to technical analysis or building a trading system. Depending on an answer you will see how qualified and willing to help you customer support personal is. Believe me, you do not want to stuck with unfriendly service.