Business

3 Ways to Hold on to Your Trading Profits

February 8, 2011 By admin Leave a Comment

If you’ve been trading for any length of time, you’ve no doubt heard the advice to keep losses small and let profits run. This advice is often difficult to put into practice because sometimes letting a profit run can backfire. Without the right trading strategy, you might find a trade reversing on you, making it impossible to hang on to your profits. Fortunately, there are things you can do to preserve your profits.

Adjust Your Stop Loss to Preserve Profits

One way to protect your profits is to move your stop loss once your trade has become profitable. Placing your stop loss at your entry price will ensure that you will not lose on that trade. You will risk nothing by being in the trade. As the price continues to move in a profitable direction, move your stop loss to preserve your profit. You need to be familiar enough with the stock, currency or commodity that you are trading. Moving your stop loss into profit only makes sense if price is moving with momentum in a profitable direction. Otherwise, you might find a price reversal that takes away your gains.

Trade Only When Rested

One way that traders lose money is when they are fatigued or stressed. You might find yourself profitable for the day only to give back your gains because you are too tired or burned out. Make it a rule to trade only when you are alert, rested and relaxed. It will make a difference in your overall trading success.

Avoid Overtrading

Some traders place too many trades, resulting in giving back profits. The best way to hang on to your profits in this scenario is to place fewer numbers of trades. It requires a great deal of discipline to walk away when you find yourself unable to resist placing yet another trade. This simple act of placing fewer trades can help you preserve your profits.

Filed Under: Free Trade Tagged With: Business, Profit (accounting), Trade, Trading strategy

Understanding Support and Resistance in Trading

February 3, 2011 By admin Leave a Comment

Support and resistance are commonly used words among traders. Whether you use technical analysis or strictly fundamentals when placing trades, understanding support and resistance will make a difference in your trading success.

What is the Meaning of Support in Trading?

At its simplest, support is a term that refers to the bottom of the price point. You may be watching a particular stock and notice that each time the price hits $3, it bounces up. When that bounce occurs repeatedly, it’s an indication that the market believes it’s a profitable time to buy that particular stock.

Defining the Resistance Point in Price

Conversely, resistance refers to where the price has topped out in a particular stock, currency or commodity. That same stock may reach $5 and you observe the price immediately dropping. This is a strong indication that the market considers the stock not worth hanging on to at that price.

Using Support and Resistance as a Trading Strategy

Different traders have different tools for identifying support and resistance on a chart. Some use technical indicators and formulas. Others just eyeball the charts. Using support and resistance as a trading strategy means being mindful of when the price reaches those extreme levels. One trading strategy is to set a price alarm near the support price. As soon as the market moves near that price point, you would buy and place your stop loss directly below the support price. In that case, you would want to leave an adequate cushion so that you are not stopped out by just a few points.

Using resistance as a trading strategy works similarly. You would short the stock or currency as soon as price reaches resistance, placing your stop loss directly above, with enough cushion to avoid being stopped out. Pay attention to overall trends on a higher time frame if you want to trade with the trend.

Filed Under: Free Trade Tagged With: Business, Market trend, Support and resistance, Technical analysis, Trade

How to Turn a Depressed Market Into A Goldmine

February 1, 2011 By admin Leave a Comment

It has been a difficult couple years for anyone in the real estate industry. The economy is struggling, few people are buying and many properties are foreclosing. But due to these economic conditions, now is the time to buy for those with any inkling about real estate and access to capital.

This combination of difficult financial times and a bad real estate market has allowed investors to buy properties at a fraction of the cost of their true value. Much of this is because of the recession. Foreclosures have become a normal occurrence all over the nation. For investors, foreclosure means opportunity. This is especially true if they plan to see the property through the struggling market until it bounces back. Buying foreclosed properties and utilizing them for their cash flow by renting them out is a wise investment for anyone who has the means to do so. Many properties can be leased out for double or triple the monthly mortgage payment attainable by the bank. This allows investors to cover the monthly payment and create a steady revenue stream with the right properties.

However, while there are lucrative investments to be made, real estate properties also have to be properly managed. If you find yourself with an influx of new investment properties and not enough time to properly see to their care, then make sure to choose your property management team wisely. A good Portland property management company cannot be undervalued. They will make sure tenants are taking proper care of the investment according to the lease terms and also make you aware of any small maintenance issues that may arise so you can take care of them before they become big problems.

Many do not see an end to the current depressed real estate market anytime soon. But those with an optimistic outlook and capital to invest see that there are many opportunities for wise investors.

Filed Under: Advice, Stock Market Tagged With: Business, Cash flow, Investment, Property, Real estate

Managing a Trading Business

February 1, 2011 By admin Leave a Comment

Starting your own trading business is an exciting venture. Successfully sustaining a trading business across time requires practicing a few basic principles.

Practicing Money Management Techniques

Seasoned traders typically stay in the markets long-term by exercising discipline and implementing sound money management practices. One giant successful trade does not guarantee a long-term trading business. To sustain your business long-term, you will want a sound money management plan in place. Many traders write out this plan and keep it near their trading desks. You will want to know your risk threshold before entering a trade. Not having such a plan in place can lead to impulsive trading decisions and catastrophic losses.

Creating Balance in Your Trading Life

Having a trading business is like running any other kind of business. When the business is yours, it’s possible to work endlessly without acknowledging that you need a break. Trading can be exciting, but it can also be stressful. Successful management of a trading business entails creating a balanced life. When you schedule regular breaks and vacations, you create a mental space that lends itself well to making sound trading decisions on a daily basis.

Training and Managing Traders

Once you have a successful trading strategy and enough capital to open your own business, you might find yourself wanting to hire traders to increase your profit potential. Although some automated trading systems can be profitable, many traders agree that some degree of human intervention is necessary in successful trading. When hiring new traders, be sure implement a trial period. The only way to gauge a new trader’s performance is to teach him your system and allot a small amount of capital to test his abilities. As he does well trading your system, increase his trading capital. It takes a unique person to trade well, so trust your instincts on hiring new traders.

Filed Under: Free Trade Tagged With: Business, Trade, Trader (finance), Trading strategy

Risk Cutting: As Easy as ABC

January 21, 2011 By admin Leave a Comment

Many people consider themselves experts in a number of given fields. Few of these so-called “experts” actually are experts. Because of this new phenomenon of people thinking they have all the answers, there are a lot of people who are losing their shirts in the market.

The financial world is complex. There are thousands of different theories, trends, and legal terms that accompany a full understanding of this world. The issue is that the world is overpopulated by day traders. These brave men and women have decided to make a living playing the complex stock market every day.

There is no harm in this line of work. There are many that have made a very good living being the smartest guy on the web trading board, but for many, their days as a stock trader is one big risk waiting to blow up in their face. All this worrying is unnecessary when you think of the alternatives.

Getting an education in finance is a great way to circumvent the issue of risk. While there is some inherent risk in the market no matter what it is you are doing, the reality is that with online degrees available, there is much less of a risk. These degree programs will teach the day trader about advanced financial theory. It’s important for those in the finance world to be armed with this knowledge.

Imagine that you are the day trader who is making money hand over fist. Imagine that you have little education. Now, imagine going back to school and earning a degree from home, and having all the knowledge that the gentleman on Wall Street have. It’s that knowledge that will give you the edge on the competition and take you from making good money to great money. Degrees aren’t always about a new job or a diploma. It’s about learning the things necessary to be the best you can at your job.

Filed Under: Advice, Free Trade Tagged With: Business, daytrader, daytrading, Investing, Investor, Stock trader, Stocks and Bonds, Wall Street

Before You Invest…

January 4, 2011 By admin Leave a Comment

In light of the economy making a slow but steady comeback, some people are again turning to Wall Street for investment purposes. While investment has become emotionally easier because of economic progress, it is a mental challenge for many brokers and amateurs alike. Although financial stability encourages investment, higher stock prices and uncertainty often make the process a headache. Is it really worth paying standard price for stock that may be discounted later? What if the economy experiences another loss due to insufficient jobs? What about England and China’s financial stability? Despite all of these questions, Pat Dorsey of Morningstar says it’s time to invest. According to Dorsey, the economy has not made a complete turnaround but the government will continue to stimulate the economy until it is inflated.

While Pat encourages participation in the market, the author does not advise investing in everything that becomes available. In fact, Dorsey suggests a list on businesses worthy of stock purchase. At the top of the list is Health Care REIT, which manages senior living and medical office buildings. According to Dorsey, the company has little debt and occupancy levels are stable; meaning they’re not on the brink of closure.

Another company to leave your money with is Magellan Mindstream Partners LP, an income-producing company involved in energy and other commodity-related fields. In addition to receiving certain tax advantages, the company serves to benefit from inflation because of oil dependency. Even if the world went electric, the company is still a good investment because they focus on energy and not oil drilling.

Abbot Laboratories was also listed as a good company to partner with. Primarily a pharmaceutical company, Abbot laboratories experienced a 23% growth in pharmaceutical sales that placed them just below Johnson & Johnson in the Health and Wellness sector. With the recent progress of the AIDS/HIV pill, there is no telling where an investment in this company could land an individual.

Filed Under: Advice, Finance Tagged With: Business, Investment, Wall Street

Popular Stocks for Those Who Love Animals

December 27, 2010 By admin Leave a Comment

Often when investing many individuals seek to invest in companies that match their interests. For individuals who love pets and animals it can be hard to find companies that are considered animal friendly. There are a couple of different ways to approach this situation. One would be to invest in companies that are focused on providing products and services for animals. Examples of these type of companies would be as follows:

PetSmart (PETM) a retail pet store that is a major supporter of animal rescue which can be found at www.petsmart.com online. VCA Antech (WOOF) owns veterinary clinics and labs throughout the United States while IDEXX Laboratories (IDXX) is a company that makes several of the tests and other products used by veterinarians. Animal Health International (AHII) also is a maker of animal health products used by veterinarians and the public. One of the largest online pet supplies companies to the public is PetMed Express (PETS) and has been doing well in the stock market.

Another way of looking at pet friendly stocks are companies who do not necessarily sell pet supplies, but go out of their way to promote the well being of animals. For example, if you were looking to invest in an airline that was pet friendly Jet Blue (JBLU) would be a good choice. According to Petfinder.com, not only do they allow your small cats or dogs to fly on board with you, “if a pet becomes ill mid-flight, JetBlue will ring the cabin crew to see if there is a veterinarian on board who can treat the pet immediately – showing their dedication to the health of our furry friends”. See Jet Blue’s site at http://jetblue.com/jetpaws/ for more information on their JetPaws program. Also, many companies will list on their website any community involvement programs they support or have created. Do some research and you may find some great pet friendly investments.

Filed Under: Advice, International Markets, Stock Market, World Trade Tagged With: Business, Pet, Recreation, Veterinary medicine

Natural Investing

December 26, 2010 By admin Leave a Comment

Investing in your future can also mean investing in companies that support the environment. Companies that support the environment can be those that sell specific products that are natural. While others may be stores that carry out processes such as recycling or produces goods in an earth friendly manner. One stock that is recommended by the Rainforest Alliance at www.rainforest-alliance.org is Whole Foods Market (WFMI). Whole Foods focuses on the sales of natural and organic products. Some other companies the Rainforest Alliance states produces goods and services in “an economically and environmentally sustainable way” are Bed, Bath and Beyond (BBBY), Books-a-Million (BAMM), Costco (COST), Target (TGT), and Wal-Mart (WMT).

Of course you can also consider stocks in renewable resources. Renewable resources are those that are able to replenish through natural cycles. Such resources would be water, wind, solar energy, and biofuels. Geothermal energy is one resource that is starting to get attention. Some of the well known players in the oil and gas industry are even reaching into the green to diversify. Chevron (CVX)has recently signed with Aragorn Power and Energy Corp for a $300 million geothermal project in the Philippines.

If you plan on investing in a renewable energy company do your research. First learn about what you are investing in and how it is used. If you think that solar power companies are only those that put the solar panels on the roofs of buildings, please take the time to read up on the uses of solar power. Investments should be made on education and not hunches. Whatever your choice in investments in our planet, diversify your portfolio. If you want a environmentally friendly portfolio do your research and you will find that many companies are shifting their focus to natural products, processes, or they may just provide major support for environmental or humane causes.

Filed Under: Advice, Free Trade, International Markets, World Trade Tagged With: Business, Energy, Renewable, Renewable energy, Renewable resource

What is International Trading?

December 24, 2010 By admin Leave a Comment

All individuals experience international trade in one way or another even if you are unaware of the fact. International trade is when countries exchange goods and services. Therefore, when you go to the department store and pick up that item marked Made in China you are experiencing part of international trade. The world is a global market and what affects one country can have a ripple effect on many other countries. Countries trade capital, labor, technology and other resources in the attempt to acquire items they need for items that they can easily produce.

Many countries seek foreign investment to help their economies grow and allow for participation in the global market. As with all aspects of government and finances there are opponents and proponents to global free trade. Global free trade has no restrictions and operates on the idea of supply and demand. The definition of supply and demand according to Investopedia is “if there is a low supply and a high demand, the price will be high. In contrast, the greater the supply and the lower the demand, the lower the price will be”. If you are interested in delving into trading, specifically with foreign exchange, there are elite trading companies such as UFX Markets that will partner you up with experts in the industry.

Also, there are various resources available to learn more about international trade. The US government has the International Trade Administration, which has information on trade topics, data and analysis of various industries, publications for research, and many other resources to learn about international trade. For small business owners the Small Business Association also has information on their site that can help small businesses compete. To find out about the various associations related to international trade you can check out the Federation of International Trade Associations, and explore their links to transportation and logistics, directories, software, and a variety of other information. Therefore, with just a little research and connecting with experts in the industry, one can become well versed on the aspects of international trade.

Filed Under: Advice, Free Trade, World Trade Tagged With: Business, Federation of International Trade Associations, International Business and Trade, International trade, Trade

What are the Various Types of Investments?

December 22, 2010 By admin Leave a Comment

For a beginning investor the world of finance can be frightening. The first question many ask are what types of investment vehicles are out there for the everyday person? Let’s take a basic look at some of the most popular types of investments. These investments are stocks and bonds. First let’s start with stocks.

Stocks come in two types: common and preferred. Both represent a claim of part ownership of a company’s assets and earning. Common stocks allow for dividends and the ability to vote when shareholder’s meetings take place within the company. Preferred stocks do not allow for voting yet they will receive dividends usually at a higher rate than common stock holders. There are different type of shares that can be classified by a company. The stocks represent parts or a shares of a total amount that a company has issued. The New York Stock Exchange has a page entitled Investor Education at www.nyse.com/about/education/1022630233386.html which is a good resource for a beginner information.

The Library of Economics and Liberty at www.econlib.org/library/Enc/Bonds.html states that bonds are “fixed-income financial assets essentially IOUs that promise the holder a specified set of payments. The value of a bond, like the value of any other asset, is the present value of the income stream one expects to receive from holding the bond”. The government is the main source to issue bonds, but corporations and municipal governments may also issue bonds to the public. U.S. Savings bonds are the most popular form of bond sold, but there are other types of bonds such as treasury bills, treasury notes and treasury bonds that individuals can purchase. Maturity rates differ from one type of bond to the next, so it is important that an individual do research in regards to maturity and interest rates.

Which investment type you choose should be decided upon after careful research. Look at your lifestyle and how much risk you are willing to take.

Filed Under: Advice, International Markets, Stock Market, World Trade Tagged With: Bonds, Business, Common stock, Investment