Money in the stock market
Money can come and go very easily at the stock market.Take the following stock market chart for example with mentioned DryShips, Inc.(NASDAQ:DRYS) stock.Yes the shipping industry has financial problems for many years but this stock activity is very strange.A spike in volume and price could make a lot of money but recently the stock has lost almost 88% of this high price of about $100 per share.This is not investing,it is gambling.And money can come and go very quickly.To make money in the stock market you need a solid investing and risk management plan.This speculative move did not last long,but could have made a lot of money in a very short time if someone could jump early in the rally.
Money and finance
Why do forecasts fail and how to make money with it?
It is rather simple, you cannot predict any event with 100% accuracy.If we could we would all have tons of money from investing or trading the financial markets.Recent US election result proved it.
What is also interesting is the speed and urge of money.How much money is really enough?
The capital and financial markets reacted with a lot of volatility this first day of US election result.A lot of money was made and lost as volatility is bot good and bad for sound money management.
Online trading and money making expectations are too important
If you trade online to make money online then do you have expectations?A plan when to take your profits and make money or when to cut losses and just lose money?Watching the capital markets and financial markets online to set up trades daily is both challenging and difficult.You get tired watching the screen,unless you know what to look for.The trade that will bring you closer to your financial and investing goals.For the day.Tomorrow is another whole different day for the capital markets and your new money making goals and desires.
Money and financial markets online trading
There are no stupid trades, trading is risky with no guarantees of success and profits.Simplicity in online trading is one of the most effective financial advice that a trader, financial analyst can apply.A daily trading plan need not be too complicated to confront financial markets opportunities
There are many steps to a daily trading plan. But simplicity is one of the best advice to apply in online trading. Here are 5 steps that I personally apply to my trading and financial analysis for stock market and forex market.
1.Read latest fundamental and economic news, and daily calendar with news releases that may cause volatility and significant price action.
2.Form your own objective view based on your analysis and arguments about what side of the market will you open any positions, long and bullish or short and bearish. Be an independent thinker.
3.Set up your trades with well-established levels of profit, loss and open or close positions if they meet any of your risk/reward criteria. If not any good trade setups appear it is ok to pass on and do not trade at all.
4.Have a positive mood and state of mind, affirmations can help a lot on that, think of success only.
5. Apply your risk management plan and review at the end of day your performance appraisal and attribution. Even if you made a loss as long as it was within your defined risks limits and not an excessive one, it is not a failure.
Finally remember that stock market and forex market are both risky and to make money consistency is very important as great risk management is also. One month of great profitability is not enough to make you a great trader, financial analyst or portfolio manager. Same rule applies to a month of losses. It is the long run performance that matters in online trading, and statistics are not always indicative of whole truth.
Avoiding large drawdowns in returns is both challenging and tough to achieve. But at the end numbers only matter, and effort or time spent plus stress that was felt to achieve those numbers are ignored.
Have a daily positive attitude for facing the financial markets, each day is almost unique, this makes them exciting and do not set boundaries, then just apply your trading plan and be satisfied and happy you approached trading as an investment professional.
Money and real estate
Real estate can be a making money business or a very risky venture.There are no guarantees that investing in real estate will make money.Risk and capital invested are very big.But there are always new financial or investing ideas.What if you could make money with your home and invest it in another financial market?
For now this financial idea needs a lot of due diligence.Ideas are mainly free,results in terms of profits are not.Diversification is always a good thing in investing.But what if this idea is just another investment that is not suitable for everyone?Do not get carried away,make your own investment policy statement.Or with the help of a financial professional.
Money and trading contests
Contests for traders and money are available regularly from many sources.Forex brokers often offer such trading contests.Their goal is to attract participants and gain online exposure and free publicity.The gain for any trader is experience and knowledge.Even if competition is tough and winners are only a few,trading in a contest can teach valuable financial lessons.But treat capital like real money.Just because in most cases you trade a demo account risk management rules should not be ignored.
Only gains and not just in money terms exist from such trading contests.And if you win then you can add this achievement to your trading career and goals.
Money and investing
Money and bonuses.An interesting connection.Good performance in investing and trading often brings more money as a bonus.Bonus payments are acting as an incentive and a reward if actual investing performance is better than a benchmark.But there is always the danger of excessive risk.Some guidance must always apply as to risk taken to preserve capital.
Fees and money bonuses need close examination.But there is nothing wrong when good returns are achieved with modest risk taken bonuses to be paid.It is a winning financial decision both for investors and fund managers.
Money and finance
What is the worst scenario about money and personal finance?The possibility of creating wealth,a lot of capital and high income.And then one day or gradually over time lose it all.It can happen if you have a business or have invested money and capital without having diversification.It is an unpleasant scenario.And sometimes nothing can prevent it from happening.So financial planning and putting a fund for emergency reserves is vital.Money comes and goes and we want to to control the rate of spending it.
What is one of the most important trading and investing features you must focus on?
Some may say it is profitability.It is correct.Some may say it is winning.Also correct.But there is also another feature often neglected.It is a statistical ratio and although statistics do not tell always the whole truth this ratio does all the time.
The statistical ratio we refer to is the win to loss ratio.It does not matter what is the winning ratio.It would be great to have a 100% win ratio but it is not a logical one.What is important is a ratio that will help consistency and profitability over time.There is a very simple rule.Win more than you lose each time to grow your trading account and capital.
With that said a minimum 1:1 risk reward ratio should be the minimum one to consider placing any trade.The higher risk/reward ratio the better and there is no golden rule what is the best ratio.But we mainly like a 1:2 risk/reward ratio meaning you risk for example $500 to win $1000.With this ratio you can be profitable even if you lose almost 55 to 60 percent of your trades.
Having in mind that trading often does not mean profitability always then a focus on quality and well researched trades is vital.Should you skip a trade with a risk/reward less than 1/2?Not always.It depends on your trading style and risk aversion.But the ultimate trading goal should be to stay as an investor in the financial markets for many years to come.A good risk reward ratio will help a lot on this.To make money over time.
Forex Market News
Forex market news offer many opportunities almost every day.The main question related to forex market trading when news are released is what to really do.Today there were news about US retail sales for July and the result was much worse than anticipated.So the US dollar initially lost ground.Later on there was the University of Michigan confidence which was again below expectations.However the US dollar managed to appreciate against several other currency pairs.
Forex market trading around news strategy
There is a lot of volatility at forex market when fundamental news are released.And there are mainly only 2 simple strategies about forex trading.Trade either before of after the news.Which one is the best strategy overall?Which strategy offers best risk reward ratio and minimizes risk?The answer is not so simple.It would be great if it was easy but you cannot make money trading any financial market without taking risk.
A prudent and more conservative option is to trade after the news.And if you have any substantial profit before the release of the news then close the position.Close the position?Why?
It is simple.You book the profits.Until you press the button and close any trade any profit or loss is not realized.One of the most annoying things that can really have a negative effect to your trading psychology is when a profit suddenly turns to a loss.This is often.It happens,guess when,around news releases.
What about waiting patiently to trade after the news are made known to the public?This is a good strategy but has one major drawback.This is that immediately when news are published there is a strong move for a currency pair and you miss the main opportunity.Now you can wait for a pullback or decide to trade in another day.This is fine.Do not chase any trade and break your risk management rules.Opportunities come and go.Be wise with your trading capital and money.