No matter what system and tools are available to those who are Day trading online, true success in trading still relies on the psychological strength of the individual trader. Day trading is a system based on rules, but as charts are analyzed and prices fluctuate, traders may find that they have a difficult time sticking to those rules when fear or greed become involved in the analysis. Successful traders are able to buy despite feelings of fear and sell despite feelings of wanting to prolong the holding of a stock.
A confident trader will still take the time to test and re-test a stock. At first glance a stock might look like it's in top shape and performing as expected, but a successful trader will not solely rely on first glance appearances. Those who day trade stocks know that in an instant the market can change and it's important to stay abreast of company information as well as market news and conditions. A successful trader will stick to the rules set up in day trading systems to ensure that his or her reactions remain unbiased throughout the trade.
Effective day trading strategies focus on providing consistent and disciplined actions. Successful traders have a consistent approach to the market and trading. They will take the time to systematically build up their own trading system that takes into account their own personal elements of risk control and they will take the time to stick to their original trading plan. It's not that traders shouldn't make changes based on market information, but that the changes made should be based on established trading rules that help traders determine what their entry and exit points on a trade should be.
Some of the best day trading tips that a trader can get help them deal with fear and greed. Many traders find that they may be able to memorize the rules and familiarize themselves with knowing how to accurately interpret stock charts, but they also need to learn how to prepare themselves to deal with fear and greed.
Fear in trading primarily takes on two basic forms the fear of loss and the fear of missing out. The fear of loss leads to selling stocks prematurely and as a result, they aren't able to capitalize and recover fully on the trade. When they start to enter into trades, the trade isn't given enough time to mature and the trader sells so that more isn't risked.
The fear of missing out is another form of fear that compels people to abandon their rules so that they don't lose out on another major stock move. These fears need to be dealt with because they will impact a trader's entry and exit decisions.
Greed is the motivation for over-confidence. Dreams of making it big in trading can cloud a trader's perspective. Again, they abandon the rules of their trading system in the hopes that more money will come their way. Traders need to learn how to deal with greed so they can maintain their focus and not have their thoughts be swept away with illusions.
by Manny Backus 1969
Feb 5, 2009
Why Forex Is A Better Investment Idea Than Stocks or Commodities
Forex, the Foreign Exchange Market, is a worldwide market for buying and selling foreign currencies. The major currencies that are traded include the U.S. Dollar (USD), Euro (EUR), British Pound (GBP), Canadian Dollar (CAD), Australian Dollar (AUD), Japanese Yen (JPY), and the Swiss Franc (CHF). The purpose of this article is not to go into the details of how Forex works, but to compare the benefits of trading in the Forex market versus trading the Equity (American stocks) or Futures markets (Commodities).
The Forex market is the largest market in the world with over 2 trillion dollars traded every day. This compares to the 200 billion dollars traded daily in the Equity and Futures market each. Because of this, the Forex market benefits from fairer prices, price stability, and better trade execution.
Forex has the advantage of being open 24 hours a day. The Forex market opens on Sunday afternoon and remains open until it closes on Friday afternoon. The Equity and Futures markets are only open Monday through Friday 8:30 a.m. to 5:00 p.m. Eastern Standard Time. This gives Forex traders the opportunity to trade around their personal schedule. Also, liquidity in the Equity and Futures markets are reduced after regular trading hours.
When trading Forex, you will not incur the commissions or transaction fees that exist in the Equity and Futures markets. You pay a spread on the currency pair you are trading and costs are very low, especially when compared to the other markets.
Investment leverage in the Forex market can be as high as a 200:1 margin. In the Equity and Futures markets your average margin is 4:1. This means that you can control $10,000 worth of currency with only a 50-dollar margin.In the Equity and Futures markets, investors are expected to fund several thousand dollars to open a trading account. In the Forex market, you can open a mini account for only 300 dollars and begin trading.
In the Equity market, short selling is very risky and comes with limitations. In the Forex market, you are able to buy long or sell short any currency pair with no limitations or difference in risk.As an investor in the Forex market, you are able to concentrate on only a few major currencies. There are seven major currencies yielding four major currency pairs that most Forex investors concentrate on. Whereas in the Equity market, investors have over 40,000 stocks to choose from when contemplating where to invest their money.
There are many factors to consider when deciding on which market you want to spend your time and money. The Forex market provides many benefits over the other major investment markets that will allow you, the investor, to make larger profits, take less risk, and spend more time with your personal life and less time investing.
If you want to learn more about trading the Forex market, you can find tips, news, analysis and a great FREE ebook, Forex Freedom. How To Turn a $300 Investment Into $30,000 In As Little As 6 Months, learns more to tornadoforex.com
by Kevin Moon
The Forex market is the largest market in the world with over 2 trillion dollars traded every day. This compares to the 200 billion dollars traded daily in the Equity and Futures market each. Because of this, the Forex market benefits from fairer prices, price stability, and better trade execution.
Forex has the advantage of being open 24 hours a day. The Forex market opens on Sunday afternoon and remains open until it closes on Friday afternoon. The Equity and Futures markets are only open Monday through Friday 8:30 a.m. to 5:00 p.m. Eastern Standard Time. This gives Forex traders the opportunity to trade around their personal schedule. Also, liquidity in the Equity and Futures markets are reduced after regular trading hours.
When trading Forex, you will not incur the commissions or transaction fees that exist in the Equity and Futures markets. You pay a spread on the currency pair you are trading and costs are very low, especially when compared to the other markets.
Investment leverage in the Forex market can be as high as a 200:1 margin. In the Equity and Futures markets your average margin is 4:1. This means that you can control $10,000 worth of currency with only a 50-dollar margin.In the Equity and Futures markets, investors are expected to fund several thousand dollars to open a trading account. In the Forex market, you can open a mini account for only 300 dollars and begin trading.
In the Equity market, short selling is very risky and comes with limitations. In the Forex market, you are able to buy long or sell short any currency pair with no limitations or difference in risk.As an investor in the Forex market, you are able to concentrate on only a few major currencies. There are seven major currencies yielding four major currency pairs that most Forex investors concentrate on. Whereas in the Equity market, investors have over 40,000 stocks to choose from when contemplating where to invest their money.
There are many factors to consider when deciding on which market you want to spend your time and money. The Forex market provides many benefits over the other major investment markets that will allow you, the investor, to make larger profits, take less risk, and spend more time with your personal life and less time investing.
If you want to learn more about trading the Forex market, you can find tips, news, analysis and a great FREE ebook, Forex Freedom. How To Turn a $300 Investment Into $30,000 In As Little As 6 Months, learns more to tornadoforex.com
by Kevin Moon
The Rules of Real Stock Investing
The stock market is the anticipator of the economy.That is right, but it is not how to succeed with stock investing. If the balance sheet of a company is sound its stock will rise either sooner or later.Doesn't this sound plausible? Well, even if the whole stock market contained good and rock-solid companies, this wouldn't mean that their stocks will rise.
Well, one of the oddities of stock investing is that stocks do not necessarily behave according to the company's condition. Everybody remembers the years 1998-2000. The internet stocks appeared in the markets and there were plenty of these stocks. And they rose like brokers never dreamed of before. But their fundamentals were unbeaten when it came to making huge losses!
The rule to that booming time is still valid today. Buy stocks when they make strong upward movements accompanied with a huge trading volume. So the upward movement should come together with a lot of buys and sells. That is one of the stock investing principles. Buy when the stock market begins to roll and sell when the stock market makes a big break. One strategy is to buy stocks which have newly surpassed their all-time-high. This is done because it is often seen that those stocks begin to soar even more after having significantly broken the all-time-high-resistance line. This way of stock investing or trading is called the Darvas strategy.
Naturally, the mere buying of rising stocks doesn't mean stock investing work is finished. The real hard work begins just after purchase. Now the phase of managing stocks has begun. What must the investor do, if they begin to fall and what when they soar? This is the most crucial point of stock investing. Generally, whenever stocks are bought, the maximum pain level must be set up. This is also called the stop loss. This must be done in order to cut losses to a level, which doesn't bother the investor too much.
But even if stocks go vertically upwards after purchase it is very important to adjust the stop loss level that means this level has to be increased in order to lock in some profits.
Doing it that way, increases the probability of stock investing to be profitable. But the main problem is to do all this with discipline and this exactly is the point where the most investors or traders fail.
by Jophan Celebi
Well, one of the oddities of stock investing is that stocks do not necessarily behave according to the company's condition. Everybody remembers the years 1998-2000. The internet stocks appeared in the markets and there were plenty of these stocks. And they rose like brokers never dreamed of before. But their fundamentals were unbeaten when it came to making huge losses!
The rule to that booming time is still valid today. Buy stocks when they make strong upward movements accompanied with a huge trading volume. So the upward movement should come together with a lot of buys and sells. That is one of the stock investing principles. Buy when the stock market begins to roll and sell when the stock market makes a big break. One strategy is to buy stocks which have newly surpassed their all-time-high. This is done because it is often seen that those stocks begin to soar even more after having significantly broken the all-time-high-resistance line. This way of stock investing or trading is called the Darvas strategy.
Naturally, the mere buying of rising stocks doesn't mean stock investing work is finished. The real hard work begins just after purchase. Now the phase of managing stocks has begun. What must the investor do, if they begin to fall and what when they soar? This is the most crucial point of stock investing. Generally, whenever stocks are bought, the maximum pain level must be set up. This is also called the stop loss. This must be done in order to cut losses to a level, which doesn't bother the investor too much.
But even if stocks go vertically upwards after purchase it is very important to adjust the stop loss level that means this level has to be increased in order to lock in some profits.
Doing it that way, increases the probability of stock investing to be profitable. But the main problem is to do all this with discipline and this exactly is the point where the most investors or traders fail.
by Jophan Celebi
Warning, Currency Consolidation Ahead
Wall Street advanced sharply last week as investors interpreted minutes from the Federal Reserve's last meeting, as an indication that the central bank is going to keep cutting interest rates in order to boost the economy. The Dow Jones industrial average, and Standard & Poor's 500 index, reached new record highs. Leading the charge has been the high tech Nasdaq 100, with companies such as Google, Apple and RIM (Blackberry) powering to record levels. Many questioned Google's IPO price of $100 per share, but with a share price above $600, Google continues to grow at an astonishing pace says Michael Wright of Betonmarkets.com
The minutes from the Federal Open Market Committee's September 18th meeting revealed that Fed governors voted unanimously for a half-point cut. The minutes also showed that officials were concerned that weakness in the dollar, could lead to higher inflation. Balanced against this were fears that the summer's credit crisis could still pose a significant risk to economic growth. The market interpreted this as meaning that the Fed is willing to intervene with a rate cut. Many believe the likelihood of a second cut either in October or at the December meeting seems greater than before the minutes were released.
Furthermore, the president of The Federal Reserve Bank of St. Louis, William Poole said during a speech on Tuesday, that he believes the financial markets are "still fragile" from weakening credit conditions, but that they do appear to be stabilising. San Francisco Federal Reserve Bank President Janet Yellen, said in a speech, the central bank must focus on "how financial market developments are likely to affect employment, output and inflation."
All this doesn't look good for the US dollar, which has lately suffered major losses against all major currencies. As of writing, the Canadian dollar is worth more then the USD, for the first time in more then 30 years. The Euro/USD is currently in consolidation mode after breaking the 1.40 barrier in August of this year, and Sterling is trading above two dollars to the pound.
This time a rate cut, if it comes, may not be as unexpected, and so might not create as volatile a move as it did after the last one. After the excitement of September, and with the next US rate cut potentially already priced in, it may be time for some consolidation on the currency markets. With the ECB widely expected to keep rates the same going into the New Year, the best point of attack may be the EURO/USD exchange rate, which has been consolidating over the past month.
With BetOnMarkets.com the average trader can take advantage of this possible situation with a 'barrier range' bet, which compensates a trader, if a trade doesn't touch either of two predetermined levels for the duration of the bet. You are predicting that the market will remain within two higher and lower barrier levels.
A no touch on the EURO/USD with a 30-day term, and a 500 pip spread either side, yields around 10%.
by Mike Wright
The minutes from the Federal Open Market Committee's September 18th meeting revealed that Fed governors voted unanimously for a half-point cut. The minutes also showed that officials were concerned that weakness in the dollar, could lead to higher inflation. Balanced against this were fears that the summer's credit crisis could still pose a significant risk to economic growth. The market interpreted this as meaning that the Fed is willing to intervene with a rate cut. Many believe the likelihood of a second cut either in October or at the December meeting seems greater than before the minutes were released.
Furthermore, the president of The Federal Reserve Bank of St. Louis, William Poole said during a speech on Tuesday, that he believes the financial markets are "still fragile" from weakening credit conditions, but that they do appear to be stabilising. San Francisco Federal Reserve Bank President Janet Yellen, said in a speech, the central bank must focus on "how financial market developments are likely to affect employment, output and inflation."
All this doesn't look good for the US dollar, which has lately suffered major losses against all major currencies. As of writing, the Canadian dollar is worth more then the USD, for the first time in more then 30 years. The Euro/USD is currently in consolidation mode after breaking the 1.40 barrier in August of this year, and Sterling is trading above two dollars to the pound.
This time a rate cut, if it comes, may not be as unexpected, and so might not create as volatile a move as it did after the last one. After the excitement of September, and with the next US rate cut potentially already priced in, it may be time for some consolidation on the currency markets. With the ECB widely expected to keep rates the same going into the New Year, the best point of attack may be the EURO/USD exchange rate, which has been consolidating over the past month.
With BetOnMarkets.com the average trader can take advantage of this possible situation with a 'barrier range' bet, which compensates a trader, if a trade doesn't touch either of two predetermined levels for the duration of the bet. You are predicting that the market will remain within two higher and lower barrier levels.
A no touch on the EURO/USD with a 30-day term, and a 500 pip spread either side, yields around 10%.
by Mike Wright
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