Archive for the ‘Swing Trading’ Category

Trading Systems Of The Wealthy That You Can Use Today

Many people venturing into the trading world, will most likely be coming from a corporate background and wishing to enter into the world of trading in the hopes of making money online that will either top up their retirement or even help them retire sooner.

But most people are blind to the fact that trading is 80-90% psychological and 10% pysical. What this basically means is that the vast majority of people loose money online, no because they are poor traders, but rather that they cannot manage their emotions properly, most golfers think that the game of golf is 90% psychological and hence for this reason have their own psychologists.

So what does psychology have to do with trading, well in order for you to manage your emotions correctly, you will need to have a system in place to trade at your full capacity.

Lets look at is this way, most people have eaten in a fast food restaurant or any world renowned fast food place, what you will notice of these highly successfull businesses is that everything is systomatic.

They leave nothing to chance! They have someone taking orders, one person working the till, the other making food, the other cleaning tables, another delivering the food to the tables etc, you need to think about trading in the same way.

This Is The Reason Why Traders Make Money, They Have A System!!

A system will keep you desciplined and inorder to be a successfull trader discipline is number one on the list, so when you have a system that says ” i will only buy stocks after 10 am in the morning” then thats what you do, you will not be acting on impulses, which are purly emotional.

Investing should not be emotional, if you have a hunch about something or feel weird in your stomach about something that might happen, its probably not your gut instinct but rather the cheese burger you had for lunch.

You system needs to tell you what you will do, when will you do it, how will you know you have reached your goal in terms of your one, two and three year goal plan when it comes to trading, you need to have a system on how you are going to go about choosing the stock, trading the stock, when you will enter and exit the trade, all these things should be set in stone.

This is why so many people fail at trading, not that the markets are difficult to learn, but the fact that they are weak at discipling themselves, so how do you become diciplined?

Well you start off small, like by doing what you say you going to do, like i will switch of the T.V every night for one hour to read financial news about stocks in todays headlines, small but daily diciplined actions like this will change your life and most of all your bank acount.

Even A Poor Trading System Will Beat The Best Trader Of The Long Run With No System

A good system takes all the guess work out of you daily trading routine, you do not want to waste your time on things that done work and especially waste the hard earned money that you work so hard to put into the markets.

When you start the system its ok to refine it as you go, but do not for any one reason go and change the plan just because you think a particular stock will increase or decrease in value, follow the system and follow you long turn goal plan and you will find success when it comes to trading.

One last thing here, is that, just because you have a system does not mean that you will not make money in the markets, what this means is that you will have a solid plan on how to better manage the losees and any future losses, learn from your mistakes, improve daily and continue learning and you will make money for sure in the markets, but it all begins with a system.

Swing trading Up And Down To Your Success

I am going to tell you a little secret about swing trading and most of all its quite profitable, but first i have to ask you this question about trading. Do you want to be a successfull trader? i hear you say of course! but i want to challenge you to the following, the next time you mention the following to someone you know or in passing, say the following ” the stock markets crashing today”

Have a look at their face, you will hear people loosing there shirts like we have seen this year and last year 08/09 yet i laugh when i hear this, not because they lost money or because im sick in the head but because it just doesnt have to be this way at all.

When i mention to people that when the market goes down i can make money, i often get told yes “just buy more stocks when its down” Hmmm but how do we know its not going to keep going down? The truth is we dont and i like this answer for several reason though at the same time it annoys me and heres why.

How Ordinary People Make Money In Bull And Bear Markets

, Whether They Go Up or Down They Make Money

You see, markets always go up and down “ofcourse” but hear me out before you think i am trying to insult your intelligence! The thing is most people are so busy working hard for money each day, they cant be bothered to learn how to make money, so they give there hard earned money to fund managers who can only make money when the markets going up, so what do you think the manager tells his clients when the market goes south?

You guessed it “buy more units/shares as, this is the best time to buy” i wonder why they tell this to so many people, maybe to keep their funds alive?

Well it doesnt have to be that way, with swing trading we follow a stock using technical analysis, knowing that on average every four weeks the stock will move in one of three directions, up, down or side ways, now its nice to make money on the upside and everyone know buy low sell high, but what about when the stock goes south?

Well then we simply short the stock, which means we borrow the shares from our broker at $40 they then give it to us and lets say that the stock goes down to $10, we then go buy the stock and give it back to them (please not this all happens through you broker, you do not need to go out there an actually do this yourself, thank goodness!!)

So you give it back to them! you bought it for $10 but shorted it at $40 (40-10=30) you just made $30, sound simple? well it is! there is a whole section of the market that just do this and its getting more and more popular.

The Beauty About Swing Trading Is There Are Always Going To Be Seasons And Cyclicals When It Comes To Investing

This stratergy can be enhaced by combining options with the stock, all you do is when you short the stock, sell calls and buy puts as well as keep shorting the stock, this is what creates synthetic positins, but more about this later.

Anyway, you no longer need to worry about what a stocks going to do with shorting  besides when it consolodates (moves sideways) if you combine shorting with options you can have the odds much higher when it comes to making money.

Shorting takes practice and a good knowledge of technical knowledge but with a bit of practice, you can find it a lot more rewarding then just buying and hopeing the stock goes up.