Everyone who wants to learn day trading wants to follow certain guidelines. I will not say rules because a lot of folk don’t like the word, but principles. Many of them are quite well known and some of them are less so, but they’re all crucial to the successful stock trader. The Forex Rebellion defines them as the four major guidelines of day trading.

1. The Buck Stops With You

Whether or not you are looking round for a day trading system or developing your own, remember that whatever you do is your responsibility. Ask for recommendation and help by all means, but do not believe everything you hear. Everyone is different and their trading styles can alter very, so never follow recommendation blindly.

Equally, you can purchase in a system but do not neglect to test it. Whether or not the guy who designed it is saying that it will double up your cash in two months for certain sure, you must test, because there are three possible issues with that. One, he could be lying. 2, perhaps it used to work well but it does not work any more. Three, maybe it works for him but for some weird reason to do with your spread or whatever, it doesn’t work for you. Your money is your responsibility and yours alone, so put the system to work on a demo account until you are sure.

2. Stay Calm

The largest enemy of any trader is their own emotions and this is especially true for the person that wants to learn day trading. If you’re the kind of person who makes bad calls under stress, you might want to think again about choosing day trading as your method. This is a fast moving world where seconds can count in thousands of greenbacks, so you must keep a particularly cool head.

Now pretty much everyone likes to think they seem to be a calm kind of person who would react way below pressure, so even if you’re convinced you are going to be the planet’s number one ice cold trader, test yourself as well as your system in that demo account. If you curve off the system even once or start altering your position size, closing out early, waiting too long etc in demo mode, sorry but you aren’t prepared for real life trading when things will be much more hairy. Work on it.

3. Track Everything

Even though you have to work fast when you are using day trading systems , it is worth taking the time to pen everything down. Again this is a habit you can train yourself into while in demo. You’ll be dazzled how much it helps you to grasp why things went wrong or right when they actually did. This can enable to to tweak a marginal system into a moneymaking one and make all the difference to your bottom line. A straightforward spreadsheet recording your position, the signal(s) and the opening and closing costs is enough during trading. Afterward you may need to add a comment.  

4. If You Doubt, Stay Away

This is a well known trading and investment rule. Do not take a chance on something that almost fits your system but not actually. It may work once but over the long run this will lead to disaster. There’s probably a reason why the system is set up for the signals that it has , and if the market does not fit, don’t force it.

Equally if you are sick or under strain about another area of your life, it can be better to keep away from the market, particularly while you are still a relative beginner. There will be other and better occasions to learn day trading when you are feeling in top condition.

Technorati Tags: day trading, forex robot, forex software, forex trading, intraday trading, trader

Currency exchange trade signals can provide you with an easy way to trade the foreign exchange market… So long as you understand what you are getting what to do with it. There are lots of providers of forex signals like Correlation Code out there and not all the services are the same, so it is important to know what you are enrolling for.

Many companies provide foreign exchange alerts that tell you when conditions are right for trading. In a few cases they’re directed at beginners and will advise you on stop losses, profit aims and number of lots for the trade which will vary according to the strength of the observed trend.

Acting on signals like these is nearly like using a forex robot, except that you do control the trade yourself. This has the edge that the final decision is yours, but it also has the downside that you may not be in a position to act and access the market at the time the signal comes thru, while a robot would do that automatically for you.

If you’re comparing foreign exchange signal providers with the purpose of following their trading plan, you’ll need to have a look at their results, if published. This is the results of making trades in the live market based on the signals. It’ll usually say that all of the suggestions were followed.

When you are having a look at results, keep in mind that they are often based on a standard forex account with a lot size many times bigger than most newbies would start out with. This means that you could only have a small fragment of the profits shown. Also, they’re going to make guesses about costs which you check carefully. They may assume a smaller spread than you can expect on a mini or micro account.

Ultimately, do not be too involved with recent results, but look at the long term trading losses or profits. Be suspicious of any company that only provides results in the recent past. Remember that there are no guarantees with currency trading. You could pay a lot for forex signals and still finish up losing money. A lot relies on how you manage your funds.  

Other forex trade signals will be less prescriptive and simply announce market conditions or the result of indicators, leaving you to make your own trading decisions. In this situation you have a lot more control and of course you want to grasp the market yourself in order to make the best use of these alerts. Many seasoned traders use a service like this so that they can be away from the computer for most of the day without missing good trading opportunities .

Signals are usually sent by e-mail and/or SMS. Which you prefer depends on you. SMS is better if you check your text messages more frequently than email, but you may be a ways from a PC when you receive the text. It can be frustrating if you receive forex trade signals and then can’t place the trade.

Technorati Tags: correlation code, finance, forex signals, forex software, forex trading, fundamental laws, investing, money, trader

Although it may seem obvious to most stock market swing traders there are a number of simple rules that you can follow which will ensure that you have more success when buying stocks:

In the USA stock market there are 3 major indexes which are each made up of a basket of stocks, they are the S and P 500 (also known as the S&P500), the DOW 30 and the Nadaq 100. These stock indexes generally only contain major blue chip stocks, as long as you buy from these 3 groups you will at least know that you are getting a well known solid stock.

For example the DOW 30 contains major industrials and large multinational stocks such as Home Depot (HD) and Johnson and Johnson (JNJ) whereas the Nasdaq 100 mainly contains techical companies such as Apple (AAPL) and Miscrosoft (MSFT).

Always buy a stock that is liquid, this means that it is a highly traded stock, this will enable you to easily buy and sell at the price you want without having a delay. You will also get a smaller spread, thats the difference between the BID and ASK price of the stock. For a stock to be considered highly liquid it should trade at least 500,000 shares per day, ideally even more.

It is best to aviod stocks that are bellow $10 as this usually means the company is in trouble, although with the bear market of 2008/9 there have been a lot of good stocks at bargin prices between $5 and $10. Avoid buying a stock that is below $5 at anytime.

Another consideration is options, does the stock has options?, this will be important if you want to trade options around your stock, such as a covered call, or you may want to buy a PUT option inorder to protect your stock.

Be very cautious about buying a stock just before it’s earnings are released, stocks often drop significantly if they come out with a poor report. Earnings releases are 4 times a year with one of them being the annual report.

If you are going to trade options make sure that you learn how to trade by getting some good education. There are many swing trading strategies that work well with stocks in todays volatile markets.

 A675645879

Technorati Tags: call, finance, invest, investment, money, options, put, stock market, stocks, trader, trading

Technical analysis of the stock market, or any other market such as Forex, Bonds, Futures, is how most traders and investors make their trading decisions. This is as opposed to fundamental analysis which most people more agree is pretty much done as a way of making trading decisions, unless of course you are Warren Buffet!.

You only have to think back to major stock market scams like Enron to know that it is almost impossible for the average, and even very sophisticated fund manager or hedge fund trader to really know what the real financial state of a company is.

Just by reading the balance sheet and other quarterly reports they release gives you a very limited insight into the real health of the company. Whereas the technical charts of the company tend to give the real picture of what the market thinks of the value of the company. In the case of Enron even simple technical analysis told you to SELL when the stock was in the $80-90 range, this is why technical analysis of stocks is so popular.

So what are the secrets to technical analysis?, I’m about to tell you, here are my golden rules:

* Only use 3-5 simple technical analysis indicators

* Make sure that you understand how the indicators that you have selected work, what the parameter settings are and in what market conditions they are effective

* After selecting your indicators and parameter settings don’t mess with them.

The real secret to technical analysis is to become VERY familiar with your choosen indicators, and really this can only be done by watching and studying the market, so that you get to the point that you TRUST them.

The fact is that in any market, for each bar, there are only 5 pieces of information, the open, close, high, low and volume, yet there are now hundreds of indicators. Most of these indicators are displaying much the same information and so are redundant.

For the record my set of indicators are:

* 4 Simple Moving Averages

* Bollinger Bands

* MACD

* Stochastics

But the way I use them is quite special, to learn more about how to become an expert at technical analysis visit:

Top Dog Trading Review

A875645387

Technorati Tags: bonds, day trading, investment, money, options, stock market, stocks, technical analysis, trader

There is a lot of hype surrounding options trading, and for good reason, it’s a good way make a lot of money fast, or can be used to grow your capital consistently month after month.

There’s also a lot of hype about how complicated it is and why you need to spend thousands of dollars on options trading education before you get started. Needless to say this last statement usually comes from trading seminar companies trying to sell your their trading course on options.

Lets cover a few of the basics about options and set you straight about a few important points. Firstly yes it is true that you can make a lot of money trading options, but of course you can also lose money just as fast.

When trading stocks your leverage is 1:1, if you go full out on margin you get get 1:2 leverage, but thats about it. With options it is not quite as straight forward to calculate the leverage but generally speaking you can get between 1:5 and 1:10 when you buy an option on a stock, or ETF.

So with 1:10 leverage, when the stock increases by 5% your option can increase by approx 50%, and this can happen in just a few days, this is why swing trading strategies using options on stocks is so popular.

However the downside is that the reverse can happen, if the stock drops by 5% your option can also drop by 50%, at which point you may want to close the trade and save some of your option value, it really depends on what your stop loss and risk management plan is.

What I’ve just described is called directional option trading where you are betting on the getting the direction of the stock movement correct, this is highly speculative. Options can also be used in option strategies which are much more non directional, such as covered call trades, credit spreads and Iron Condors. In these trades there is much lower dependance on getting the stock direction correct, but it still matters.

So should you trade options?, in my opinion you should not do directional option trades until you become an expert stock trader first. This is because you really need to be very precise with your entry and exit strategy and trading plan, and be very good at technical analysis.

Whereas if you want to do non-directional option trades you don’t need to be such an experianced stock trader to be successful, but of course it does not hurt either.

Learning how to trade options is a very useful skill you have, but don’t rush into it and blow out your account. Make sure that you get a good options trading education before you start, and also make sure that you have a very solid stock trading education as well, such one from Top Dog Trading Review.

Technorati Tags: day trading, finance, forex, investment, money, options, stocks, trader, trading