Technical Analysis Course – How Losers Think Part I

We’re going to look closely at the thinking of losers with this technical analysis course series.

Tagore – the famous poet: —- wrote , “Pessimism is a form of mental dysomania. It distains healthy nourishment and indulges in the strong drink of denunciation and creates an artificial rejection which thirsts for a stronger draught”.

Lemmings that race to the ocean is what losers are like . The trap of rejection and self denunciation catches them and they can’t wait to get more of it ! Parents and relatives constantly bombarding kids with negatives through their lives is as if there is a conspiracy to develop and sustain an attitude of “can’t do” in people . Conditioning continues through song lyrics, television commercials, pressures from friends, relatives, neighbors, social contacts and nearly all of society . A paper can’t be distributed , a news hour cannot be made interesting unless you have misery and unpleasantness …. which is what makes up a loser .

Losers out there love misery – it is the only thing that makes him happy . Think of it !

The losing trader is a self-defeatist . He does the best when stress and strain occur, and losing money makes him feel at home . The loser who strikes gold in the market, literally falls apart … that isn’t what he is used to . Success is something he doesn’t know how to enjoy . Struggling and losing have always been what his thoughts are build upon . A win occurs, he loses it, becomes an expert – he develops what one prominent futures trader (Larry Williams) called “the King Kong feeling”. Self control is lost and he quickly loses his profits , and he goes back to the struggling and the misery – something he’s used to, – like lemmings to the sea , and he may not wish to admit it but he loves to struggle,- to struggle to win . Winning is something his mind can’t cop with . Struggle is what he copes with . It’s incredible, isn’t it? Especially if you look closely at it with a technical analysis course.

He correlates a posture of immaturity . It’s easy to see why he is made a fool of by the cordial politician that says “Don’t worry about things. We’ll deal with it. We know what’s best for you” .

A loser has a desire to win that is overwhelming . They tell themselves that winning can happen , and to save face they keep coming back . In their psychological patterns ineffectualness is already programmed in. He almost becomes hypnotized with success by those events that occur. Mind hypnotism or a trance occurs to him. Sinking feelings about various things occur to him. The things he did right he can’t wait to apply, usually to the very same market but at a time that is all wrong. His mind is almost saying to him, “It really isn’t happening to you” . He is unaware of where he is. He becomes another person .

[ It’s always great to see a win occur to a loser, but it becomes sad when you see them in a trance state, and you know that soon they’ll start losing once again – so much, that they will be right back where they started .]

In some cases when a profit happens , the profit will make their mind so happy , that it will grab it, but nearly always prematurely . If there is a loss occurring, his mind says “It will all work out in the end” and he/she hangs on . He cuts profits short and allows losses to run on.

Shorting the market is difficult for a budding trader. He thinks that prices have no ceiling and that the sky is the limit . Growth is inevitable as long as he is buying against base zero , since to his mind that is what life is all about, – growth, upward movement . We will continue this discussion about how losers think in our next article in this technical analysis course series.

Understanding Short Term Trends is Essential For Successful Day Trading The Daily Trading Report d

When you are ready to buy stocks, there are several different strategies that you should have in your arsenal – long term plans are an essential part of that, but some of your resources could be well served by putting them into shorter term strategies.

The underlying fundamentals of these strategies are somewhat different than buying stocks for the long term, and the risks are different because of that – in normal trading, you might take a long term, higher risk position on a small company that is just starting up – say, a hi-tech firm or a restaurant chain, or lower risk companies such as those companies which have been around for a long time and which for whatever reason you feel they are somewhat undervalued.

Short term, or day trading, is somewhat different – but it is not a totally random proposition either, as some trading strategies would have you believe. To understand some of these underlying forces, finding good research and strategies is essential, and this is where the Daily trading report comes in – they look at a different set of information than many in this industry, giving their clients a step up in the short term information game, and they also run several different portfolios.

The Daily Trading Report has also built a trading community where like-minded traders can share their views and what other traders are doing – they take a different view than many, with the idea that their shared success is very important. This is reflected in the view of short term market – if they really were just random circumstances that make no real sense in the short term, then some of the semi mystical trading strategies would make sense, but the Daily Trading Report seeks to cut through that random background noise to determine what is really driving markets, and identifying the most important aspects of these fundamentals which will allow you to make smart, short term decisions based on real information and not some strategy to ‘play the randomness’.

The Daily Trading Report is confident in the tools and analysis it provides, and offers a week free for a person to gain access to their site in order to delve deeper into their strategies and the vast amount of information that they make available to their members – if the goods are not there, then you are free to back out, but that rarely happens once someone signs up.

There are also three portfolios that the Daily Trading Report runs, and they include short term, medium term and longer term portfolios. For instance, the Global Macro Portfolio takes on long term trends, but not in the usual ‘trend following’ that many such strategies utilize – rather it uses a set of criteria developed over a twenty year history in the trading world, developed by Brad McFadden, the Chief Investment Officer of the Daily Trading Report; he, along with his partners, have built a site which gives you the tools you need to make smart, strategic decisions on making short term decisions for your money, bringing not only the highest payoff but also with the goal that this should be fun.

For the best information and analytical tools of any trading report, get the analysis and tools of the Daily Trading Report.

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Trading Rules Are The Base For Intraday Trading

In trading, its very important to have a specific set of rules that you follow religiously. Frankly speaking, trading really doesn’t have any rules. You can either get in or get out of the Intraday trading whenever you want.

Trading is the only business which has too much freedom. Freedom is good, but you need to have a structured freedom. If you decide to trade without any rules, then definitely you will not be successful. Now what does structured freedom means? It means that you can trade whenever you want, but that trade should fall under your set of rules. Rules will help you to be more consistent with your trading. These rules will help you that can drain your account.

Once in every six months, write a new set of trading rules for yourself. These rules will help you to be structured with your Intraday trading. The problem is most people don’t want to make up their own rules, because that would make them to take responsibility for their results. Most people don’t want to take responsibility for their action. But only by taking 100% responsibility, you can be successful in trading.

Common Rules to be followed in trading:

1) Never place a trade without a stop order. It would be like swimming without a life jacket.

2) If you lose 3 trades in one day, stop trading. Avoid digging yourself in a huge hole.

3) If you earn decent amount of money in a trade, then don’t allow yourself to lose money on that trade.

4) Always use a chart formation or technical reason to get into Stock market. Only use a signal to get into the Stock market. Don’t just take a shot. You will usually get yourself in trouble if you take a shot.

5) Use the value area. It will help you to stay on the right side of the Stock market. Consistently trade on long side above value and the short side below value.

6) Always act with your best interest in mind. Try and do this with each and every trade you put on.

7) Relax with your trades. If you don’t enjoy your trade then you will not be successful.

8) You don’t have to trade everyday. Sometimes, just leave the Stock market alone and forget about it for a day. It usually refreshes you.

These are some of the common rules which have to be followed. But its advisable to come up with the own set of rules and follow it religiously. Your ability to follow the rules is a direct reflection of how much money you will make with your Intraday trading. It also reflects your survival in Stock market. The more you follow them, the better you trade.

Even if you take the Intraday tips from the stock advisory company, you have to follow your set of rules while placing a trade. Otherwise, it becomes very difficult to survive in the Intraday trading and ultimately you will leave the Stock market with bitter experience.

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Overcome Your Fear While Trading

Most of the traders sabotage their Intraday trading because of their fear. Fear may be good and helpful in our lives. But in trading, it is harmful.

Fear makes you to avoid things in the environment, which you perceive as threatening. What you perceive may not necessarily be threatening. When you try to focus on your losing trades, mistakes etc, you give your subconscious mind powerful directions. You would then easily end up with those same losses which you were actually trying so hard to avoid. What you focus your attention is usually what you get.

If you want to be successful as a trader, then try to focus your attention on winning trades and proper trading mechanics. But if you intensely focus on your mistakes and poor trading decisions, then you will end up with the same. Your subconscious takes the mental pictures which you are giving it and acts accordingly. It does its very best to act out these directions on your behalf.

Your subconscious is not bothered about your interest. It simply attempts to follow the information. When you trade with fear, you can easily block things out. Fear acts as a warning mechanism. Fear will lead you to make wrong trading decisions. You will ignore different pieces of information that would help you to make good trading decisions. This is very dangerous.

A fearful trader will handle a winning trade in the negative way. His fear of losing will cause him to focus on what the Stock market can take away from him in his current winning trade. A fearful trader will ignore all the information that states the Stock market has potential to continue in a profitable direction. So, he will exit the trade early regardless of the profit potential left in trade. Whereas, in a losing trade, the fearful trader will focus on only those information from the Stock market that supports his current position and ignore other factors that may not agree with his opinion.

This fear will make the trader to come out of the profitable trade. This will lead him to leave the money on table. This is the reason why most of the traders cut their profits short and let their losses run.

In this way, the fear will sabotage your Intraday trading. To prevent it, you must learn to trade without fear. In order to trade without fear, you should completely trust yourselves to know that you will always act in your own best interest. Fear would definitely do nothing good to your Intraday trading career. It would put your trading career in doldrums. So, it is very important to overcome the emption of fear.

If you are not sure about the entry and exit to the trades, then take the help of the stock advisory company which provides sure shot Intraday tips. This company will tell you when to come out of the trade or when to stick to the trade. In this way, you can earn even in volatile stock market. Your Intraday trading career will also be safe.

Forex: What Desire For Risk

The single most significant issue for us to understand once first starting to trade is risk management. Of course we all need to trade to aquire money. So the main thing we need to understand is not to lose it. Of course you will experience losing trades, we all do, it is part of trading, it is inevitable. But learn to survive those losses and subsequently endeavour to minimise and keep on minimising them.

With this in mind I confess to being intrigued by the wildly distinctive approaches proposed by various people. Some will tell you to swing trade so that you can capture whichever significant swings that occur throughout the day. Their argument is that by doing this they will not lose out on any major movements that take place. They benefit from sizeable stop losses to allow the trade a chance to breathe, as they say. This way they can permit the trade run and run for a decent long while and gather in a nice high profit. They do not need to stay chained to a laptop all day long and are comfortable in the knowledge that a large stop loss allows them to trade in this way. And various traders do precisely this.

Let us consider the amount they are risking. Suppose for example the pound is falling against the euro and the chart shows the price bouncing down and up against say the 40 daily moving average. Let us imagine that our stop loss is trailing slightly above the 40dma.There might well be a difference between the price and the stop loss of say 2-400 pips. That is one heck of a lot of risk! You need very deep pockets for this method.

Another method that the risk adverse beginner might want to consider is somewhat different. Imagine the chart described above instead of being a daily chart is a 10-minute chart although we will presume its outline is much the same. Because the price variations are smaller the risk is much smaller. Being a smaller time frame it will need closer monitoring than a swing trade but this is a balance that needs to be struck.

It often amazes me that certain traders will let a trade rise to its summit and subsequently let it retrace in the hope that it will take off again to a higher peak. This it might or might not achieve. When a price reaches its high point it is surely wise to exit the trade at the earliest obvious sign of a reversal and to re-enter later on. By following such an approach the stop loss, instead of being placed on a moving average can be placed at say the low of the preceding bar. As a consequence the risk is reduced to a very low level and fulfils one of the criteria outlined at the start of this article. In order to continue to reduce the risk element you might find you can reduce the stop loss to a portion of the proceeding bar so instead of having a 200 pip stop loss you can perhaps get away with say 20. Now that is low risk.

Why Some Have More Luck In Options Than Others

Why do some people have more ‘luck’ when buying options than others?

Better yet, why do some people have better luck with stocks than with options?

I believe a lot of that has to do with fully understanding how options work.

Believe me, options are not rocket science. But there are a few more things to consider than when buying a stock.

For example: Delta. This is the percentage the option will increase or decrease in value in relation to the underlying price movement of the stock. The delta gets bigger as it gets closer to being in-the-money or goes further in-the-money. The delta gets smaller as the option gets further out-of-the-money.

For example: let’s say you bought an out-of-the-money option on stock XYZ for $500 with 2 months of time until expiration. Let’s also say the option had a delta of .5, which means it’ll move 50% of the underlying stock’s movement, or in other words, it’ll move 50 cents for every $1 the stock moves.

Now let’s say the stock goes down -$3. That option will likely decrease by -$1.50. (50% of the $3 move.)

However, that option’s delta will also now have fallen. Let’s say that option now has a delta of .40.

If that stock went back up $3, that option will now only have increased by $1.20. (40% of $3 is $1.20.)

So the stock is essentially where it was when it started. But the option that was worth $500 is now off by -$30 or -6% from its original value when you bought it.

If that move happened over a course of weeks or more, the loss in the option would likely be even greater as the option would have experienced a larger amount of time decay.

Moreover, if the movement in the stock was slow and incremental over time, volatility would likely have decreased as well in the option, which means it would have reduced the delta even more, thus limiting your ability to ‘make it back’.

And if your option is fully out-of-the money — since your option has no intrinsic value but instead only time value, the less time you have left on your option, the less value that option will have.

Getting back to our example, let’s say that option now has only a few weeks left until expiration and it’s still out-of-the-money. That option could literally be worth only $20 or $30 (or less) � which is far from the $500 that you originally paid. And this is true even if the stock stayed the same or was even higher than when you bought the option.

And that’s the point I want to make.

You cannot trade options solely based on the underlying stock.

If you buy a stock and it goes down, and then meanders about for a while before going back to where you bought it, your gain or loss is zero. You haven’t made anything or lost anything. If you wanted to sell it for what you bought it for, you could.

With options though, you have to look at the option’s delta, as well as the volatility (as this will impact the delta), and also how much time you have left on the option before it expires.

The option traders who consistently lose are the ones who forget about these simple things.

If you find yourself saying, “I might as well hang onto the option since it’s fallen this far and since I still have time”, you’ll likely be the guy who turns a loss of some of his option premium into a loss of all of his option premium.

Now this article isn’t meant to ‘neg’ anybody out on options. On the contrary, it’s meant to empower someone to take decisive action and to cut their losses when the trade is not working out. Because while options provide great leverage with a small amount of money and a guaranteed limited risk � you do not have all the time in the world as you do with as stock.

If what you were expecting to see happen isn’t happening, cut your losses and rethink your strategy before time runs out and you lose what you put in.

Nothing will ‘neg-out’ a new options trader quicker than losing his entire premium. And the way that happens is by not understanding an option’s limitations in addition to its advantages.

So pay attention to the option’s delta, time value/decay and volatility. And remember, when you’re trading options, there’s more to winning in options than just the underlying stock movement.

You can learn more about different option strategies by downloading our free options booklet: 3 Smart Ways to Make Money with Options (Two of Which You Probably Never Heard About).

And be sure to check out our new Zacks Options Trader

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Learn The Secrets of CFD Trading

The financial markets have changed and now anyone with a computer, an internet connection and a small investment can start to make big money with contracts for difference trading, or CFD. Some people use CFD trading as a chance to make a little extra money on the side, while others leave the day job behind to become full-time traders on the markets. Whatever you choose to do, it is important to be well prepared and well informed before you set out to make an investment. CFD trading is becoming increasingly popular thanks to its accessibility, as well as the possibility for normal people to make incredible returns on their investments.

Becoming a CFD Trader

Preparation is vital wherever your capital is at stake, so before you begin you should attempt to find out more about the market, the trading platforms and the various methodologies different traders prefer to operate. There are literally thousands of websites and blogs dedicated to CFD trading, each with its own unique perspective on the market, so it is worth your while to invest some time in the forums, getting to know the trading community and seeking advice from friendly online communities who are all interested in the same thing. Many sites also offer introductory courses and training in the various forms of CFD, allowing you to learn more before you put your money on the line. The key attributes of a successful CFD trader are ambition, willingness to learn and a healthy prudence in protecting their investment. CFD trading offers enormous potential returns, but as with any leveraged product, there is a risk of loss, so the first and most important thing to do is act wisely to protect your savings, avoiding rash purchases and keeping your impulses in check while you consider each situation carefully in light of your training.

CFD Trading – How to Begin

Once you have thoroughly read up on the theory and principles of CFD trading, the time has come to choose your platform and think about starting to trade. There are hundreds of trading platforms out there, each offering a variety of different styles and features, so it may take you some time to find one that works for you. Fortunately, many platforms offer a free trial version where you can try out many of the features without having to put your money on the line. These trial versions also offer an excellent opportunity for new traders to test the waters without having to risk their savings, as they allow you to put your training into practice with a trial balance. This can give you a feel for the way the markets operate as well as allowing you to decide which one of the many trading platforms feels right for you. Once you have completed your training and found your platform, you can think about beginning to trade for real, but remember you can never know too much about CFD trading, and that you can always learn something new which could help increase your profits exponentially.

Four Tips to Successful Day Trading

Day trading is also known as spread trading. Day trading consists of opening and closing trades in a single day. It is called day trading but it’s traded all around the clock because when people go to sleep others are waking up in another part of the world. The internet has enhanced day trading since you can conduct your trades at the comfort of your home or in any location around the world as long as you have internet connection. The basics of day trading is to monitor the market and track every change in order to trade every opportunity the market offers. You will find, here, a day trading guide that will help you become a successful trader.

Cut your losses quickly

The key to any trading strategy is to defend your capital from a margin call before thinking of making any profit. There are rules that, if followed can assure you success. The most important rule you need to have is to reduce your losses as soon as possible. Many experts would recommend that you wait until your stop is hit, but that is not totally true as the only time you are allowed to wait is before opening a position.

Use tight stop losses

A tight stop is your best friend in this market. Never wait for a trade hoping that the market will reverse. Hope is a good quality in human nature but hope can be your enemy in the markets. Never hope that your trade will turn positive. Most of the time, a loser won’t become a winner. To become successful, you have to trade against human instincts. This is one of the main reasons; successful traders are so rare. Human nature is the reason why 90% of day traders fail in the first place.

Make sure every trade goes into profit immediately

As a day trader, you need to break every complex process into small parts and deal with each of those separately. That is why you should be constantly checking your day trading guide to make sure you don’t forget your own rules. This will help you in the better understanding of the trade. It is very easy to fail and very easy to succeed. Wait for the perfect moment to enter your trade. This will help you make your trade go into profitable territory immediately, if it doesn’t then your best strategy is to close it. This might be radical to some people, but it does work.

Don’t wait for the market to prove you are wrong

The best day trading tip is that it is not logic to wait for any market to prove you wrong. If the market does not prove you right as soon as you enter into a trade, it shows that you should leave immediately. Some of the most successful traders have been using these rules for decades and they sure do enjoy the benefits.

You also have to know the best currency pairs to trade and at what time. Four currency pairs are traded most in the forex market. It is important to stick to these currencies that have high liquidity.

In conclusion

Be on the lookout and exit a trade when you think it is about to go sour. Eliminate hope in your trading, it can be the cause of your margin call. Constantly keep revising your day trading guide to stay relevant in the market.

Day trading requires your attention in every moment of a trade. This is why you should have a look at the following guidelines to be on the safe side when starting out.

3 Deadly Mistakes to be Avoided in Intraday Trading

Intraday traders fail in stock market due to various reasons. Intraday trading is not a rocket science, but nearly 90% of the Intraday traders fail, because of the following 3 common mistakes they conduct while doing Intraday trading. If the Intraday traders try to avoid these mistakes, then they will be in the track of earning the consistent gains in the Stock market.

a) Lack of Stock market knowledge: It has been observed that most of the traders enter into Stock market either based on a very little knowledge about the Stock market or based on hot tips. This is not a healthy practice. Its very important for the trader to gain the knowledge about the Stock market. Without the knowledge of domestic news/updates, international markets, its not possible to earn consistent gains in Stock market. If you are newbie, then spend atleast 2 to 3 hours analyzing the markets, studying the company fundamentals etc. After doing all the above things for couple of months, then you will start understanding the market and then you can proceed doing the paper trading in order to gain the confidence. Once you start earning profits on paper trading, then you can start real trading. If you jump into trading without having a proper knowledge about the Stock market, then you will end up losing money.

b) Greed: Greed is the factor which can turn the profitable trade into the losing trade. Profit generation in Stock market totally depends upon the Stock market direction. You have to listen to the market and if you think that trading is not possible on that particular day then stay away from it. In Intraday trading it is advisable for the trader to book small profits and do multiple trades, because in Intraday trading, its very difficult to judge the Stock move. Don’t convert your profits into losses by becoming greedy.

c) Impatience: You have to be patient while doing Intraday trading. You should not panic when you incur the losses. If you become impatient, it will provoke you to take wrong decisions.

If you think that if you have any of the above factor at extreme level, then try to overcome it in order to be successful in Intraday trading. If you don’t overcome the above mistakes, then you cant earn profits from the stock market even if you take the Intraday tips from the reputed stock advisory company.

Day Trading For Dummies

Because they happen on the market, it is therefore important to talk about the method that you as a dealer may maximize your endeavours towards the greatest day time trading.

A trader in which wants the very best of stock investing would have become familiar with the type of the market. These kinds of particular man or woman is actually surely a great optimist that feels customers with rock-bottom prices chance to make awesome stock income in the active marketplace. He understands that the consequences of every moment available, and that he can certainly use these so that you can his / her advantage. Finest day time stock trading involves ability to discern industry having around accuracy, if not exactly. This is not for very sluggish traders or perhaps idiot’s since it demands considerable endeavours by the particular trader.

On the web stock-trading demands you to come with an accounts using a trading organization that gives online stock trading of stocks. So once you’ve made the decision the kind of buying and selling that you simply need to proceed with you must switch on an account using these online stock trading businesses. Deciding which company will be the most effective for you could be complicated but with some study through keeping the next at heart it is possible to choose which may be the greatest for you personally.

The particular investing types (swing or day trading) then the company.

Will the business offer you management of their bucks expertise?

Based on how extended has the business been functioning?

Will be the online stock trading method given by all of these user-friendly?

Will the organization provide you with techniques on how to move around in that scenario?

With online trading it is possible to trade options sitting at your home as well as handle your account much more. Most of these on the internet stock-trading organizations offer you on the internet help for their users so that they can get their questions in regards to the currency markets responded to. The actual trading professionals connected with these companies might assist you with assessing any scenario as well as allow you to organize any strateg

A few principal options associated with backtesting are:

A single. Homemade! Sure, it is very gradual, dull and time consuming, but it’s the only real alternative that really teaches you concerning investing. The knowledge acquired through backtesting will probably be worth each and each second spent. Homemade backtesting entails experiencing traditional data eventually at any given time, keeping the actual diary in regards to the trading signs during the day forward, next looking into the next chart and also document the investments as well as indicators for an additional day. Open up a trial accounts using a brokerage of your liking which fits backtesting computer software package through the trading program. Make sure that your forex boker features a good reputation and the trading program will be easy. My own suggestion is MetaTrader 4.

Two. Automated Software program. Hottest choice among dealers, because it is less difficult then “Do-It-Yourself” backtesting. The commercial software program retains the records with the buying and selling information (and therefore you don’t need to do all the effort yourself). The majority of computer software package assists you to trade the past. Indeed, you are able to actually trade the body for a long time as well as figure out whether or not the program is effective upabout prolonged time frame.

3. System The Software system. This method is just with regard to personal laptop or computer system software engineers. The theory is always to signal the script so that you can retrieve the actual trades in the past in accordance with your own buying and selling technique. This may look like a great optimum backtesting approach, but you can find tones of restrictions. For starters, you have to be a good developer! In the event you never had a good come across along together using development earlier, it is prudent to not even think about this alternative. It really is tricky to system the particular trading plan. For example, you must work out how to deal with Eu buying and selling classes if the product is made to take trades only during the Hard anodized cookware buying and selling session.