You can beat the market if you control the rules!

Yes making money trading can be incredibly difficult, investing geniuses keep telling us that we have to be invested in the stock markets to really make the big time rich list.

But what if the markets go down like they have recently? Unless you get out early then you have no protection at all.

Going to a bank for a safe protection is great if you want your investment for your future children…when they grow up.

The only true way to make a descent return on your money and reamin protected when the markets go south is to trade.

But in todays uncertainty that’s also very difficult.

Trading in the futures and Options is very profitable for the short term both have some risks, but both rely on selling low and buying high.

Which means that to truly make a huge profit a trader needs to know ( or guess ) whether the price of that commodity in the future will go up or down.

The statistics are clear on that. 70% to 80% of money managers will NOT beat the market in other words most investors in the stock markets will not make money.

That leaves 20% or 30% are they the ones getting rich? Actually that is incorrect, these ones will also underperform, the facts are that less than 5% actually make money on a regular basis.

And the fundamental reason why the number is so low is that every one is trying to beat the market.

You see the principle of buying low and selling high is simple, implementing it is the difficult part since this relies on predicting the future price.

BUT what if we changed the rules? what if we were not to rely on the direction of the price but rather the size of price movement?

Now we are getting close to that %5 of traders who make lots of money trading options, those traders who do this for a living and live in those huge mansions.

The key is Volatility and Probability.

Hang on there is no need to go for the abacus or call your uncle who is trigonometry expert.

This is easier done than you care to think, you see by recording the rice history of an options stock for one month we can get its volatility and with that we can ( using Excel or similar ) we will derive the probability of where the price of that stock will be in a given future time.

No, not which direction the price will go, thats what the 70% or 80% and the rest are trying to figure out, but what we want is the range that the stocks price will be trading in the given future time.

Once we have this we are already 120% in front of every other investor out there, all we need to do next is look for an option to buy. To read another topic on different site categories, please visit recursion, strojmat, maesc, cubaaction, dengarblog, soahubs, doktermuda, ririn’s, bazzanella, playyourpart, sielmob, spazphotos, and groesbecktennis.

Trend trading can be a very profitable way to make money in the stock market. It can be as simple as buying stocks that are going up and holding onto them until they start going down. Below is a list of actions you must take if you want to be a profitable trend trader. 1. You must first find a stock in an uptrend. So, what is an uptrend. It’s simple an uptrend occurs when a stock is making higher highs and higher lows. Thus the overall movement of the stock is upward. The first step to being a trend trader can be just as easy as finding a stock that is going up.

2. After you find an up trending stock you are going to want to get in this stock. You don’t want to get in at just any point however. Wait for the stock to make a higher low. When it makes the higher low a trend trader sees the signal to get in the trade. Getting in when a stock is making a higher low has advantages. First you get in the stock at a lower price than if you got in it during a higher high. Second it minimizes your risk because you can sell as soon as the stock makes a lower low.

3. Once you are in a trend trade you are going to want to hold it until it makes a lower low. This can take anywhere from weeks to months to years. As long as the stock keeps making higher highs and higher lows a trend trader should stay in it. A trend trade is different than a swing trade in 2 ways. First a trend trade will typically be longer than a swing trade. It also does not have a target. Trend traders like stocks that go up and will never leave them until they go down. To read another topic on different site categories, please visit recursion, strojmat, maesc, cubaaction, dengarblog, soahubs, doktermuda, ririn’s, bazzanella, playyourpart, sielmob, spazphotos, and groesbecktennis.

Ok, so no trader truly enjoys taking a losing trade. But if you want to succeed in this business of day trading, learning to love your losers (or at least accepting them) is one of the most important lessons you can learn. Psychologically, human beings are not well designed for trading financial markets. We hate losing, we hate being wrong, and we get buffeted about by those twin emotions - fear and greed. This leads us into all sorts of self destructive habits. Moving stop losses further out - just to give the trade time to turn round. Or grabbing a profit as soon as it appears - just in case we have to give it back. The simple fact is that most successful traders lose as many, more likely more, trades as they win. What separates them from the rest is their ability to cut a losing position and run a winner for as long as possible. The arithmetic is simple. If your average winner is twice the size of your average loser, then you can be wrong on 50% of your trades and still make very good money. Read the rest of this entry »