Stock Picks – The Development Of A Stock Trader
If you take a look at just about any profession, you’ll find that people evolve through three stages: novice, competent and expert. Let’s take a look at how this works in the stock trading profession.
A novice stock trader is a one trick pony. They have one trading style they cling to for dear life. When they perceive that it no longer works, they’ll find a new stock trading system and believe with all their might that THIS is the way… until it too shows itself to be flawed. They are also inflexible and easily become confused when the unexpected happens. And, sooner or later, the unexpected will happen. They have lots of misconceptions, such as “shorting is bad.”
After the novice has been bloodied and bruised enough, he has a decision to make. Perhaps “stock trading is not for him.” If he sticks with it long enough, he eventually develops the experience to become competent.
A competent trader has “enough tricks in his bag” that he can adapt to a range of situations. However, he knows he needs to keep learning, and that there is always more to know. The overconfidence of the novice is replaced by the experience to know that uncertainty is a permanent fixture in his relationship with his chosen market.
As a trader matures, it gradually dawns on him that there is no “Holy Grail” of stock trading. There is no perfect indicator, system or money management approach that will GUARANTEE success. Usually, about the time the thankless search for the Holy Grail ends, a trader is competent enough to find his way without needing such an unrealistic psychological crutch.
A competent trader focuses on acquiring the right facts and making disciplined decisions based on these facts. He feels “safe” if he believes he “understands” the situation. For example, he may have a number of ways of picking stocks and a number of ways of playing his stock picks.
Eventually, a competent stock trader notices that he understands a situation even if the facts are not all in. This is because he can relate it to similar situations he has experienced in the past. He is then ready to graduate to expert.
An expert stock trader has enough tools, stock trading software and tactics under his belt that he can confidently take advantage of a trading situation without having to rely on detailed systems. In a sense, this is the opposite of the novice approach, because the expert knows what he is doing on an intuitive level. Getting to this point takes lots of hard work, and, as the saying goes, “many are called but few are chosen.”
However, the financial rewards for being an expert trader are greater than in most professions. Being able to pull money out of the market almost at will means you will make a very nice living. However, there is one last hurdle to overcome. It’s a battle that will last a lifetime: always be humble. No matter how good you are, the market is willing to take it all back if you ever forget that it will always be much bigger than you are.
Trade well, with earned confidence, and you will prosper.
Doug Newberry is the Director and Founder of Investing Systems Network. He builds very reliable stock trading software so tens of thousands of all kinds of investors can trade with confidence. Investors in more than 25 countries enjoy his newsletter and his weekly online radio show.
Stock Market Traders Buy Gold To Protect Portfolio
Should Stock Market Traders Buy Gold To Protect their Portfolios?
It has often been said that Gold is the No. 1 “safe haven” in harsh economic times.
Research seems to bear that out – between mid-2007 and 2009, gold prices went from $940 an ounce to nearly $1,220 an ounce. That’s more than a 33% gain at a time when equity prices, real estate prices and the value of the greenback were in a freefall.
That alone is reason enough to make investors want to add gold to their portfolio… And they have.
But with the strength of the dollar rising in the wake of the euro’s near collapse and the still-green shoots of recovery pushing up into the sun, you might need more than one reason to keep or add gold to your portfolios.
5 Reasons to buy gold today
In 2009, investors bought a total of 573 tonnes of gold through exchange-traded funds (ETFs). That’s 20.2 million ounces and, at the average price per ounce in 2009, that’s an investment of $19.6 billion!
And now, with the eurozone’s near collapse sending the dollar shooting higher and volatile global markets turning investors into quivering mice, smart investors are running back to the one asset they can count on: Gold.
Today, I’m going to share five reasons why you must join them – before it’s too late.
Reason #1: Soaring global debt
Do you know how much money the European Union (EU) decided to raise to bail out Greece? A cool
$1 trillion. Add to that the SDR4.8 billion (SDR means “Special Drawing Rights”) in outstanding purchases and loans from the IMF, and Greece is in a massive debt hole that’s threatening to collapse the whole European Monetary Union… And that’s just one country in the IMF’s accounts.
Remember Iceland’s breakdown in 2009? Its outstanding purchases and loans figure is 654.76% above its IMF quota.
In fact, the IMF’s member countries are SDR1.3 billion in arrears as of May 31, 2010. That’s the amount of money from IMF loans that are at least six months overdue. These countries are weighing down the global economy, and any economic fears will increase interest in gold as a safe haven.
Reason #2: Overextended dollar
With the euro crumbling, investors are seeking the safety of the US dollar. Against the euro, the dollar has climbed as much as 21.3% in the first half of 2010. But has the dollar really climbed in value?
No… Government debt continues to climb above $10 trillion. The Federal Reserve won’t even print the true total amount of dollars and dollar promises (read T-bills, etc.) in circulation. Interest rates are still at near zero, and have been for more than a year and a half.
The American consumer still feels strapped and our jobs growth is hardly making a dent in unemployment.
That means the growth in the dollar’s value is mainly due to the pain and suffering in Europe. That’s nothing to hang your hat on, and it’s certainly a reason to put gold in your portfolio.
Reason #3: Stability and growth
The fluctuations in gold’s price means there’s a strong inverse correlation with the dollar’s value. That’s what makes it such a great hedge against a falling dollar. When the dollar drops, gold prices climb, and vice versa. It’s a very stable relationship.
This is because gold is priced in dollars, so when value is eroded, it takes more dollars to buy the same amount of gold.
But here’s the thing… When the dollar falls sharply during tough economic times, investors flock to gold. When demand for gold climbs, so does the price, since we’re not making any more of it! That means you can see profits from investing in gold above and beyond the hedging protection it offers you and your portfolio.
Reason #4: Latent inflation
Right now, with the global economy still a bit wobbly from the worldwide recession, the world hasn’t been hit with skyrocketing inflation — like it should be, considering the amount of freshly minted dollars governments have flooded the market with in the past two years.
But with the stimulus programs (read, printing programmes) and the absurdly low interest rates governments keep holding, we’re, in effect, creating a bit of an inflation “bubble.”
Keep credit and borrowing cheap and hand out new dollars and you’re going to have to pay the piper at some point. This latent inflation will send our economy into a tailspin once the rest of the world gains its footing. All the more reason to buy gold.
Reason #5: “Blood in the streets”
Everyone knows the “Blood in the streets” theory…
Even Warren Buffett says when people are panic-selling, that’s the time to buy. His thinking is that you’ll get some great deals, and he should know. But Buffett is a long-term player. He thinks in decades, not months or seasons, or even weeks like some investors.
“Blood in the streets” also means people are scared and not willing to put their money at risk. Instead of investing like Buffett, they sell, sell, sell, creating a self-fulfilling prophecy that sends markets sharply lower, which incidentally sends more people to the safety of gold.
We’ve seen moments of panic in our markets, even after the recession was deemed over. The month of May was really turbulent, while June saw the JSE drop sharply. Meanwhile, gold climbed back above $1,200 an ounce during the same period.
What’s your next step?
These five points should have convinced you to think of adding gold to your portfolio.
By Sara Nunnally
Stock Trading Picks – EVSI
Did any of you manage to get into EVSI as suggested in last week’s Stock trading picks.
It closed up 20% at the end of the trading day! It was as high as 30% gains mid-day before leveling off a bit and finally closing at $.59 a share. ( Subscribed readers get picks like this regularly)
Right now Envision Solar is looking interesting
EVSI Current Price: $0.50
Website: http://envisionsolar.com
EVSI is a solar company that specializes in building and designing integrated solar building solutions and deploys them globally to companies, schools, corporations and government agencies. The company’s products include Solar Tree ®, Solar Row (TM), Life Port (TM), Life Village (TM) and Solar Grove ®.
Worth paying attention to if.
Stock Trading – Should You Trade On Borrowed Money | stock market
Stock trading is a risky business and needs to be approached with care and caution – but not fear.
Too often we hear about how dangerous it is to trade the market and yet many astute investors and speculators make massive gains every day.
But they succeed because they are skilled at the business of risk assessment and managing their emotions.
Let’s face it – almost every able bodied man and woman drives a vehicle almost every day and many get themselves involved in terrible accidents that sometimes cost them their lives. And yet they persist in driving. And it is these same people who think the stock market is fraught with danger.
Trading the stock market requires skill and this is at the hub of answering the question of trading on borrowed money. Gain the stock trading skills and emotional maturity that is necessary and the risk is much reduced. Once the risk is reduced than trading on borrowed money becomes more feasible.
Finding The Best Technical Analysis Tools For Stock Trading
In a recent article a number of elements towards effective technical analysis of stocks and shares was discussed.
Many traders in today’s stock market are opting to use a technical analysis tools program which carries out all of the analytical work on their behalves and delivers stock tips which are algorithmically based right to their e-mails. At this point any kind of investor whether you’re a Wall Street mogul or a stay-at-home mom can trade accordingly without having the time to put towards the analytics.
This article is going to look at what you should look for to pick out the best possible technical analysis tools for stock trading.
First and foremost, you’ll find that you can significantly weed out the ineffective programs by making sure that the publisher offers a money back guarantee on the technical analysis tools.
This of course is a sign of good faith from the publisher but at the same time it enables you to get the technical analysis tools and receive a few of its first stock picks and gauge their performances as they progress in the market accordingly.
You should also be sure to note whether the technical analysis tools exclusively targets penny stocks, greater priced stocks, or mixes them all together. The reason for this is that tools which attempt to look at and anticipate market behavior in penny stocks as well as much greater valued stocks typically perform much worse than those which go after one or the other exclusively because it’s a completely different analytical procedure anticipating faster moving/more volatile penny stocks versus greater priced stocks.
You should also take a glance and see what sort of support the authors behind the program offer to their customers. In the ideal situation, they would offer 24 hour phone support but realistically I have found that many of these companies rely solely on their e-mail support. That’s not necessarily a reason to write them off, as often times I’ve found that they’ll respond to your queries extremely quickly.
Consumer reviews are also generally great places to find the best technical analysis tools from people who have used them themselves first hand.
Start to dominate the stock market today by using the most precise and reliable technical analysis tools available right now.