General Investment Information Before You Make That Big Step

By Mr Christopher Latter

Investing Information for dummies is for those who want everything in an easily understandable format-in a way that even a child can easily understand. 'Dummies' are not expected to have mature knowledge. This article is provided for those who are planning to start their investment activities in the stock market. Most of us are generally busy with the tasks we have. In that situation, the 'needed' information in a 'simplified' form can save you loads of time.

Lots of people are very keen in investing in the stocks but little do they have knowledge on how to initiate the process. The investment information for dummies provides them the necessary information on how to start and where to start, in a simplified sentence. The investors have to have a basic idea on their starting investment in the stocks. They need to gain knowledge on how to choose the investments that best fit their goals, read and understand the financial reports, balance their portfolio, compare the benefits of new investments, and manage their retirement fund. Many investors spend their time and money in buying the shares at a low price and selling the same for a better price (considerable high). But reality, the value of a stock depends on its demand, either directly or indirectly.

As a part of knowing the investment information, it is also vital to know the two fundamental elements of investment-'why' and 'how'. 'Why' represents the reason for making the investment in that particular stock and 'How' represents the way you are going to generate profits out of it. It is very vital to have a deep discernment on how the stock is behaving with respect to the demand and time. Buy a stock when you think it is the best possible price you can get it with respect to time and trade it at the best possible maximum price accordingly. Also, do not trade your stocks too early than needed. Trades must be done at the exact point of time.

Investing information for dummies primarily focuses on all the fundamental aspects of investing. To make profits, one always has a hell lot of options to choose from. He can either invest in mutual funds or can invest in stocks or can invest in any other relative field that generates huge profits. Also to facilitate his trading transactions, there exists plenty of investment software enabling him to put all his strategies in the automatic machine. The automatic investing software takes care of all his trading transactions and does the trading automatically based on the strategies that the investor has fed into it. The software never contradicts the rules set by the investor and also notifies him whenever it comes across some events or patterns that are close to the rules set by the individual. Before doing the trades automatically with the help of a software, it is highly recommended to do an in-depth analysis of the potential of the investing software. There are plenty of software packages available in this regard. If you are not satisfied with the one you already are having, try to choose one that caters to all your needs.

Also, it is advised to be kept updated with the current business news and investment information. Do not depend on all that one hears. Try to have some hands-on experience on the news and develop a strategy of your own. - 23223

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Top 5 Investing strategies

By Mr Christopher Latter

1. Advertising: Advertising now occupies the first position amongst all the other investment strategies. With world racing with enormous speed, there is also a subsequent development in the field of media. There are plenty of organizations and companies that are totally dependent on the public people-they manufacture products expecting the public to buy them so that they can make a fortune. And for these products to gain exposure, it needs some level of advertisement among the public. This is where the advertising companies come into the scene. As the number of products increase rapidly, there have been a great demand for advertisements in the same pace. Investing in such advertising companies can ear you good fortune.

2. Using Long-Standing Investment Strategies: Prefer long run investing strategies that will help guard the investment capital from losses and risks. Enduring strategies comprise dividend investing, with the intention that one can bring in compounded interest which actually sums up in the long run. Investment strategies like these seek to decrease the losses in capital, and are generally more conventional than temporary investing strategies and practices. One might receive a little a smaller amount of a come back with this conservative investing, however the advantage is that the risks are very much lower.

3. Saving from your own income: There is no clever investment strategy than saving some bucks from your own pocket. It is very advised to gather hay when the sun is till shining. Set aside some part of your income and invest in the form of bonds or certificate deposits so that you can use them in times of need. They also can be a form of 'security' at times when things around you get worse.

4. Diverse Investments: Diverse investments are investments that are invested in an organization or in a company for a certain period of time until the investors feels satisfied with the amount accumulated. Generally, diverse investments are made keeping the long term high returns in mind. People belonging to both the parties agree to a set of conditions and sign on a contract that clearly specifies the benefits that an investor would get. The company agrees to pay the investor certain percentage of amount from its profits in regards to his investment. Upon accumulating some considerable amount of money, the investor can either choose to withdraw from the company or can choose to continue with the company to make more profits. Generally, it is highly advised to continue with the company as much as possible because, the value of the investment tends to increase with respect to time. The more time the investment is in the company, the more will be its value. This form of investing strategy can draw you higher returns with respect to time.

5. Always do remember that the financial markets always go in a cyclic fashion: Maintaining ones viewpoint is very necessary to evading silly and reactive moves. To finish "extreme" anything works only in sports - not in investing. Multiplicity and calculated action is only the way to go ahead. Never stop investing. Always maintain a habitual investing strategy.

So use the above investing strategies for making effective investments and in turn getting good returns. - 23223

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Why Out Of The Money Covered Call Writing Does Not Work In A Declining Stock Market

By Marc Abrams

Incredible things have been promised by many websites and e-books regarding investment training strategies. One of the more common stock market trading strategies taught is to sell covered call options on stocks. These websites promise that you can earn up to 10% monthly returns using that very strategy. Sound good? Read on.

I will be the first to admit that selling out-of-the-money covered calls can bring lucrative monthly returns under the right circumstances. I have successfully used this very strategy. However, this strategy is not without its disadvantages. Website and e-book marketers of this strategy fail to educate you properly. They market this strategy as conservative with little risk. They also leave you hanging when it all goes wrong.

When the stock market is rising in value selling out of the money covered calls works well. Additionally, when the stock market is neutral (not going up or down by any meaningful amount), this strategy also works well. Please tell me when the last time was that the stock market remained neutral for any length of time?

We are currently in the midst of an extremely volatile market. The Dow frequently moves as much as 200 points either way in a single day. Hardly a profitable market for an out-of-the-money covered call writer. Your profits will start to evaporate once the stock you are holding starts to decline. I can assure you that profits can evaporate very quickly. I have seen the value of a stock drop from $10 to $1 over night! There is never enough premium on an option sale to cover that kind of decline.

You want the stock to get called, that is the key to out of the money covered call writing. Many so called experts do not want the stock to get called. They say you should keep the stock so you can continue to sell a covered call option on it in future months. This strategy is flawed. What you should do is select stocks that are moving up in value, in a rising market. Those stocks will make you the most money. I am happy when a stock gets called because I ended up making the profit that I expected.

What if the stock shoots way up in value? If the stock shoots up through the strike price and remains there at expiration, it simply gets called away. Isn't that what you wanted to begin with? You may think you left money on the table by not being able to participate in those gains. If that upsets you then just buy the stock outright and don't sell covered call options on that stock. Instead, let the stock get called away and take your profit for the month. Then look for another stock to buy and sell calls on for the next month.

Remember, you can create an excellent source of income selling out of the money covered calls in a rising stock market. However, the stock market we find ourselves in today is less than ideal for this strategy. There are other strategies, however, that offer significant protection in a declining or volatile stock market. - 23223

About the Author:

Marc Abrams Is A Certified Public Accountant With Over 15 Years of Financial And Investing Experience. Visit Marc's Website at http://www.rebuildingmyfuture.com To Learn More About Successful Covered Call Option Writing Strategies In A Declining Market.

ETF Trading Signals, Low Risk Trading Instruments

By Taylor Bans

Investing in the stock market can be risky. I'm always looking for new strategies to grow my money without too much risk. ETFs are a great way to invest, but with low risk, the returns aren't as good as with other trading instruments. Then I stumbled across ETF Trading Signals.

A friend of mine told me about ETF Trading Signals and said he was doing better with his ETF investments since he started subscribing to the service. I was skeptical, but I took a look and did some investigating. ETF Trading Signals changed the way I looked as ETFs as an investment instrument. While the returns were less than I make on some of my hot stocks, the risk was a lot lower. I decided to try it out.

Instead of considering my ETFs as long term financial instruments, I started looking at them as I would any other stock. The low buy in meant that I didn't have to tie up as much capital as I did with some other methods. It isn't as fast as hot stocks, I usually hold my ETFs for one or two months, but following the tips from ETF Trading Signals has helped me to make more in this market than I thought I could. I owe my friend a nice dinner.

I was thinking about buying some ETFs to add to my portfolio with my other long term investments. I started checking out websites that brokered ETFs and I came across ETF Trading Signals. ETF Trading Signals is a site that keeps track of the highest performing ETFs on the market. They even send alerts and give advice on the most profitable ETFs every month. I already keep track of hot stocks and this looked like a good idea.

I've been using ETF Trading Signals for about six months and so far they picks have been right more often than they've been wrong. I've made more than I expected to in the ETF market, and my investment capital hasn't been tied up for long periods. I've still minimized my risk while increasing my yield.

If you are the kind of investor that looking to get rich overnight, you probably won't like this instrument. Usually I try to keep my ETFs for a couple of months before I sell them. This doesn't have the fast pace of hot stocks and trend following, so if you're in the market for the excitement, you may not like ETFs.

On the up side, so far I haven't taken any serious losses with my ETF investments. I didn't really expect to since the reason for getting into the ETF market was the low risk and relatively low investment of capital. I have made more profits than I initially expected to by following the advice offered by ETF Trading Signals. Hot stocks can make more, but I've also had more losses in hot stocks. The risk is a lot higher for hot stocks and trend following than it is for ETFs.

I recommend ETF Trading Signals to anyone who is thinking about entering the ETF market. It may not be the fastest way to make a buck, but you can't have everything and this is a great investment if you can't afford to lose a lot. If you haven't considered ETFs, you should certainly investigate the market's potential. - 23223

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Go to ETFTradingSignals.com and sign up for their free newsletter to receive the best ETF of the month or find more about their natural gas ETF.

Money Management in Currency Trading (Part III)

By Ahmad Hassam

Live to trade another day is perhaps the best advice that you will receive in your trading career. Forex markets are brutal and unforgiving. You need to learn to survive in the markets.

The single most common factor that causes many currency traders to blow up their accounts and lose all their money is greed. You start taking unnecessary risks when you get greedy. You will spend many hours trying to find the Holy Grail technical indictor or a forex robot that can make you rich. You will believe that by discovering that secret, you will become rich.

Unfortunately there is no Holy Grail for anyone in trading. You will win and you will lose. So you must learn not to risk more than 2% of your account on one trade. Grow your account incrementally over time. Never ever be tempted to risk big making one single winning trade that can make you rich.

You should know how much you are willing to risk in a single trade. I said 2%. But if you want to be aggressive you can go up to 5% but stay between 2-5%. Dont exceed it. If you are conservative, on the other hand, you should consider risking between 1-2% only.

Once you have decided on the amount of risk you are willing to take, the rest is simple. Suppose you have a $50,000 account. You decide on a risk of 2% only. How much you can risk on a single trade? (50,000)(0.02)=$1,000. This is the maximum amount you should risk on a single trade.

However, if you are in more than one trade at the same time, the amount may be higher. Suppose, you are in 3 trades and you risk only $1,000 per trade. So the total amount at risk will be $3,000. Once you have determined your risk level, you are ready to determine the trade size.

Trade size is the number of currency pair contracts you purchase in any one single trade. You need to first determine where you want to put your stop loss in order to determine the trade size. Lets use a simple example to make it clear and suppose you are willing to risk $1000 on trading EUR/USD pair. You decide on a stop loss of 50 pips. Each pip on EUR/USD pair is equal to $10, so the number of contracts that you can trade are 2= (1,000)/ (50) (10).

By calculating your trade size, you have taken the guesswork out of your trading once you have determined your risk level. You can sleep well now. You know how much of your money is at risk. You are going to be able to trade tomorrow. No matter what happens today.

Using these common money management rules will help you avoid the pitfall of losing almost all the money in your account. Learning to survive the markets and trade another day is the essence of trading. This can help your trading take the next level of profitability. - 23223

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading and swing trading stocks and currencies. Trade Dow Futures. Learn Forex Trading.