Watch The Stock Market News

By Michael Swanson

For many years, the Wall Street Journal was considered the source for stock market news. Today, however, stock market news can be found in many ways.

While the Wall Street Journal is still published daily, there are many other sources for stock market news. Many of these sources will be more current than the morning newspaper. In addition to the Wall Street Journal, you may find limited stock prices listed in your local or state newspaper.

News on the market can be found on radio and cable television. Many of the news channels will show a ticker of the market several times daily, until they show the final for the day. In addition, you will find shows that are dedicated to money and market news.

For the quickest news on the stock exchange, however, one has to turn no further than the internet. Prices of stocks are known immediately around the world with the advent of the World Wide Web. In addition, we can know what is happening in many of the world markets almost as soon as they happen.

Perhaps you think the market does not affect you. Think again. The prices in the market will determine your cost of living. If you have money tied up in a 401K or an IRA, chances are that your money is directly tied to the stock market. The growth of those funds only happens when the market is increasing.

Persons losing their jobs due to the current economic conditions have learned this lesson the hard way. Since they no longer work for the company, they must cash our or roll over their 401k. A retirement fund that was at one hundred thousand dollars two years ago may be worth less than seventy thousand dollars today. Money that you had deducted from your checking account was invested in a mutual fund. This fund buys shares of different stocks to invest your money.

Knowing stock market news lets you keep an eye on your investments. - 23223

About the Author:

For more on stock trading strategies go to WallStreetWindow.

Trading System - Are you A System Trader?

By Maclin Vestor

A trading system is a methodology of trading. An investor who uses one system and follows a specific set of guidelines when making a decision, follows system trading, and will usually never deviate. A trading system is only one method of trading, and usual requires no thinking. It is possible to have one system that is governed by multiple system.

For example, to have 10 different systems, and select only one stock from each system every month according to the main system's qualifications.

Someone that uses several Trading Systems is a multiple system trader. They have to either have an overall system that encompasses all of them, or make their own decision on which to follow. Doing so can be dangerous, as the purpose of system is to prevent human error. It is advised to be a system trader who trades one system at a time, or trade multiple systems within a larger core system, and avoid being a multiple systems trader.

Trading System - Trading can be awfully hectic without some kind of methodology. You can't expect to take on the best traders in the world who have teams and resources at their disposal just by throwing around money at will hoping that it works. You need an actually defined system in order to be able to trade effectively.

Many successful systems are based on earnings and high potential for growth. Stockbee's trading system often swings for the fences. As a result, it requires a solid degree of protection. Obviously you shouldn't limit yourself to someone else's system, you need to find one that is right for you.

There are two kinds of traders, technical traders, and fundamental traders, each has their own system. Of course there are some who use both.

Technical traders

Some system traders, are day traders. Others are swing traders. Still other people are more of a trend trader. Each will have it's unique system. The system will be based on the technicals. Is it volume that triggers the buy? Is it price movement? A combination of both? Or perhaps it's pattern trading.

Some people even have trading machines or robots that do the work for them. Others rely on pattern recognition done by a system. The method is to sign up for email alerts, or some form of alerts, then make a purchase based on the software's recommendation. There are some people that screen down a stock based on strong fundamentals, and only trade those stocks, but trade them based on the technical chart patterns and volume.

They will sell based on a trend break, or rules on when to take gains such as 20% gain according to their system. They will set a stop loss based on their system as well. It might be 4%, or 8%, or it may be a trailing stop.

Fundamental traders

Fundamental traders might do things a little differently. They are looking for improving fundamentals, or stocks that pass through a certain screener. Zacks.com is a great resource if you want to rely on fundamentals. Earnings is always a big part of a system, and the Zacks' ranking uses earnings revision to get in early when the earnings and company internals appear to be improving. Zacks' has several screens, and their software allows you to screen stocks according to many different options.

Regardless of your trading system, one thing remains important in every single system. Money Management and loss protection.

It doesn't matter what the upside is or win rate is, if you can't protect yourself from major declines, you shouldn't be trading. I don't care if your system is 90% effective (no system is and if they say they are, they're lying), and if the gain is 1,000%. If you put all your money on it repeatedly, eventually you will suffer a loss so catastrophic you will never be able to recover without borrowing money. By taking one loss, you hinder your ability to make money. That is more costly then the potential for greater gains that you would gain by taking additional risk.

Just to illustrate if your system causes you to take a 95% loss, you need a 2000% return just to make up for that loss. You cannot trade like this. No system is better then it's weakest link. That weak link unfortunately for many people is the ability to manage money. Fortunately, it is a skill that can be learned, and doing so will make you a better trader. Better yet, if you do not wish to be a better trader, you can simply follow the rules of a system that contains a methodology on how to manage money and how much to invest before placing a trade.

I recommend that you either have a trailing stop or a hard stop. You can also buy a protective put if you are afraid of a stock bottoming out overnight and plummeting through the stop. Protective puts are like owning insurance. Unfortunately, you have to continue to buy the insurance as it eventually expires if you don't use it. Don't trade options without learning everything about them.

Some puts are not good for some strategies. Longer term trades and Investments will require long-term equity anticipation securities, or LEAPs, where as you may not need to risk as much capital for short term protective puts. A trailing stop should be usually 20%, where a hard stop should be more like 7%. Different systems will require different stops so take this with a grain of salt.

A good investor or trader actually will rarely need to ever be fully invested. There are people that trade on complete margin for a few times the entire year, and the rest of the year they're on the sideline, but generally the best traders that have a career that lasts have lots of money on the side, even more so if they use options and are unhedged. If you are unhedged, that is only playing one side of the market, (all buys, or only playing one theme such as only playing inflation or only playing deflation), you need to have even more cash on the side.

The lower the win rate, the more money on the side you need, and the smaller your positions should be. Any good system won't require you to analyze. Having to do a lot of the thinking can cause you to panic and make incorrect decisions. Most people aren't cut out for that, and that's why it is a smart thing for many to use a trading system.

If you trade within a system, you have a much better chance at placing winning trades. A trading system will have a solid record of success, evidence that it works and has been working, an understanding of the decline and proper money management planning. If you trade within a system, you can estimate your results, and by doing so attain measurable success consistently with a trading system. - 23223

About the Author:

Maclin Vestor teaches about How To Buy Stock Online. You can even learn about virtual stock markets and advice on the Stock Market For Beginners at his blog.

Does Your Trading System Have an Exit Strategy?

By Maclin Vestor

Many good trading systems use multiple exit strategies. In normal trading system, you need to know when to exit from a gain, and when to exit from a loss. Generally you want to be cutting your profits short, and letting your profits run. At a minimum, you generally want nearly a 3:1 gain to loss. This means you should take profits at 3 times the percentage amount as you cut your losses short. We will use this system and do the following

1) Exit stop at a 7% loss. This stop-loss should sell ALL of your shares. The simple method is to just set the stop and leave it. There are dangers of this because people may be able to see someone make the stop order on the floor, and if they have enough money, they can take advantage of that, selling lots of shares of the stock, pushing the stock price down below the stop, then forcing you and others who may have stops out, and then buying the stock below your price, so the stock will stop out, and then quickly rebound. The more advanced mode is to just watch it, and if it is going to CLOSE below your stop, only then will you exit 10 minutes or so before the markets close. The sophisticated way is to just not use stops, and instead buy puts. this increases the cost of the investment and thus limits your win, but you give up a fixed amount for protection against large losses.. This would insure that the stock doesn't drop overnight. A failed breakout is signaled if a stock drops 7% below breakout point. If you are buying stocks on the pullbacks, a 7% drop should signify a breaking of support.

2) Set a profit target at 20%. You can use a limit sell order to sell here if you would like, particularly for those who don't have the time to watch the stock. You should be willing to wait a full 4 months for it to hit it's target. If it hits the target, you should sell 1/2 to 2/3rds of your shares, and let the rest ride. Also, if your stock hits the price target within 8 weeks (2 months), this signals that your stock is a good one, and you want to hold onto your winners. There is a simple strategy and a sophisticated strategy. The simple strategy is to hold onto your stock until the entire 8 weeks is up. The sophisticated strategy is to sell most or all of your shares, and convert them to an option that you should own at strike price, or very close to it. You should ensure that this transaction is such that in a worst case scenario, you still will have a 5% gain. Generally, you will own say 100shares, sell 100, and buy 1 call contract at the same strike price the stock is at, and secure a profit, while still maintaining the same upside leverage minus the cost of the option and the transaction.

3) Set a trailing stop of 25%. This should serve as a function primarily to exit the remaining 1/3rd to 1/2 of shares that you let ride after you hit your price target of 20%. It is possible that the stock goes up near your target, which will raise this stop to 5% below where you bought it, or if you aren't using a limit sell, it could spike way up to up 35% from where you buy it, and then quickly come down, and sell out a small portion of your shares for a small gain. This is fine. In this case, either the stock will then proceed to drop below your buy point and go and hit the 7% stop-loss, or it will then bounce and gain until it hits your 20% target. In either case, you will sell the rest of your shares. Of course, if this all happens in a short amount of time, you may attempt a swap as a sophisticated strategy, but generally you should be done with it.

4) You should always keep records. Record how many you bought at what price and which exit(s) were triggered. You want to check all these stocks in a year, or so, and see if you could have made more by adjusting your stops, or adjusting the size of which you sell.

5) Enjoy the profits.

If you are a good system trader, you will make sure that they trading system you use has an excellent exit strategy. At System Trading|Stocks Trading Systems you will learn that an exit strategy will allow you make sure that you have a trading system with greater returns on your average gains than you have losses on your average losses. This is only one small aspect of a trading system but it is a very important one. In fact, your exit strategy will be vital in determining how much capital you allocate when managing your money in a trading system.

In addition, if you can find a stock selection vehicle in combination with a good exit strategy, it will insure that any given investment has a positive expected value. In other words, with a good exit strategy and stock selection that picks winners often enough, you will win more than you lose, provided you manage your money right. Learn these tips as a system trader, and you stand a much better chance at being a profitable trader than someone who does not understand the importance of a good exit strategy within a trading system. - 23223

About the Author:

Maclin Vestor teaches about a few examples of an online trading system and teaches you to find an options trading system that works for you.

Stimulus Package $1600 Free

By Sam Thomas

Australian Homeowners will receive $1600 Free from the Federal Governments latest stimulus package. The stimulus package designed to reduce greenhouse gases and save homeowners money on energy bills. This is completely free to homeowners that don't have current insulation.

The Federal Governments $4 billion economic stimulus plan is giving Australian Homeowners $1600 Free. The insulation rebate is available from 1st July 2009 for a limited time. For homeowners, the insulation rebate is up to $1600 worth of ceiling insulation and $1000 for tenants and landlords. The insulation rebate will cover up to 2.9 million Australian Homes.

Free Insulation- The Savings will be in your pocket

Insulation rebate will save you money in more ways than One, first, unlike many other rebates where the purchaser is required to pay for the product and then apply for a rebate payment back from the government, the insulation rebate is paid directly to the installer after completing the work. Meaning the homeowner has to pay nothing. It is completely Free.

This means the homeowner does not have to pay for anything - no out of pocket expenses at all! Second, the installation rebate of up to $1600 per household in most cases covers the entire cost of the job, with the average home costing between $1200 to $1600 to supply and fit with ceiling insulation.

Third, the purpose of the insulation rebate is to increase energy efficiency in Australian homes - this improved efficiency will mean that you will save money on your energy bills. For your Insulation

Protect the Environment and reduce Greenhouse

Up to 35% of heat in a house can be lost through the roof, but with up to 2.9 million homes improving their energy efficiency thanks to the insulation rebate, the huge reduction in energy consumption by Australians will result in a significant dropping the emission of the greenhouses gases.

Insulation Rebate: Cost YOU NOTHING

The insulation rebate covers each eligible home for up to $1600 worth of FREE ceiling insulation; with the average home costing $1200 this means absolutely NO OUTLAY to you. The ceiling insulation must be installed by qualified and registered installer to be eligible for the insulation rebate. The installer will supply you with a written quote and complete the job and handle the paperwork. The installer will then receive the insulation rebate directly from the government.

Taking up the insulation rebate offer is simple: Fill in the form below to take advantage of the INSULATION REBATE: IT COST YOU NOTHING - 23223

About the Author:

Insulation Rebate For Homes Offers all Australian Free Ceiling Insulation.

When The Out Of The Money Covered Call Writing Strategy Fails Miserably

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.

Under the right circumstances, impressive monthly returns can be achieved by selling out-of-the-money covered call options. This strategy has been successfully used by me. However, it is not without its disadvantages. The public has not been properly educated by the website and e-book marketers. This strategy is marketed as having low risk and being conservative. They leave you holding the bag when it all goes wrong.

Selling out-of-the-money covered calls works when the stock market is going up in value. Additionally, when the stock market is neutral (not going up or down by any meaningful amount), this strategy also works well. I don't know about you, but when was the last time the stock market traded sideways 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.

The key to out-of-the-money covered call writing is to select stocks that will get called. Many so called experts do not want the stock to get called. They want you to keep the stock so you can sell a covered call option on it the next month. This strategy is flawed. You need to select stocks that are trending up in value, hence, a rising market. Those stocks will make you the most money. If the stock gets called, I know I ended up making my maximum anticipated return.

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 Today's Stock Market.