•3 Reasons Why Stocks Move
For years, I have been asked this same question over and over again, "Why does stocks move?".
For most people, the reason why stocks move has been a mystery. In fact, there are people who believed that someone is controlling these movements behind the scene playing against them! There are even people who believe that stocks move mainly due to good fundamentals. Well, look at it this way, if there is this big institution playing against you and taking all your money away from you, why aren't...
•Are Futures Riskier Than Options
Let’s face it, derivative trading is risky. Period.
Derivatives such as futures and options are leverage instruments and by virtue of being leverage instruments, derivatives inherently carry more risk and exposure than pure and simple stock trading. Leverage instruments are risky because leverage allows you to do more with the same amount of money than you would normally be able to. Yes, leverage instruments such as futures and options have the potential to generate over 10 times more profit...
•Finance Series : Exploring Investor Rationality
The Efficient Market Hypothesis has been under fire since Eugene Fame of the University Of Chicago Graduate School Of Business first suggested it back in the early 1960s. The central idea behind the Efficient Market Hypothesis is the theory that investors are completely rational in interpreting and acting on market news and information (which, ostensibly, is fully revealed public knowledge).
It has since come to be known as the Theory of Rational Expectations. This rational investor behavior...
•Fundamentals Of Technical Analysis
Technical analysis was truly an arcane art before the internet boom. Chartists perform technical analysis in their secret rooms with data that was carefully collected from professional sources. Those were the times when stock prices and data did not have a medium through which to be readily available to the public and be ran through publicly available software to produce the charts that are available today.
Today, with internet in almost every household, technical analysis became an art anyone...
•Holy Grail Of The Capital Markets
Introduction
Ever since I retired at the age of 28. I have been doing a lot of thinking into these “Tough Cases” of the investment world. What I present today hopes to unveil the most mysterious of them all, the Holy Grail of The Capital Markets and I will be giving you my argument as to why it truly exists and to help you find your personal Holy Grail of Trading and Investments by the time you finish reading this report.
So let’s go treasure hunting…
The Fabled HOLY GRAIL…
We have heard...
•Investment Series : Risk Free Investment Methodology
For a millennium, mankind attempted to define and measure risk.
From the early days of Pascal and Golton to the modern forerunners in academia, defining and measuring risk has been a relentless pursue. Until we properly define and measure risk, there seems no way to mathematically defeat risk, creating risk free financial markets and economies.
Mathematics opened up a new door for mankind with the invention of probability study. Mankind started using probability studies in real life...
•Investment Series – Investor Versus Trader
Many people have mixed up the terms “ Investor ” and “ Trader ” to mean the same thing. They can’t be more wrong. It is exactly the mixing up of these 2 very important terms that led to many people starting on the wrong foot in the capital markets.
An Investor is a person who puts his money where it can potentially generate a return. He does not usually get involved in the money making process. Investors include buyers of investment real estate and buyers of funds.
A Trader is a person who...
•Investment Series: Why Rising Stocks Always Pullback?
We've all been frustrated in the stock market before, haven't we?
Did you remember the time when you identified a really good stock with really good news on its heels and rallying strong? However, just a couple of days after you buy shares of that company, it pulls back and you incurred a loss? Even worse when you used futures on that stock instead?
Didn't it make you wonder why such strong stocks pull back so strongly? In fact, why does stock markets even pullback as a whole?
There is an...
•Is Option Trading Gambling?
We have seen it way too often, haven't we?
Advertisements that tout making thousands of percents in profits within days and millionaires made within weeks, all by option trading! Such advertisements usually draw hordes of hungry, indebted gamblers who need that "one big win" to recover their debts or losses elsewhere to their unusually expensive seminars.
95% of those who walked into such seminars, paid for it and actually traded options, lost all their money. 3% will make some money within...
•Newton’s Laws Of Stock Market Trading
Read the oldest stock market wisdom from the world renowned physicist.
This revelation had me surprised too. I was idly flipping through my old physics textbooks yesterday when it suddenly struck me. I was amazed to realize that Sir Issac Newton’s laws of physics points to so many profound and important rules in the stock markets today.
So, here we are… the physics of the stock markets.
Newton's First Law of Trading
“A Stock at rest tends to stay at rest and a Trending Stock tends to stay...
•Online Trading And System Trading
Indeed, online trading has revolutionalised the way common folks like you and me trade in the capital markets.
Online trading has its pros and cons. Online trading’s main pro is convenience and speed, giving a trader maximum control of all aspects of trading. Conversely, online trading’s main killer con is in the tons of human error that can happen due to a lack of guidance.
Due to a lack of guidance, most online traders find themselves extremely prone to their emotions when trading...
•Option Trading : Why You Should Never Compound Profits
Perhaps the most direct way of investing long term in stock options is through buying LEAPs call options. LEAPs call options are stock options that expires 6 months to a year in the future. This kind of long expiration stock options allows anyone to benefit from the same move in the underlying stock in a leveraged manner, using lesser money than stock traders do.
However, the one mistake that most option traders make when investing long term in call stock options is that one magic word that...
•Option Trading Explained – In Layman Terms
Robert Kiyosaki says that Option Trading is the investment of the rich.
Indeed, option trading is the most versatile form of investment in the world today. Its versatility has been the topic of many speakers all over the world. Terms such as “Covered Calls” and “Credit Spreads” have become well known amongst traders new and veteran alike.
Option Trading Explained - Simply put, it is the trading of option contracts on a particular stock. Options Explained – A contract that allows you...
•Option Trading – Developing An Option Trading System
There are 2 kinds of option trading systems in general; Discretionary and Mechanical. A discretionary option trader follows no specific rules but chooses, enters and exits an option trade using all of his knowledge or gut feeling. A mechanical option trader is one who translates his knowledge of choosing stocks, entry and exit into objective rules. Such a system is commonly translated into a computer program in order to completely automate the option trading system. The advantage of mechanical...
•Portfolio Management Art Of War
It’s been a long and hard decade…
Having been managing investment portfolios and accounts for the past decade both professionally and personally, me, like an army of other portfolio managers out there, are not only looking for the perfect trading system, but also the perfect way to manage an investment account.
Indeed, there are whole bombardments of theories of risk management and portfolio management out there that it is mind boggling. There are risk management concepts that attempt to...
•Spotting Tops & Bottoms Before it Happens
Spotting tops and bottoms before it happens is definitely the Holy Grail to making a fortune in the capital market. Traders have been trying for ages to devise such a trading method. It doesn’t matter which market you are trading; Forex, Options, Futures or Commodities, you can make a fortune as long as you are able to sell before prices start dropping and to buy just before prices start rising.
The problem is, is it even possible?
Is it possible to tell when a car is going to stop when the...
•Stock And Option Millionaire Psyche
If you are like most of us, we have all lost our fair share of money in the stock markets using strategies written by so-called gurus and experts costing thousands of dollars.
Have you ever wondered, how does these stock and options trading experts develop these strategies, prove its worthiness all over the internet and in books, made money with them, but when you use these stock or option trading strategies, its magic fades away and you started losing money…
Going deep into the core of the...
•Stock Market Trading Styles Defined
Have you ever heard of the terms Scalping, Swing Trading, Trend Trading and Momentum Trading? Wonder if you are any of them? Wondering what suits you? Here’s a quick definition.
The different forms of trading are actually better differentiated by time frame more than the techniques that are involved. Because of the difference in time frame, different techniques must be used in order to reap profits from the capital markets.
>From the shortest holding period to the longest, we have...
•Stock Option Trading Millionaire Principles
INTRODUCTION
Having been trading stocks and options in the capital markets professionally over the years, I have seen many ups and downs.
I have seen paupers become millionaires overnight…
And
I have seen millionaires become paupers overnight…
One story told to me by my mentor is still etched in my mind:
“Once, there were two Wall Street stock market multi-millionaires. Both were extremely successful and decided to share their insights with others by selling their stock market forecasts...
•Trading Psychology to Make Millions
Trading Psychology – Introduction
What makes an F1 racing champion? Is it the car? Is it the technology that went into building the engines? No, it is the driver. The driver’s confidence around corners and patience in the face of daunting challenge by other drivers makes a champion. Similarly, it is the trader that makes the difference in stock and option trading. It is the stock or options traders’ confidence in their chosen methodology and their patience in the face of daunting price changes...
•Why Most Stock Pick Service Fails
You know about the multitude of stock pick services out there that pick stocks for subscribers through newsletters and the internet, right? These stock pick services usually claim to be able to choose stocks that beat the market consistently. While some of these stock pick services truly produce consistent performance over the long term, many of these stock pick services usually fail the moment you sign up or after a short while.
Here, we will explore the reason why most stock pick services...
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