Tag Archives: stock market

Stock Market Training – Making Your First Foray Into The Stock Market

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If you are thinking of investing in the stock market and have no previous experience, you should consider doing some basic stock market training. It is important to know that this is not a “hobby”, but a business opportunity and it should be treated as such.

There are countless books as well as resources that offer stock market training to help you to become knowledgeable in preparation for the countless intricacies of the stock market. There are also certain terms that you should be familiar with as part of your stock market training.

A “Bull Market” is how the market is referred to when the economy is strong, jobs are everywhere and investors are buying and trading stocks. A “Bear Market” is experiences when the economy is depressed, people are unemployed and stocks are not being invested in or traded.

Making your first foray into the stock market can be a humbling experience. Using a solid investment management software program will help you with stock market training and point you in the direction of sensible investment choices. It can also help you to keep tabs on losses, profits, the cost of your trades or any other costs you expend for your investments. One should also know the basic principals of accounting, how to read and understand an annual report and some of the history of the stock market as part of stock market training. You also need basic knowledge of asset allocation.

You should read as much material as you can find about the stock market so that you will have a solid foundation of stock market training. Try to read materials concerning investment theories, economics and corporate finance. It is also prudent to locate and utilize a good investment service to keep yourself updated with what is happening with the stock market from day to day.

Learn more about stock trading market. Stop by Henry Taylor’s site where you can find out all about stock market training and what it can do for you.


Iron Condor Probability Analysis In Trending Markets

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Hi option traders. I hope you’re having a great day. In this article I want to discuss standard deviations and probabilities as they are calculated by the popular options analytical software that is on the market. In the video that is attached to this article we are using software by Think or Swim. This is one of the most popular software programs in the world. It has a built-in feature to help us calculate probability of complex option strategies, but there is one thing missing when we use this feature. The software does not consider the current trend of the underlying that is being analyzed. Instead, the software always assumes that the underlying is trending sideways.

The technical traders out there know that these patterns and trends with technical analysis are pretty consistent. When we are looking at standard deviation charts, and we are using software to calculate probabilities, the software does not know the current trend. It is assuming that we are just going sideways. It’s assuming that there’s an equal chance for that object to fall to the left or to the right. But when it comes to trading options, it’s not like that because we do have patterns.

Let’s consider a real trading example. If RUT is trending down and we set the standard deviation at the money, then the software might give us a probability of 79% for an Iron Condor. However, if the market is really in a down trend, is this probability really accurate? What do you think the correct probability is on this trade?

This Iron Condor strategy is very popular in the options trading community, and one reason is because everybody thinks it has a very high probability. But the truth is the probability on this trade is not near as high as we think it is. The reason being that the market does not trend sideways for very long. In fact, if you look at a price chart, you will see that the market normally trends up or it trends down. This makes the probability of an ATM Condor much lower than it appears to be.

Let’s think about the rain. When rain falls from the sky, does it always lands on a perfectly flat and level surface? If it does, then the calculations of probability by placing the standard deviation at the money would be correct. However, consider this. What if the rain drop land on a slanted hill? If this is the case then most likely the water will splash downhill and not uphill. Now if you look at this video, you will see that this Condor appears to have a very high probability, but if we move the standard deviation to the left because we are in a bearish market, then the probability is substantially lower. In fact it might only be about 45%. We are just estimating here, but it’s important that you understand the concept.

Every experienced trader knows that the market normally trends in a direction, making the probability of the Iron Condor not as high as we believe. Those of us who believe in technical analysis should find a way to calculate probability using the trend combined with standard deviations. This would give us a more accurate analysis of the trade. As a final example, a bearish trade will actually have a higher probability in a bearish market than it appears to have in the options analytical software.

I will finish by saying that maybe we should really ask the question: what factors should we include in our calculation when we analyze the probability of an option trade? Should we throw technical analysis out the window and always assume that there is an equal chance for the stock market to go up or down at any given time? When it rains, how often do rain drops land on a perfectly flat and level surface? Do they ever?

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Bear Market Winners Make Fortunes

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No doubt you have heard people talk about bull markets and bear markets before. For those who don’t know what the terms mean: A bear market is nothing else but a continuous and sustained drop in the price of a wide selection of stocks over a period of time. Usually a market has to remain in a declining phase for at least two months and drop by at least 20% before described as a “bear”.

A bull market is just the opposite: A prolonged, widespread rise in the price of a large number of stocks. While the pessimism behind a market with declining prices drives it even further down, the optimism underlying a bull market drives the prices to even higher levels.

You shouldn’t get confuse a declining market and a normal market correction. A market correction happens after a sudden increase in the price level when people sell their stocks to take profit. It normally doesn’t last more than a few days.

It’s easy to see how one can make money in a bull market. In fact, it’s hard not to make money in such a market. But how can you make money in a declining market?

One way of making money in a declining market is if you could with some degree of accuracy predict when the market has reached its bottom. Then buy a bunch of stock tips. Traders use all sorts of fundamental and technical indicators to assist them with this, but it remains a mammoth task. Many highly experienced traders still often lose money because they incorrectly expected the market to turn around.

Another possibility is to sell stocks short. What you in effect do is to borrow stocks from a brokerage and sell them to a third party at the current high price. Once the price has dropped, you buy them back and refund the brokerage. You should only do this with stocks which are virtually sure to drop in price.

Another route open to you is to buy what is referred to as “put options” in the industry. These increase in value during a bear market when the price of the underlying share drops. Once again you have to be right about the fact that the price is going to drop, otherwise you will lose the funds you paid for the put option.

For more on the stock market subscribe to the WallStreetWindow swing trading newsletter written by Mike Swanson.


Chinese Economy A Bright Spot

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The People’s Republic of China has the fastest-growing economy it has seen since the 1970s. Growth is at an average of 10% per year over the past 3 decades. It is third in size only after the United States and Japan. China economy is growing at a fast pace, and the future is promising. Chinese stocks have been top performers in the past few years.

China had little effect on the world economy before the latter part of the 1980s. It took nearly a decade for economic reforms of the late 1970s to have an impact. Growth was generated in investments, consumerism and the living standards of many citizens.

People who formerly lived in poverty have been elevated to a better standard of living. The fate of the 53% living in poverty in 1981 improved life for all but 2.5% in 2005. Poverty, however, is defined differently in China. Actually, 10.8% of the people live on less than a dollar a day. This rate takes exchange rates into account.

The large population lives in an immense geographic area in the country of China. This has a powerful impact on the worldwide economic market. Smaller, still developing countries can use China as a good example to follow for their own economic advancement.

They would have to adapt the ideas to the smaller scale required. Capital investment seems to be the key to growth. It is even more effective when profit incentives are offered to small private businesses and those in rural areas. This is in addition to the incentives reaped by urban areas.

Attaining an elevated rate of exchange for the yuan would benefit China. It would help by lowering the cost of imports and minimizing the demand. Services and consumerism are areas that should be encouraged to grow.

The full potential of production and exporting of goods has almost been reached. In spite of a depressed worldwide economy, China economy is growing at a fast pace. Prospects are even more promising that at the high point of financial crisis in the world. China’s already successful economy remains as likely to continue growing as it ever was.

For more on the stock market go to the WallStreetWindow stock trading newsletter.


How To Make Money In Forex Market With Forex Robot

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There is much talk going on about the IvyBot Forex Robot. And most of these talks are praises and positive reviews regarding this forex software. As of now, the IvyBot is considered as one of the best trading robots ever to grace the field of foreign exchange market industry. Among, and mostly, I must say, these praises and reviews are about the performance of this forex software. Come to think of it, who would not talk about a product with a good reputation such as this one, and add to that is the high percentage of profitability it can guarantee a trader in the market? Especially if that forex software offers a lowest of risks imaginable.

Once you key in all the necessary things you want to put in to your trade, you would let now the Forex robot to run by its own system, letting you run away from the computer. You would be able to save more time now; you won’t be waiting now for applicable signals for you to trade successfully in the Forex Market. By automatically letting your Forex Robot do the trading for you, they can execute your plans without your help. By this, you can let go of your emotions on doing your trading, for some trades in the Forex Market lure you to use your gut feeling, making you forget of all your solid strategy.

The common precept in buying and selling states that ‘purchase low, promote excessive’. This has been around in the Forex Market area for a long time. But, among the Foreign exchange traders often overlook this single advice. There are times that the forex is low, however some traders are hesitant to buy the currency, as a result of they fear that it might go lower. Additionally, when greed comes into play, some don’t simply promote in hopes that it would go higher. The Foreign exchange Robotic could prevent all these mishaps, you are actually ensured that your plans are carried out, you could purchase and sell on your most advantage.

Some traders although, used the Foreign exchange Robot with out really considering, they just log on to their accounts, and guess positions they assume they are advantageous. After all, the Foreign exchange Market is just not all pure luck, with out thinking and educating yourself within the Foreign exchange Market, you’d often lose. But there are traders too who used blacktest to double check if their plans and strategies are really working, this wound enable them to gain more from the business, by making the most of all the great issues that a Foreign exchange Robotic software program can do.

You may say by now, that by the help of those Forex Robots, you can make yourself higher in your business. And by that, you get extra credit by gaining extra revenue from the standard; you can now be one of those smart traders who bought rich from the business. Again, Forex Robots provide you with virtually all the benefits there’s within the Forex Market, plus that it may give you lots of free time to do more things.

Having the perfect things on hand would allow you to succeed from Forex; do not go into the battlefield on the earth of Forex with none assist from a Foreign exchange Robot.

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