Sell a Stock

Capturing the Right Moment to Sell a Stock

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Whether you’re getting involved in day trading or long term investing, you really need to know when the fold ‘em — as the song goes. In other words, you really need to know when you have to exit part of the market and sell a stock. In a perfect world, stocks would rise like crazy and just never come down. However, the world that we live in is really far from perfect. This means that you have to know when to get out of a stock and save your profits. Until you cash out of a stock, you really can’t claim all of those lovely profits — they’re just paper profits. Now, there’s nothing wrong with having wealth on paper, but it is a little more risky than we always want to deal with.

So, how do you really know when to back out gracefully and leave the premises? Good question. Here’s what you need to know.

Let’s say that our example stock is at $50.00 and you do your research through fundamental analysis. You basically look at all of the information surrounding a company to figure out the fair value / fundamental price of the stock. You determine that the stock is really worth $100. Since this is higher than the stock market is currently asking for that stock, you go ahead and buy it. Next thing you know, the stock indeed rises to $100 like you studied it all along — good buy, right? Right — so far.

The trouble here is that many investors start thinking to themselves that there’s more profit to be had. You did the research and realized the stock is worth $100 — but what if it swung higher? You would miss out on even more profits! Instead of thinking that way, you need to think about the chance of losing all of the gains that you’ve achieved so far. If you don’t get out of the stock, you’ll lose the profits you’ve earned if it begins to fall back down again.

Charting a stock’s historical rises and falls is another good way to really make sure that you’ve got everything that you need in order to really make sure that you know when to back out of a market.

If you’re familiar with the resistance level of a stock, then you will be able to look and see if the stock is going to rise back up to a former resistance level. If you believe that will happen, then you will want to keep the stock. On the other hand, if you know that it won’t push through the resistance level, it’s time to sell.

Over time, all of these things will get clearer and clearer to you. You just need to hang in there and keep learning new concepts — that’s the best way to grow as an investor!

car insurance

Are you paying too much for your car insurance?

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On many policies – utilities, car insurance, communications – people automatically renew their annual subscriptions, even if they feel they’re paying too much for the services. Simply by comparing suppliers it’s possible to reduce costs, and consumers should make a habit of reviewing prices to ensure they’re not paying too much. Have a look at MoneySupermarket car insurance to compare current insurance prices.

Insurance is a competitive industry and as a result companies are constantly reviewing their strategies to offer good deals (just another reason to keep an eye on the marketplace). It’s really important to read the fine print on contracts so that your car insurance provides comprehensive cover without unnecessary extras.

For example, it’s nice to have a courtesy car in the event that your car is unavailable, but you might be able to live without it so that your insurance premium is affordable. Similarly, legal protection in the event that you’re involved in a third-party accident is not always necessary, although it may be included in your policy. Consider whether you want driver’s cover overseas – it may be good for reasons of work or travel – otherwise leave it out.

Although every insurance company tends to offer different policies, generally the more you include in your motor insurance cover, the higher the cost will be. Choosing additions such as excess, breakdown assistance and damage to or loss of personal items inside the car will make it more expensive. Ultimately, it’s up to you what you choose to pay for.

PPI Claims

Fight Back Against Bad PPI Claims – Your Investing Portfolio Will Thank You!

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In the world of investing, risk and loss are things that just go along with the territory. So there’s no real insurance product to protect against loss. However, there are insurance products for other areas of the finance world. For example, many people were offered payment protection insurance for their mortgages, car loans, car hires, and even payday loans. That doesn’t mean that the insurance offered was effective at all. In fact, many salespeople sold PPI knowing full well that it would not be helpful for anyone at all — especially their customers! It was a matter of greed and deceit, and now the people that were ripped off are finally getting a chance to get their money back.

If you’ve been ripped off by PPI and mis-sold something that you thought would protect you, now is your time to shine. That’s because you can get the money back plus interest on the money. If this is something that’s been happening to you for a long time, chances are good that you can actually get your money back rather than just going without it. There’s no point in just dealing without the money that you deserve. That wouldn’t make any sense at all. Many PPI claims were rejected on their face without further study — making people feel even more frustrated.

What would you be able to do with the money if you won your case? Well, in a nutshell — you can actually do just about anything that you want with the money. If you really want to go wild and invest in a few risky things, that’s up to you. If you want to make your portfolio a little more conservative for long term growth, you could do that as well. A good stocks and shares ISA is always one of our favorite places to put extra money, especially if you haven’t hit your yearly limit yet.

The truth is that the ball is definitely in your proverbial court. It’s up to you to decide where the money goes, but you’re going to need to make sure that you focus on the overall goal here — getting the rights that you fight for. This is not a good time to just ignore the world around you and not fight for what matters to you. That just wouldn’t make sense at all. Why not step forward and get started today on fighting bad PPI claims?

Stock Futures

Stock Futures and You – Making the Most out of Market Predictions For Maximum Profits

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The market is a tricky thing, but if you play the market right, you’re going to be able to add a little zing to your portfolio. Of course, this isn’t really for the faint of heart — you will want to make sure that you have a working knowledge of the market and how things are going to operate. If you don’t get that basic knowledge, you’re really not going to make any good decisions that you can acutely count on.

You’re going to have to figure out how to take your general knowledge of the market and then push it into stock futures. This is the best way to really make sure that you can time the market for maximum profitability. Of course, it goes without saying that there is still going to be risk. There’s going to be a point where you just need to make sure that you look at your options.

Stock futures, such as E-mini S&P 500 Futures, are a great way to watch where traders think a certain stock index is going to move in the coming months, savvy investors will keep an eye on both the live and futures market for their selected indices.

With such a high-risk profile, you might wonder why inventors would even be interested in stock futures to begin with. Well, the simplest reason is this — they can hedge against market fluctuations. When you have your portfolio unbalanced, huge swings in the market affects your whole day. You will need to make sure that you focus on the long term by balancing your portfolio as much as possible.

With stock futures, two parties are going to basically enter into a contract to buy or sell a specific amount of stock for a certain price on a set future date. This is taken from the commodities market as well — you just don’t have an expiration date.

What you’re going to be able to do is actually take these futures contracts and sell them on the open market. That definitely changes things around, doesn’t it? You’re not going to have to really worry about the road ahead in the futures market. If you have the price right — you will find plenty of traders.

Again, we know this isn’t an option for everyone, but if you’re ready to take your investing game to the next level, this is definitely the best way to go!

stocks

The Perpetual Fallacy of Market Timing

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One of the biggest mistakes that plague new investors is the idea that you can time the market. Yes, it’s something that’s been hashed out to death, but strangely enough, investors still think that they can follow a sure thing right on up to the top. They are assuming that they’re going to make back their investment at least three or four times, so they plunge in without a second thought.

What you have to realize is that the financial market runs off of speculation. There are a lot of people that are tapping into your emotional centers. You want to give your family the best life possible, right? That means that you’re going to do things that help you get to that point. if that means that you have to push in and take some risks, then it’s all worth it, right?

Well, not quite. You’re still better off thinking about the long road ahead rather than short term fixes. It seems that the only people that ever really profit from those hot stock tips are the people that give them — everyone else just doesn’t ever seem to get market timing right. However, the financial gurus will tell you that it’s really not their fault, that you’re doing something wrong. Folks, there’s nothing wrong with thinking about your future. There’s nothing wrong with believing that a better future is right around the corner. However, there is something definitely wrong with the idea that stock tips are going to always just push your portfolio into the high figures that everyone else wants them to shoot for. You’re better off trying to plan other things with your life. You’re better off thinking about your future realistically and doing things that are going to make that future as bright as possible. What else can you really do?

There’s nothing wrong with planning out a few stocks that you want to take the risk of getting, but what’s not good is when you think that those stocks are supposed to carry your portfolio. Make sure that anytime you run after a hot stock tip, that you limit it to a very small percentage of your overall portfolio. That way you will always be able to get the very best gains on your portfolio because the growth stocks will not be bogged down by everything else. It’s up to you what type of portfolio you want to build. Could you still shoot for those tricky hot stocks? Sure you can — but make sure to blend in some fundamental analysis while you’re looking. That’s the best way to really make sure that you have all of your ducks in a row from start to finish. Why not start today? You’ll be glad that you did!

trading risk

8 tips to minimise your trading risk

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Trading in any market is risky, and when traders access the power of leverage through instruments like CFDs and options, or markets like forex, their risk rises along with their potential profits.

Following are eight ways to limit your trading risk:

1. Trade liquidity – either trade liquid markets, or trade in periods when your markets are liquid. The times when markets are most active are the easiest times to enter and exit trades at the prices you want, as there are more buyers and sellers at the other end wanting to trade the same assets.

2. Choose a regulated provider – different markets have different levels of regulation, with exchange-traded assets available on standard contracts and over-the-counter markets, like forex, having very little regulation and no central clearing house. If you choose to trade an unregulated market, choose a provider that is well-capitalised, has a good reputation, and is registered with your local regulatory authority.

3. Use stop losses – limit the amount you are willing to risk per trade and set a stop loss at that level, without exception. The size of your stop loss may vary with the size of your trades and the volatility of the market, but find a system and use it consistently.

4. Make a plan – your trading system should include criteria for opening, closing and adding to trades, along with your risk limits, your profit targets and the hours and markets you trade. Once you have a system, stick to it and you will enjoy more consistent profits as a result.

5. Take your profits – set a profit target on your trade and, when the price moves through that level, close it. Waiting to see how much higher a price might go often results in losing trades, as traders leave their falling positions open in the hope that the market will turn back in their favour. The exception to this would be if you use a trailing stop, which follows the market in your favour, closing your trade automatically if the market turns. In this case, set your trailing stop and don’t move it! You will always have losing trades, so make the winning ones count.

6. Trade markets you know – if you know nothing about gold but think you should buy because everyone else seems to be doing it, don’t. Trade currencies from economies that you know, or stocks in industries that interest you and that you read about. Successful trading is usually a combination of fundamental and technical analysis, so if you trade an asset that you are already familiar with, and which you would like to learn more about, you’re already on the right track.

7. Practice – when you are testing a new trading system, it’s always a good idea to trade in smaller sizes. CFDs are often available in micro and mini contracts, meaning that you can hone your strategies, learn about indicators and familiarise yourself with trading platform features with less risk.

8. Stay calm – if you’ve just had a string of losses, take a break. Remain calm and re-evaluate your system. If your trading system brought you ten wins and then three losses, consistently follow its rules and the winning trades will return. If you throw the rules out the window and start trying anything to make a profit, it is unlikely to end well. Likewise, if you’ve have had a string of winning trades, quit while you’re ahead and enjoy your profits while you wait for your next trading session.

Stock Index

What’s the Point of a Stock Index, Anyway?

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If you’ve just started your journey into becoming a solid investor, you might already be aware that you actually have a lot of choices on where to really build your portfolio. You may have already run across a wide variety of terms, but here’s a new concept for you: stock indices. A stock index is one of the things being talked about a lot on the financial news channels, so you might want to figure out what the point is behind stock indixes anyway.

First and foremost, the basic definition at play here is that a stock index is just a combination of stocks that allow you to track a particular market or sector. They can also track commodities, currencies, bonds, or just about anything else that you can think of.

Most of the time the stocks that are in an index are collected as a group, which is referred to as a basket.

Let’s use a real-life example — if you wanted to check out the Dow Jones Industrial Average Index, you would essentially be purchasing shares in all of the different companies that make up that index.

The same goes for the NDX, an index that tracks the 100 largest non-finance companies on the NASDAQ. Since the NASDAQ tends to be technology oriented, this would be a great way to round out your portfolio without overloading on one market or another. This is actually how some people invest in more risky ventures without making too much risk in their portfolio.

You might wonder how an index stays balanced when there are so many different companies that all have different valuations. The secret is index-weighting — a process that insures everything is balanced so that the price isn’t overly controlled by one company over another. That would make the index way too volatile. So in any index there might be a stock that’s worth $20, but it only represents 1 share in the bunch, while a stock that’s worth $10 might have 2 shares to make it equal to the other $20 stock.

The biggest advantage of indexes is that you can check out a market or sector without having to purchase stocks in every last company that has anything to do in that marketplace. That can be very costly as well as being very risky. You don’t have to feel like it’s impossible to enter a market just because you don’t have enough in your portfolio for every last company in the group. Indexes give you that power to invest wisely.

Yet there are disadvantages to buying an index. For starters, they aren’t completely always accurate. That is to say that just because you buy a basket of a certain index that the market the index is trying to track is going to move in the direction you want it to go. There are always fluctuations as the index tries to catch up to the market place.

Putting in a basket order can be hectic as well. Instead of getting your target price, you could have to pay whatever it takes to get the index shares that you want. The market orders may not get you any closer either — the order will eventually be fulfilled, but you may not be able to control your price as easily. Limit orders can make the process even more difficult, because you will not always get the amount of shares you were initially looking for.

This leads us to the major downside of stock indexes — lack of liquidity. It’s not a given, but not every index moves quickly. This means that it could take you some time before you can exit the market, and even more time to enter the market again. So if you were planning to quickly drop and pick up shares like you do in the rest of the market, you might be in for some surprises.

If indexes aren’t going to be your thing, then you might want to go with ETF — exchange traded funds. They are much like an index, but the “basket” is already prepared for you. You don’t have to build the basket, and it’s easier to trade with ETFs than it is with indexes. Yet there are downsides to everything, so make sure that you weigh all of your options before pushing through — you can do it!

Stock Charting

Understanding Moving Averages and Stock Charting

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As you walk deeper into the investing world, you start realizing one big thing above everything else — there’s a whole lot of jargon. Now, you might be tempted to just ignore the jargon, but the truth is that you really do need to pay careful attention to the terms used in investing.

When it comes to trading securities actively, you’ll run into a term that you really need to know. Of course, there are other terms that you need to k now, but if you’re trying to become a serious investor, you really do need to know this one: moving averages.

Why are moving averages important for your life as a trader? Well, there are actually a few reasons for that.

Let’s start with the definition of moving averages. In short, moving averages are simply the fluctuation in price across a security. There are multiple types of moving averages, but generally speaking, you will want to look at the simple moving average. This is a type of MA that averages all of your price points in the same way across a certain time period. So if we really wanted to look at the 20-day SMA, we would need to check back into the last 20 days worth of prices. Each price would be weighted at 5%, and then calculate the average (simple average, like what you would have figured out in school).

Time is going to be one of your largest variables when it comes to the market, and the time period that you choose gives you the power to really look at trends in the market from a balanced perspective. Long time periods give you the opportunity to really look at the market, which you need to make sure that your decisions are extra sound. If you’re going for long term growth, this is definitely a great tool to have in your arsenal. Unfortunately, the trend right now is to just look at the short term, coupled with what’s “hot”. This is a problem, because you really don’t want to go down this road if you can help it.

One thing that you will need to keep in mind when it comes to simple moving averages is that there is a bit of a delay. You will be able to divine a few things about the potential future, but there are many investors that think a little too much into moving averages. You might think that the price action is going to be fixed and make a play, only to find out at the last minute that your movement wasn’t the correct action after all. The trouble with a long SMA is that you might not always catch reversals that could signal that the market is moving in a completely different way. This is why investors usually like to check out short SMAs as well as long SMAs. Then they can look at crossovers between the two.

Overall, it’s okay if you aren’t quite sure what moving averages bring to the table at first. It will take some time to actually use them — then you won’t have too much problem figuring out where to go next. Most technical analysis packages will already calculate the moving average for you.

Now, if you don’t want to just stick with the simple moving average, you should know that there are other types of moving averages that you might want to check out. One of them is the exponential moving average (EMA). One of the biggest reasons why people turn to the EMA over the SMA is that there can be spikes in the SMA that change your judgment — but in a bad way. Those spikes can throw off otherwise sound results, which is why we want to delve into the EMA just to make sure that we’re on the right track.

The EMA is calculated slightly differently — it gives much more weight to more recent periods, which can “block out” those spikes that the SMA gives too much weight to. This gives you a better sense of what’s going on. Will it make you future proof? Not really — it’s just one more tool that you can use to help make more sense of the marketplace.

One thing that we like to tell investors in our investment group is that no matter what tool you learn about, you shouldn’t fall in love with it. Instead, you should look at all of your resources as building blocks that add up to a solid strategy. One tool isn’t higher than another, and you need to keep that in mind. If you aren’t paying careful attention to what’s going on in the market from every angle, the chances of losing money shoot up dramatically. Will you have many misses on the great journey to higher profits? Sure you will. However, if you really pay close attention to what’s going on around you, there’s no reason why you can’t get good gains in time!

The Stock Platform You Pick Matters!

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Stocks take a bad rap in investing circles. When they’re doing well, there’s not a newspaper around that won’t praise the good fortune of stocks and encourage people to jump right in. However, when stocks aren’t doing so good there’s not a news outlet around that wont’ bash the entire system. This can give newcomers to the world of investing the idea that stocks aren’t a good choice, and that they might as well wait till the market gets better before they jump in.

Here’s a news flash — the market is always going to be uncertain. People don’t just invest with numbers — they invest with emotions as well. They invest with their whole hearts, and when their portfolio isn’t doing well, they tend to freak out and pull all of their money out.

Given the laws of the market, when investors do that stocks tend to take a beating. In small numbers, the volume is easy to correct. However, when such actions are triggered by global crises and concerns, that means that there comes a point where you have to realize that there are definitely going to be some ups and downs that are far beyond your control.

Does that mean that you pull out of the market? Not always — the people that stuck with it enjoyed a lot of appreciation as the market eventually corrected itself. The truth is that markets always move in cycles. For every bust, there’s an eventual boom. Now, we’re talking in the sense of the long term, of course — if you only judge the stock market on whether or not it’s up in a short term format, you’re going to be disappointed. It’s better to look at things from a larger picture to make sure that you’re keeping everything in perspective.

If you’re ready to jump right in and start trading, you’ll need to make sure that you pick a good stock market platform that’s going to allow you to do just that. Every brokerage is going to have a different platform, but they all share some basic functionality that you’ll nee din order to be the best trader around. Here’s what to look for.

First and foremost, research is the heart of good investing. What, you didn’t think that we were going to recommend that you just play from your gut, right? Right! The truth is that you’re going to have to really make sure that you are doing as much research as you can to make sure that you’re making the right move sin the market. As you become a seasoned investor, there are some plays that you just “know” are the right ones. However, we have to remind you that even the pros rely on skillful charting and fundamental analysis in order to really make sure that they’re making the right decisions from day to day or even hour to hour.

Another thing that you will want to look for is automation. Unless you’re just enamored with the idea of trading all day, you’re going to want to make sure that you can get up and enjoy the rest of your life. So when it comes to the stock market platform of your dreams, you need to make sure that it has functionality for stop and buy orders. Limit orders can help you back out of a trade when it starts going south on you, and there always comes that time where you need to cut your losses and run. Traders that think otherwise are doomed to have to deal with lesser profits, and why would you want to deal with that at all?

Don’t forget that there’s a very well-informed and well-connected Web just waiting for you online, chock full of traders. Look at reviews of brokerages and platforms before you just plunge in. Better yet, if you can get a demo account to look around before you go off funding your account, then that’s even better than the alternative. The last thing that you will want to do is find yourself unable to look around a brokerage before you actually commitment. Free trials are your friend, but pressure is not — it’s your money, wield it the way you want to!

Reporting and tracking are part of the package — you want to be able to see at a glance your losses as well as your profits. If you don’t do that, then how would you ever be able to see what’s really going on? This is also important for tax purposes — you will need to report capital gains as part of your income. Investment income is nice because it can grow without you having to babysit it, but you also have to manage your time as well as your money and weigh all of your options. Risk vs. reward, and all that good stuff.

Overall, there’s a lot of good to be said about the stock market. People like it because you really can grow your money without having to really do much other than good research and solid trading strategies. Sure, there’s a lot of talk about specialized robots and other software, but when you really get right down to it, it’s the stock market platform that matters. As mentioned previously, you’re going to definitely want to look at reviews, as well as the experiences of other traders. If a platform and brokerage have good reviews and a good reputation, believe us — they’ll float to the top rather quickly!

Investing in stocks

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Investing in stocks is not something to be taken lightly. It may be something which looks like it could make a lot of money. The stock market does often do better than other investments. However  it is a bigger risk. All investment can increase and decrease in value but some are likely to do it more than others. The stock market is likely to fall more than most other investments but it is also likely to rise more as well.

Risky investments are something which should be taken with care. If you need the money, perhaps to pay off your mortgage or for a future purchase then think hard about investing them in something risky. The best thing is to use money that you can afford to lose, although not many people have that type of money these days.

It is perhaps better to invest some money in a safer place such as government bonds, which will not give such a good return and then put some in the higher risk stocks. Then if you lose the money in the stocks, you will at least still have some, even if it has no accrued very much interest.

If you are keen to invest in stocks then it is a good idea to learn more about them. There are a lot of websites which have unbiased information on about how to choose stocks and these will be useful. Be prepared to read quite a few and spend some time doing research. You are taking a big risk and the more information that you gather the lower your risk is.

You also need to be brave if you are investing in stocks. If the market falls you must not pull out your money. This will mean that you lose a lot. It is something which a lot of people do, worried that they may lose even more. However, if you leave the money in there, it is likely to go back up again and you should be able to make a profit. However, it is a long term investment and should not be expected to make a fortune overnight.

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