Tag Archives: stock

Market Analysis

Risk Control Method no-2 Proper Account Sizing in stock market

Leave a comment

Drawdowns are the bane of futures traders. When you are making money in stock market, everything is fine. It is when losses start to mount that doubt creeps. The longer a drawdown lasts and the deeper it cuts into your equity the more painful it becomes. A trader starts to think “I wonder when I’ll get back to a new equity high in stock market,, or even if I’ll get back up to a new equity high.” It’s like inadvertently getting on the down elevator in a sky rise; you don’t know how long it will be before you get back to the floor you were just on. Drawdowns are never easy to deal with. However, if you experience a drawdown that is within the realm of what you had expected going in, it is a far different situation to deal with emotionally than if you figured you would never experience anything worse than a 15% drawdown and now you are 30% in the hole. Or even worse, if you really had no idea what to expect in terms of drawdowns in stock market when you started out, and you suddenly find yourself deep in the hole in stock market. Under such circumstances it can become almost impossible to maintain confidence in your approach.

Following the steps in Section Two can give you some idea as to what you can realistically expect from your trading approach, both in terms of profitability and drawdown as a percentage of your trading capital. By properly sizing your trading account you take an important step toward minimizing your risk even before you make the first trade in stock market.

Market Analysis

Two Reasons Why Automation Is The Wave Of The Future For Stock Market Trading

Leave a comment

All throughout the close of the 20th century, human civilization was promised a veritable wonderland of technological innovations and advancements that would completely revolutionize the way in which we lived, worked, loved and even dreamed. From jet packs and flying cars to robots and condos on the moon, human kind expected the 21st century to be a completely New World Order. Of course, now that we are collectively entering into the second decade of the 21st century, we are beginning to realize just how far off of the mark the predictors and experts really were.

Instead of flying cars and jet packs, we now have super-slim computers and a first class World Wide Web. And though the latter two are no slouches, they are not really what one would consider as “grandiose.”

But there is one innovation that is making some serious noise, and is poised to completely change the way that investors make money. In fact, with this new innovation, stock market crashes may become a thing of the past. The innovation is an automated trend trading system that can nearly perfect the way in which investors deal with the markets, and eliminate a large share of the risk inherent with stock market trading.

Here are two ways in which automated trading systems far surpass traditional trading systems.

They Eliminate Human Biases

One of the biggest things that automated systems have going for it is the fact that they completely eliminate the biases and prejudices that come with human stock brokering and fund management. Say a particular trading broker once got burned on soy bean futures. Twenty years later, he or she now completely dismisses the market of soy bean futures and does not factor them into the market analysis. An automated system harbors no such bias, and is able to make full use of the advantages of all types of investments. Truly, nothing is off of the table with an automated trend trading system.

They Mitigate Human “Emotional” Error

Automated systems can also mitigate human error, because they have a set pattern recognition algorithm that is responsible for analysis, and every move that it suggests is based upon preconceived patterns. With human analysis, this is not true. A human stock broker faces the problem of being caught in a particular situation that he or she could not predict, and overreacting in one way or another.

Market Analysis

How Stock Market Trading Software Is Forging A New Path Through The 21st Century

Leave a comment

Though it may seem rather mundane, compared to the numerous visions of flying cars, robots and jet packs that people were all promised would be staples of the 21st century, the truth is that the technological marvels of our age are far more useful and advantageous than any of that could hope to be. We live in an age where automated systems can find cheaters, land 747s, keep watch of sensitive materials, and they can even make us very, very well off financially. Through the concerted use of stock market trading software, investors are able to receive the very best in stock market analysis and prognostication at a competitive price, at a time when accuracy is in fairly short supply on the world’s markets.  

And, there are quite a few ways in which this automation has led to – and will continue to lead to – incredible innovations in the way investors make their decisions and interact with the markets of the world. Here are a few of the reasons why automated trading software is far superior to the traditional methods of human brokerage and management.

The Same Level Of Analysis At A Fraction Of The Cost In Far Less Time

One of the chief benefits of using automated stock market trading software is that it allows investors to utilize a far more precise, efficient and prescient system of market analysis than a human broker can provide, at a cost that is far less than a broker would charge. For the upfront costs of the system, and on ongoing monthly fee for automated analysis far trumps what a broker would charge off of the top of every dividend or margin call. And, the automated software is able to scour reams of data in a fraction of the time that a human broker could, with a far higher level of accuracy.

System Is Completely Devoid Of Human Error And Human Bias

Also, automated software is free of the two major drawbacks to human brokered systems – human bias and human error. Because it analyzes the market in a dispassionate way, with no feelings whatsoever, it is able to render rational, accurate advice in a way that a human broker might not be able to with his or her job on the line. Also, human biases are completely removed from the equation through the use of stock market trading software, because a computer would never account for its mistakes as reasons to dismiss potential opportunities.

Market Analysis

Stock Market Trading Analysis May 2010 Major Stock Markets Fall

Leave a comment

The stock market trend analysis below was issued at 8:00 AM EST on 5/4/2010 prior to the stock market open. We saw broad based distribution The Dow Jones industrial average fell about 225 points, erasing its 143-point gain from Monday. The Dow and broader indexes each fell more than 2 percent. Treasury prices rose on increased demand for safety investments.

Stock Market Analysis 2010 SP 500 Puts and Calls NDX 100 Puts and Calls

SMF Market Analysis moving forward 5-4-2010

SMF Trading inline month using outer line months for the longer term trades on indexes the inline month is used as an intraday ranges as the longer term positions are being developed for the June and July positions using May as the intraday trading.

SMF Established short positions on the indexes getting the wholesale bids below the markets for the May Contracts along with the June and July using the May Contracts Intraday Trading Profits selling gaps as an even lower cost basis getting on all sides of the moves mathematically that equal huge profits.

Mario Marciano at SMF is telling longer short sellers on the indexes to move out to July. Trade the Mathematical Ranges using the SMF Index Formulas which create the trades on the days. We expect huge up and or down daily stock price moves with in the market topping off June and July contracts.

Getting the shorts on the days there are up moves and getting lower dollar entry on the index put options and trading the calls on the burn day up, then cashing them in and keep trading both sides of the SP 500 PUTS AND CALLS AND NDX 100 PUTS AND CALLS AND USING SMF RISK MANAGEMENT ENTRY MODELS.

Trading both sides and ringing the cash register as you balance out the mathematical trading ratio huge profits following the SMF models on index trading making a market on both sides is the key to huge success as an SMF Index Ratio Models we us along with over bought and over sold indicators that we have customized at SMF

 

To learn more about investing and trading join http://www.stockmarketfunding.com.

General Forex

Stock Trading Psychology

Leave a comment

Many of today’s highly successful traders will tell you that the general key to success in trading is to be able to comfortably take a loss. It is general knowledge among experts in the trading psychology field and among traders that the market is not predictable and it is safe to say that it never will be. In the world of trading, it is expected to take a loss; even those who are highly skilled traders know that it is inevitable. With that said, let us have a look at things you as a trader should be aware of, how you can take a loss effectively and use it towards the greater good of your trading world.

Trading psychology tells us that when a trader loses he begins to become somewhat of a perfectionist in his dealing. Many traders think that in trading, a good day will always be one that is profitable. Trading psychology experts tells us this is not true. A trader should define a good day as one where they have extensively researched and planned with discipline and focus, and have followed through to the entire extent of the plan. Yes, when a trader has mastered the art of accepting losses and working through them with a well thought out plan then good days will become profitable in time.

Because the art of trading in an unpredictable market fluctuates so greatly from one day to the next, experts in trading psychology believe that it is important that you concentrate on what you can control, instead of things that are beyond your control. Looking into the short-term you cannot expect to be able to control the profits of your trading. With that said, look at what you do you have ability to control.

You do have the ability to control the difference between good and bad days. You are able to control this factor by extensively researching the strategies you implement within your trading experiences. By learning to research your chosen strategies, thus controlling the amount of good and bad trading days you experience, you will, in the long-term begin to generate profits, which is the ultimate goal of every trader.

Trading psychology experts tell us that it is important to become realistic in trading instead of becoming a perfectionist. Perfectionist traders, relate a loss with failure, and will become obsessed with the failure, focusing only upon it. Realistic traders understand the unpredictability of the market and taking a loss is simply part of the art. The main key you must remember in trading psychology to be able to effectively limit your losses, instead of becoming obsessed with them. A common thing seen within the trading psychology world is that traders who are obsessed with their losses often have a hard time bouncing back from them, thus losing in the end.

Experts in trading psychology have organized three basic strategies you can use to effectively stop losses. These strategies are:

• Price Based

• Time Based

• Indicator Based

Stops that are priced based are generally used when the other two have not functioned. To make this work you will need to make hypothesis’s about the trade and identify a low point in that particular market. Then you will set your trade entries near your points, thus making sure that losses will not be overly excessive if the hypothesis fails.

Time Based stops constitutes making use of your time. Designate a holding period you allow to capture a certain number of points. If you have no achieved your desired profit within that time limit, you should stop the trade. If effectively used you should stop even if the price stop limit has not been achieved.

The Indicator based stop makes use of market indicators. As a trader, you should be aware of these indicators and utilize them extensively within your trading experiences. Look at indicators such as, volume, advances, declines, and new highs and lows.

Experts in trading psychology say that setting stops and rehearsing them mentally is a good psychological tool to use and will help ensure that you follow through.