As long as there is volatility, day traders may generate profits. Nevertheless, just because day trading strategies are working at the moment doesn’t mean you should quit your job or even use this strategy. That’s what many traders did in the 1990s, and it didn’t end well. For those interested in day trading, consider the following: 1. Start small: The No. 1 rule is to start small. Whether you are day trading stocks, options, or exchange-traded funds, if you are a beginner, start with no more than 100 shares of stock or one or two options contracts. This way you…
As a guest speaker at colleges and high schools, I discovered that many teenagers need to learn more about investing. They get an “A” for knowing how to spend money, and many work hard for income, but few know how or why they should invest in stocks, mutual funds, or index funds. Typically, most teenagers haven’t thought about building wealth by paying themselves first. Sometimes the biggest obstacle to making money is our perception. We believe investing is rocket science, or something that only professionals can do. By giving your children the confidence to manage and invest their own money,…
With the stock market becoming more volatile, it will be useful to learn how to use two basic option strategies: buying calls (if you believe the market or a stock is going up), or buying puts (if you believe the market or a stock will go down). The benefit to buying either calls or puts is that you use as little money as possible to generate large returns. I’m sure you’ve heard the horror stories about speculating with options. Many people are afraid to consider options because they believe they are too risky, too complicated, or that you could lose…
Opinion: Ridiculous investment advice you should never follow
On CNN, “Anderson Cooper 360” features a segment called “Ridiculist” that showcases certain people’s most ridiculous behavior. That got me thinking about some of the most ridiculous investment advice I’ve ever heard.I believe in stop loss orders to protect stock positions or to lock in gains. When the stop loss is triggered, your stock is automatically sold at the market at the best available price.
The best available price? Unfortunately, that can be a misnomer.
Did you know you can use options to make money every month or every quarter? And you can use options as insurance, for example, to protect your stock portfolio. And if, on occasion, you wanted to speculate, you could leverage your money to double or triple your profits. It will cost you a lot less than if you bought stocks. And finally, if you like to short stocks, it can be safer to use option strategies than to use the stock market.
If you've been thinking of ways to trade the falling euro (EUR), or any other currency, you might consider the foreign exchange market. Forex, which is open 24 hours a day and five days a week, is the world's most traded financial market and also the most liquid. This means you can quickly get into and out of a trade.
Of all the mistakes I’ve made in the stock market, these three stood out.
Although this column is primarily about trading, I’ve also interviewed and learned from hundreds of longer-term investors. Successful traders and investors often have similar goals: manage risk; diversify, and learn to control emotions. The main differences are the tools they use and how long they hold a position.
Here are a few notable investors I’ve interviewed over the years, and what I learned.
Day trading sounds so easy, doesn’t it? After all, isn’t it just sitting at your computer all day, buying and selling stocks — and piling up profits? Well, not exactly. Few people realize how much experience and skill is needed to make money as a day trader. It’s easy to get tripped up by mistakes, especially during your first year. Here are 10 of the most common errors many day traders make. 1. Not having a plan “The most common mistake traders make is entering a trade without a good plan,” says Toni Turner, author of “A Beginner’s Guide to…
MIAMI, Fla. (MarketWatch) — Buffy the Vampire Slayer, meet Buffett the Doom Slayer. The Oracle of Omaha, Warren Buffett, is firmly entrenched with optimists who believe the worst is over for both the U.S. economy and the stock market. “It’s a terrible mistake to get pessimistic on America,” Buffett said on CNBC last month. “It has not worked since 1776 and it’s not going to work now.” Tell that to Harry Dent, Gerald Celente and Robert Prechter — confirmed pessimists who predict a stock market crash, financial panic, and perhaps a run on the banks. A market crash is coming…
MIAMI, Fla. (MarketWatch) — The allure of penny stocks is simple: They don’t cost much money and promise big profits. But trading penny stocks is also a good way to lose money. Sure, it’s possible to profit when you understand the game, but the odds are against you when you don’t. And worse: manipulators and scammers often run the penny-stock game. For investors who can’t afford shares of Google or Apple, the potential gains from trades like this are too good to pass up. So penny-stock trading thrives. With a relatively small investment you can make a nice return if…
MIAMI (MarketWatch) — Recently I gave a talk at Colgate University, a liberal arts college in Hamilton, N.Y., about understanding stocks and studying the market. It was homecoming weekend, and I was amazed that so many people attended the seminar. By the way, Colgate beat Cornell in overtime. But in learning to be a successful investor, even a little bit of money can go a long way. If you have less than $3,000 to invest or trade, it’s possible to participate in the financial markets. Learning about the market is a lifelong pursuit, so this initial investment is your “tuition.”…
Commentary: Wall Street may need a little help from angels I am standing on the sidewalk in front of a SoHo clothing store in lower Manhattan. It’s Fashion’s Night Out, and thousands of people are having a one-night fashion celebration. On this night, models, celebrities, and designers are encouraging customers to shop for clothes at reduced prices. Judging by the festive crowds and ringing cash registers, the night is a huge success. Models and Money In front of me are hundreds of awe-struck fans waiting in line to meet the angels: Victoria’s Secret Angels. Victoria’s Secret (NYSE:LTD), an American retailer…
MIAMI, Fla. (MarketWatch) — If you’ve been following the market, you know that it’s resembled a wild roller coaster ride. Although selling in May was exactly the right move, when to get back in is less certain. At the moment, the charts look dreadful: the major stock indexes are well below their moving averages, and other technical indicators signal dangerous conditions. For insights into this volatile market, I spoke with trader Toni Turner, author of The Beginner’s Guide to Day Trading Online (2nd Edition). A few months ago, Turner noticed that the market was changing for the worse. “Starting with…