Trade Simple, Trade Smart
By Cory Mitchell
We can reduce the amount of time and "homework" it takes to find highly tradable securities by running screens and stock scans but there is still the common problem of making strategies far more complex than they need to be. Complex strategies generally start from a simple strategy which works well for the trader, but then that strategy is tweaked and re-tweaked in an attempt to make it even more profitable.
If this tinkering has worked with some strategies, that's excellent, but it is common for the trader to begin to have too much on their mind; profits cease and the trader ends up going back to simple strategies anyway or fading from the market. There seems to be an allure to complex and bizarre strategies. While a method may sound elegant and sophisticated, that in itself will not put money in the trader's pocket. (For more, see Getting To Know Stock Screeners.)
Is Simple Better?
Complex strategies can easily draw in traders since it is somewhat logical that the more information we factor into a system, the more reliable it will be. Yet, the market does not always reward logic and when it does it, it may not do it in the trader's timeframe. Remember, the market can be wrong a lot longer than the trader can afford to be right.
Read more: Trade Simple, Trade Smart http://www.investopedia.com/articles/trading/09/simple-trading.asp#ixzz4idBQgAfD
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With an increasingly complex universe of financial products and services, how are America's high-school students prepared to manage their money as they enter adulthood?
Not all that well, according to a new assessment of financial literacy from the Organisation for Economic Co-Operation and Development (OECD). The Programme for International Student Assessment (PISA) test measures the financial knowledge and skills needed to make the jump from high school to college and on into the workforce.
The results raise several red flags given that one in five American teens fail to meet the level to be considered financially literate. By comparison, only about one in 10 Chinese and Russian students fail to meet that benchmark. American teens haven't improved their scores since 2012. On top of that, teens who continue on to college often must make complex decisions about student loans that can impact their lives for decades.
Read Entire Article: http://www.cbsnews.com/news/financial-literacy-us-teens-compare/
Face-to-face, a human and a chimpanzee are easy to tell apart. The two species share a common primate ancestor, but over millions of years, their characteristics have morphed into easily distinguishable features. Chimps developed prominent brow ridges, flat noses, low-crowned heads and protruding muzzles. Human noses jut from relatively flat faces under high-domed crowns.
Those facial features diverged with the help of genetic parasites, mobile bits of genetic material that insert themselves into their hosts’ DNA. These parasites go by many names, including “jumping genes,” “transposable elements” and “transposons.” Some are relics of former viruses assimilated into a host’s genome, or genetic instruction book. Others are self-perpetuating pieces of genetic material whose origins are shrouded in the mists of time.
Read Entire Article: https://www.sciencenews.org/article/jumping-genes-play-big-role-what-makes-us-human
One reason that the stock and securities markets are so volatile is that they respond to news events. Prices reflect information, changing when any little bit of information comes into the market — even if the info is just that someone wants to buy and someone wants to sell right now.
The problem is that sometimes the market participants don’t react in proportion to the news they receive. Good traders have an almost innate ability to discern news that creates a buy from news that creates a sell. Sometimes traders want to go with the market, and sometimes they want to go against it.
If you are a long term investor (versus a day trader), your investments are also affected by news announcements. When this happens, you need to consider how your position — and you — will react.
After all, no matter how long your time horizon and how careful your research, things happen to companies: CEOs have heart attacks, major products are found to be defective, financial statements turn out to be fraudulent, and so on. How are you going to respond?
Read Article: http://www.dummies.com/personal-finance/investing/day-trading/good-day-traders-react-to-breaking-news/
There are thousands of stocks to choose from, some which move very little, some which move a lot. Day traders can choose any sort of stock they want to day trade, but many choose to trade high volume stocks that are seeing significant price movement. This approach typically requires some research because which stocks are seeing lots of movement may change from day to day or week to week. If you want to day trade stocks that see the biggest price moves, here are a few ways to find them.
Narrowing down the universe of potential day trading stocks requires a stock screener, also called a stock screener or stock filter.
Constantly Volatile StocksIf you want to trade volatile stocks, with minimal research, run the following criteria on a stock screener each week. Pick two or three stocks from the list (if there are more than two results) and trade them for the week. On the weekend, run the screen again, and repeat.
Using the screener on StockFetcher.com works best for this one:
show stocks where the average day range(100) is above 5%
and price is between $10 and $100
and average volume(30) is greater than 4000000
and exchange is not amex
add column average volume(30)
add column average day range (30)
Create a new filter on StockFetcher.com (it's free) and copy and paste the above into the Customize field. Click "Fetch Stocks!" to see your list. The free version of the software only produces five results, but you only want to pick two or three from the list anyway, so the free version of the software should suffice for most day traders.
Read Entire Article: https://www.thebalance.com/find-day-trading-stocks-1031458
Like starting any career, there is a lot to learn when you're a day trading beginner. Here are some tips to steer you in the right direction as you start your journey. These tips will get you setup with the proper equipment and software, help you decide what to trade and when to trade, show you how much capital you need, how to manage risk, and how to practice a trading strategy effectively.
Read Article: https://www.thebalance.com/day-trading-tips-for-beginners-on-getting-started-4047240
Day trading – the act of buying and selling a financial instrument within the same day, or even multiple times over the course of a day, taking advantage of small price moves – can be a lucrative game. But it can also be a dangerous game for those who are new at it or who don't adhere to a well-thought out method. Let's take a look at some general day trading principles and common day trading strategies, moving along from basic tips you need to know to advanced strategies that can help you learn how to day trade like a pro.
Read more: Day Trading Strategies For Beginners http://www.investopedia.com/articles/trading/06/daytradingretail.asp#ixzz4i4TSw3kU
Trading is often viewed as a high barrier-to-entry field, but this is simply not the case in today's market. Now, anyone with ambition and patience can trade, and do it for a living, even with little to no money.
Sounds fantastic? It is, and there are so many options available to people with the desire to put in the time to learn.
The New Era of TradingChanges in technology and increasing volumes on the exchanges have brought about a number of very low barriers-to-entry trading careers. In some cases no personal capital is required, and in other cases a small amount of capital will be required to get you started, in order to verify your commitment to trading. With markets so interlinked, it's always open trading time somewhere on the globe, and many of those markets can be accessed with relative ease. This means that even people who have full-time jobs or children at home can trade - it is just a matter of finding the right market and opportunity.
This is not to say that trading is an easy business - it can be very tough to stay in for the long haul. As we look at some different trading alternatives available in today's market, you will see that you are able to enter the market, but your ultimate success depends on you. We will look at these options in depth to see what they offer career wise, or if they can simply be used to generate additional income.
Read Article: http://www.investopedia.com/articles/trading/09/how-to-trade-for-a-living.asp#ixzz4hyNk0NRZ
Landmines are explosive wartime weapons. People bury them or leave them on the ground for their enemies to step on or drive over. Yet once peacetime arrives, some of these buried bombs may remain behind. They’re often in empty fields, where they can maim or kill innocent civilians. But a new technology can make it easy to find landmines — even from a safe distance. And this might let bomb crews disarm these weapons before someone gets hurt.
Read Article: https://www.sciencenewsforstudents.org/article/tweaked-germs-glow-pinpoint-buried-landmines
By Kristina Zucchi, CFA
Active trading is the act of buying and selling securities based on short-term movements to profit from the price movements on a short-term stock chart. The mentality associated with an active trading strategy differs from the long-term, buy-and-hold strategy. The buy-and-hold strategy employs a mentality that suggests that price movements over the long term will outweigh the price movements in the short term and, as such, short-term movements should be ignored. Active traders, on the other hand, believe that short-term movements and capturing the market trend are where the profits are made. There are various methods used to accomplish an active-trading strategy, each with appropriate market environments and risks inherent in the strategy. Here are four of the most common types of active trading and the built-in costs of each strategy. (Active trading is a popular strategy for those trying to beat the market average. To learn more, check out How To Outperform The Market.)
TUTORIAL: How To Analyze Chart Patterns
1. Day Trading
Day trading is perhaps the most well known active-trading style. It's often considered a pseudonym for active trading itself. Day trading, as its name implies, is the method of buying and selling securities within the same day. Positions are closed out within the same day they are taken, and no position is held overnight. Traditionally, day trading is done by professional traders, such as specialists or market makers. However, electronic trading has opened up this practice to novice traders. (For related reading, also see Day Trading Strategies For Beginners.)
2. Position Trading
Some actually consider position trading to be a buy-and-hold strategy and not active trading. However, position trading, when done by an advanced trader, can be a form of active trading. Position trading uses longer term charts - anywhere from daily to monthly - in combination with other methods to determine the trend of the current market direction. This type of trade may last for several days to several weeks and sometimes longer, depending on the trend. Trend traders look for successive higher highs or lower highs to determine the trend of a security. By jumping on and riding the "wave," trend traders aim to benefit from both the up and downside of market movements. Trend traders look to determine the direction of the market, but they do not try to forecast any price levels. Typically, trend traders jump on the trend after it has established itself, and when the trend breaks, they usually exit the position. This means that in periods of high market volatility, trend trading is more difficult and its positions are generally reduced.
3. Swing Trading
When a trend breaks, swing traders typically get in the game. At the end of a trend, there is usually some price volatility as the new trend tries to establish itself. Swing traders buy or sell as that price volatility sets in. Swing trades are usually held for more than a day but for a shorter time than trend trades. Swing traders often create a set of trading rules based on technical or fundamental analysis; these trading rules or algorithms are designed to identify when to buy and sell a security. While a swing-trading algorithm does not have to be exact and predict the peak or valley of a price move, it does need a market that moves in one direction or another. A range-bound or sideways market is a risk for swing traders. (For more on swing trading, see our Introduction To Swing Trading.)
Scalping is one of the quickest strategies employed by active traders. It includes exploiting various price gaps caused by bid/ask spreads and order flows. The strategy generally works by making the spread or buying at the bid price and selling at the ask price to receive the difference between the two price points. Scalpers attempt to hold their positions for a short period, thus decreasing the risk associated with the strategy. Additionally, a scalper does not try to exploit large moves or move high volumes; rather, they try to take advantage of small moves that occur frequently and move smaller volumes more often. Since the level of profits per trade is small, scalpers look for more liquid markets to increase the frequency of their trades. And unlike swing traders, scalpers like quiet markets that aren't prone to sudden price movements so they can potentially make the spread repeatedly on the same bid/ask prices. (To learn more on this active trading strategy, read Scalping: Small Quick Profits Can Add Up.)
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