Archive for May, 2005

May
31

Stock Picks 101: Profiting From Fear - Greed and Hope

Posted by admin on May 31, 2005 under Uncategorized

There is a common misconception that trading should be a purely logical activity devoid of all emotion. Let me make quick work of this erroneous belief right now. For one thing, if you try to discipline yourself not to feel your emotions, you will end up simply playing hide and seek with them and ultimately that’s quite counterproductive. Your subjugated emotions will arise and display themselves in the most unexpected and usually unprofitable ways

Let’s face it, when you trade stock picks, you’re trading for a reason, most likely because you want more money. To an extreme, that leads to greed. There’s nothing wrong with wanting money, but that want needs to be disciplined so you don’t end up wanting more money than the situation in a trade will reasonably provide.

It would be nice if such discipline were something you could just make up your mind about and it would happen. However, the reality is that often it takes a lot of experience, sometimes painful experience, before you get to the point where you have an innate sense about how much profit a trading situation will provide.

Conversely, a certain amount of fear is healthy. It keeps you from entering an ill considered trade. And, once in a trade, fear gets you to question whether you should continue to be in that trade. But again, that fear has to be tempered so you don’t end up getting out of a trade due to fear just at the very point it turns around. In fact, you might find yourself getting out of trades just at that very pivot point a disturbing number of times. Once again, experience ends up being the best teacher.

You may also find that greed is simply fear in disguise. Greed is a fear of loss: loss of opportunity, loss of those things money can buy.

Let’s also talk about hope. Hope is a very dangerous emotion when it comes to trading because you may find yourself holding onto trades which a proper dose of fear would have gotten you out of. Hope is an emotion that in trading can bleed you to death, slowly and surely.

If you ever find yourself saying, “I hope this trade turns around in the next few minutes or hours,” that should raise a huge red flag. Although sometimes the trade will indeed turn around, holding onto a trade simply because you hope it will turn itself around is usually a huge mistake. If you do continue to hold onto a trade there should be a very clearly defined logical reason for doing so. Often this relates to the underlying conditions of the trade not having changed significantly from the reasoning you used to enter it.

Again, it takes true discipline to notice when you’re in a state of hope. In the case of trading, it’s simply false hope. In trading, it’s always false hope. Just because sometimes you get away with hoping does not mean it is a part of good trading discipline.

We’ve talked about emotions on a personal level, and hopefully you’ll develop an awareness of how those emotions affect your trading. However, there is a much more powerful use for those same emotions.

You see, the whole market, the herd as a whole, trades on fear and greed. If you have mastered your own fear and greed, you can then start to recognize the mood of the market. Once you’ve recognized the mood of the market, the balance between fear and greed, it is often possible to anticipate what a stock or the market in general will do. As you can imagine, the ability to “predict” what the market will do can be immensely profitable.

So as you can see, mastering your own emotions and understanding the emotions of the market will provide you with a great advantage in your trading. Every attempt should be made to develop this mastery.

Doug Newberry is a Director of Investing Systems Network. He also is its founder. Investing Systems is a company with more than 20,000 customers from more than 70 countries. These customers use the Investing Systems tools and services to become better, more disciplined investors. You can learn more about profiting from Fear, Greed and Hope at stock-picker-rt.com Stock Picks.

May
31

The Way Forward with Adverse Credit Secured Loans

Posted by admin on May 31, 2005 under Uncategorized

Adverse credit secured loans are possible for borrowers irrespective of the number of CCJs, IVAs and other bad credit factors that may show against the borrower. An adverse credit secured loan requires you to pledge collateral for the loan and this comes usually in the form of your own home.

The very fact that you own your home means you will be able to apply for an adverse credit secured loan. Your home is your greatest asset, and you will find that you can leverage this asset to your advantage because, as you will find, secured loans will be cheaper to service (in terms of the monthly repayments) than unsecured loans. It makes sense to opt for a secured loan every time as long as you can meet the repayment schedule.

Beware of adverse credit secured loans that may seem too good to be true, as they might be just that. Remember that this is your home being put forward as collateral, so only apply to loan companies of the utmost probity and reputation. The regular high street banks are, of course, the most well-known lenders, but they may not be particularly experienced in offering credit to people in unusual financial situations. The best solution is to go to a specialist lender who knows what to look for, and can probably find a solution where there was none before.

Loans of up to 125% of the property value are also generally available. All adverse credit secured loans are subject to status and a credit search specified by the lending company. Borrowers should be encouraged by the fact that such loans are designed to suit the borrower’s individual lifestyle and particular circumstances.

Some loan companies offer special incentives, gifts or extra low interest rates at the start of the adverse credit secured loan to get you signed up. You may well find that you are offered a repayment holiday of several months. Take advantage of all these things while you can.

One aspect of adverse credit secured loans is that of debt consolidation. The borrower will be able to consolidate existing debts into one manageable and affordable loan at a better rate. Credit card borrowing may be up to three times as expensive as secured loan borrowing (store cards up to five times) so it would make sense to wipe out such debt and consolidate it with an easier payment method.

Consolidation loans also exist based on the equity in shared ownership homes. If ownership is shared and the joint owner’s financial circumstances are much better than the main owner then this will make the loan process much easier and a positive outcome more likely. It might be worthwhile considering shared ownership in such cases.

Borrowers will want to find a lender who does not charge fees; most online brokers allow you to apply from a simple web form for no charge. Online borrowing is also by far the quickest way to get credit, and presents the borrower with the least fuss and hassle. Look for a free no obligation loan quote service and easy application procedure.

For a cheaper alternative than a secured loan from their bank, adverse-credit-secured-loan-application.co.uk Adverse Credit Secured Loan Applications UK offers a fast solution with no fees and access to a large panel of lenders. Apply now for a 5 month payment holiday.

May
31

Stock Picks 101 - Trading on Insider Activity

Posted by admin on May 31, 2005 under Uncategorized

Everyone knows that insider trading is illegal, but do you think that keeps it from happening? Of course not. Just because you’re not allowed to trade on insider information doesn’t mean you can’t trade on the telltale signatures that insider trading activity leaves. This can be quite profitable if you can detect it in a reliable way.

Some tools are very useful in detecting insider trading. For one, most of the better discount brokers aggregate the news for you. Be sure to use this valuable feature. Having scanning software that filters for price moves on volume is also vital.

You can suspect insider trading is going on when you see a strong price move in the stock picks you’re monitoring on increasing volume with no news about those stocks. This is the key to detecting insider trading. If the price goes up suddenly on good volume with no news, you really need to ask yourself “Why?” One possible explanation is insider trading.

To detect these strong price moves you should have scanning software that filters for price moves on volume. These scans should be run a number of times daily, focusing especially on early in the day. It’s also important to know that there is no significant “important news” to explain the price moves. Deciding what constitutes “important news” requires some experience. Of course, insider trading volume spikes can also happen toward the end of the day as well. These happen in anticipation of important announcements after the market has closed.

When you see a price spike on volume, another thing you can check for is whether there is expected to be some significant “newsworthy event” about that stock in the next day or two. Examples of such “newsworthy events” include earnings announcements, announcements of research results, announcements from various kinds of industry-related conferences or any kind of imminent news item about the stock or the industry. This is another sure way of detecting that perhaps insider trading is going on.

Once you’ve detected this possible insider trading, the next question is what to do about it. How and when do you enter the trade? Here is where some experience comes in at detecting what insider trade price moves look like. You can develop this experience by studying price charts that show evidence of insider trading. With some good scanning software you can detect these kinds of price movements.

Finding a good entry point is half the battle, but finding the right exit point is actually even more important. You have control over when you enter the trade and which stock you pick, but once in it, you need to find the exit for that particular stock.

Often, insider trading will plateau, and also perhaps you’ll suddenly find that there is a newsworthy event that could explain the insider trading. This is how you find the exit point. So, exiting insider trading trades is a great example of buying the rumor, which in this case is unexplained strong price movement on high volume and “selling on the news.” This is to say, when the news comes out, the party’s over, and it’s time to go find another trade.

So, as you can see from these tips, riding on the coattails of insider trading can be quite profitable with the right preparation.

Doug Newberry founded Investing Systems Network. He is also its Director. Investing Systems is a vibrant company with more than 20,000 customers who hail from more than 70 countries. These customers use the tools and services they get from ISN to become better, more disciplined investors. To learn more about insider trading, go to stock-picker-rt.com Stock Picks.