Full Money Market

Posts Tagged ‘daytrade’

Free Stock Market Analysis.Keep an eye on your money.

I’m an independent trader for 10+ years now, and I trade the SPX Index and SPY ETF most of the time. Im

dedicated to helping people keep an eye on there money by analyzing the markets using technical

analysis on charts.

All posts are written strictly for educational purposes and should not be viewed as advice to buy or

sell anything.

Please Tip or donate at:

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Contributions: We appreciate all donations, please help keep the videos free for the World to see and

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Free Stock Market Analysis
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Duration : 0:7:29

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http://www.informedtrades.com/

A less on how traders determine their initial stop levels when trading the stock, futures, and forex markets.

In our last lesson we looked at the difficulty of overcoming a loss in the market to further emphasize the importance of protecting your trading capital as a critical component of any successful trading strategy. In today’s lesson we are going to start to look at the first and one of the best ways of protecting one’s trading capital, setting your initial stop.

As we learned about in our lesson on the effects of trading losses, 50% or more of the trades made by many successful trading strategies are losers. These trading strategies and traders are successful not because they are highly accurate on a trade by trade basis, but because when they are wrong they cut their losses quickly and when they are right they let their profits run. While the trading strategy that you eventually end up trading for yourself may have a higher success rate than what I mention above, any strategy is going to have loosing trades, so the first key to staying in the game is to have a plan for managing those losses so they do not get out of control and wipe out your chances for success.

With this in mind, what most traders will start with when designing a plan for setting their initial stop loss is the amount they can afford to loose on a per trade basis without having a detrimental affect on their account. While this varies from trader to trader and from strategy to strategy, as Dr. Alexander Elder mentions in his book Trading for a Living, many studies have shown that strategies and traders who risk more than 2% of their overall trading capital on any one trade are rarely successful over the long term. From what I have seen most traders risk way more than this on an individual trade basis, another large contributor to the high failure rate among traders.

Traders who set their per trade risk level at 2% of their trading capital or less, not only put themselves in a situation where a fairly lengthy string of losses will not knock them out of the game, but also put themselves in a situation where any one trade is not going to make or break their account. This is important not only from a money management standpoint but also from a psychological standpoint in that they are not attached to any one trade and are therefore more likely to stick to their strategy.

In order to have a true understanding of what this number should be for a specific strategy you will need to know what the expected accuracy rate is for the strategy, something which will cover in later lessons. For now however it is sufficient to simply understand that you need to have a feel for how much you plan to risk on a per trade basis as a first step in designing a successful money management strategy, and that you should be very wary of any strategy which risks more than 2% of your trading capital on any one trade.

Now that we understand that determining how much to risk per trade is the first step in any successful money management strategy, we can move on to other methods of setting your initial stop which fit within the limit set by the amount a trader is willing to risk on a per trade basis.

As always if you have any questions or comments please leave them in the comments section below so we can all learn to trade together, and good luck with your trading!

Duration : 0:3:16

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Technorati Tags: Business, daytrade, finance, Forex, futures, howto, informedtrades, investing, market, money, of, psychology, stock, Trade, trading

Free Stock Market Analysis.Keep an eye on your money.

I’m an independent trader for 10+ years now, and I trade the SPX Index and SPY ETF most of the time. Im dedicated to helping people keep an eye on there money by analyzing the markets using technical analysis on charts.

All posts are written strictly for educational purposes and should not be viewed as advice to buy or sell anything.

Please Tip or donate at:

http://bit.ly/ypnAj

Contributions: We appreciate all donations, please help keep the videos free for the World to see and profit from. Thanks again.

follow my Blog: http://bit.ly/19aEJN
follow my Blog: http://bit.ly/38kSU
follow me on twitter: http://bit.ly/39oBEO

Free Stock Market Analysis
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Duration : 0:9:56

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Technorati Tags: 34rocco, aapl, alphatrends, analysis, apple, bonds, Cash, CRAMER, day, daytrade, dia, Education, fast, Forex, fred, Free, funds, futures, geithner, GLD, gold, hedge, Hot, hotforwords, indu, Inthemoneystocks, intra, invest, investing, Investors, iwn, jim, madoff, making, market, money, mutual, oil, option, options, picks, QQQQ, rogers, Sexy, SP500, SPX, SPY, stock, stocks, Street, technical, Trade, traders, trading, uso, vix, Wall

Free Stock Market Analysis.Keep an eye on your money.

I’m an independent trader for 10+ years now, and I trade the SPX Index and SPY ETF most of the time. Im dedicated to helping people keep an eye on there money by analyzing the markets using technical analysis on charts.

All posts are written strictly for educational purposes and should not be viewed as advice to buy or sell anything.

Please Tip or donate at:

http://bit.ly/ypnAj

Contributions: We appreciate all donations, please help keep the videos free for the World to see and profit from. Thanks again.

follow my Blog: http://bit.ly/19aEJN
follow my Blog: http://bit.ly/38kSU
follow me on twitter: http://bit.ly/39oBEO

Free Stock Market Analysis
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Duration : 0:9:41

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Technorati Tags: 34rocco, aapl, alphatrends, analysis, apple, bonds, Cash, CRAMER, day, daytrade, dia, Education, fast, Forex, fred, Free, funds, futures, geithner, GLD, gold, hedge, Hot, hotforwords, indu, Inthemoneystocks, intra, invest, investing, Investors, iwn, jim, madoff, making, market, money, mutual, oil, option, options, picks, QQQQ, rogers, Sexy, SP500, SPX, SPY, stock, stocks, Street, technical, Trade, traders, trading, uso, vix, Wall

Free Stock Market Analysis.Keep an eye on your money.

I’m an independent trader for 10+ years now, and I trade the SPX Index and SPY ETF most of the time. Im dedicated to helping people keep an eye on there money by analyzing the markets using technical analysis on charts.

All posts are written strictly for educational purposes and should not be viewed as advice to buy or sell anything.

Please Tip or donate at:

http://bit.ly/ypnAj

Contributions: We appreciate all donations, please help keep the videos free for the World to see and profit from. Thanks again.

follow my Blog: http://bit.ly/19aEJN
follow my Blog: http://bit.ly/38kSU
follow me on twitter: http://bit.ly/39oBEO

Free Stock Market Analysis
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Duration : 0:8:21

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Technorati Tags: 34rocco, aapl, alphatrends, analysis, apple, bonds, Cash, CRAMER, day, daytrade, dia, Education, fast, Forex, fred, Free, funds, futures, geithner, GLD, gold, hedge, Hot, hotforwords, indu, Inthemoneystocks, intra, invest, investing, Investors, iwn, jim, madoff, making, market, money, mutual, oil, option, options, picks, QQQQ, rogers, Sexy, SP500, SPX, SPY, stock, stocks, Street, technical, Trade, traders, trading, uso, vix, Wall

Here is the latest trading and free market analysis video on the S&P500 (SPX), SPY, QQQQ, DIA, GLD, OIL ETFs and more…

Free Stock Market Analysis.Keep an eye on your money.

I’m an independent trader for 10+ years now, and I trade the SPX Index and SPY ETF most of the time. Im dedicated to helping people keep an eye on there money by analyzing the markets using technical analysis on charts.

All posts are written strictly for educational purposes and should not be viewed as advice to buy or sell anything.

Please Tip or donate at:

http://bit.ly/ypnAj

Contributions: We appreciate all donations, please help keep the videos free for the World to see and profit from. Thanks again.

follow my Blog: http://bit.ly/19aEJN
follow my Blog: http://bit.ly/38kSU
follow me on twitter: http://bit.ly/39oBEO

Free Stock Market Analysis
Please Rate this video and subscribe to my channel – Thanks

Duration : 0:8:26

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Technorati Tags: 34rocco, aapl, alphatrends, analysis, apple, bonds, Cash, CRAMER, day, daytrade, dia, Education, fast, Forex, fred, Free, funds, futures, geithner, GLD, gold, hedge, Hot, hotforwords, indu, Inthemoneystocks, intra, invest, investing, Investors, iwn, jim, madoff, making, market, money, mutual, oil, option, options, picks, QQQQ, rogers, Sexy, SP500, SPX, SPY, stock, stocks, Street, technical, Trade, traders, trading, uso, vix, Wall

Free Stock Market Analysis.Keep an eye on your money.

I’m an independent trader for 10+ years now, and I trade the SPX Index and SPY ETF most of the time. Im dedicated to helping people keep an eye on there money by analyzing the markets using technical analysis on charts.

All posts are written strictly for educational purposes and should not be viewed as advice to buy or sell anything.

Please Tip or donate at:

http://bit.ly/ypnAj

Contributions: We appreciate all donations, please help keep the videos free for the World to see and profit from. Thanks again.

follow my Blog: http://bit.ly/19aEJN
follow my Blog: http://bit.ly/38kSU
follow me on twitter: http://bit.ly/39oBEO

Free Stock Market Analysis
Please Rate this video and subscribe to my channel – Thanks

Duration : 0:8:3

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Technorati Tags: 34rocco, aapl, alphatrends, analysis, apple, bonds, Cash, CRAMER, day, daytrade, dia, Education, fast, Forex, fred, Free, funds, futures, geithner, GLD, gold, hedge, Hot, hotforwords, indu, Inthemoneystocks, intra, invest, investing, Investors, iwn, jim, madoff, making, market, money, mutual, oil, option, options, picks, QQQQ, rogers, Sexy, SP500, SPX, SPY, stock, stocks, Street, technical, Trade, traders, trading, uso, vix, Wall

Technical analysis video review of the stock market and individual stocks for Friday June 1, 2007 including; Nasdaq 100 Trust Shares (NASDAQ:QQQQ), S&P 500 Index (AMEX:SPY), Semiconductor HOLDRs (AMEX:SMH), iShares Russell 2000 Index (ETF) (Public, NYSE:IWM), Alexion Pharmaceuticals, Inc. (Public, NASDAQ:ALXN), Tetra Tech, Inc. (Public, NASDAQ:TTEK), Presstek, Inc. (Public, NASDAQ:PRST) Cepheid (Public, NASDAQ:CPHD) and Geron Corporation (Public, NASDAQ:GERN). Trend analysis for daytraders and swingtraders of stocks and options. Trading stocks involves risk; this information should not be viewed as trading recommendations.

Duration : 0:6:27

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Technorati Tags: averages, Business, daytrade, fibonacci, invest, moving, options, stocks, Trade

Free Stock Market Analysis.Keep an eye on your money.

I’m an independent trader for 10+ years now, and I trade the SPX Index and SPY ETF most of the time. Im dedicated to helping people keep an eye on there money by analyzing the markets using technical analysis on charts.

All posts are written strictly for educational purposes and should not be viewed as advice to buy or sell anything.

Please Tip or donate at:

http://bit.ly/ypnAj

Contributions: We appreciate all donations, please help keep the videos free for the World to see and profit from. Thanks again.

follow my Blog: http://bit.ly/19aEJN
follow my Blog: http://bit.ly/38kSU
follow me on twitter: http://bit.ly/39oBEO

Free Stock Market Analysis
Please Rate this video and subscribe to my channel – Thanks

Duration : 0:9:30

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Technorati Tags: 34rocco, aapl, alphatrends, analysis, apple, bonds, Cash, CRAMER, day, daytrade, dia, Education, fast, Forex, fred, Free, funds, futures, geithner, GLD, gold, hedge, Hot, hotforwords, indu, Inthemoneystocks, intra, invest, investing, Investors, iwn, jim, madoff, making, market, money, mutual, oil, option, options, picks, QQQQ, rogers, Sexy, SP500, SPX, SPY, stock, stocks, Street, technical, Trade, traders, trading, uso, vix, Wall

http://www.informedtrades.com/5712-video-review-dr-alexander-elders-book-trading-living.html

A lesson on crowd psychology and how it relates to trading the stock, futures, and forex markets.

The best summary that I have seen on this subject, as well as a great book on trading in general is Dr. Alexander Elder’s book Trading for a living. As the Trader and Psychologist points out in his book, people think differently when acting as part of a crowd than they do when acting alone. Dr Elder points out that “People change when they join crowds. They become more credulous, impulsive, anxiously search for a leader, and react to emotions instead of using their intellect.”

In his book Dr. Elder gives several examples of academic studies which have been done which show that people have trouble doing simple tasks such as choosing which line is longer than the other when put in a situation with other people who were instructed to give the wrong answer.

Perhaps no where is the strange effect is the psychology of crowds seen than in the financial markets. One of the more recent examples as I have spoken about in my other lessons of the effect that the psychology of crowds can have on the markets is the run-up of the NASDAQ into 2000. As you will find by pulling out the history books however, this is not an isolated incident as financial history is littered with similar price bubbles created and then destroyed in the same way as the NASDAQ bubble was.

So why does history continue to repeat itself? As Dr. Elder points out in his book, from a primitive standpoint chances of survival are often much higher as part of a group than they are alone. Similarly war’s are often one by militaries with the strongest leaders. It is thus only natural to think that human’s desire to survive would breed a desire to be part of a group with a strong leader into the human psyche.

So how does this relate to trading? Well as we learned in our lessons on Dow Theory, the price is representative of the crowd and the trend is representative of the leader of that crowd. With this in mind think about how difficult it would have been to short the NASDAQ at the high’s in 2000, just at the height of the frenzy when everyone else was buying. In hindsight you would have ended up with a very profitable trade but, had the trade not worked out, people would have asked how could you have been so dumb to sell when everyone else knew the market was going up?

Now think about all the people who held on to their positions and lost tons of money after the bubble burst in 2000. As they had lots of company there were probably not a whole lot of people who were laughing at them. Yes they were wrong but how could they have known when so many others were wrong too?

By looking at this same example, you can also see how panic selling often ensues after sharp trends in the market as this is representative to a crowd whose leader has abandoned them.

In order to trade successfully people need a trading plan which is designed before entering a trade and becoming part of the crowd so they can fall back on their plan when the emotions which are associated with being part of a crowd inevitably arise. Successful traders must also realize that there is a time to run with the crowd and a time to leave the crowd, a decision which must be made by a well thought out trading plan designed before entering a trade.

That completes our lesson for today and our lessons on the psychology of money management. In tomorrow’s lesson we are going to begin looking at different strategies which can be used to manage a trade once you have entered, which many traders also use to help remove some of the negative emotional effects of trading as part of a crowd.

As always if you have any questions or comments please leave them in the comments section below so we can all learn to trade together, and good luck with your trading!

Duration : 0:7:0

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