Category: How to Start Trading – Beginners

Investing With Just $100 Per Month

You don’t believe it’s possible? Well, you should read this post.

By Guy Avtalyon

Ok, you have an extra $100 each month and you are enthusiastic about investing but you don’t how it works? Also, you are worried if $100 is enough? Investing with just $100 per month is possible, of course.

You don’t need thousands of dollars or euros or whatever to become an investor and get into investment. Traders-Paradise found several possibilities for investing with just $100 per month.

Reasonably, you will not make a ton of profit off a $100 investment, but the crucial thing is really getting started. $100 may not appear important, but you can make it expand into more.

This is where it gets a bit more difficult.

One of the hugest problems with investing a small sum is that brokerage fees can be expensive. For example, if you want to buy some stock that can cost you up to $20 with some brokerage and your investment easilly may become $80 worth. Yes, there is a simpler way and cheaper brokerage.

There is one way that will cost you less. Just use some investment app. Most of them will charge you a $1 per month fee. The great thing about investment apps is that you can easily pick the simple portfolios related to your goals, interests, and ideas about investing.

The app will do the rest.

Honestly, when it comes to investing, time is more significant than the sum. Let’s say you are in your 18s. With an interest rate of 7%, you could end with almost $50,000 after 20 years by investing with just $100 per month.

It’s never too start investing, but why should you waste your time and miss the opportunity to get the wealth.

Savings account

The best place for you to start with $100 per month is to set it in a savings account. That will be more an emergency fund than investing with current interest rates. But it will provide you to get into more serious investments because you will build a safety net. You will not capture great returns but you will be safe even if you lose your current job. At least by putting $100 every month on your savings account you will have several months of breath if such an incident appears.

Hold it as the source to something bigger. Wise investing can turn your $100 into a great future and you have to begin around.

The time frame will make an immense variance in how you should invest. So, suppose you want to invest in stocks.

Stock investing with just $100 per month

If you have $100 that you’re able to load every month, you should think to invest in individual stocks. I already mentioned that will cost you 20% of your investment and you may think it is too expensive. But think again. The misconception is that you need a lot of money to be able to invest in a stock. Investing with just $100 per month is quite good for the start.

Let’s debunk the theories.

For beginners, if you’re ready to do your homework and buy around amid brokers, you will find a great potential. For instance, you can find a broker with bare-bones $5 commission and without minimum deposit terms. What you have to think about is that low-cost brokers may charge you some additional costs, for example, inactivity fees or additional costs connected with buying stocks trading below $2 per share.

But, if you buy individual stocks you are entering the long run. Yes, it is possible to find a good stock for investing with just $100 if you have a long investment horizon. You will hold your stock for years. If you trade them you will pay 10% commission for every buying or selling, that’s true. If you don’t like to pay commissions every month you can make savings of $300 or $400 and buy stocks every 3 or 4 months, you don’t need to buy stocks every month. In this way, you can lessen your cumulative commission charges.

Certificates Of Deposit or CD

Of course, there is an alternative to investing in stocks. You can invest in CDs. This simple way. All you have to do is to loan your money to the bank and collect the interest on it. CDs range in time from 3 months to 10 years. The point is, the longer you invest, the higher interest you will catch.

Moreover, the CD is penalty-free. That gives you the possibility to withdraw your money if you want and without penalty. But read everything you have to sign, some CDs have penalties. Some banks can charge you if you withdraw your money before the maturity of the contract.

Another solution for your investing with just $100 per month is peer-to-peer (P2P) loans.

The cool thing with this type of investment is that you can decide not only how much you want to invest but also, how your investment will be used. You may choose one particular investment from the different loans, also, you can determine an interest rate and loan period. As an investor, you will get your money back according to repayment plans.

Index funds are a good choice for investing with just $100 per month

Some companies don’t have a minimum balance requirement for index funds. So you can invest $100 in a class of stocks. The primary index fund tracks the S&P 500, but you can find numerous other. Index funds are good because they give the diversification of your investment portfolio. Some stocks will rise in value, some will drop, but the final result is that you will profit.

What do you want wit that $100? Do you want to improve your current financial situation, or maybe you want your capital to grow? You have to figure out that.

If your finances are in good health, then there is no excuse to delay investing.

Start building your wealth. Don’t worry if you have just $100. It is enough to start, it will turn into more! But if you don’t begin investing, you will never have that chance to earn. The day when you will think how smart you were when invested $100 is so close. So, simply start investing with just $100 per month.

16th September 2019
How To Profit By Investing In Bad Companies

2 min read

You don’t believe it is possible. Profit by investing in bad companies sounds pretty stupid and naive. But it is possible.

To be more precise, sometimes it is possible to make notable investment returns by buying the stocks with minimum chances. The key is to recognize the companies which will grow in the future.

There is some math behind. The point is to make a difference between business and stocks.

Let’s be more clear!

For example, you have some money aside and want to invest in some cheap stocks. But you find two similar companies in the same industry, say gold.

Company ABC is a large one. Gold is currently at $100, its exploration and other costs are $60, that is a $40 profit. Not bad.

Company XYZ is a disastrous business. It’s exploration and other costs of $90, which is only $10 in profit at the current gold price of $100.

Which one to choose?

The logical answer would be ABC but the wrong one.

Let’s assume the hypothetical situation.

The price of gold suddenly rise in the market, and the current it is $300, for example.

Let’s see the numbers for those companies.

Company ABC offers $240 in profit.

$300 gold price – $60 in expenses = $240 profit

Company XYZ offers $210 in profit

$300 gold price – $90 in costs = $210

But here is where the math has the greatest influence.

Company ABC earns more money for any reason, its profit rose 600% from $40 to $240. But, compare it with company XYZ which grew its profit 2,100%.

Moreover, there is a phenomenon

It is very reasonable to assume that company XYZ will experience a multiple expansion, meaning added increase. The possible final result: company XYZs stock price is raising exponentially more, much more than the stock price of company ABC.

What to say? Company ABC is maybe a healthier business, but company XYZ is better as a market choice.

How is possible to profit by investing in bad companies?

This is recognized as operating leverage.

Operating leverage describes a company’s level of fixed costs in comparison to its revenue. Companies with high operating leverage have large fixed expenses. They are obliged to cover them as first. If fixed expenses are exceeded, the revenue will fall. Such a situation may cause great difficulties for the company, from large cuts to lower profits, even bankruptcy.

You can find companies with high operating leverage in almost all sectors and industries. Gold miners, airlines, crude oil companies, are some examples. Actually, you may find these companies where the business has enormous changes in revenue. You will notice enormous profitability fluctuations. That comes because fixed costs can’t always adapt as quickly as the market value.

But you have to know that investing in bad companies carry a lot of stress and risk. Investing in some of these companies can make you rich but it is almost impossible for them to provide you a constant profit.

It’s easier to invest in some solid businesses with steady profit and dividend. You should avoid headaches.

You would like to read How to Become A Trader or Investor in Just 10 Minutes

15th September 2019
When To Buy Sell or Hold On The Stock

The enter or exit the investment must be in line with your investment plan.

by Guy Avtalyon

Beginners in the stock market are usually enthusiastic, but do they know when to buy, sell, or hold on to stocks to gain maximum growth and limit loss?

There are no guarantees for stock’s price, they can go up or down driven by various circumstances. So how to know when to buy, sell, or hold on stock?

No one can tell you about one specific, the best strategy, good for everyone. But advanced traders follow some “rules of thumb” when they examine their investment movements. They are establishing entry and exit points and evaluating fundamental factors. But they had to learn some universal systems at first and after that, they were able to choose the one or a few that suit them the best.

Examine Entry and Exit Points

An entry point is the price level where the trader buys an investment or “enters the position”. The exit point is a price where you sell or “exit”.

If you want to avoid the wrong decisions and if you want to know when to buy, sell, or hold on the stock you have to define your entry and exit points. That means you must have a clear strategy to lower the risk and enhance your return. In other words, you have to set the right entry point to maximize winnings.

Also, it is extremely important to define where to set a stop loss. This point is worth in case the stock price starts to drop. Yes, some traders will wait for the dropping price to grow, but that may be dangerous in case the stock value continues to decline. This is especially important for short-term traders with the idea to buy and sell in a short time.

Traders usually practice stop and limit orders to maintain the balance between gains and losses.

The point is to have more winning trades, right?

To avoid permanent watching the charts and price changes you can set stop or limit order. That will provide you to enter or exit the investment according to your investment plan.

A limit or stop order means that you decide how much stock you want to buy at a specific price or when it peaks a specific price. So, you can place a limit or stop order for a higher or lower price than the current market price. The market price is the prevailing price of the stock.

Stop and limit orders act separately but associate to the trader’s action in the same way. They enable traders to not have to continually watch price movements, but traders have various goals with these orders.

For example, when setting a limit order, the intent is to buy or sell a stock at a defined price. To be more clear, if a stock’s value is $85, and you want to buy it, you may set a buy limit order at $80 if you think it is your best entry point.

Thus, if you want to sell the stock, you may place a sell limit order of $90 if it is your projected or planned exit point.

Stop order is a defensive strategy to lower losses.

To secure your investment, in case the stock continues increasing in value, you may set a stop order at a point a lot bellow the current price. But if you expect that stock to be trading below, you may try to minimize your losses with a higher-stop order that will be close to the current price or just a bit under the current price.

Stop and limit orders are created to trigger when the pre-arranged price is reached. If you set a limit order at $90, the stock will be sold immediately when the stock increases, and $90 is touched. Or vice versa, if you set a stop order below the current price, the stock will be sold when the price drops and it reaches that price.

I hope the point is clear, the trader with the limit order wants to sell when the price rises, and the trader who placed the stop order wants to sell when the price drops.

Why is important to know when to buy, sell, or hold on the stock?

There is some risk involved in limit orders. A limit order “guarantees the limit price or better” but on the other side, what if it never gets filled?

A stop order means an exit from the stock position if the price drops, after your stock scores the stop you’ve set. In that case, your stop order becomes a market order and there are many competitors waiting to be filled. Hence, you don’t have a guarantee that your order will be filled at the specific price you placed. In some cases, you may end up selling the stock significantly below that level.

Moreover, if you have a sell stop at $90 and the price falls to $40, your order will be triggered at $60, which is a good thing. But things could go in the wrong way too. For example, if you purchased a stock at $80 and placed a stop at $75, the stock might go down to $70 and be sold, of course, but it can jump back to $90.

When to buy stock?

In investing, it is important to determine what a stock is worth. Will it rise up to the estimated value? Set a range at which you would like to buy a stock. That might be helpful. Will you pay that amount for a particular stock? Be honest while giving the answer.

If you don’t know the price target range, you will be in trouble with determining when to buy a stock.

Also, you have to know about the financial health of a company. It is possible through the company’s financial statements that have a treasure of information.

You have to pay attention to the company’s revenue, for example, or how it relates to its past reviews. Are the company’s sales growing or shrinking? Read the company’s guidance for revenue or sales, which reveals how it expects to perform in the future.

Cash flow is important too because it will provide you information about a company’s liquidity. A very good sign is when more money is coming into the company than it spends. It is a positive cash flow.

Further, a stock might be undervalued. So, you must estimate a company’s upcoming prospects. Compare it with current reports. In this way, you will find a possible price target. If the current stock price is lower, buy it.

When to sell the stock?

Whenever the expected price is bigger than the current stock price, you have a chance to earn.

The size of the return depends on how much of a discount a stock trades related to its expected value. Also, it is related to how much time the market needs to update its expectations. The higher the stock price discount and the sooner the market corrects its expectations, the higher the return.

You can sell your stock when it hits its expected value, or a more winning stock arises, or you change your expectations.

When to hold the stock

You have to know that it can take time for a stock to reach its real value. Any stock price forecasting is actually simple guessing.

Your stock may need several years for a stock to reach close to a price targeted. If you are sure your stock will grow, hold it 3 to 5 years. Very often, you will profit more. It is essential to know when to buy, sell, or hold on the stock if you want a profit.

11th September 2019
Asset Allocation Models – Protect Your Investment

Here is how to protect your investment with different models of asset allocation

By Guy Avtalyon

Asset allocation models are the way to split your investment into different asset classes: stocks, mutual funds, bonds, private equity, etc. That will give you the possibility to lessen the risk of your investment. Every asset class carries some level of risk but different. For example, if the value of bonds rises, the stocks will fall. When the market is falling, real estate may provide you a nice return.

The point is to have a diversified portfolio built by the asset allocation model among asset classes. Every investor has its own model of asset allocation. It is based on individual investing goals and risk tolerance.

Also, personal asset classes can be separated into different sectors.

You can use different types of asset allocation models.

Asset allocation model created by your needs

For example, for some investors equities are more favorable than other asset classes. Or if you are in serious ages you may prefer to put your money in some source of fixed income that can provide you stable retirement income because your goal is to save what you earned during your working life. Thus, you are not worried about market fluctuations. So, you may have the majority of your portfolio in stocks.
But if you are a younger investor you may prefer some investment with faster returns.

What are the different models

Most asset allocation models come into four models: growth, preservation of capital, income, balanced.

The growth asset allocation model is suitable for beginners interested in long-term investments. If you are at the beginning of your professional career you will be interested to deposit some amount every year in long-term investment such as common stocks that may not pay you dividends but can be good in the long run. Fund managers could advise you to invest in some foreign equities to diversify your portfolio.

But if you want to preserve your capital you will like some other model of asset allocation, like preservation of capital. This model will suit you if you want to avoid risk to lose even a small part of your investment because you would like to use it in the next 12 months, for example, to buy a house. In this case, your investment portfolio will have about 80% in treasuries or commercial papers. There is some risk in this model of asset allocation due to the inflation that can lessen your buying power. Think about that.

Income as an asset allocation model

The usual income investor comes from a group of people near retirement because the need for cash in hand is of essential importance.

The balanced model of asset allocation is kind of halfway between income and growth. It is a compromise between long-term growth and current income. This mixture of assets that can provide cash but also the growth of principal value.

Balanced portfolios is built of medium-term investment and stocks of well-established companies.

The investor’s needs may change during the time.

The asset allocation will follow that change. For that reason, it is always smart to switch a portion of your investments before the important life changes. Do it occasionally. For example, you could move 10% of your investments to the income allocation model yearly as you are approaching retirement. So, you will have the whole of your portfolio adjusted to your new goals.

8th September 2019
Limit order vs Market order – When and How to Use

3 min read

When you are buying or selling a stock, you have two main ways to define the price you want to trade. You can choose the market order and the limit order. If you choose the market order, you trade the stock at the current price, whatever it is. By using a limit order, you can set a price and when the stock meets it you can say the trade is executed.

This is the basic difference. But to understand more, several things must be taken into consideration.

Limit order gives you the price you want

The benefit of the limit order is that you can set your price. When the stock meets that price, the order will be executed. It is usual to set a limit order to be executed in a frame of 3 months after you enter the position.

A limit order can be placed for buy or sell a stock at a particular price. A buy limit order will be filled only at the limit price or below. Hence, a sell limit order will be filled at the limit price or more expensive. For example, you want to buy the stock at $20 or less and you place a limit order for this sum. The order will be executed if the price of the stock is at $20 or below.

The disadvantage is that you are not promised to trade the stock.

In case the stock never hits the limit price, the trade will not be executed.

The other problem may arise if there is not adequate demand or supply to fill the order. That could be the case with illiquid stocks Also, the stock price may change during the 3 months and your trade may be fulfilled at a price extremely changed from what you could have made.

For example, you want to sell some company stock at, say at $90. Those stocks are suddenly traded from $85 up to $120. But your limit order is at $90. So, what can you do? Be informed on a daily base to avoid to end up with less money when you can get more.

The opposite can occur with a limit order to buy. You may be forced to buy at a costlier price than you think the stock is worth.

Use a limit order when you want to name your price a much different from the current. The other reason, you aspire to trade stocks that are illiquid. Also in the case when the bid-ask spread is great or you are trading a large number of shares.

A market order is executed quickly

The biggest benefit of a market order is that it can be executed quickly since you are choosing the best price possible at that time. The market order will be executed no matter what price the seller is asking or the buyer is offering.

The most important disadvantage of the market order is that you can not determine the price of the trade. It may influence if the price changes fast which could lead you to end up trading at a much-changed price from when you placed the order.

For example, you placed the market order after the closing hours. Suddenly, over the weekend, the stock price increased. What you have to do is to cancel your market order before the market’s opening.

Also, the lack of buyers or sellers able to cover your order may cause the price to increase or decrease.

Use a market order if you want an immediate fulfilling at any price or you are trading an extremely liquid stock. Also, if you trade several shares, meaning less than 100.

Limit order vs Market order

Limit orders will help you to save money on commissions. But you can save your money by a buy-and-hold approach to your investment.

Both limit order vs market order has its drawbacks and advantages. The final selection depends on you. The limit order can be expensive. A market order is simple to execute but can be a difficult choice during volatile market circumstances.

6th September 2019
How to Calculate the Loss and Profit
2 min read

(Updated October 2021)

It is always useful to discover the percentage rise or drop. That is called profit and loss.
To calculate profit and loss we have to make clear some terms involved in the calculation.

We will use the stock as an example.

* Cost Price ( CP): The price at which you buy a stock is the cost price. That is the amount paid for purchasing stock.

* Selling price (SP): The Price at which you sell a stock is the sales price. That is the amount received when a stock is sold.

* Profit (also the gain): You get a profit when you sell a stock at a price higher than its cost price. You will like to sell your stock at a higher price. CP < SP

* Loss: If you sell a stock at a price lower than buying price, then you caught a loss. CP > SP

The percentage of profit or loss is always calculated on the cost price.

The formula for profit is

Profit = SP – CP

The formula for loss is

Loss = CP – SP

Let’s calculate the percentage of loss and the percentage profit. Percentage Loss and Percentage Profit are calculated based on CP

Profit% = (Profit/CP) × 100

Loss% = (Loss/CP) × 100

For example, one trader purchased a share of stocks for $1.000 and then sold it or $1.250.

What is the profit and profit in percentages? Is it 3%, 15%, 18%, 20%, 25%?

OK, this is basic.

The words “purchasing” or “buying” are indicated as CP, cost price.

In our case, CP is $1,000.

The trader sold the stock at $1.250.

The word “sell” is indicated as SP, selling price.

In our case, SP is $1.250.

We can easily find the profit. It is SP – CP, so

profit = $1.250 – $1.000 = $250

Don’t miss this What Is APY and How to Calculate it

Now, we have to find the profit percentage.

The formula is

[(profit)/CPx100]

so

[(250/1000)x100] = 25%

Our trader made a 25% profit in this transaction.

But what would happen if our trader sold the stock at $800?

CP is $1.000

SP is $800

loss = CP – SP

loss = $1000 – $800 = $200

or

[(200/1000)x100] = 20%

The trader’s loss is 20%.

Calculate the Loss and Profit in Percentages
- Divide the amount that you have profited on the investment by the amount invested. To calculate the profit, subtract from the price for which you sold the price that you initially paid for it.
- Now that you have your profit, divide the profit by the initial amount of the investment.
- The last step, multiply the number you got by 100 to see the percentage difference in the investment.
If the percentage is negative, you have lost on your trading. If the percentage is positive, you made a profit on your trade.

By calculating the profit or loss you are actually estimating the change. Our calculation is based on the relationship between the selling price, and cost price. The difference shows if we are making a profit from the transaction or will we have a loss.

You would like to READ: Gordon Growth Model – Mathematics of Trading
6th September 2019
Limit Orders – Use Them to Buy or Sell Stocks

3 min read

The limit orders are a type of orders in the stock market that lets traders to sets the wanted price at which they want to buy or sell the stock. In this way, the traders have more control for the execution of price, especially during the volatility. Possibility to specify their own price by using a limit order is a better choice than a market order. By using the market order traders can only choose the price but not to define it.

A limit order can be modified until it is completed.

It is intentionally practiced to get a guaranteed better price. So, it has to be put on the exact side of the market.

Buy and Sell Limit Orders

Buy limit order must be set at a price lower than the current market price. Hence, the sell limit order has to be set at a price higher than the current market price.

For example, you want to buy 100 stocks, but you have a limit of $30 or below. If you want to sell that stocks at $35 that will not happen until the price of $35 is reached or it is more than $35.

A limit order means that you want to sell or buy some stocks only at the price which you put in your limit order.

It differs from a market order because the market order fulfills your buy or sell transaction instantly despite the price. Honestly, sometimes brokers don’t like limit orders. Your limit order will have good treatment only if the price is the best ask or bid price and your stocks will be sold very fast. But, if it is not, well, you will wait to come to the top of your broker’s list.

Some traders believe that limit orders have some defects but the others are convinced they are their best weapon. The most important feature of limit orders is that your order will be executed only at the price you placed, or better.

How to place a trade

Chart Image Source: StreetSmart Edge®

A limit order has five elements buy or sell as the first, number of shares, security, type of order and price.

For instance, if you want to buy 100 shares of stock and you want to pay $35 each. Your limit buy order would be expressed as – Buy 100 shares (ticker symbol should be added) limit $35.

This order indicates the market that you want to buy 100 shares, but without a doubt, you will not pay more than $35 per share.

The benefit of the limit orders is that your order will not be filled above the price you set but the price may drop and you can pay your shares at a cheaper price, lower than $35 as you placed. So, you see, the limit orders are not fixed orders.

The same thing comes for a limit sell order. When you open a limit sell order for $35, your stock will not be traded for less than the amount you set per share. When the stock grows over the set price before your order is fulfilled, you may earn more because the stocks you want to sell reached a higher price before the transaction was executed.

You will need the experience to recognize where to set limit orders. First, never set limit buy order too low. Why is that, you don’t have money? If you do that who will sell you the stock at that too low price? In that case, your order will never be filled.

The point of using limit orders is to protect yourself from buying a stock at too high or selling at a too low price. Keep in your mind, if the stock’s price never meets your limit price, your trade will not be executed.

The limit order could be a problem if you don’t pay attention to the market.

Here is a strategy, not very creative, but works.

Let’s say you placed a sell limit order at $3 over the market price. At the same time, you set a buy limit order at $3 under the market price. You will make a profit in any scenario.

But what if the price jumps for $10 per share?

Sadly, you missed the additional $7. Can you assume the opposite of this situation? The stock fell and your buy limit order was fulfilled as the stock was in a drop.

Limit orders are wonderful tools, but they are not absolutely sure-fire. In a volatile market, limit orders may be painful due to the possibility to be executed too soon.

The best way is to set a limit order that is not connected to daily price changes. The point is to have even minimum control over the price.

5th September 2019
Stop-loss Order Means How Much Are You Willing to Lose On a Trade

Stop-loss order is an easy and powerful tool when used properly. Find how to do that.

By Guy Avtalyon

Stop-Loss orders are suitable when conditions in the market get a bit out of control. If you never place the stop-loss order the risk potential is huge. You may lose everything.

The main characteristic of a stop-loss order is that it becomes a market order. It can happen when the price of your security is selling at or under the stop price. So, a stop-loss order is a great protection against falls in the value of your stock. Stock investing is risky, but you can control it and protect it with a stop-loss order. Wise investors always use stops. The others stay with losses. The stop-loss is an easy but powerful tool that will protect you when an unexpected turn in the market occurs.

How does Stop-loss Order work?

For example, you hold a stock of some company and it is currently trading at $30. But your stock is volatile and you place a stop-loss order at $20. If the price of your stock drop at or below $20, your order will become a market order and you’ll be able to sell your stock instantly at the best possible price.

If you want to be a day trader, for example, you have to place a stop-loss order on your every trade. The stop-loss order will tell you how much you can lose on a trade. So, you have to know how to calculate your stop loss. You have to determine precisely where your stop-loss order will go.

Basically, a stop-loss order is a method of investment risk management.

A stop-loss order is when you define a particular step to be taken at a particular price. For example, you bought a stock at $50 and you placed a stop-loss order at $40. This means your stock will be sold when the price drop to $40. Of course, you may place the stop-loss order at any price.

But not all is ideal with this order.

Stop-loss orders are static. They don’t move. Imagine the following situation. You set a stop-loss order at $40 but the stock price goes up at $80, which is much more than you bought it. In this case, when your stop-loss order is at $40 your protection is worthless.

How to calculate stop-loss?

A stop-loss order is created to reduce your loss. For example, if you place a stop-loss order for 15% below the original purchase price, your potential loss will be limited to15%. For instance, you bought a stock at $100. What you have to do is to set a stop-loss immediately after buying and you set it at $85. This is important in case the price of your stock falls below $85. Your stop-loss will automatically be recognized as market price and even if the stock continues to fall, you will obtain your $85 per stock or the amount close to it.

You may choose whatever percentage you want, all is up to you.

Some advisors will tell you to set a stop-loss order at 10%. But if you think your stock is a good player you may decide to take more risk and set a stop-loss at 20, 30, or even 50%. For long-term investors, this may be a good solution, the bigger percentage will give space to the range and enough time to annulate the losses that can occur over time because they have a bigger investment horizon and have hope for a great return one day.

But if you are a day trader just avoid big percentage, 10% of the initial price is quite a good solution to protect your trade.

Defining a stop-loss order placing is all about targeting an individual risk potential. You should determine this price to limit loss. That’s the point.

How to place stop-loss orders when trading

Stop-loss orders are usually market orders, as we said. But if your stock doesn’t have a buyer at that price you may end with a lower price. That is slippage.

Stop-loss points shouldn’t be set at unplanned positions. Placing them is a strategy that should be based on your experience with different methods. This means you must have a trading plan. You have to know how to find the best way to enter the trade, how to control the risk, and how and when to exit the trade.

If you are a beginner, just use a simple stop-loss strategy. That will give you the opportunity for the price to move in your benefit. Also, the simple stop-loss strategy will diminish your loss promptly if the price goes against you.

Where to set stop-loss orders when buying

One of the easiest ways is to set it below a swing low. A swing low happens when the price drops and then hops. That is the price support at some level.
When you buy, the swing lows should be going upward.

Where to set a stop-loss order when selling

Set it above a swing high. A swing high happens when the price grows and then drops. That is resistance.
If you want short selling the swing highs should be going downward.

What is important with stop-loss orders

There are several things you have to know about stop-loss orders.
They are not suitable for dynamic traders and large chunks of stock because you can lose more in the long run.
You must be sure that your stop-loss order has confirmation, never assume.

5th September 2019
The Stock Market prediction Is Possible or Not?

Everyone would like to know everything about this

By Guy Avtalyon

Stock market prediction is the intention since the beginning of the stock market. The reason is clear. Every single participant in the stock market aims to gain huge or decent returns and to avoid losses. Sounds logical, indeed. In early days traders and investors were just guessing, to say it simply. Well, frankly, not just guessing. There were some estimations, judgments, listening to the rumors, asking. But today, traders and investors may employ different tools, machine learnings, and AIs to help them in stock market predictions.

Is the stock market prediction possible or not?

We already learn that past performances can’t show future trends. But is this truth 100%?

Of course not.

Watching past performances can help you with a high level of certainty to predict how some stock will act in the future. This is very important because based on that data you will determine and decide what to do with some stocks. Would you buy or sell, would you stay on position or leave.

The modern stock market prediction is often based on machine learnings and AI technologies varying from very simple to complex ones. Those stock market prediction tools or techniques, whatever would you like to call them may help you a lot to secure your investments. Even the simplest can give you an insight into the future stock market trends.

Using robust algorithms has benefits, of course. But not every trader or investor can afford them. Some are very expensive and the result is very often almost the same if you use the simple version or some simple tool.

The crucial thing about stock market prediction is to have quite enough historical data to be able to make a conclusion, to have a basic sense of some stock’s nature.

How to predict the stock market movements?

The relationship between supply and demand is what dictates the stock price. And this works very simply. If there is in the market more sellers, that means the supply is greater than demand, so the price will decrease. And vice versa. That is the easy part of the stock market. Things become more complicated when you try to understand why some investors like one stock more than the other. But that is another question. We want to know is the stock market prediction possible or not.

The algos, tools, learning machines deliver their predictions based on historical data. This means that all of them show the prior values of some stock and based on that give the future estimation of stock price action.

And that is exactly what you need as an investor. To get some info with the highest level of possibility on how some stock will perform in the future. To have that kind of info you don’t need to spend a fortune. Some simple tools may benefit you too. Such a tool must have historical data about prior performances, for some limited time, for example during one year. Based on that info you will be able to check your trading or investing strategy. And that is crucial. The possibility to check your strategy on your own and not to put all in the “hands” of some algorithm, because we want to be honest with you, algos can make fails. Algos, as like your trading strategy, depends on inputs that some other implemented in it. To say simpler, it is based on other people’s knowledge about the stock market prediction and investor expectations.

Le’s check one example. Let’s say you have a strategy and you want to check how it works on a particular stock.

How efficient your strategy is?

If it shows your strategy isn’t good you can easily change the strategy or test it on some other stock. Moreover, the possibility to test different strategies on numerous stocks is extremely important when it comes to choosing the stock to invest in or strategy to employ. What is the main point of trading? To gain a nice return. And how to provide that? You have to find the best possible to take a profit point and stop-loss point.

Based on the info you can obtain from such a tool you can easily decide about your future trading.

Very simple and very helpful, don’t you think?

What Traders-Paradise wants to say is just stay tuned.

1st September 2019
Who Is The Richest Person That Ever Lived?

It is always an intriguing question. Here is what Traders-Paradise found.

By Gorica Gligorijevic

Some of you may think that Bill Gates is the richest person ever lived. Well, he is one of the richest today with $77.8 billion. Also, there was much fanfare when Amazon boss Jeff Bezos was marked as the wealthiest person ever lived with his $105.1 billion fortune. But it is a small part of what some other man held.
That title is assumed to go to Mansa Musa. Who is Mansa Musa?

He was a West African ruler with wealth valued at $400 billion. This isn’t a fairytale and you will see why.

“Contemporary accounts of Musa’s wealth are so breathless that it’s almost impossible to get a sense of just how wealthy and powerful he truly was,” Rudolph Butch Ware, associate professor of history at the University of California, said the BBC.

And Jacob Davidson wrote about the African king for Money.com in 2015 Musa was “richer than anyone could describe”.

Do you know who were the greatest stock traders of all time

Why Mansa Musa is the richest person that ever lived?

His wealth is estimated at $400bn, but historians admit that his wealth is difficult to pin down to a number. That’s how huge it was.

Mansa Musa was born in 1280 in a family of rulers. His brother, Mansa Abu-Bakr, ruled the empire until 1312 when he abdicated and went on an expedition with a fleet of 2,000 ships and never returned.

Mansa Musa inherited the kingdom of Mali. He was an impressive ruler.

The kingdom of Mali was from the Atlantic Ocean to Niger, with parts of Senegal, Ivory Coast, Mauritania, Mali, Niger, the Gambia, Guinea-Bissau, Burkina Faso, Guinea covering almost 2,000 miles. That large landmass gave great resources, for example, gold and salt.

According to the British Museum, under Mansa Musa ruling, Mali possessed almost half of the Old World’s gold. And everything belonged to the king.

“As the ruler, Mansa Musa had almost unlimited access to the most highly valued source of wealth in the medieval world,” said Kathleen Bickford Berzock, who specializes in African art at the Block Museum of Art at Northwestern University, to the BBC.

“Major trading centers that traded in gold and other goods were also in his territory, and he garnered wealth from this trade,” she figured.

The empire of Mali had so much gold that Musa was the world’s greatest gold producer and seller.

Who was Mansa Musa?

To meet one of the five pillars of Islam, Mansa Musa made a pilgrimage to Mecca. This adventure cost huge amounts of cash. This “Lord of the Mines of Wangara” had to travel stylish and luxurious. The 60,000 big caravans had 1,000 helpers, 100 camels with gold packages, countless musicians for Musa to enjoy, and more than 500 slaves.

Mansa Musa came back from Mecca bringing several Islamic teachers. Among them were direct descendants of the prophet Muhammad, for example, and an Andalusian poet and architect, Abu Es Haq es Saheli, who designed the famous Djinguereber mosque. Musa allegedly paid the poet 200 kg in gold. Counted today, it is about $8.2 million.

Besides his legacy, Musa’s property is estimated to be worth an inconceivable amount, to around $400 billion. According to Time magazine: “There’s really no way to put an accurate number on his wealth.”

Some believe that Mansa Musa’s unbelievable fortune may have been somewhat overstated. Nevermind, he is still the richest person that ever lived.

Don’t tell to the Rothschild Family.

28th August 2019