Tag: stock market

All stock market related articles are found here. Educative, informative and written clearly.

Margin Call – How to Profit From The Trade
Every second in your account you must have 25% of the total price of the stock you hold to cover the maintenance margin.

By Guy Avtalyon

A margin call is something that every trader would like to avoid.
- Buying on margin means borrowing money from your broker to buy stocks.
- There is no profit without the risk involved.
Have you ever seen a better movie than Margin Call? A movie about the Financial Crisis? It just crossed my mind when I started to write this.

Okay, never mind. The subject of this article is a margin call in the stock market.

Let’s start from the beginning.

What turns around and around the stock market is a risk. I know that is the major problem for most of you. How to take the risk? Because the risk has its bright and dark side and you know that. For example, you are trading some stock without guarantees that it will perform well.

The identical risk that boosts stock prices one day can lower them tomorrow. Yes, the identical. Pretty scary.

But here we come to the bright side of the margin call. For investors who want to profit a lot and quickly nothing is better than buying on margin.

Buying on margin means borrowing money from your broker to buy stocks. Basically, it’s a loan from your broker.

How “buying on margin” works?

You can borrow from your broker up to 50% of the price of a stock.

For example, when the stock price is $20,000 you will pay $10,000 and your broker will lend you the rest which is another $10,000.

Let’s look at the possible scenarios.

Assume the stock price grows at $24,000. The return on your investment will be 40%. You invested $20,000, but you have to give back to your broker $10,000 and you will end with $14,000 in your hands. But you invested yours $10,000 so you will have $4,000 of profit. This is good and you can be happy because you made a profit.

But things may go in another direction.

Assume the stock price went down at $16,000. You will end up with a 40% loss on your investment. Even more, you have to give back the borrowed money to your broker increased by charges, fees, and interest on the loan, of course.

Buying on margin may be extremely risky. You may lose your entire investment. But you may lose more because of something known as a margin call.

Every second you must have an adequate amount in your account to cover the maintenance margin. That amount is 25% of the total price of the stock you hold.

What can happen if you don’t have enough cash in your account? Your broker will issue a margin call. That means, your broker is demanding you to cover the difference with more deposit and reach that 25% maintenance level.

Let’s go back to our example and situation when things went wrong. What will happen if the stock price drop at $12,000? Your loss is $8,000 and now you have only $2,000 in your account. The rule is that you MUST have 25% and $2,000 is not enough to cover that. So, you lost $8,000 and at the same time, you have to deposit an additional $500 in your margin account to stay in the market. Also, you have to pay back the money to your broker.

Is margin call dangerous to investors?

It can be extremely dangerous. In our example the missing deposit is small as the money invested isn’t big, but you can count how it is an enormous loss when the value of the investment is $200,000, $500,000, or million dollars.

The most frightful detail about margin call for you as new investors is that your broker has no obligation by law to warn you that your margin account is too low. So, what the broker will do?

The broker will sell your stock and liquidate your assets if it is necessary. He or she needs to ensure the maintenance level in your margin account. Even more, the broker can begin selling your stock even the margin call is issued. Such will not wait for you and will not give you a grace period. Damn, you are dealing with a un-patient broker. This is an extremely painful and dangerous situation. If you come up to this situation how will you earn your money back when the market turns in your favor. You have nothing to trade with.

The other danger about margin call is that you do not have an influence on which stock your broker may sell. Of course, the broker will choose the best players to cover fast and smooth the maintenance margin.

Moreover, the brokerage may change the rules and issue the margin call based on them. You will not have even zero chances to delay paying the margin call.

How to avoid the potential risk of a margin call

First, stay away if you don’t have enough experience in trading. Second, open some other account for an emergency with enough money to cover the margin call.

I can understand that you are willing to enter the market as a big player. At least to earn a big profit. Nothing is bad with that. Everyone wants the same. Just keep these things on your mind when you want to trade on margin. Buying on margin is an extremely exciting method, risky but with great potential to profit.

If you are 100% sure that you have a great player in your hands, and don’t have enough money to buy it, do it. Borrow from your broker. Sometimes, a great risk will bring a great profit. In the end, there is no profit without the risk involved.
13th September 2019
How Long To Hold Stock?

Patience is golden, but even being a golden rule of stock investing, it isn’t enough, there is more.

By Guy Avtalyon

Yes, you are asking the right question, because many stock investors ask: “How long to hold stock?” There are some possible answers.
You may hold your stock until it provides you a profit, or break your stop-loss rule, or you may hold your stock forever.

Actually, there’s no general rule that fits all stocks when the holding periods are in the question. So many variables can influence how long to hold stock.

The decision to hold stocks for the long term or the short term is individual. It depends on your poverty, expectations, or advisor. Several factors are involved in your personal decision especially if you have a winner in hand. The right question is: Will the winner be an excellent moneymaker in the future and how long?

How long to hold stock

A lot of factors will influence your decision.

First of all, the time you enter the market is important. If it is during a bull market you have to know two things. First, the usual bull market cycle will last from two to four years and you’ll be able to earn the majority of your profit during the first or second year. In simpler words, you have to wait until your stock rises up to 20 – 25% from buying price, that is the point where the profit can be taken. If your stock increase over 20% in the first 3 weeks or in a shorter period, hold it at least 8 weeks. After that period you have to examine the stock’s charts to check if your stock keeping up well. When you get this confirmation from the charts and the market is increasing too, there are a lot of chances that this trend will continue. You can expect the new breakouts and the value of your stock will rise more.

For genuine market winners, the average time from breakout to top will be from 12 to 18 months.

This looks like a pretty simple answer, but is it the right one?

What if your stock starts a downtrend and you see you can be stuck in a losing trade for a long time? That is why you must have settled rules before you enter a trade.

How to determine how long to hold a stock

The best way to determine how long to hold a stock is to do that based on your trading rules.

Before you purchase any stock you have to define what profit do you want to make. The next will be your ability to forecast how much your stock could decrease. Will your strategy provide you a bigger gain than loss? Is the stock in its downtrend, bottoming, or up-trend? You have to determine the largest possible loss you can afford.

Traders-Paradise has one suggestion for you.

The gain has to be minimum 1,5 to 2 times bigger than loss. There more variables you have to consider. For example, how much will you earn when sell your stock?

The golden rule in stock holding

Let us examine one possible scenario. You have bought the stock and you are 20% in profit after the first week. You predicted the worst scenario as a loss of 10%. In this case, your reward is at 2 to 1.

What you have to do? Should you sell? Well, the brief answer is No.

The right answer is that you should hold a stock for a longer time if you have, for example, a medium-term horizon. You have to hold your stock for several weeks or even months.

Hold the stock as long as you want to make a notable gain from a stock price move. Some traders would advise you to hold a stock something between two and 10 months to get the best reward. You have to be very blessed to develop a great profit overnight.

The average high-profit trade is 30% and the hold time is about 45 days. Also, the average drawdown is -11% to -15%. That is the statistics.

Patience is golden

You must be patient with a stock. Stocks need time to give you the profit you want. Long-term investments have made incredible profits.

Anyway, you must be careful because stocks can drop suddenly. To avoid a catastrophe you have to limit your loss but don’t place your stop-loss order at 5%. Usually, a stock may pull back 10-15%, and very soon after that, a profitable move happens.

12th September 2019
October Effect – Investing When The Stock Market Go Lower

Is October effect just a myth or there is something?

By Guy Avtalyon

The October effect is a recognized market oddity when stocks tend to fail during October. The October effect is an irrational suspicion of some investors related to previous market crashes that happened during October. Investors become superstitious, you might think. Well, the fact is that some great historical market crashes happened this month.

We will point some of them. In 1907, the Panic, later, in 1929, were three large crashes – Black Tuesday, Black Thursday and Black Monday, after almost 60 years 1987, Black Monday happened October 19, when the Dow fell 22.6% in one day. Also, on Oct. 9, 2002, the market caught a five-year low. And the market plummeted 16% in October of 2008 when the Great Recession began.

When the stock market crashed in 1929, the investors were surprised. It was quite unusual because only a few weeks before the stock market was on the highest level ever, the stock prices were 25% higher than in the year before. In October 1929 stocks dropped nearly 25% for only two days. It cost investors billions of dollars. This market crash led to the Great Depression. October has accepted as a permanent warning to investors of how suddenly wealth can turn over.

What is October Effect?

There’s no proof that this great market crashes occurred in October for any other cause. Coincidence is truly a master of the game. Since there were not too many market crashes in October, we are free to say that investors will make money during October more often than they will lose.

According to research conducted by Yardeni Research, the medium monthly return in October 2015, was 0.4%.

It wasn’t a great return but still, it was. But can we say the chain of unfortunate market events over October is broken?

The truth is that if markets go down over October, they do it very hard and painful. But just for a sec try to be reasonable. Compare the drop of 4.7% in one month with 11 good months when the average gain was about 4.1%. Everything is math.

So, we can say, at least, that October could turn high in any direction.

For investors, September is statistically the worst month since they lose approx 1% during this month. History shows that September can be difficult for stocks. Since 1950, it has been the most critical month for the S&P 500, with declined at an average of 0.5%. But, for the last 10 years, the S&P 500 has a 0.9% profit in September.

Is it possible to predict the stock market?

It is hard to predict the stock market. Markets are going up and down. You can be sure of one thing: when it is down, it will climb up. The markets go up over time and you are a long-term investor you shouldn’t be worried about the market’s condition over one month. But if you are a short-term investor your portfolio should be built mostly on cash and bonds, less on stocks. That means it is better to be a conservative investor. So, the October effect will have no or less influence on your investments.

Investors’ sentiments can become negative when October is near. That may influence the stock market play. As investors’ feelings incline to the depressed, negative market growth can produce overreactions. They will start to sell stocks in panic and the negative influence will increase more.

Keep in your mind, statistically October isn’t the worst month, it is September. But due to the great market crashes that occurred over October, we have that scary phrase – October Effect.

By the way, do you know which month is the best for the stock market? July! Remember this.
It would be amazing if the market crashes chose to happen just in one particular month of the year. Honestly, it is impossible, like the impossible is to have just one incredible good market month.

October is just one of the 12 months of the year. The difference from others is that leaves start to fall. That is the October effect.

10th September 2019
Investing In Penny Stocks Can Be A Highly Profitable Strategy For Investors

3 min read

The charm of investing in penny stocks lies in the possibility to trade at a lesser $5 and investors can buy a large number of shares at one time. The worries about recession are growing and many investors are moving into safer investments like bonds. Of course, experienced investors are not panicked, they know what to do and how to protect their investments.

But if you have a more extreme approach to market conditions today, maybe you should think about penny stocks.

The truth is you have to be very cautious, buying penny stocks in unsure economic circumstances may be the antagonistic approach to the market. But if your risk appetite is powerful and your risk tolerance allows you, investing in penny stocks can be a profitable strategy for you.

The question is which penny stocks to buy?

Traders-Paradise will give you some idea, but you have to explore the suggested companies and find the best for you.

Hebron Technology (HEBT)

This penny stock has made great gains this year. Hebron Technology Co Ltd (HEBT) is from China. Last week, on Thursday, it earned 10% more as investors continued storing into it. HEBT stock has gained an enormous 400% in 2019.

Hebron Technology Co., Ltd. is involved in developing, manufacturing and providing customized installation of valves and pipe parts for the clean industries such as pharmaceutical, biological, food, and beverages. The Company’s products are Diaphragm Valves, Angle Seat Valves, Sanitary Liquid-Ring Pumps, Clean-in-Place Return Pump, Sanitary Ball Valves and Sanitary Pipe Fittings.

Here are its Reports fiscal year 2018

OrganiGram Holdings (OGI)

The second penny stock to watch this month is pot stock OrganiGram Holdings Inc. This cannabis stock performed big progress after it won a slope from a leading brokerage. Last Thursday an analyst at Oppenheimer had placed a rating of ‘perform’. And here is its annual reports.

Can OrganiGram profit on cannabis market growth? We can recognize a good chance for the company’s future.

OrganiGram is equipped to produce almost 90,000 kilograms of cannabis per year. The company plans to expand its production to 113,000 kilograms per year by the end of this year. That will rank OrganiGram in the top 10 Canadian cannabis producers.

OrganiGram is one of four Canadian cannabis producers that has supply agreements with all of Canada’s regions. Also, this company is well-positioned for the cannabis derivatives market and new partnerships are coming with Pax Labs and Feather Company.

OrganiGram’s annual report

Trinity Biotech plc (TRIB)

Why Trinity Biotech plc? Trinity Biotech is a small company with a market capitalization of US$28m. Maybe it is unfamiliar to most investors.

Trinity’s new HIV screening product under name Trin-Screen will be introduced to the World Health Organization at the end of the year. Trinity Biotech stock is cheap right now it is at $1.42.

Here are its Reports fiscal year 2018

It could be a high increase in stock value. In order to fully understand TRIB here are some data.

Trinity Biotech was founded in 1992. Its main aim was to become a leader in the diagnostics market. Today Trinity Biotech has an awesome portfolio of over 400 products. Specializing in the development, manufacture, and marketing of diagnostic test kits, Trinity Biotech’s continued success is based on the fact that as a company it consistently achieves standards of excellence in the quality of all it does.

Its test kits are used to detect infectious diseases, autoimmune, cardiac arrest, hemoglobin disorders, and detect and control diabetes.

It is quoted on the NASDAQ exchange. Sells products in Europe and America, in more than 110 countries.

Bottom line

A penny stock is a normal share of a small public company that is traded at a lower price. In the US, penny stocks are traded at a price less than $5, in the UK, penny stocks are the stocks that are valued under £1.

If you want to trade penny stocks set a strong stop loss. Investing in penny stocks can be highly profitable but risky too.

We can assume the more volatility in the markets, especially among the penny stocks, soon. So, it is possible to see a wild ride. May the force be with you!

9th September 2019
The Low-Interest Rates Could Lead You to Great Earnings

3 min read

When interest rates are low you may think: Oh, what a good opportunity. Loans are cheaper, banks or and peer to peer sites will fight for loan clients. Yes, at some point of view and for a short time it is favorable.

But on the other side, the low-interest rate means lowering returns for lenders. If interest rates are low for a long time, where is the benefit for lenders? That is the very clear relationship between demand and supply. Low-interest rates can damage lenders, and the borrowers can be damaged too because borrowing money becomes difficult.

In periods when the interest rate is low, banks are in a difficult situation. They don’t have a strong deposit base, the income from loans is lower too which causes the banks to don’t want to take a risk by giving cheap loans to borrowers with the lower credit rating.

And here we come to the point. It is difficult to finance, for example, small businesses, and investing becomes more difficult too. But not impossible yet.

Low-interest rates inhibit investors from putting money in savings accounts. They rather use the funds to pay their debts or use their money to invest in shares or buy some property.

For example, if the interest rate on deposit is about 1%, why would you put your money on savings? The better choice is to buy shares, the return is bigger.

Instead to put your money on your saving account, invest it

When the interest rate is low, investing is a great opportunity for many people. The truth is, if you put your money in the bank, the returns will not follow the inflation rate. Investing demand more risk, that’s the fact. But the returns, if not defeat the inflation, will follow the speed of it.

You don’t want to miss this: Economic downturn – How to prepare for it

The point is that you will take more risks to get bigger returns. How much risk you should take and stay calm? You can decrease risk by diversifying your investment portfolio. Investing in higher-risk assets gives higher returns.

So, where to invest when you withdraw your money from the bank account?

The most popular are bonds and stocks that are paying dividends.

The yield is what every single investor wants, no matter if it is an individual investor or institutional. The aim is the same.

Invest in fixed income assets, that will give you a high return. But if you invest in different asset classes, meaning you build a diversified portfolio which is the best strategy, you may be sure you will have increased yields.

In any case, bigger than if you leave your money in the bank while the interest rate is low.

The stock market is one of the best long term capital raising opportunities.

Yes, the stock market levels are high at this moment. To explain this. When interest rate drops, people will think they are safe and accumulate their capital or savings into stocks.

This action is driving the markets higher. The demand is bigger and the prices are high.

Increased stock markets are a difficulty for many people. So, what you have to do is to keep your money for a while, just wait for the market correction or invest for the long term. The long-term investing is a good choice because how could you know the market will weaken.

The stock market doesn’t like high-interest rates but likes the low-interest rates. High-interest rates can boost costs for companies which can lead to lower profits, hence lower stock prices. But it is a great opportunity for everyone who wants to buy. Low-interest rate rises the price of the stocks because the people will rather invest in stocks than to keep their money in the banks. So, the demand is bigger, hence stocks prices are higher.

The worse scenario is to leave the money in the bank during the period of low-interest rate or inflation. You don’t want to watch how smart people defeated inflation and you were the victim. Don’t be the looker-on, take your place in the game.

3rd September 2019
Spelling Errors Cost Investors Millions Every Year

Is really possible that spelling errors can cost investors millions? Here is the full story.

By Guy Avtalyon

You entered the stock market but still make mistakes. This time spelling errors. Okay, you are not the only one. Spelling errors cost investors millions every year. re you happy now? Of course not.

As we said billion times when you enter the stock market you have to be very aware of which company you want to invest in. What Traders-Paradise wanted was to present you with a wonderful world of investment. And you can find a lot of articles that we offered numerous examples, from how to choose the broker to how to calculate your profit. A lot of times we tried to teach you how to check the company in the market. And how important their ticker symbols are.

What we saw is that you invested in FORD!

WOW, good choice indeed. But did you really want to invest in “Forward Industries” or “Ford motor”?

Under this ticker symbol, FORD is “Forward Industries” not the car company. What, you already invested there? You should be more careful. Ford motor is under the ticker (F), just F.

Take care of it because Ford Motor will publish its Q3 earnings on October 24th.

Why investors are losing millions every year?

If you did invest in FORD, the only problem is that you invested in a manufacturer of “carrying cases for medical monitoring systems” worth $10 million, so don’t expect too much from them. Experts calculated that this error costs investors about one million in trading only for the fees.

Where is the lower or lost return? Can you calculate that?

A lot of those investors usually don’t even correct this mistake until it is too late. They still think they made a good investment until they see in the quarter or annual reports. Some of them notice the error several days after and try to sell their stocks, but is the game with poor results. Actually, it is very rare they can bring the invested money back.

So, let’s see again where you can make similar errors?

For example HP. Do you really think it is a giant company, Hewlett Packard? Nope! It is the ticker symbol for Helmerich & Payne. You are free to check their official website:

“H&P is the leading U.S. unconventional driller, and our drilling experience spans the globe. Our company currently owns and operates land rigs across North America, South America, the Middle East, and Africa, with offshore rigs in the Gulf of Mexico.”

Do you still want to invest there instead of Hewlett Packard, it trades under (HPQ)?

Also, Hewlett Packard Enterprises, you will find under (HPE).

Would you like to invest in ZOOM? Yes? That is another mistake. It is an unclear Chinese wireless business. We suppose you wanted to invest in ZM which is $25 billion worth video conferencing platform.

Spelling errors cost investors millions

For example, you want to invest in Twitter. What is their market ticker symbol? TWTR or TWTRQ? Don’t invest in TWTRQ, it bankrupted. Yes, several years ago, in only one year, during 2013, it’s stock rose1000%. What a market star! But a shooting star. There is no more this home entertainment retailer.

But TWTR is still there ready for you to invest in.

There are more.

Two professors at the Rutgers School of Business-Camden discovered that over half of listed US companies deal with a “meaningful part” of their tickers with a different company.

It can be in a different industry and, also, with huge differences in market capitalization. Those professors found almost 250 so-called, company pairs that can lead you to wrong decisions. Professors claimed, “250 company pairs where the possibility of confusion is particularly high.”

For example R1 RCM (RCM) vs RCM Technologies (RCMT) where market cap difference is 3,215%

The problem appeared due to a phenomenon known as “fat finger trades.”

So, take care, avoid spelling errors that cost you a lot of your hard-earned money.

Also, the robo advisor can make mistakes. Yes, of course. The inputs are given by the people and the people make mistakes. The algorithm will follow inputs without the question. You can be sure.

What we want from you is to “spellcheck” your investments. Proofread the tickers from your preferable company and make corrections on time.

25th August 2019
Is it Possible to Predict Stock Market Movements?

How is possible to predict stock market movements. Read to the end.

By Guy Avtalyon

Different gurus and many experts try to predict the stock market movements. Actually, they try to explain the stock markets by using many different theories. Sometimes, stock market predictions are more interesting than the last season of GoT which isn’t so hard, right?

Even if you are not a trader and you never traded stocks, the possibility to predict stock market movements is exciting. Imagine that you can do so. How much it can be beneficial to your financial status?

Real estate can be failed at its lows, money can be removed from mutual funds, anything can happen.

What we have to do when the markets start to turn around?

Maybe to invest in gold, oil, some other tangible assets? To leave crypto? To sell stocks?

Yes, when things rise to go bad, relocating money into tangible assets is a benefit. But is it possible to know the danger is ahead before it happens? How to successfully predict the stock market movements consistently over time?

Do you know the maxim that “past performance cannot predict future success”? The paradox of that saying is that it will come up to you just after your broker tells you how great that investment was acting in the past.

Wink-wink, bro! At some point, the future can be similar to the past. Even the same.

Stock markets go upward, stock markets go down

Why do stock markets do that? Well, it is easy to explain. When more buyers than sellers are in the market, the prices will go up and vice versa. When more sellers than buyers are in the market the prices will go down.

What provokes people to buy and sell? More often it is connected to the emotions than to logic. And here we come. The emotions are unpredictable. The stock markets are under the emotional influence, so they are unpredictable too.

And you may think it’s useless to try to predict stock market movements. Or they are created to be unpredictable. It is a partial truth.

We found this on investmentwarrior.com:

“If today’s market is up…there is a 73% probability of tomorrow’s market is being as well, and a 27% probability that tomorrow’s market will close down.

If today’s market is down…there is a 62% probability that tomorrow’s market will also be down, and only a 38% probability that the market will close higher.

Historically the market has advanced on 58% of all market days, demonstrating its overall historic upward bias.”

The future of the stocks in the market is a complex problem. Too many variables have to be calculated. Quantitative models, historical patterns, all failed.

The best prediction tools are our brains. It is a damn good forecast tool. But a human intellect cannot solve a mathematical equation so fast as a computer can. The human brain isn’t even close to the simple calculator. But the human brain developed powerful tools, machines, and algorithms. They can calculate very fast. Some of them will solve the most complicated formula in a sec.

Why predict stock market movements

Predicting stock market movements is possible. It isn’t a waste of time.

Experienced traders being a witness of a lot of market’s ups and downs, believe that the market will be equal, one day.

Let’s go back to the predicting tools.

There is something called “algo trading”. With AI you practically can have the possibility to make a profit almost for sure. How successful will you be, depends on the inputs you add to algo.

Can you predict how the bulk of traders would respond to some events? It can indeed be completely unpredictable.

Who want to predict stock market movements

They need to be sure they are investing in safe assets. Also, they have to know they will have fast and huge returns.

Here we come to algorithms. How? The historical data are extremely important for trading and investing, for predicting the stock market movements. Are you ready to spend days, weeks, or months to gather valuable results? Why would you torture yourselves? Instead, you can use some good stock predicting tool, very fast and reliable to calculate the final result, to show you where to invest, when to enter, and when to exit the trade.

Traders-Paradise is preparing – Find the Best Exit Strategy Algorithm

Traders-Paradise chooses to develop this tool because the exit strategy is maybe more important than anything in your trade. How is that? While you have many strategies and choices to enter the trade, the exit of trade can be done in only two ways: with lost or with profit.

To know when to exit your trade you will need a lot of data. The tool like mentioned one is the easiest way to obtain them. Also, at the same time, similar tools are going to help you to predict the stock market movements. This tool will estimate how far the price will move and ensure that your profit potential exceeds your risk. Without that data, it is impossible to predict when to exit the trade.

Traders-Paradise is preparing something for you from that field. You will see it soon and you’ll be able to use it. It is very useful and impressive. But, the best news comes last. You have to wait for a while but stay tuned

22nd August 2019
The stock market trading for beginners – It Shouldn’t Fright You

If you’re afraid to start trading stocks, here are some sure ways on how to do that

By Guy Avtalyon

The stock market trading for beginners can appear somewhat terrifying. Trust me, I know that.

Before you begin to trade stocks you need to know the costs. Invest the money you can cover if failed. The tricky part of the stock markets is that you can’t expect any guarantee you will get big returns.

But there is a big advantage when trading stocks. It gives you an opportunity to preserve your savings in circumstances of rising inflation. If you work smart and catch the experienced traders’ performances, you may have the chance to hit big returns.

How to start trading stocks?

As first, you have to pick a broker. That broker must be licensed and regulated. This matter is crucial for all stock market trading beginners.

The chosen broker will provide you access to its trading platform. For instance, you would like to join the stock market. You have to know better what are you dealing with. If you want to become friendly with the platform you prefer, the general advice is: begin with small sums of money.

You are a fresh participant in the arena of online stock market trading.

You have to read the financial news. That is helpful when it comes to which stock to buy. News is very important for stock market trading for beginners. Also, you can participate in a number of forums. There you can find some advice.

Truly, you can get a lot of helpful free data in public places for stock market trading for beginners. And study a business you prefer before you stock market trading.

The reasons to start the stock market trading

Say, you got some stock. And the time goes by as always. Assume that after several months the price of the stock goes up. So, you may trade your stock, sell them, and earn a profit. Of course, you can wait longer. If you were smart enough and done well research you picked a worthy company and your stock will rise more.

The stock market trading for beginners is full of chances. But here we come to the importance of news. The value of your stock depends on a large variety of circumstances. As you are a beginner in the stock market trading, you have to know that socioeconomic impacts, geopolitical topics, inflation, and so many others may have an influence on the value of your stock.

You have to know that all the time, all of them, are acting cooperatively. Sometimes they are operating in reverse courses, but they are working. And all of them may have influenced the price of the stock. That is necessary to know for stock market trading for beginners.

But possibly the highest influence on stock prices create the people. If there is a crowd that assumes the price is going up, the price will go up. It will take some time to learn how to trade stock but it worth your effort.

Stock trading strategies for beginners

When you start a stock trading and you are beginners one central question appears. Which trading strategies for beginners to implement?

This question isn’t without purpose.

Some stock trading strategies are very complicated. You should not implement those as the best stock trading strategies for beginners. As a beginner, you should rise with simple strategies. With something smooth and comfortable. This rule fits every novice. It is very important to understand how markets work, so it is highly recommended to follow the trends.

Following the trend is an excellent strategy for stock trading for beginners. Just set it and open the position in the course of the trends. There are various ways created to identify when a trend begins and finishes. An easy stock trading strategy for beginners has simple rules. Follow trends and you can gain large profits. But there are also some disadvantages. Actually, large trends develop rarely.

This strategy can generate losing trades. “The trend is your friend, UNTIL THE END,” said some very smart and experienced once. The end is when the trend sinks.

It is very important for stock trading strategies for beginners to be executed with risk management. Find more about stock trading and investing in stocks with a little money HERE

Don’t waste your money!

28th May 2019
PENNY STOCKS – How much does it cost to invest in

3 min read

Penny stocks sound cheap, don’t you think?

Yes, because they are. They are also called micro-cap stocks

Penny stocks describe shares of a company that trades for low amounts. It is usually between $0.01 to $2.00. But some institutions count a penny stock is anything that trades for less than $5.00 per share.

They’re not expensive, so what’s the catch?

So why trade penny stocks?

Everyone who entered the stock market knows that penny stocks equal a bigger risk than regular stocks.

The reason for inflated risk is simple. The companies that hold penny stock typically have no profits and minimal operations.

Many of these companies are speculative because they are thinly traded, usually over the counter instead of on major exchanges like the New York Stock Exchange.

They usually trade on the pink sheets or on FINRA’s over-the-counter bulletin board (OTCBB) and are not required to file with the Securities and Exchange Commission (SEC).

These stocks have low liquidity due to a lack of buyers and sellers. Hence, orders may not be filled right away or even at all. Moreover, volatility tends to be high among OTC (Over-the-counter) stocks, and bid-ask spreads are frequently large.

Investors in penny stocks should be prepared for the possibility that they may lose their whole investment.

Plus, penny stocks are notorious for being part of so-called pump-and-dump schemes. The scammers buy up shares and then promote it as the next hot stock on blogs, message boards, and e-mails. Once the stock price is unnaturally pumped up by all the gossips, the scammers sell their stake. The investors stay with big losses.

But…

Where penny stocks have the advantage is the low cost.

Also because of the simple math of penny stocks. If you buy shares for $0.40, and if the stock goes up by $0.20, then your profit is at 50 percent. That’s the pie-in-the-sky scenario.

However, it’s just as easy for your $0.40 share to go down by $0.20 and lose 50%, instead.

So, a $1,000 investment could lose value pretty quickly.

Of course, not everything is so dark.

Several years ago, CNN published a story about a young man who made his first million dollars from trading penny stocks.

He decided to begin with his life savings of $1,500. And 3 years later his portfolio was worth more than $1 million.
See how worth it was.

So, how to trade penny stocks?

We warned you but, yet you still want to trade penny stocks.

It is possible to trade penny stocks successfully.

If you trade penny stocks successfully, they really can offer the greatest risk-reward ratio of any investment type. But take care, the odds are not in your favor if you don’t understand what you’re doing. The must is, you have to learn. You must have the knowledge, education, in order to understand the market to successfully trade penny stocks.

And you must stay far away from scammers. Read the fine print on any email or ad you see on social media and in emails. If you find a disclaimer at the bottom of a social media post or an email, be cautious.

That means that someone’s getting paid to post an ad.

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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 Apple, for example, the potential gains from trades like this are too good to pass up.

So penny stock trading prospers. With a relatively small investment, you can make a nice return if the trade works out.

So, if you spot an advertisement that promises dollars from your pennies just remember these several rules:

Never trust the sweet stories

You must not believe the penny stock stories that are touted in emails and on social media websites.

And you have to say no. Let’s say, you can’t invest in penny stocks as if they were lotto tickets.

Unfortunately, that’s what most people do, and they lose over and over. Think of penny stocks as people that you can’t trust.

Instead, focus on the profitable penny stocks with solid earnings growth and which are making 52-week highs.

Read the disclaimers

Penny stocks are sold more than bought. They come as tips in emails and newsletters.

Remember, the free penny stock newsletters are not giving you tips out of the goodness of their heart. Read the disclaimers at the bottom of the newsletters. And you will see. They are getting paid to pitch a stock because their investors want a presentation for the company. There is nothing wrong with that, but almost all penny newsletters make false promises.

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You have to know something. There is a difference between stocks making a 52-week high based on an earnings breakout and stocks making a 52-week high because three newsletters picked it. The disclaimers at the bottom of the email or newsletter, which the SEC requires, reveals very often a conflict of interest.
They are being paid to pump up the stock, but they rarely tell you when to sell. Usually, it’s far too late.

Sell your penny stock quickly

The charm of penny stocks is you can make 20% or 30% in a few days. If you make that kind of return, sell quickly.
Never get greedy, aiming for a 1,000% return. The penny stock is getting pumped up, take any profits. And move further.

Never trust company management

Don’t believe what you hear from companies in this penny stock’s world.

The companies are trying to get their stock up so they can raise money and stay in business. That’s okay, but there is no reliable business model or accurate data. So, most penny stocks are scams that are created to enrich insiders.

There are large circles of the same people run promotions using different press releases and companies.

Never sell short

Don’t do it.

Penny stocks are too volatile. If you’re on the wrong side of the trade, you could lose 50% or more on a short squeeze. Another problem is that it’s difficult to find shares of the penny stock to short. Leave shorting penny stocks to the pros.

Focus on penny stocks with high volume

Stay with stocks that trade at least 100,000 shares a day. It could be difficult to get out of your position if you trade stocks with low volume.

Traders Paradise suggests that you trade penny stocks that are priced at more than 50 cents a share. Penny stocks that are trading less than 100,000 shares a day and are under 50 cents a share are not liquid enough to be in play.

Don’t trade large positions

You really need to be careful with position sizing. Never learn the hard way not to trade big. Famous traders rule is not to trade more than 10% of the stock’s daily volume.

The limitation of position size will provide you to get out of the stock faster.

The bottom line

If you want to invest in penny stocks you have to learn.

By the way, learn from Timothy Sykes, who is famous for turning his Bar Mitzvah gift money of about $12,000 into millions by day-trading penny stocks while in college. For the past years, Sykes has been teaching his strategies through the sale of instructional newsletters and video lessons. You can find his lessons very easy.

28th January 2019
Leading Stock Exchanges In The World
3 min read

There are two basic types of stock markets:
1. physical location exchanges, which include the New York Stock Exchange (NYSE), and
2. electronic dealer-based markets that include the Nasdaq stock market, the less formal over-the-counter market, and the recently developed electronic communications networks (ECNs)
They are the world’s two leading stock exchanges.

A Stock market or exchange is a facility where people can buy or sell stocks, bonds, and securities through brokers and traders. Most often the traditional Exchange floor is where the selling and buying take place.

However, modern trading is now also done through electronic networks for its speed and lesser cost.

But there is the place where we can be faced with some problems.

The dark pools, electronic communication networks, and alternative trading systems are also using as trading locales.
Buyers and sellers are stock investors who may profit or lose capital depending on whether there is a bull or bear market, respectively. The stock market is usually preferred by investors for transparency.

As of April 2018, the New York Stock Exchange ranked as the largest by market capitalization with a value of tradable shares amounting to 23.14 trillion U.S. dollars.

Let’s say several words about each type of markets.

The physical location exchanges are formal organizations. They have tangible, physical locations and trading in designated securities.

There are exchanges for stocks, bonds, commodities, futures, and options.

The physical location exchanges are auction markets with securities going to the highest bidder. Buyers and sellers place orders with their brokers who then execute those orders by matching buyers and sellers.

Although specialists assist in providing continuity to the markets.

The electronic dealer-based market is consists of hundreds of brokers and dealers who are connected electronically by telephones and computers.

The dealer-based market facilitates the trading of securities that are not listed on a physical location exchange.

A dealer market includes all facilities to conduct security transactions not made on the physical location exchanges.

These facilities include:
1. the relatively few dealers who hold inventories of these securities and who are said to make a market in these securities;
2. the thousands of brokers who act as agents in bringing the dealers together with investors;
3. The computers, and networks that provide a communication link between dealers and brokers. Dealers continuously post a price at which they are willing to buy the stock (the bid price. Also, a price at which they are willing to sell the stock (the ask price). The ask price is always higher than the bid price. The difference (or “bid-ask spread”) represents the dealer’s markup or profit.
More about the leading stock exchanges

At the end of April 2018, the NYSE is the largest stock exchange operator by market capitalization. The total value of tradable shares amounting to 23.14 trillion U.S. dollars.

That is three times larger than the second largest operator, NASDAQ.

NASDAQ was the first stock market to start trading online. But NYSE is the first global equities exchange.

NYSE exchange has successfully grown into the powerhouse that it is today, due to a series of international mergers. The

NYSE merged with Euronext. That was the first integrated cross-border exchange. Now, NYSE trades almost twice as many foreign companies than NASDAQ.

The interesting fact is that the world’s two largest stock exchanges lie only a few minutes apart in New York City, United States.
The New York Stock Exchange founded on May 17, 1792, is the world’s biggest stock exchange in trade value and has a capitalization of $19.223 Trillion USD. Notable market events have included the 1929 Wall Street Crash, the 1987 Black Tuesday, and the 1997 mini-crash.

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The second one on this the list is the tech-heavy NASDAQ. It is founded on February 4, 1971, also in New York, with a market capitalization of $6.831 Trillion. It is owned by NASDAQ, Inc, as the first exchange to use the electronic system in trading.

The other leading stock exchanges are the following:

Third on the list is the London Stock Exchange Group in the United Kingdom and Italy founded in 1801 and has a capitalization of $6.187 Trillion.

Notable market events have included the 2007 acquisition of Borsa Italiana, the 2009 acquisition of Millennium Information Technologies, Ltd., and the 2011 merger with TMX Group.

Asian leading stock exchanges

There is also the Japan Exchange Group in Japan founded on January 1, 2013, with a market capitalization of $4.485 Trillion.

It was formed with the merger of the Osaka Securities Stock Exchange and the Tokyo Stock Exchange. Notable market events have included the 2013 JPX was launched.

Fifth on the list can be the Shanghai Stock Exchange in China re-established on November 26, 1990, after a 41-year hiatus. With a market capitalization of $3.986 Trillion.

Memorable market events have included the 1891 founding of the first Chinese stock exchange. At the year 1904 registering of it as Shanghai Stock Exchange. In 1941 it stopped operations due to Japanese occupation and the 1949 closing during the Chinese Revolution.

Also, there is the Hong Kong Stock Exchange in Hong Kong (SAR China founded in 1891 with a market capitalization of $3.325 Trillion. It is owned by Hong Kong Exchanges and Clearing.

In 1914 renaming of it as the Hong Kong Stock Exchange, and the 2000 HK Exchanges and Clearing acquisition of the HK Stock Exchange.

And the Shenzhen Stock Exchange in China founded on December 1, 1990, with a market capitalization of $2.285 Trillion. It also owns a tech exchange, ChiNext, founded on October 23rd, 2009.

Canadian leading stock exchanges

Also, TMX Group in Canada founded on May 1, 2008, with a market capitalization of $1.939 Trillion.

It also owns the Montreal Exchange, NGX, TSX Alpha Exchange, and several other exchanges. The TMX Group is founded after the acquisition of Montreal Exchange by TSX Group.

European leading stock exchanges

Of course, the first is the London Stock Exchange Group. But, there are also the Euronext, United Kingdom, Belgium, Portugal, France, and the Netherlands with a market capitalization of $3.321 Trillion.

Notable market events have included the 2007 merger with NYSE, the 2013 International Exchange acquisition of NYSE Euronext, and the 2014 Euronext IPO.

The Tenth is the Deutsche Borse AG in Germany came in 1992 with a market capitalization of $1.762 Trillion. It runs the Frankfurt Stock Exchange and the Scoach. It is located in Frankfurt.

You would also like to know more about the Australian Stock Market

The bottom line

The stock exchanges in developed countries, as well as those exchanges in developing countries, serve as measurements of where the national economy is headed.

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Moreover, the largest stock exchanges play an important part in the world economy. The stock exchanges are A dealer market includes all facilities to conduct security transactions not made on the physical location exchanges. for the economic development of many developing countries.

In developing countries, there are also stock exchanges.

And the stock exchanges in the developed countries are mature and are the major backbones of that country’s economy.

Financial market growth equals higher standards of living as well as create more jobs. Mature financial markets support funding international projects. This funding mitigates poverty.

Risk Disclosure (read carefully!)
10th January 2019