Low, Medium, and High risk trade entries are defined by the time, money, and skills that a person has to place into the trade.  Notice that I didn’t say education, talent, or greed.

Because trading is an inherently emotional act, and profiting is just the opposite, the greatest skill is eliminating emotions from our trading.  Spock of Star Trek fame would make a great trader.  Sans a Spock-like personality a good solid trading system helps us do that.

Every day trade example.

In the above example the components of the trade are the underlying security (QQQ), the slightly in the money option ($63 weekly put for the end of Feb.) and several moving averages.  It took only about 50 minutes to carry out and grossed a profit of nearly 14%,  Total commitment for 10 contracts including in-and-out costs came to about $870 and selling $950 for a net of $70 and just at 9%.  Not bad for 50 minutes of trading.  And these trades are found nearly every day and usually multiple times.  Not enough to hold your interest?  Multiply this trade, the money applied, or both by a factor of 10 and the picture gets more interesting.  And it continues and gets easier from there.  No matter which direction the market heads, up or down.

The average Joe can learn to trade this way in the time it takes to open a brokerage account and fund it; about three weeks and 4 hours total.   And the best part of leaning to do this type of trade is that it teaches you things that you can use across the trading spectrum.  Options aren’t the only option.  10-minute charts could be 10 days, 10 hours, or 10 months.  No super computer required.  And the best part?  It takes very little money.

If you’re interested in learning more let me know in the comments and tell me what part of the system you might be interested in learning more about.

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Aptera Motors aimed to produce a car that could have been iconic within the ultra-fuel-efficient commuter car market.  It was sleek, aerodynamic and incorporated many forward-thinking ideas.  I added the Aptera to my wish list but they couldn’t seem to get a handle on the production.

Aptera, may yea rest in peace.

via Aptera Motors shuts its doors.

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Just passing this along to everyone I know.

I do a lot of research for different projects.  Most of this work is online.  To do this and speed up my daily routine I’ve gathered some apps  and browser widgets that Readability does naturally.  It has eliminated a few work-a-rounds for me and so…  In the interest of pure utilitarianism I suggest checking this program out.

http://www.readability.com/

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If this speech plays out the way this article suggests I have two words for the President; FAIR (Flat) TAX!

I don’t want to get into a spitting match with the President.  Also, I don’t want to go there with any of the other possible candidates to the 2012 election.  As I’m sure that most of us are tired of trying to parse any of the politicians words I want to see action toward specific goals.  Not band aids for broken discourse.

A proper Fair/Flat Tax would eliminate many advantages the privileged class have had during the last century.  When you hear something that tries to move us American Citizens away from that goal you are listening to political gamesmanship and class warfare.  We should no more accept this from any of our leaders than from any enemy of democracy.  Divide and conquer is still alive and well in the rhetoric the

 

President Barack Obama will travel to Osawatomie, Kansas on Tuesday to emphasize the need for Americans to pay their “fair share.”
It’s an argument that many in the Republican party reject as class warfare, but Obama will draw on a Republican president — Theodore Roosevelt — to justify his message.

via Obama Is About To Give A Huge Class Warfare Speech.

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Just a few words about something hardly ever spoken when people are trying to sell you a stock trading system (a good system is invaluable).

There is  a rule of thumb that goes like this, “Know your out before you get in”.  That puzzled me for a long while when I first got into the stock market.  As a trader I’ve realized that getting out is harder for me than getting in.  One thing that has been a constant struggle, and the fact that I’m getting better all the time is getting  out of a trade at the right time (hint: There are no right times.  Just good times and bad times.).

Just as another rule of thumb implies, “Bulls make money.  Bears make money.  But pigs get slaughtered.”, we shouldn’t be looking for the highest point or the lowest point to get in or out of a position.  Instead, we should be looking for a good time to do those things.  You’ll find those good times not only in the technical indicators of a security but in the sleep factor of your trading.

Now when I start teaching someone to do what I do I give them the “in” but make them learn the “out”. `They learn faster and make more money from the onset.

Think about that when you review each of your trades.  Placing more emphasis on learning when to get out just might make you more money and help streamline your profitable trades.

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Following my charts today reminded me of a “Rule of THUMB!” (said with much thunder, echo, and deep voice). The gist of it is “When in doubt, go out.” It means the same as “Go to the balcony” but refers to the time-frames that we’re trading.

I tend to stick with a 15 to 30 min. timeframe but sometimes find myself looking at a 1 minute or 5 minute wondering if this time or that would make a good entry or exist point.

If those things aren’t clear in the shorter time periods then we need to move out to longer time period to gain a longer perspective. In fact, the longer time periods are where the real money is.

Sometimes it’s profitable to drop to a smaller time-frame but when in doubt, go out.

More on this later.

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When I decided to make Financial Widgets a site for stock trading I knew that there would be a conflict with what people called a widget.  A widget is undefined.  For instance; the video below is from Trading Tips.  I’ve really enjoyed watching many of their videos but this one strikes more cords than most.

Even if you aren’t interested in becoming a stock trader or trading better this video is still a “must watch”.  The points noted are specifically what a good trader needs to think about but those points could also be used to discuss almost any form of risk taking, even in personal finance, what job you’ll be doing next, or whether any “widget” you ever acquire will ever be different in your life.  Confidence could be one of them.  As an example view the screen shot below.  Click it to go to the full video.

Click here to watch the whole video on YouTube. (Opens a new window.)

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Breaking to the upside?

I get a broad view of the news everyday just to gauge the mood of the market. This is what I noted today.

We have lots of doom and gloom. No surprise there. But I also note that the tone of the news went from “there are some negatives” to “there are some positives”.

If I had to speculate I’d say that from this point we have a shift in market mood. That jives with the way the stock markets have been trading over the last week.

We’re at a pivot point in the markets and that point may be up. I’ll try to not let my perpetual bear feelings influence my objectivity and let my charts tell me which way things go from here.

Hint?: While I’m on the subject of the markets… Didn’t the last hour of yesterday’s trading seem like a blow-off top?

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If you haven’t had an opportunity to use Google+ yet this is your opportunity.  I’ve been using it for a month or two and found it very useful.  Not only is it easy to direct post/status updates to interested and/or concerned individuals but being able to control who gets what allows for greater security of your personal information.   My opinion: Google+ is salient new way to use social media.

Salient.  Look it up! 

Google+ is being opened up for anyone to join after two-and-a-half months in closed testing.

via BBC News – Google+ opens social network to everyone.

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Learning To Trade Can Be So Much Fun

The Setup

My first real exposure to a true stock market trader was when I invited one to lunch so I could pick his brain.  Kevin was stock trader for well over 20 years and for many people, me included, was experience worth it’s weight in gold.  It was a surreal experience.

Kevin agreed to meet me for lunch and at the appointed time and place drove up in a brand-spanking new touring-class BMW.  He was wearing a custom-tailored suit, handmade Italian loafers and the first Rolex watch I’d ever seen outside a jeweler’s store.  With his manicured nails and perfectly groomed hair he really looked like my impression of a successful stock trader.

The Punch

All through lunch, one I was willing to pay for, he kept repeating “I don’t have much time.  I’m a day late and a dollar short.”  Since he was eating a meal that cost well more than a dollar about the time the entree came I offered to give him a dollar.  I thought he was just spouting a phrase I’d heard often for as long as I remembered but it made me nervous to think I’d be given the short shrift because he couldn’t focus on what I wanted to learn from him.  I also said I couldn’t do anything about being a day late.  He chuckled and said he was actually about 50 bucks short and needed to get back to his [trade] station but he had enough time to finish lunch.  I thought; “Here’s a guy that is suppose to be a good trader and he’s worried about 50 dollars?  Maybe this lunch wouldn’t be very fruitful after all.”

Over desert I told him I didn’t have $50 to loan him but I’d give him the money for a couple of hours of watching over his shoulder as he traded.  Even if he wasn’t a good trader learning the process would have been invaluable to me at the time.

Kevin eyes seemed to gleam and he suddenly burst out laughing.  ”I didn’t realize how much of a novice you are but now I do.”

When he calmed down enough to continue he told me that traders often speak in money terms where they strike the last two zeros.

So a penny is a dollar, a nickle was a five dollar bill, a dime was really $10 and a dollar was really $100.  

So when he told me that he was really $50 short  what he really meant was that he was $5000 short.  I didn’t have that type of money.  I seriously doubted that I even would have loaned Kevin the money if I did.

The Knockout

Fortunate for me, Kevin went on to explain that many traders don’t do pocket change like anyone else.  When he said he was $50 dollars short what he should have said is that he hadn’t made his trading goal for the day (DAY!?) and he still needed to try to gain the other half (OTHER HALF?) after lunch.  The last little piece of advice he gave me was that when I understood the reasoning that drove traders to talk this way I would be a much better trader than I was at this lunch.

I never saw Kevin again.  Though I thought I understood what he had told me, I didn’t truly understand until I started to trade options.  You see, options are priced in pennies.  I seldom spend more than a dollar or two for a contract.  But those contracts represent 100 shares, so whenever I see a price like 50 cents for a contract I immediately think $50.  When I go to buy and I want 10 contracts I know it represents $500.  100 contracts?  $5000.  100 contracts at $2/contract?  $20,000.

If you think of how invasive this type of thinking is to trading you’ll realize that this little difference shows up in the risks we traders take, the money we have to trade, how much we spend for the goods we purchase, etc.  And yes, even how we speak about our trades.  Put’s a whole new twist on the phrases like “Buddy, can you spare a dime?” and “I’m a day late and dollar short.”, doesn’t it?  More on the latter later.

The Bell

Oh!  And Kevin, bless his heart, he threw down 50 cents to pay for the meal.  It didn’t make the meal free to me but it didn’t cost me any money.

Now, if you’ll now excuse me, I think I’ll go make a little pocket change.

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