stock trading

Five Forex Trading Tips You MUST Know

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Jumping into Forex trading with both feet? Here are five must-know tips on Forex trading and mini Forex to help you stay afloat in the Foreign Exchange currency market.

Know your Forex trading market.
Educate yourself about the currencies that you trade. The more you know about the country whose currency you’re trading in the Forex market, the more accurately you’ll be able to predict which way the money will move.

Pick a Forex trading system – and stick with it.
Savvy Forex traders will tell you that system is everything. Forex trading by system lets you automate your trades based on history, following the traditional peaks and valleys. Set up a system and live with it to make the most of your Forex trading.

Practice makes perfect – but it’s not the real world.
Practice Forex trading accounts are great for learning how a particular trading account works – but they’re not the real world. Many experienced traders recommend starting off with a mini Forex account to minimize your losses while you get acclimated.

Keep your eye on the margin.
Margin trading is a great way to lose a lot of money quickly. Stay away from Forex margin trading until you’re sure you know what you’re doing.

The only win that counts in Forex trading is the bottom line.
In Forex trading, the bottom line is how much money you made at the end of the day. Don’t count won or lost trades – only dollars and cents.

The Profit Room

Short-term vs. Long-term stock investment

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There are many persons that run towards stock investment as a means to make some quick money. This is perhaps however not the best investment option for persons with short term rewards in mind. The best option when thinking of investing in stocks is if you are interested in accumulating funds over a long period of time. One such example is the investment for future needs such as a nest egg for retirement and so on.

In stock investment both short term and long term investments come with risks attached and therefore nothing is truly guaranteed in the stock market. Today could be very good and tomorrow very bad resulting in great gains or great losses as the case may be. However, in terms of long term investment, it is shown according to statistics that there are no 20 year portfolios that have lost on the stock market. The average returns have averaged about 10 percent and these accounts all have a broadly diversified portfolio of stocks.

In the short term the market is very risky. The market will go up and then go down so if you are only thinking of investing for a short period then this is not the best option. If you are nearing retirement age and now beginning to invest in stocks this is not a good option. The best option in these cases as a protection against inflation, rather than stocks, is to invest in stable investments such as bonds and other cash instruments. This offers more security than stocks in the short term.

So how long is considered short term? Many persons are under the misconception that short term means less than a year but this is in fact not so. In terms of stocks short term is considered to be five years or less and some persons will recommend more years rather than the minimum of five years. A good rule is that if you are going to need your funds in the next five years then stay away from stock investment. Another point to note is that unless you are an active trader then short term investments make no sense. If the funds being used are for retirement investment then being an active trader is also not recommended.

The average down time for some markets is a year but this has been seen to last much longer a well so though for a long term investor this downtime may seen to be a lifetime it will pass but if you are a short term investor you will lose a lot depending on the market fluctuations. Stock investment will offer many great opportunities but can be devastating for a short term investor. If you know that the funds you are investing will be required for use in a short time then choose investment options that are more secure and protected. It is true that you may get lucky and make a fortune but it is also true that the risks are high and that you can lose everything.

The Profit Room

Greed And Fear

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Greed and fear are the major players in the stock market. These two emotions are the
driving force behind almost all market participants – Institutional mangers, stockbrokers,
Investors, traders and yourself.

You might be saying to yourself that greed and fear will never get in the way of my trading,
but believe it or not they will be. It is not something to be ashamed of. It is something you
have to admit to, come face to face with, If you are to become a successful stock trader or
investor.

This is why our day trading chat room is helpful. You can see how our moderators deal with this everyday.

What do greed and fear look like in the stock market trading arena?

You have been watching a particular stock for some time now. It has set up perfectly, so you pull the trigger. You bought it at the perfect price and now it is moving higher just as you thought it would.

Now greed steps up to the plate and says to you, this is going to be a rocket ship. So you buy some more shares. Or your stock moves a few points and goes passed the price that you decided to get out. Greed tells you this baby is going higher tomorrow so you hang on.

When stocks make strong moves to the upside greed from all the cumulative market participants joins the move.

Stock prices usually fall faster then they go up, and when this happens, fear now steps up to the plate.

Lets look at the example above, where your stock went through your get out price and you held on because greed was by your side. The next morning the stock price gaps down. Their is heavy selling all morning long. Greed is telling you to hang in there the price will come back. The price keeps going down, now you get a knot in your gut, and your knuckles are turning white. Fear is now by your side, but by now it is to late, your nice profit has turned into a loss.

Everyone goes through this until they have mastered the ugly faces of greed and fear. Master this and you are well on your way to becoming a successful stock trader.

The Profit Room’s premium courses are designed to help you conquer the greed and fear that can result from trading.

Trade Safe!