When it comes to investing, many first time investors want to
jump right in with both feet. Unfortunately, very few of those
investors are successful. Investing in anything requires some
degree of skill. It is important to remember that few
investments are a sure thing - there is the risk of losing your
money!
Before you jump right in, it is better to not only find out more
about investing and how it all works, but also to determine what
your goals are. What do you hope to achieve with your
investments? Will you be funding a college education? Buying a
home? Retiring? Before you invest a single penny, really think
about what you hope to achieve with that investment. Knowing
what your goal is will help you make smarter investment
decisions along the way!
Too often, people invest money with dreams of becoming rich
overnight. This is possible - but it is also rare. It is usually
a very bad idea to start investing with hopes of becoming rich
overnight. It is safer to invest your money in such a way that
it will grow slowly over time, and be used for retirement or a
child's education. However, if your investment goal is to get
rich quick, you should learn as much about high-yield, short
term investing as you possibly can before you invest.
You should strongly consider talking to a financial planner
before making any investments. Your financial planner can help
you determine what type of investing you must do to reach the
financial goals that you have set. He or she can give you
realistic information as to what kind of returns you can expect
and how long it will take to reach your specific goals.
Again, remember that investing requires more than calling a
broker and telling them that you want to buy stocks or bonds. It
takes a certain amount of research and knowledge about the
market if you hope to invest successfully.
๖/๒๗/๒๕๕๐
Options Offer Incredible Potential That Stocks Can Never Give
Options Offer Incredible Potential That Stocks Can Never Give Us' -- And
This Successful Trader Proves It!
Dale Whaeatley was a contractor who traveled around the country
helping the telephone companies with their excess needs that
they could not handle in-house. As with any type of contract
work, it was inconsistent. It was difficult for him to budget
his money not knowing what his income or expenses would be. Dale
went looking for an alternative source of income. He attended
the usual Real Estate seminars, but realised he had no real
interest in becoming a landlord or managing property. Instead he
turned to stocks.
Dale had played in the stock market in his 20's, but didn't
understand it. He decided to educate himself on stock trading.
During this process Dale read how options offered limited risk
and unlimited potential for gains, a strategy that appealed to
him. To learn about when to trade, he read many technical
analysis books and spent over $500 a month just for quotes and
charts. he also plotted many charts by hand. Years later, he
discovered a company called AIQ Systems and bought two of their
programs, TradingExpert and OptionExpert. Still, all Dale was
doing was spending money with no return to show for it. It was
not until he sat down and examined his winning and losing
trades, comparing them to the charts and indicators, that he
finally began to discover the value in one particular indicator,
the MACD, known as the Moving Average Convergence Divergence. He
knew that when one line crossed the other it meant to buy or
sell, but that did not work well or consistently, both
requirements for trading options, since they are wasting assets.
By examining divergences in the MACD indicator, however, one
could tell when a stock was ready to change direction with a
great degree of reliability. He concentrated on perfecting his
entry and exit strategy using this indicator, but incorporated
various indicator time frames, a process Dale had never seen
done before. Soon Dale's returns were improving dramatically.
Why did Dale choose options rather trade the stock itself?
Options offer incredible potential that stocks can never give
us. Plus chart patterns develop clearly enough to see definite
direction changes that will produce returns in excess of 1,000%
in hours, days, or weeks depending on the strength of the
pattern relative to the price. Dale's philosophy is simple, he
doesn't want to "own"anything! He just want to make money to do
the things he wants, when he wants. Sometimes the chart patterns
looks so strong that Dale is sometimes limited by the number of
contracts he can buy at one time.
The pattern of the underlying security is of primary importance
in Dale's trading system. He does not use any pricing models
such as the Black-Scholes pricing formula or any other valuation
method. These formulas are not designed to help make a profit on
options, but rather to show what happens if the underlying stock
performs in a certain fashion. There is nothing that can Dale
can do about the options prices. Whatever the bid and ask prices
are that is what he has to pay. It's the surety in the trading
startegy that is paramount.
The pattern that Dale looks for is always the same, but it could
be on different time frames (hourly, daily, weekly, monthly,
etc) depending on the time left until the option's expiration
and distance from next strike price. Whathe looks for is a
divergence in the MACD indicator compared to the price of the
underlying security. he then looks to buy call options when a
stock tests its prior low but has a positive divergence in its
MACD indicator. The opposite is true for identifying tops. He
uses this pattern because after much experimenting he found it
to be the most consistent and accurate.
Here are some great examples of Dale's trades. LAM Research
(LRCX). Lam Research hit an initial low on February 12 and then
rallied. That low was retested on March 1-5. In effect, a
double-bottom pattern was forming. The key to the entry,
however, was the positive divergence in the MACD indicator A
similar example can be seen in Nicor Inc. (GAS), the initial low
came in mid-January, the stock rallied, and then retested on
March 5. Once again there was a strong positive divergence in
the MACD indicator. March 45 calls were purchased on 03/07/07.
Finally the topping formation of Freeport-McMoran Copper & Gold
(FCX) hit level highs in April/May at the same time that its
MACD indicator was falling. That was a time to buy put options.
On a daily chart, this pattern does not always signify major
reversals, but in the Freeport-McMoran case, the weekly chart
also had a huge negative divergence. Huge downside divergences
under multiple time frames is the perfect setup.The options went
from $0.20 to $12. Dale made sixty times his money in just one
week! More recently, in May he entered Advanced Micro Devices
(AMD) and General Motors (GM) call options, and both turned into
1000% gainers in only a few days! Dale beliieves that you can
avoid losing trades with his technique. A losing trade is not
the fault of the charts, but rather the trader. It is really
just a question of discipline and knowledge coupled with action
when the correct pattern appears. If you learn the correct
technique and act only when everything is in place, you will
always make a profit.
Determining which option Dale purchases depends on several
factors, such as the stock's price, how far that is from the
strike price, how many days are left until expiration, the cost
of the option, and the option's liquidity. dale almost always
buy out-of-the-money options that expire in the near term month
if the pattern appears on the daily chart. If it appears on a
weekly or monthly time frame, he buys out-of-the-money options
that could expire several months away.Dale's selling technique
is simple when the momentum turns back against the move using
the MACD divergence line, he exits the position.
Dale educates others on the technique in his Options Hunter
weekly webinar service, information can be found at
http://www.aiqsystems.com/optionshunter.htm He began teaching
others when some investors asked him to explain his trading
style and ever since then he has been talking about his
discovery to everyone he meets. Dale has taught people around
the world, some that he met on airplanes in the seat next to him
and in other casual situations. He enjoys showing people
extraordinary possibilities. Dale wishes he had someone to teach
him in the beginning how to avoid the pain of investing but, as
the saying goes, "The harder the conflict, the more glorious the
triumph. What we achieve too easily, we esteem too lightly."
Dale learned that the separation between rich and poor is
because rich people continue to do the things that produced
their wealth and poor people continue to do the things that
created their poverty. Dale believes it is a choice each of us
makes and he wants to help others to make the same choices and
to feel empowered in their own lives. There was a time when he
worried about everyone "catching on" if he told them what he
did, but after teaching so many people over the years exactly
what he does, he is still amazed that only a small number of
people actually apply the strategy. Dale has found it has more
to do with individuals and their preconceived ideas about
returns and investing, along with the fear within themselves
that actually prevents them from being successful. People all
need to look hard at their beliefs before expecting to become
successful options traders, or succeeding with anything in life.
Dale'sOptions Hunter service began rather slowly because people
came from different backgrounds and experience levels. Some were
beginners and others experienced. As time went by, however,
those who stayed have found many charts without Dale having to
hold their hands. One week, as the market was beginning to
change its momentum, many subscribers chimed in with about 15
stocks that all had the correct look and the next week some of
the options were jumping over 1,000%. There have been traders in
the group buy calls on QLGC, HD, CAL, AIG, MM, VLO and the
homebuilders and mortgage related companies (even with all of
the bad news out about subprime lending, etc).
This Successful Trader Proves It!
Dale Whaeatley was a contractor who traveled around the country
helping the telephone companies with their excess needs that
they could not handle in-house. As with any type of contract
work, it was inconsistent. It was difficult for him to budget
his money not knowing what his income or expenses would be. Dale
went looking for an alternative source of income. He attended
the usual Real Estate seminars, but realised he had no real
interest in becoming a landlord or managing property. Instead he
turned to stocks.
Dale had played in the stock market in his 20's, but didn't
understand it. He decided to educate himself on stock trading.
During this process Dale read how options offered limited risk
and unlimited potential for gains, a strategy that appealed to
him. To learn about when to trade, he read many technical
analysis books and spent over $500 a month just for quotes and
charts. he also plotted many charts by hand. Years later, he
discovered a company called AIQ Systems and bought two of their
programs, TradingExpert and OptionExpert. Still, all Dale was
doing was spending money with no return to show for it. It was
not until he sat down and examined his winning and losing
trades, comparing them to the charts and indicators, that he
finally began to discover the value in one particular indicator,
the MACD, known as the Moving Average Convergence Divergence. He
knew that when one line crossed the other it meant to buy or
sell, but that did not work well or consistently, both
requirements for trading options, since they are wasting assets.
By examining divergences in the MACD indicator, however, one
could tell when a stock was ready to change direction with a
great degree of reliability. He concentrated on perfecting his
entry and exit strategy using this indicator, but incorporated
various indicator time frames, a process Dale had never seen
done before. Soon Dale's returns were improving dramatically.
Why did Dale choose options rather trade the stock itself?
Options offer incredible potential that stocks can never give
us. Plus chart patterns develop clearly enough to see definite
direction changes that will produce returns in excess of 1,000%
in hours, days, or weeks depending on the strength of the
pattern relative to the price. Dale's philosophy is simple, he
doesn't want to "own"anything! He just want to make money to do
the things he wants, when he wants. Sometimes the chart patterns
looks so strong that Dale is sometimes limited by the number of
contracts he can buy at one time.
The pattern of the underlying security is of primary importance
in Dale's trading system. He does not use any pricing models
such as the Black-Scholes pricing formula or any other valuation
method. These formulas are not designed to help make a profit on
options, but rather to show what happens if the underlying stock
performs in a certain fashion. There is nothing that can Dale
can do about the options prices. Whatever the bid and ask prices
are that is what he has to pay. It's the surety in the trading
startegy that is paramount.
The pattern that Dale looks for is always the same, but it could
be on different time frames (hourly, daily, weekly, monthly,
etc) depending on the time left until the option's expiration
and distance from next strike price. Whathe looks for is a
divergence in the MACD indicator compared to the price of the
underlying security. he then looks to buy call options when a
stock tests its prior low but has a positive divergence in its
MACD indicator. The opposite is true for identifying tops. He
uses this pattern because after much experimenting he found it
to be the most consistent and accurate.
Here are some great examples of Dale's trades. LAM Research
(LRCX). Lam Research hit an initial low on February 12 and then
rallied. That low was retested on March 1-5. In effect, a
double-bottom pattern was forming. The key to the entry,
however, was the positive divergence in the MACD indicator A
similar example can be seen in Nicor Inc. (GAS), the initial low
came in mid-January, the stock rallied, and then retested on
March 5. Once again there was a strong positive divergence in
the MACD indicator. March 45 calls were purchased on 03/07/07.
Finally the topping formation of Freeport-McMoran Copper & Gold
(FCX) hit level highs in April/May at the same time that its
MACD indicator was falling. That was a time to buy put options.
On a daily chart, this pattern does not always signify major
reversals, but in the Freeport-McMoran case, the weekly chart
also had a huge negative divergence. Huge downside divergences
under multiple time frames is the perfect setup.The options went
from $0.20 to $12. Dale made sixty times his money in just one
week! More recently, in May he entered Advanced Micro Devices
(AMD) and General Motors (GM) call options, and both turned into
1000% gainers in only a few days! Dale beliieves that you can
avoid losing trades with his technique. A losing trade is not
the fault of the charts, but rather the trader. It is really
just a question of discipline and knowledge coupled with action
when the correct pattern appears. If you learn the correct
technique and act only when everything is in place, you will
always make a profit.
Determining which option Dale purchases depends on several
factors, such as the stock's price, how far that is from the
strike price, how many days are left until expiration, the cost
of the option, and the option's liquidity. dale almost always
buy out-of-the-money options that expire in the near term month
if the pattern appears on the daily chart. If it appears on a
weekly or monthly time frame, he buys out-of-the-money options
that could expire several months away.Dale's selling technique
is simple when the momentum turns back against the move using
the MACD divergence line, he exits the position.
Dale educates others on the technique in his Options Hunter
weekly webinar service, information can be found at
http://www.aiqsystems.com/optionshunter.htm He began teaching
others when some investors asked him to explain his trading
style and ever since then he has been talking about his
discovery to everyone he meets. Dale has taught people around
the world, some that he met on airplanes in the seat next to him
and in other casual situations. He enjoys showing people
extraordinary possibilities. Dale wishes he had someone to teach
him in the beginning how to avoid the pain of investing but, as
the saying goes, "The harder the conflict, the more glorious the
triumph. What we achieve too easily, we esteem too lightly."
Dale learned that the separation between rich and poor is
because rich people continue to do the things that produced
their wealth and poor people continue to do the things that
created their poverty. Dale believes it is a choice each of us
makes and he wants to help others to make the same choices and
to feel empowered in their own lives. There was a time when he
worried about everyone "catching on" if he told them what he
did, but after teaching so many people over the years exactly
what he does, he is still amazed that only a small number of
people actually apply the strategy. Dale has found it has more
to do with individuals and their preconceived ideas about
returns and investing, along with the fear within themselves
that actually prevents them from being successful. People all
need to look hard at their beliefs before expecting to become
successful options traders, or succeeding with anything in life.
Dale'sOptions Hunter service began rather slowly because people
came from different backgrounds and experience levels. Some were
beginners and others experienced. As time went by, however,
those who stayed have found many charts without Dale having to
hold their hands. One week, as the market was beginning to
change its momentum, many subscribers chimed in with about 15
stocks that all had the correct look and the next week some of
the options were jumping over 1,000%. There have been traders in
the group buy calls on QLGC, HD, CAL, AIG, MM, VLO and the
homebuilders and mortgage related companies (even with all of
the bad news out about subprime lending, etc).
Bonds Can Be As Risky As Stocks
If you are new to investing perhaps you are not familiar with
bonds. Before you get started, you need to understand some of
the risks associated with bond investing. Most people assume
that all interest-bearing securities are completely risk free,
but this is not the case. Even if you know a lot about
investing, you may not be aware of some of the risk
characteristics associated with bonds.
The most important thing to take into account is the interest
rate. The Federal Reserve (also known as the Fed) meets every
6-8 weeks to evaluate the health of the economy. At each
meeting, the Fed renders a decision regarding interest rates.
If inflation is rising, the Fed will need to raise interest
rates to tighten the money supply. If inflation is moderate or
contained, the Fed will likely leave rates unchanged. However,
if the economy is slowing down and there is very little
inflation or maybe even deflation, then the Fed might decide to
reduce interest rates to create a stimulus for economic growth.
The reason why you need to consider present and future interest
rate levels is because as interest rates increase, bond prices
go down, and vice versa. If you are able to hold your bond until
maturity, then interest rate movements do not really matter,
because you will redeem the principal upon redemption. But
often, investors have to cash out their bonds well before the
maturity date. If interest rates have moved up since you
purchased the bond, and you sell it prior to maturity, then the
bond will be worth less than your initial investment.
You should also be aware of the claim status of the bond you are
buying. Claim status refers to your ability to liquidate your
investment in the event the bond issuer goes bankrupt. If you
are buying a government bond, such as a Treasury Bill, claim
status is irrelevant, because the odds of the Federal Government
going bankrupt are slim and none.
If you are buying a corporate bond, however, there is always a
chance that the issuer could go out of business. In the event of
liquidation, bondholders are given priority over stockholders.
However, there are often different classes of bondholders.
Senior note holders can often claim against certain kinds of
physical collateral in the event of bankruptcy, such as
equipment (computers, machines, etc.). Regular bondholders can
not always claim against physically collateral, and are next in
line after the senior note holders.
Next, you should always check the three main features of the
bond you are buying; the coupon rate, the maturity date, and the
call provisions. The coupon rate is the interest rate. Most
bonds pay an interest rate semiannually or annually.
The maturity date is the date that the bond will be redeemed by
the issuer; simply put, the maturity date is when the company
must pay back to you the principal you loaned to them. The call
provisions are the rights of the issuer to buy back your bond
prior to maturity. Some bonds are non-callable, while others are
callable, meaning that the company can buy your bond back before
maturity, usually at a higher price than what you paid.
Finally, you should also understand that if economic conditions
become more favorable after you a buy a bond, and interest rates
start to go down again, the issuer will likely issue a lot more
bonds to take advantage of the low interest rates, and will use
the proceeds to try to buy back any callable bonds it issued
previously. So, when interest rates go down, there is an
increasing likelihood that your bond will be redeemed prior to
maturity, if in fact the bond is callable.
You should invest in bonds. However, you should also take into
account the risk factors we have covered. Your portfolio should
contain a mix of corporate, federal, municipal, and even junk
bonds (there is always a default risk associated with junk
bonds, but they pay a huge interest rate). Talk to your broker
about diversifying the kinds of bonds in your portfolio and you
will reduce your overall risk and maximize your return.
bonds. Before you get started, you need to understand some of
the risks associated with bond investing. Most people assume
that all interest-bearing securities are completely risk free,
but this is not the case. Even if you know a lot about
investing, you may not be aware of some of the risk
characteristics associated with bonds.
The most important thing to take into account is the interest
rate. The Federal Reserve (also known as the Fed) meets every
6-8 weeks to evaluate the health of the economy. At each
meeting, the Fed renders a decision regarding interest rates.
If inflation is rising, the Fed will need to raise interest
rates to tighten the money supply. If inflation is moderate or
contained, the Fed will likely leave rates unchanged. However,
if the economy is slowing down and there is very little
inflation or maybe even deflation, then the Fed might decide to
reduce interest rates to create a stimulus for economic growth.
The reason why you need to consider present and future interest
rate levels is because as interest rates increase, bond prices
go down, and vice versa. If you are able to hold your bond until
maturity, then interest rate movements do not really matter,
because you will redeem the principal upon redemption. But
often, investors have to cash out their bonds well before the
maturity date. If interest rates have moved up since you
purchased the bond, and you sell it prior to maturity, then the
bond will be worth less than your initial investment.
You should also be aware of the claim status of the bond you are
buying. Claim status refers to your ability to liquidate your
investment in the event the bond issuer goes bankrupt. If you
are buying a government bond, such as a Treasury Bill, claim
status is irrelevant, because the odds of the Federal Government
going bankrupt are slim and none.
If you are buying a corporate bond, however, there is always a
chance that the issuer could go out of business. In the event of
liquidation, bondholders are given priority over stockholders.
However, there are often different classes of bondholders.
Senior note holders can often claim against certain kinds of
physical collateral in the event of bankruptcy, such as
equipment (computers, machines, etc.). Regular bondholders can
not always claim against physically collateral, and are next in
line after the senior note holders.
Next, you should always check the three main features of the
bond you are buying; the coupon rate, the maturity date, and the
call provisions. The coupon rate is the interest rate. Most
bonds pay an interest rate semiannually or annually.
The maturity date is the date that the bond will be redeemed by
the issuer; simply put, the maturity date is when the company
must pay back to you the principal you loaned to them. The call
provisions are the rights of the issuer to buy back your bond
prior to maturity. Some bonds are non-callable, while others are
callable, meaning that the company can buy your bond back before
maturity, usually at a higher price than what you paid.
Finally, you should also understand that if economic conditions
become more favorable after you a buy a bond, and interest rates
start to go down again, the issuer will likely issue a lot more
bonds to take advantage of the low interest rates, and will use
the proceeds to try to buy back any callable bonds it issued
previously. So, when interest rates go down, there is an
increasing likelihood that your bond will be redeemed prior to
maturity, if in fact the bond is callable.
You should invest in bonds. However, you should also take into
account the risk factors we have covered. Your portfolio should
contain a mix of corporate, federal, municipal, and even junk
bonds (there is always a default risk associated with junk
bonds, but they pay a huge interest rate). Talk to your broker
about diversifying the kinds of bonds in your portfolio and you
will reduce your overall risk and maximize your return.
Stock Investing For Beginners
Before you can start investing the first thing you should do is
make an assessment of your personal financial position. Before
you can invest in anything you need to have the necessary
capital available. Perhaps the best way to tackle things would
be to list all your assets i.e. real estate, savings, cash,
mutual funds etc set against this your liabilities mortgages,
loans and` credit card debt, this will give you an indication of
the amount of capital you have available for investment.
Before you consider any form of investment it is much better to
clear high charging debts particularly if you are not using them
to acquire an appreciating asset, such as the mortgage on your
home. Credit cards, particularly store cards and personal loans
with higher monthly payments should be paid off before you
consider investing capital in the stock market.
Once you are certain that you have capital available for
investment in the next thing is to decide on your risk level, or
to put it another way the amount of volatility in the stock
price that you can live with, and still be able to sleep at
night! The general guideline is that the higher the risk the
greater the potential gain, that is why you should only invest
in the stock market with capital that you do not need for
immediate daily requirements. If you are only prepared to take a
low risk and are happy to accept a correspondingly low return
Money Market Funds would probably be most appropriate for you,
the stock market however offers the potential for a much greater
gain with a correspondingly higher risk.
Once you decide to start investing take it slowly at the
beginning, only invest part of your capital preferably no more
than 20% in one or two stocks, this will allow you to get the
feel of things without risking everything, you may also wish to
diversify your holdings and have a mixture of stocks and bonds
and mutual funds this will have the effect of reducing your risk
and of course will also reduce your potential reward.
The actual mechanics of investing in stocks or mutual funds is
very easy to do, online there are many investment services that
offer up to date information about stocks and once you are ready
to invest it is very easy to find and no-frills online
stockbroker who will work to one very low commission rates. If
you require more information and a high level of service you can
always use of full-service stockbroker but of course this will
involve significantly higher charges.
Providing you take the time to thoroughly researched the subject
before you commit your hard earned capital, stock market
investing can be very rewarding even for beginners.
make an assessment of your personal financial position. Before
you can invest in anything you need to have the necessary
capital available. Perhaps the best way to tackle things would
be to list all your assets i.e. real estate, savings, cash,
mutual funds etc set against this your liabilities mortgages,
loans and` credit card debt, this will give you an indication of
the amount of capital you have available for investment.
Before you consider any form of investment it is much better to
clear high charging debts particularly if you are not using them
to acquire an appreciating asset, such as the mortgage on your
home. Credit cards, particularly store cards and personal loans
with higher monthly payments should be paid off before you
consider investing capital in the stock market.
Once you are certain that you have capital available for
investment in the next thing is to decide on your risk level, or
to put it another way the amount of volatility in the stock
price that you can live with, and still be able to sleep at
night! The general guideline is that the higher the risk the
greater the potential gain, that is why you should only invest
in the stock market with capital that you do not need for
immediate daily requirements. If you are only prepared to take a
low risk and are happy to accept a correspondingly low return
Money Market Funds would probably be most appropriate for you,
the stock market however offers the potential for a much greater
gain with a correspondingly higher risk.
Once you decide to start investing take it slowly at the
beginning, only invest part of your capital preferably no more
than 20% in one or two stocks, this will allow you to get the
feel of things without risking everything, you may also wish to
diversify your holdings and have a mixture of stocks and bonds
and mutual funds this will have the effect of reducing your risk
and of course will also reduce your potential reward.
The actual mechanics of investing in stocks or mutual funds is
very easy to do, online there are many investment services that
offer up to date information about stocks and once you are ready
to invest it is very easy to find and no-frills online
stockbroker who will work to one very low commission rates. If
you require more information and a high level of service you can
always use of full-service stockbroker but of course this will
involve significantly higher charges.
Providing you take the time to thoroughly researched the subject
before you commit your hard earned capital, stock market
investing can be very rewarding even for beginners.
Looking to invest????
Are you interested in trying to invest to help meet your needs
for the short term or the long term?? well i have found that
after i read this ebook i have been able to add more income to
what i am already making. if you want more information go to
http://tlwatson.dtcoach.hop.clickbank.net/
for the short term or the long term?? well i have found that
after i read this ebook i have been able to add more income to
what i am already making. if you want more information go to
http://tlwatson.dtcoach.hop.clickbank.net/
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