How to Make Money in a Down Stock Market

By W. Alan Gay

One of the core questions my coaching clients have asked me over the past few months is: "Can I still make money in stocks with the market down like its been?" The answer is yes, or no, depending on the type of investments you have.

If you hold stocks, stock mutual funds, or your investment is in the standard asset allocation accounts the answer is probably no. The simple explanation for this is that these types of accounts are so large that they are not allowed by the regulators to hold short stock positions. This means that if the stock market goes down over the next 3-5 years, the accounts will lose money every single year.

If you use short positions as your investment strategy, you will be able to make money no matter if the market goes up or down. However, short position investments are not available unless you trade through individual accounts.

You can take charge of your investments and profit nearly every day by trading through an individual trade account rather than a fund. That way, despite whether a stock value increases or decreases, you can make money, buy buying or selling short, as applicable.

If its that easy, why isnt everyone doing it? For one thing, it requires approximately $25,000 to set up an individual account. Many people dont have that kind of investment or are unwilling to risk it. And, it is true that stock trading for a novice can be very challenging. If you do not know what you are doing, you can lose all your money very quickly.

I can suggest a few things to minimize your concerns.

First, find a trading program that gives you low risk trade picks. The program I use and that I recommend to my coaching clients has a 31 year average experience level for its trade pickers. So a trader can simply follow their trade recommendations and have a very high probability of realizing returns. If you remember to set your stops at a level that suits your comfort zone, you will have a maximum loss that is very small and insignificant over the course of time.

Secondly, its important to find program that walks you through every step to success. For example, in my 9 day trading class the students learn every aspect of using a turnkey system that is both safe and profitable to buy and sell short stocks, so that you can make money even if the stock market goes down.

The goal with any system you choose is to find one that will give you stock trading success while those around you complain over poor performance; by making sure that you are working with experienced advisors and a step by step process, you can achieve that goal. - 23196

About the Author:

W. Alan Gay has been a stock trader and coach for fifteen years. His free report describes Alan's voyage to becoming successful at trading stocks and gives useful tips he and his students have used to repeatedly trade profitably. Click to obtain a free copy of his report and learn more about how you could be trading stocks profitably in as little as fourteen days.

How to Choose the Right Dealer? (Part I)

By Ahmad Hassam

Almost 90% of the investors enter currency markets as short term speculators. Most of the investors look for quick capital gains in forex. Many start forex day trading as a speculative venture. If you have made the positive decision to start forex trading, your first step should be choosing the right forex broker. This is very important. The right choice of a forex broker will greatly influence your success as a forex trader.

Now days, the market is overcrowded with companies and banks offering online forex brokerage services to individual retail traders and small investors to access the currency markets. It will not be easy for you to make the right choice without a certain set of criteria. These criteria will mostly depend on your interests, preferences and means as an individual trader depending on your trading strategies and tactics.

What is the best method to choose the right forex broker? Compose a list of questions to ask the forex broker before making a final decision. The following are some of the suggested questions. You should ask the forex broker these questions before making a final decision.

What is the amount of the interday and overnight margin? What is the corresponding leverage? Many online forex brokers offer margin between 2-5%. They provide leverage ranging from 20:1 to 100:1. Higher margin requirement means lower investment efficiency for you. Margin is the amount the broker sets aside as guarantee against your trading losses.

However, beware of lower margin. It means that most of the time the forex broker will be against you as a trader and will do everything possible to prevent you from winning. You will face many trading problems with such a broker. It will become difficult for you to work under such conditions.

What is the minimum contract size? Now days, the standard contract size is $100,000. This contract size is quite affordable and allows for reasonably effective money management with limited capital. This contract size also allows small individual investors to participate in currency speculation.

What are the requirements of minimum deposit? The investment and financial means of traders differ. It is common that many new traders dont have sufficient funds to open an account. In my opinion, the optimal minimum amount is $10,000 with 2% margin requirement. I think $10,000 is the required minimum amount corresponding to the forex market conditions.

What are the terms of setting and executing stop and limit orders by the forex broker? The ideal condition should be the execution of the stop and limit orders at the fixed price. This should be regardless of the market conditions, its speed and its direction. Some forex brokers provide this type of execution. Other brokers reserve the right to fulfill an order with slippage under unsteady market conditions mostly defined by the broker themselves.

The amount of slippage depends on the current state of the currency market. It can vary from a few pips to tens of pips. It is practically impossible to arbitrate the prices received from the broker during a currency transaction. The slippage creates favorable conditions for the abuse of an individual trader by the forex broker. - 23196

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading and swing trading stocks and currencies. Learn Forex Nitty Gritty. Develop your own Forex Trading System.

How to Use Automated Forex to Make Money

By Chuck Kessler

The fact is it is not too hard to make money with forex. The problem is it is not too hard to lose money with it either. I am going to tell you what you can do to put your forex currency trading on autopilot and make some serious money. You don't need a huge upfront investment to start, only a little courage and some spending cash.

You will first need to get your hands on some automated forex trading software. You can find these all over the internet, some are even free. You then install the software on your computer and let it run in the background. The key here is that you computer needs to be on, no trades will be executed while your computer is turned off.

You must remember that you computer needs to be on for these to work. You will not execute trades if you turn off your computer. Now you will also set things like your risk tolerance. You can use a conservative approach which can take a long time to make money. The reason is just like with anything else, low risk is low return.

If you opt to go for a more aggressive approach you can make a lot more money, however you can also lose a lot more money. The basic fact is the more risk the more return. Obviosuly, more risk also means more chance of losing your money.

The automated forex software uses trends and trading signals programmed into it to make decisions about trading. It uses historical currency data to make these decisions. In today's economy the currencies are all over the place, so now is the time to trade them.

Why don't you start your search today for some automated forex software. Wouldn't it feel good to set it up and go to sleep tonight and wake up with free money tomorrow? How would it feel to be the guy in the neighborhood with that nice sports car? Wouldn't it be even better if you bought it with free money? - 23196

About the Author:

If this all sounds too complicated for you, visit my website for further information on automated forex. I give you additional tips, and can even tell you softwares that are proven to work!

Becoming a Growth Investor and Value Investor

By Michael Swanson

So you want to make money in the stock market. To do that you have to have a method. The only way to make money is to have a plan.

There are two ways two make money in the stock market everyone talks about, but you will be a lot better off if you combine the two of them. I'm talking about growth investing and value investing here. You know buy when it goes up or buy cheap and sell high later. Combine both.

Growth investors invest when they see the potential for big earnings growth in a company and don't worry how about high or low a stock is valued at. All they want is to see earnings growing. William O'Neill of Investor's Business Daily is the most popular growth investor, because he wrote the book How to Make Money in Stocks that shows you how to be a growth investor. He buys stocks in companies that have quarterly earnings growth of 20% or more. If the company has a new product coming out he likes it even better. He also only buys stocks that are acting stronger than other stocks in its group, although many other growth investors do not look for this.

In bull markets it is the growth stocks that go up the most, because everyone likes things that go up and they go up the most. But there are some scary times in the growth stocks. If the earnings growth stops then the stock can fall very hard because everyone thinks everything will grow forever.

This always happens at some point with growth companies, because nothing can grow forever. Even Wal-Mart had its growth slowdown. When that happens the stock almost always stops going up and if the end of the growth takes people by surprise it can fall very hard.

Growth stocks tend to have big valuations, because investors are willing to pay big prices to get the growth. That is why they can drop in a big way when bad news comes out or earnings growth stops. Investors need to also have some basic stock trading strategies in place to know when to take profits or sell.

The opposite of growth stock investing is value investing. The most famous value investors are Warren Buffet and his mentor Benjamin Graham. Value investors look for companies with low debt, a high book value, a dividend yield, a high sales-to-price ratio, and a low price-to-earnings ratio, among other things.

When the market has a correction then value investors can find the bargains they are looking for. The correction can happen due to a slow economy or just plain scared investors, but there is no reason to be fearful forever and that is how value investors come in and buy stocks when they are on sale and then sell them later.

Sometimes a value investor has to wait a long time after buying a stock to see it go up, because the public stays scared and doesn't see the value in the stock. This can even happen in whole markets. Gold and commodities stayed at low prices until only a few years ago for example.

Value investing strategies usually do not do as well as growth strategies in a bull market, because growth stocks go up more. But they are the best way to get in cheap and sell at a big gain. It can sometimes just take more time than most people can wait for. - 23196

About the Author:

For more articles from Mike Swanson sign up to his stock trading for beginners weekly newsletter.

The Fundamentals of Forex Trading

By John Eather

Everyday, more than 2 trillion bucks is traded in the Foreign Exchange market and without exclusion the greatest trading worldwide. The FX is open 24 hrs a day, but only 5 days a week, including public vacations. The global financial centres begin trading in Sydney, then to Tokyo, and finally London and New York.

There are always active buyers and sellers at any given time anywhere in the world. This allows the FX market the most fluidity the world has ever had or known. Currency in the Forex market is traded only in pairs, for example, EUR/USD, GBP/USD or UDS/JPY. All trades coinside with the selling of one and the purchase of another. The basis for the buy or sell is the base currency. Consider the currency as an object to be bought or sold and the first of the pair is the base currency.

The principal currency of the Forex marketplace and in general the base for quotes is the U.S. dollar includeing the USD/JPY, USD/CHF and USD/CAD. There are exclusions and they are the EUR/USD and GBP/USD. These and a lot of other currencies quotes are expressed in units of one dollar ($1) USD per the other half of the currency pair. For instance, a quote of USD/CAD. 1.1302 merely entails that one US ($1) equals 1.130 Canadian dollars. You will frequently discover whilst trading Forex, a double-sided quote. It'll be a bid' and ask' price quote. Bid' is the price to sell the base currency whilst, simultaneously, buying the other currency. Ask' price is the purchase price of base currency and, simultaneously, selling the other currency from broker.

The differences between bid' and ask' prices is the spread and is paid to the Forex broker as commission. Commission-free trading is offered by majority of brokers, and they instead profit from trades' spread. On major currency pairs the spread is usually 3-5 pips. Rollovers, what are they? The process by which the completion of a deal is rolled to another value date. The cost is based on the differential rate of the pair of currencies. Almost all brokers will roll your open positions thus allowing the position to be held over indefinitely.

Trading on leverage or the margin and trading, in truth, lets Forex brokers take the advantage of not having to bear the whole payout on the total cost of the positions value. Forex trading brokers, in any case, just about all of them, allow for more leverage than stocks or futures. The absolute sum of leverage access in Forex trading may be up to 5 hundred times higher in value than your forex trading account. Leverage availableness in Forex trading is amidst the 1st interests of a lot of traders in the Forex marketplace.

Brokers who take advantage of the leverage can make larger, much larger profits and as this can sometimes be a double edge sword and they can also ecru very large losses. However, with a careful, affordable and properly prepared plan and persistence this may never be an issue. A properly put together investment plan will aid you in your success. Here I will issue a word of caution. As in gambling, you should never, never ever invest more than you can comfortably afford to lose and when you do profit, begin using the profit for investment purposes. Go online and open and practice in fun and when ready go for it and good luck. - 23196

About the Author:

Sign up for John Eather's Free eCourse on Forex Trading and discover how to Become Financially Successful. Click on http://www.moneymakingfxtrader.com to get more info about Automated Trading.