Placing Stop Loss Order

By Ahmad Hassam

Managing risk and using systems that helps evaluate price changes is critical if a trader is to maintain a degree of profitability over time. You should understand how to select stop orders to limit your potential losses and how to let profits ride.

Managing risk should be your number one job and capturing as much profit as possible from winning trades should be your utmost goal. The descriptions of the types of stops and the pros and cons of each should help you make the right decisions for the different market conditions.

Predetermined stop loss orders help you conquer your emotions. Stops should be part of the trading system. They should be included in your trading rules. You should also know where and when to place these stops. You should know the various types of stop loss orders.

Set a stop objective and weigh the risk/reward ratio before entering each trade. When volatility is low, stop orders can be placed close to the entry level. However, when the volatility is high, stop orders should be placed further from the entry level.

When entering a trade make sure you know where and why to put the stop order. Initially you will form an opinion based on your gut feelings that is substantiated by a trade signal.

News releases create price spikes that may make an adverse move against your position. However, you will undoubtedly get caught in the news driven price shock events. It makes the markets highly unpredictable in the short run.

Stop orders are placed to protect against losses. These orders can also be placed to enter positions. Stop orders that you place online if the market trades at a certain price, then the order is triggered and become a market order to be filled in by the next best price available.

Buy stops are placed above the current market price and sell stops are placed below the current market price. Protective stops are used to offset a position and to protect against losses and against accrued profits.

Stops can be placed on a dollar amount per position. If you want to risk only $250 per $100,000 standard lot position then your stop loss will be placed 25 pips from your entry point. You can set a daily dollar amount on the loss limit.

Traders use 2-5% of the overall account size as their stop loss. Suppose your trading account size is $10,000. You can also use a certain percent of your overall account size as your stop loss. This comes out to be $200-$500.

Swing traders can use the automatic trailing stop. This makes the decision making process fully automated. Many traders tend to turn winners into losers as they get in the let it ride mindset. The trailing stop reduces the chance to let trades ride. - 23204

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and forex. Develop your own Forex Trading System. Learn Forex Trading .

If You Learn Technical Analysis, You Need To Learn About The Hanging Man Pattern

By Chris Blanchet

Short-term investors rely on volatility and overall stock trends when it comes to making money. It goes without saying that people who want to trade full time will have to learn technical analysis. Armed with this knowledge, traders will be able to execute proper trades and manipulate their positions in such a way to take advantage of short-term profit opportunities. In this regard, short-term patterns become one of the trader's most heavily used tools.

As part of the ongoing Learn Technical Analysis Series, we will discuss a short-term pattern known as the Hanging Man. This pattern gives traders an outlook as to the short-term range of that security. And given its gloomy name, investors can immediately identify the Hanging Man as a bearish signal.

When trying to identify a Hanging Man pattern, investors need to pull up the candlestick chart for the security in question. Rookie investors who have just begun to learn technical analysis will identify this type of chart type by a day's "Real Body" which is a box made up of one horizontal line for the security's open and another horizontal line for the close, and two vertical lines that join them (or box them in). The "Shadow" is the range in which the security trades over and below the Real Body.

When it comes to the Real Body of a Hanging Man, it will need to be a "Black Body" meaning the security closed lower than it opened. The Shadow will look like a tail with preferrably no Shadow above the Real Body. The tail should also be rather long, ideally twice as long as the box of the Real Body. For investors who are just starting to learn technical analysis, the Hanging Man might look more like a square tadpole than a hanging man.

As noted in previous parts of this series, any technical pattern or indicator, including the Hanging Man, should never be used in isolation. Investors who properly learn technical analysis should always confirm the signals they discover.

On the open of the day following the Hanging Man pattern, investors should seek a gap down from the Real Body of the pattern. The wider the gap (the farther down it opens from the Real Body) the better. Additional confirmation can be obtained if the Real Body of the day that follows the pattern is entirely below the Real Body of the Hanging Man pattern. Since most traders who learn technical analysis will not wait two days to execute a trade based on a Hanging Man, other technical and fundamental indicators should be used to confirm or refute the pattern early.

When the overall market sentiment is overly bullish, Hanging Man patterns are often falsely created. For this reasons, investors should sit tight until the following day. If the open is higher than the Real Body of the Hanging Man, it is likely a false signal. Also, investors should never forget to take the Hanging Man's Real Body's color into account -- "green and white are a bear trap's delight!" Remember that a red or black Real Body creates a more reliable pattern.

Even after people learn technical analysis, they will never rely on a single pattern to make a decision on a security. In most cases, they will use the pattern as a starting point and refer to other patterns and indicators to confirm or refute that indication. The more confirmation they have, the smarter their trades and consequently the higher their success. - 23204

About the Author:

Chris Blanchet has more than 16 years of experience as a Financial Advisor at one of the world's largest banks by market capitalization. To learn technical analysis free visit Online Trader Today.com where Chris writes about Technical Analysis and Options trading. Chris also maintains a debt-free blog at How To Repay Debt.com

Global Macro Investing in the BRIC's

By Paul Soros

Brazil, Russia, India, and China are collectively known as the BRIC nations. This name came from a 2003 paper from Jim Oneil at Goldman Sachs titled Dreaming With BRIC's the Path to 2050 and Beyond. Not a call to Buzz Light year but instead a legitimate economic theory that these four nations would go from emerging markets to huge economic growth engines that would possibly become the largest economies in the world.

Now that these nations have embraced capitalism and started to throw out corruption they are able to better compete for investment capital with other nations. Due to this and the fact that they have huge and growing populations along with large natural resources and you have a good chance for a big move on their way to power and influence.

Brazil has grown up a lot over the last 20 years. Having been called the next growth engine since the seventies it appears as though Brazil has finally figured it out and is building a legitimate economy that has a solid banking system, several industries, and a huge oil industry. Having gotten rid of the majority of its Latin American corruption Brazil is well on its way to becoming a major force in the world economy.

Russia is next and like Brazil has huge oil and gas reserves and resources. In addition to natural resources Russia also has a very educated population with many scientists. The only thing that Russia needs in order to further progress is to fully purge itself of corruption that is fairly rampant in the government, But hey when your leader is a former KGB agent what do you expect? Anyways if they can get past the Putin issue then they will become one of the most powerful economic forces in the world.

India has over a billion people. That in and of itself is not a big deal, except that they also have one of the largest bilingual populations on earth as well as a large educated segment. This has helped India to become first a humongous outsourcing giant and second to become a real and legitimate technology leader in its own right. They have scientists, engineers, and doctors who are rapidly becoming on par with their western brethren. The next ten and fifty years will be exciting as India continues to improve.

Finally we have China. China has the largest population on earth and has long been thought to be a huge eventual power. This idea is not a thought anymore as it is a complete reality. While they still have tons of challenges ahead of them, China is now a huge player in the marketplace. Previously only a maker of cheap goods, China is rapidly coming up so speed in most fields with a large educated population. Yes, they still have challenges ahead of them but they are improving every day as quality of life for their citizens continues to improve and corruption continues to decline. - 23204

About the Author:

If you need actionable trading ideas then check out The Macro Trader It is a weekly global macro investments advisory publication with frequent intra-week updates for time-critical analysis and actionable trading ideas.

Make Money With Penny Stocks

By Simone Bride

As you probably know, penny stocks impart broader risks but might likewise provide broader returns on any investment. This really indicates that you can either lose a great deal of your money by investing in penny stocks (because of the increased risk factor) or make a lot of money (because of the higher prospective returns). If this happens to you will rely on a lot (but not entirely) on how you approach evaluating the investment funds. So before we go further, you should be conscious that regardless how much caution there is a distinct amount of risk connected with penny stocks, that is much bigger than in the case of large capital, stock exchange qualified stocks.

In order to evaluate whether you can grow money out of a penny stock, you should understand how one makes a profit in the stock market. One of the benefits that a person gets from a stock investment is in the form of dividends. This all the same, is ordinarily a very small component of the returns that a person gets from stock investment funds. The big returns come from growth in the price of the stocks and the prices of shares are assessed using different parameters. The first of these is the issue on investment funds, so if the issue on a stock is ten percent and the value profit ratio is 10, for example, the stock would be priced at ten times the earnings or 100 percent of issue price. To put in differently, this stock would be traded at its present value and from this we can see that the value would reckon on 2 matters, the total return and the price-earnings proportion.

The 2nd fundamental element that affects the monetary value is the book value of the stock, which is fundamentally computed as a figure that represents the assets available in the company against each stock. So, if a company has net assets of 100,000 dollars and has released 10,000 shares, the value of each share under this method would be ten dollars.

The monetary value of a share is as well evaluated on the base of a few other measures. Nonetheless, the most fundamental factor from the market point of view is the returns that the stock generates. The pricing under this system would rely on the profit and the price/earnings ratio. The latter is a subject of perception that will depend on the chances linked with the stock. This belief undergo adjustments depending on the history of performance of the organization, the available information about the business, its chances, and the market buzz about immediate big events in the company: (for instance a takeover by a major organization).

From these, the most essential from the extended standpoint is the consistency and volume of earnings and the direction of the price-earnings proportion in the near future. As an investor the things you need to assess and be aware of are:-

Is the business is stable enough to maintain its profit and development by finding out who its promoters are, and how long it has been in business? Just what is the market perception of the business and is it likely to change? Do you know if the company has a good foundation and enjoy good business?

Lastly, the old adage "don't put all your eggs in one basket" is true to a greater degree in the instance of penny stocks so invest a bit at a time and do not put all your money on one or just a few stocks. - 23204

About the Author:

If you've enjoyed all the exciting information you read here about how to make money with penny stocks, you'll love everything else you find at make money with penny stocks

The Benefits of Purchasing a Timeshare or Timeshare Rental

By Chuck R Stewart

Having a respectable timeshare house that you can certainly use for timeshare rentals is an ideal way to make money and have a lot of fun times with both family and friends. There are a number of respectable uses for your house that you will surely enjoy.

A number of condo owners agree that it is a good way to entertain family and friends. If youre more of a homebody, you can certainly use your house to relax and take a break from the stress of everyday life. In fact, this is what a lot of condo owners say that they enjoy the most about their personal properties " it gives them a good opportunity to relax and escape the a lot of stresses of their everyday lives. This is ideal on a number of different levels.

There is a respectable selection of a lot of places that you can buy an ideal house. You can get such a house in any place where you would certainly like to visit for your own personal enjoyment. If you know that you certainly enjoy the beach or the mountains or any other ideal part of the good United States, you can get a good condo in any of these outstanding locations. It is surely up to you to choose from the a lot of outstanding places you can get such a good condo and you can choose a good house according to your own personal likes, wants and desires.

This is a respectable process that's surely completely up to you to decide on. A respectable use for your condo is to rent it out to a number of other vacationers and you can earn quite a substantial amount of money just by owning such a respectable house. When you have gone on a respectable vacation before, chances are you've visited a respectable house before. You've surely also paid rent to visit this ideal house and that's to be expected. You know that you can surely choose a lot of respectable and different location and a number of options for cost.

If youre looking for a good condo to rent, youll surely be able to find one in your price range and in an ideal location that you will certainly love. By renting out your good house to other vacationers you will surely be able to earn an ideal amount of money for your own personal travel and relaxation. You will certainly enjoy the a lot of extra rent payments that will be going into your bank account.

There are a number of occasions that you can go and relax and have a good time at your house. Family holidays are a good occasion for using your outstanding rental condo . Your a lot of family members will really appreciate the a lot of benefits of your outstanding rental condo . You can go there for a lot of occasions and good events in your lives and the lives of your friends and family. One respectable occasion to go to your condo is the birthdays of your family and friends " it would certainly be an ideal surprise for any of your friends and family to go to your ideal house for any holiday or birthday. - 23204

About the Author:

Chuck Stewart recently purchased a timeshare for his family to enjoy every year. He recently looked into a timeshare rental for his sister's family as well.