Trading strategy

Pick a strategy and stick to it! How many times have you heard that touted as the key to stock market success? But which strategy? There’s growth at a reasonable price, Dogs of the Dow, earnings surprise, momentum and more. The list seems to go on and on.

So here you are six months after buying that old-new economy, click-n-brick, mid-cap, high-tech stock; or perhaps it was a new-old economy, large-cap, multi-national, conglomerate, low-tech stock. Let's say your stock has jumped 20 percent in seven months, a gain you expected to take twice as long. You've made a healthy gain and you're wondering what you should do now.To sell or not to sell?If you sell a stock you've held for less than a year and a day, your profit will...
By Forex Zone - September 21, 2016
A swingin
The early 20th-century Gestalt psychologists developed some theories on perception that we find pertinent in explaining why vivid events tend to create a frame of reference.They noticed that people organize complex visual fields into coherent wholes, or gestalts, rather than seeing unrelated elements in isolation. And when organizing a gestalt, people like a focus. Recall the famous picture of the vase set off by profiles -- impossible to see both at one time.The Gestaltists came up with...
By Forex Zone - September 18, 2016
Quick Guide on How To Become A Day Trader
Being a Day Trader requires extreme attention to detail, an analytical mind, steel nerves, long hours, no one to tell you you're doing well, and the ability to do what you know is right when the whole market is telling you you're wrong.Are you ready for this? It certainly won't be easy, but can be very gratifying, and potentially very lucrative.Choose Your MarketThere is many more markets to choose from for a new day trader than in times past. Here's just a few of...
By Forex Zone - September 13, 2016
Demystifying Stock Options
For the novice investor, stock options tend to garner one of two emotions: lust or fear. On one side, you have those who have been warned to never trade options because they are perceived to be too risky and difficult to master. One the other side, there are those who view them with awe and burn to understand them, fueled heavily by traveling stock gurus on the seminar circuit.But Options are just another tool in your investment arsenal, and every serious investor should educate themselves on...
How to Bulldoze the Stock Market Using Stop Loss Order
You Place in Advance a Waiting OrderA stop loss order is meant to alert your stock broker to close your stock positions when the price hits a certain price. For example you may want to get out of the stock position before it falls any further. You place in advance a waiting order in your broker's trading system. You tell your broker you want a stop loss order at a certain price on the stock. When the stock hits that price, your stop loss order becomes a market order. Your order will then...
By Forex Zone - August 25, 2016
Eight basic ways of coping
Researchers Susan Folkman and Richard Lazarus have studied coping responses in the face of psychological stress. Their work has defined eight basic “ways of coping” that capture most of the strategies we employ when faced with threatening situations. These coping maneuvers include: confronting the sources of problems; distancing from negative events; controlling one’s emotional reactions; seeking social support; accepting responsibility for adverse outcomes; finding pleasurable escapes from...
By Forex Zone - August 23, 2016
"Dogs of the Dow" investment strategy
"Dogs of the Dow" is an investment strategy based on the theory that, of the 30 stocks that make up the widely followed stock market index called the Dow Jones Industrial Average, the Dow stocks that pay the highest dividends will outperform the overall index.There are multiple variations on the Dogs of the Dow theme. Some invest equally in the top ten yielding Dow stocks; others focus on the top 4. Another variation throws out the highest yielding stock and invests in the next three...
Forex Exponential Moving Average Based Systems
A Moving Average is the technical indicator that shows the average value of a particular currency pair over a previously determined amount of time. This means, for example, that prices can be averaged over 30 to 60 days, or 20 to 40 minutes depending on the time frame you are using at the moment of your trading activity.The basic mechanics of Moving Averages tell you where the forex market is moving, either up or down, at the moment of your analysis by considering two different time frame Moving...
By Forex Zone - August 16, 2016
Zen in the Art of Options
Some-many-like to play it safe in the financial world. These like to entrust their once and future wealth building to money managers or to very stable, low-yield financial instruments such as money markets and high grade bonds. These people feel that they don't have the time or expertise to make "sophisticated" investment decisions for themselves, and in harmony with this they are extremely risk-averse.There are others who likewise play it safe in the financial world, but according...
By Forex Zone - August 15, 2016
Options Pricing: Black-Scholes Model
A few assumptions were necessary to compile this strategy guide. The underlying stock was given a volatility of 30%, and an initial stock price of 50, unless noted. Furthermore, the option positions are established with .25 years remaining (3 months), unless stated otherwise. Finally, we take a risk free interest rate (derived from the yield on treasury notes) of 5.45%. None of these assumptions affect the basic characteristics of the positions described.The pricing of options in this guide is...