Are Your Option Trading System & Your Trading Psychology In Sync?

This is a question that every option trader needs to ask themselves, especially those traders that are ‘stressed out’ and losing more often than they are winning.

This is because when you have an option trading system that you are truly comfortable with i.e. you have backtested it extensively and paper traded it on live market prices, you have built a solid foundation for your long-term success.

This is due to the psychological advantage of ‘objectivity’ that an option trading system that you know and trust provides.

When we follow a precise set of trading rules that we have confidence in:

– We feel no pressure pushing us to trade.
– We trade without fear or the need to be right.
– We trade what we see, not what we think.
– We know in advance ‘exactly’ what we will do in ‘any’ market scenario and we have already ‘committed’ to doing it.
– We are not focused on how much ‘money’ we may or may not make, but rather on ‘trading well’.

If the above points describe you and your trading equity is growing consistently, then congratulations, you have found a good option trading system that fits your psychology and risk profile. Your option trading system and your psychology are ‘in sync’.

This is fundamental to your long-term success as an option trader.

If however, you feel that you fall short of the above criteria, then I would suggest that you stop live trading immediately (if you are) and go back and continue backtesting/paper trading your option trading system.

You may need to adjust your trading rules as you test but when you finally have a trading system that performs consistently well over time (that you have traded up, down and sideways) on a select group of stocks, you will have the ‘confidence’ to put your money into the market with a ‘winning’ trading psychology.

This is absolutely critical because as the old Wall Street adage goes, “Scared money never wins!”

The good news is that you can alleviate ‘fear in option trading’ by following a trading system that you know and trust, including sound money management and by detaching completely to the money in your trading account.

Once you reach a place of both consistent peace and consistent profits in your trading, then you will know that both your trading system and your trading pyschology are in sync.

Your long-term success depends on this ‘harmony’.

Personal Wealth. Wealth Building. Stocks And Bonds. Retirement Planning. Day Trading.

Forex trading can be like day-trading


Forex trading, or foreign currency trading, has become a bit of a craze of late, especially since it is something available to anyone who owns a computer. And anyone who is willing to put in some training time can profit from forex trading.

The forex market finds traders from all around the globe monitoring currency fluctuations, not unlike the way a day trader may monitor a stock’s fluctuation on the Dow Jones.

In forex trading, a trader will pair two types of currency, for example the U.S. dollar and the British pound. As it requires more of one currency to purchase another, that currency loses value. Not unlike, stock trading, forex traders try to accumulate currency when it weakens in hopes of selling it when it goes up in value. Forex trading is not unlike the buy low, sell high approach found in stock trading.

The way a trader on the forex market exchange goes about acquiring currency is by giving a bid/ask quote, saying he is willing to buy, for example 1.6 marks per dollar and sell them at 1.625 per dollar. One must be a market trader to have access to this process. So most people who are forex trading on line buy the currency through a bank, where they’ll pay a commission, then have to figure the commission paid to the bank into the calculation of their spread, or profit margin, when they sell it.

Forex trading is not an easy path to riches. And some people have lost considerable money in miscalculating the market. With its increased popularity, on some days the forex market exchange can see more than one trillion dollars exchanged. Packages for teaching a new forex trader how to invest in the market can range in price.

Personal Wealth. Wealth Building. Stocks And Bonds. Retirement Planning. Day Trading.

Can You Afford To Retire?


Looking to make investments for retirement always seems to be something that you think I’ll do it in another few years. However, anyone thinking in this way couldn’t be more wrong. It is vital that these days you start to think about that rainy day whilst still in your twenties and thirties because everyday you put it off could mean you have to work longer, and who really wants to work until they are in their seventies?

The way our country is today things do look pretty bleak for the future. The government is more involved with making money available to go to war than keeping the social security system in a healthy state. For many retirement seems to be fading into the distances – more of a maybe than a reality. So it is down to you as an individual whether you purchase IRS’s or put your money towards the purchase of gold coins to safeguard your future, it is something that has to be done.

Really, I am not qualified to give you advice about investing for retirement. No one simply writing an article can explain to you what plan is right for your long term financial needs. The best way to learn how to invest for retirement is to talk to a qualified financial consultant. That way, you will get the opinions of an expert, custom tailored for your needs and your financial situation. Honestly, although everyone needs to think about investing for retirement, not everyone needs to go about it in just the same way, and so having a plan that is correctly made to fit your needs is the only sure way of doing it.

The best thing about investing for retirement today is that it will eliminate years of worry. Not planning for retirement is not going to make the problem go away, and the chances are that you will be concerned about the future whether or not you have an investment plan. If you can begin investing for retirement sooner, then that will be one more thing that you can get off of your mind, and cease to worry about. Your independent financial expert will be able to advise you on your individual circumstances and have it all taken care of for you, then you will be able to sit back and watch your savings grow at a steady and useful rate. There is nothing better than that.

Personal Wealth. Wealth Building. Stocks And Bonds. Retirement Planning. Day Trading.

Understanding The Difference Between Debentures And Stocks And Bonds


A debenture is an unsecured loan you offer to a company. The company does not give any collateral for the debenture, but pays a higher rate of interest to its creditors. In case of bankruptcy or financial difficulties, the debenture holders are paid later than bondholders. Debentures are different from stocks and bonds, although all three are types of investment. Below are descriptions of the different types of investment options for small investors and entrepreneurs.

Debentures And Stocks
When you buy stocks, you become one of the owners of the company. Your fortunes rise and fall with that of the company. If the stocks of the company soar in value, your investment pays off high dividends, but if the stocks decrease in value, the investments are low paying. The higher the risk you take, the higher the rewards you get.

Debentures are more secure than stocks, in the sense that you are guaranteed payments with high interest rates. The company pays you interest on the money you lend it until the maturity period, after which, whatever you invested in the company is paid back to you. The interest is the profit you make from debentures. While stocks are for those who like to take risks for the sake of high returns, debentures are for people who want a safe and secure income.

Debentures And Bonds
Debentures and bonds are similar, but bonds are more secure than debentures. In the case of both, the company pays you a guaranteed interest that does not change in value irrespective of the fortunes of the company. However, bonds are more secure than debentures, and carry a lower interest rate. In the case of bonds, the company provides collateral for the loan. Moreover, in case of liquidation, bondholders will be paid off before debenture holders.

A debenture is more secure than a stock, but not as secure as a bond. In case of bankruptcy, you have no collateral you can claim from the company. To compensate for this, companies pay higher interest rates to debenture holders.

Additional Help
All investments including stocks, bonds, and debentures, carry an element of risk. If you are unsure of the investment options that are best for your business, then you can ask a small business consultant who will guide you to the best investment options available to you. Investing wisely today can pay heavy dividends tomorrow. Do as much research as possible on the company you’re investing in, whether that investment is in stocks, bonds, or debentures. Research is a sure fire way to reduce risk and increase profits.

Personal Wealth. Wealth Building. Stocks And Bonds. Retirement Planning. Day Trading.

Bonds – Are They Right For Your Portfolio?


For those wishing to invest their money – usually those wishing to put away a tidy nest egg for retirement or their children for school – there are a lot of decisions to make. You can’t jump into just any arrangement, and especially not the first offer that comes your way. Perhaps the most pertinent question you might ask yourself when investing is, what should oneu invest in – in other words, what’s good to invest in right now?

1. Put Your Money First

The final aspect of investing in bonds shouldn’t be the qustion as to what you should buy or sell, but rather, how much capital you are going to gain in the form of dividends. Remember, you aren’t buying stocks, you are investing. This means you expect a return on your investment.

2. Stocks

If you plan on investing in stocks, a general rule is to hold them for at least 10 years. Stocks will, over this period of time, outperform any other possible investment. Don’t even think about real estate, bonds, or commodities, stocks are definately the way to go, and it is not uncommon to see returns of up to or over 10%.

Of course, that is not to say that stocks are always the safest choice. Few investors actually buy stock and hold it for ten or more years. Also, with the exception of mutual funds individuals tend not to invest in stocks in general, but rather in a particular company. Also, even then, times change because new and better technologies come to pass. General Electric no longer makes most of its revenue from light bulbs, for example.

2. Bonds

If youre going to go with a bond, first of all, expect to pay a minimum of $5,000. You will definately want to invest in a bond that is rated AA or higher, and stick to a well known, major brokerage to handle your investment. Even with inflation you can expect to make only 4% profit per year. Of course, 4% of $5,000 is only $200, but over a period of 10 years that turns into $2,000. Of course, in today’s economy $2,000 won’t even last a month for rent, food, utilties, etc. Even so, bonds have advantages no other instrument enjoys. Since they have a set interest rate and maturity date, their behavior is much more readily predictable, given plausible assumptions about interest rate changes and other economic factors. You can’t attribute this kind of reliability to stocks, for example.

3. Currencies Or Commodities

The beginning investor should never engage in trading commodities or currencies, such as FOREX. Don’t believe the hype surrounding these investments – there is a reason why so much money is floating around out there – people are losing it!

4. Real Estate

If you think that the value of real estate is always on the rise, think again. Although a great way to make substantial gains, if you are going to make any real money you have to be able to invest a lot of your capital – more than any other variety of investing. Many simply can’t do it part time and try to make it their full time job. Some succeed, many fail.

5. Funds

If you are looking to make some quick cash, funds offer a great alternative to direct investing. Mutual funds, one of the more common types, pool investor money and diversify investment (usually) into a variety of instruments – stocks, bonds, currency, commodities, etc. Investors save money by not incurring a fee for every trade, but pay management fees of one kind or another (usually annual), and those can eat substantially into overall return on your investment.

Personal Wealth. Wealth Building. Stocks And Bonds. Retirement Planning. Day Trading.

Why Online Trading Regulations Are So Important?


When you are trading anything online, you will have to follow certain rules. In other cases, you will need to meet regulations; and if you are dealing with stocks or something like that, then you will have to know the online trading regulations. If you are unsure of these regulations, then a broker will be more than happy to help you out. But don’t just choose any broker, as they may try to get you to sign up with them before you can learn anything about the company. Get recommendations from your friends and family before making a decision on a broker.

Doing any online trading is a risky and you can always potentially lose money. Having a broker isn’t a 100% way to guarantee your success in the world of online trading; they are there to help you, but they can not be right all the time. Sometimes they make a mistake and it does happen as the online trading world is a totally unpredictable business.

There are some brokers who will not be what you expected, and you might be totally disappointed with the service; if so, then you have to act fast as you only have a limited amount of time to take legal action. You can talk to your broker and demand an explanation; and if you are still dissatisfied, then you can write to the compliance department at the main office, where you can explain your problem and ask for it to be resolved. If all that fails, then you can send a compliant to the National Association of Securities Dealers with copies of your letters you have already sent.

But let’s not get them wrong, as these brokers generally at least try to do an excellent job with their customers; and there is only a small percentage that do get the online trading regulations wrong and are end up in trouble.

Remember to ask for recommendations before you sign up. While most brokers may be good, some will have a proclivity towards risky trading and others may have a proclivity toward safe, low-yield trading. Try to find the one that fits your preferences.

Personal Wealth. Wealth Building. Stocks And Bonds. Retirement Planning. Day Trading.

Successfully Planning Retirement Can Make Your Future Secure


Over the years you’re sure to have encountered someone who’s told you to put some money into a retirement fund if you haven’t yet already. Many parents are now telling their children who’ve just started to make money to put some away for when they retire. Why do these people feel its so important to pass along the message to ‘save early’? Probably because they didn’t, and had to scramble to throw together a plan out of sheer necessity.

Really, the premise of planning retirement is quite simple: Save money now because you won’t be working later. Unfortunately, many people don’t realize how very important this is until it’s too late. Believe it or not, even people who would once consider themselves somewhat wealthy, doctors and lawyers, etc., have been reduced into living in low-rental apartment buildings in their golden years because they simply didn’t plan their retirement well enough.

So, since you are reading this it can be assumed that you’ve already realized the first and most important part of planning retirement: Start now. The rest is relatively easy.

Planning Retirement Successfully:

To successfully plan for retirement, there is a measure of dedication and financial responsibility involved. The most pain-free way is to write out a thorough plan, including a budget, and simply stick to it. If you’re lucky enough to be reading this fifteen to twenty years before you plan on retiring, the money you’ll be putting into a long-term savings fund will seem inconsequential. In other words, you won’t feel like you’re missing out on things you could have purchased with the money you’re now saving for retirement with. This is because it will amount to such a small percentage of your current income.

How much money you’ll need to save is calculated on a variety of different things, most importantly, how you’d like to spend your time. Traveling abroad, or staying near the grandkids. Living in a house you’ll have paid off, or adding a cottage by the lake. Really, it’s all about balancing what you want now with what you’ll want then: Bigger house now, or cottage on the lake then? In a perfect world, we’d all have the money for both, but that just isn’t the case sometimes so planning retirement should take you at least a few days worth of thinking, and it should be open to updates whenever something changes. Nothing about planning retirement should be set in stone.

There are many different avenues of income that are associated with retirement, some of which can have confusing terms. The term for saving for your retirement personally and then cashing it all in when you retire is called superannuation. This, unsurprisingly, is the most prominent form of planning retirement financially.

All in all, there’s no better time to start planning for your retirement than right now. Even if you’re not sure what your income will be like in the coming years, it always helps to write down what you think you’d like to be doing when you retire so that you’ll at least have an idea of how much money you’ll need. Though planning retirement can be stressful, remember that not having a plan when you’re suddenly 65 years old is far worse than doing a bit of number crunching now.

Summary:

To successfully plan for retirement, there is a measure of dedication and financial responsibility involved. The most pain-free way is to write out a thorough plan, including a budget, and simply stick to it. While planning retirement can be stressful, remember that not having a plan when you’re suddenly 65 years old is far worse than doing a bit of number crunching now.

Personal Wealth. Wealth Building. Stocks And Bonds. Retirement Planning. Day Trading.

What People Don’t Know When Building Wealth


We choose our own destiny. Each living person chooses and they will take the responsibility along with the result. Each time that passes, his choice will be deeper and deeper in his daily life. Actually, wealth is created through a state of mind. Most people become rich and keep growing rich and still not have a feeling that they have become wealth. In the other side, poor people feel enough for what he has done and they enjoying their life. To acquire money and property is a simple and easy process. Once you are on the road to wealth, it is impossible to stop the growth.

Lucius Annaeus Seneca from Rome said, “If you live according to what nature requires, you will never be poor. If according to the notions of men, you will never be rich. This is especially detremintal to us, what we live, not according to the light of reason, but after the fashion set by others.” The problem to getting wealth is still the same until now. Same things kept people poor today and the principles of getting wealth have not changed since the year one.

Most people in the world are afraid having poverty condition, it can turn a good man to be criminal to getaway from the poverty. For everyone who have the will of progress, they didn’t have this fear. Thucydides (425 B.C.) said that, “An avowal of poverty is no disgrace to any man; to make no effort to escape it is indeed disgraceful.”

It has been understood by man until now that he who made little or no effort to rise above poverty, was largely responsible for his own unhappy condition. There is a difference between poverty and pauperism, though it is only a short slide. One who has a misfortune may have no avenue to escape from becoming a pauper. This pauper needs help. But the poor are those who spend more than they get or spend all that they get. They cannot control their expenses and exceed his income. If that person be in that condition for a long time enough, he will be a pauper.

We live to live. All of us are climbing to reach our dreams to reach wealth, ease, comfort, and even contentment. But dreams will end in dreams if we don’t work hard and sacrifice now. Poverty comes from idleness, intemperance, extravagance and folly. That means for you who is reading this article by now, the way to wealthy is open to you.

“Wealth may be an excellent thing, for it means power, leisure and liberty.” – James Russell Lowell.

Wealth is a state of mind. To change your life from poverty to wealthy, or to grow your wealth, all you need to do is change your mind from the previous thought. Discover the way to the wealth and apply those principle in your life. And there’s an exact result that you are on your way to reach wealth.

Personal Wealth. Wealth Building. Stocks And Bonds. Retirement Planning. Day Trading.

Online Forex Trading is Quickly Becoming a Booming Business


Online Forex trading is more popular now that most everyone has access to a computer and internet. Unlike the stock exchange, the Forex does not have a particular place for trading to take place. While trading takes place all over the world, online Forex trading makes this process more convenient than ever.

Transactions in the Forex are traded very rapidly. The Forex is open around the clock on every business day of the year. Trading begins every morning in Sydney, Australia and as the business day in each country begins, the Forex online trading opens around the world. Online Forex trading allows banks, financial institutions, brokers and speculators to trade their currency rapidly and with ease. Online Forex trading is also a popular way to change foreign currency because it happens in real time with no delay.

Because online Forex trading makes exchanging foreign currency so easy and accessible to millions of people, many are trying to learn the ins and outs of the Forex. Brokers and financial institutions can offer advice on investing in the Forex. Brokers will also do the actual trading for the consumer. However, many are willing to learn to trade on the Forex on their own. When learning about online Forex trading it is imperative to understand everything there is to know about the Forex. Many online websites can offer potential traders tutorials and demos on how to get started in online Forex trading. Practicing on the demos helps speculators learn the basics of online Forex trading.
Also, another tip to learning online Forex trading is to study the news, including international news and news relating to politics, economics and finances. Inflation, changes in government and taxes just to name a few all affect the Forex on a daily basis. It is crucial to understand how these changes affect trading and the value of currency.

Personal Wealth. Wealth Building. Stocks And Bonds. Retirement Planning. Day Trading.

Introduction to Mutual Funds


If you know absolutely anything about investing, then you have probably heard of mutual funds. Once an obscure investment vehicle, they are now popular with almost all investors. If you ask your average investor whether they have any of their investment dollars allocated to a fund, they will likely answer yes. There are literally trillions of dollars of American money currently invested in mutual funds.

Funds have made investing for the average investor a little less complicated. A person no longer has to sift through stocks individually in the newspaper or spend hours watching the financial news on television. You can simply select a diversified fund that contains a bunch of different stocks of companies that fit into a certain paradigm, such as a fund containing nothing but small cap stocks, mid-cap stocks, large cap stocks, technology stocks, bonds, etc.

A mutual fund is really an investment company in and of itself, with a manager and other officers who administer it. When you buy shares, you are buying a portion of the holdings of the fund, which contains many different stocks and bonds within the portfolio. And, just like with individual stocks and bonds, your shares increase in value when the share price of stocks within the portfolio appreciate, or when interest payments are made on the bonds. As with stocks, you can sell your shares in a mutual fund at any time.

There are many different types of funds. They vary based on composition (stocks, bonds, or fixed income securities such as money market instruments), and strategy. Some funds, as already mentioned, invest in companies that have a particular market capitalization (i.e. large cap, mid cap, small cap). Other funds invest solely in foreign companies, while some invest in certain sectors within the economy, such as the financial, technology, or industrial sectors. Also, some mutual funds may pick companies based on ideology, such as a socially responsible or environmental fund. There are also index funds that simply invest in companies that are contained within a certain index, such as the Dow Jones, or the S&P 500.

The most important thing to understand when looking for a mutual fund is the cost structure. There are four expenses you need to review before investing. The first is the management expense, which is a charge assed on your money to pay the manager of the fund. The second is the administrative fee, which is usually assessed annually to cover the costs of mailings, postage, etc. The next fee is the 12B-1 fee, which covers the cost of marketing and promotion. And finally, there are sometimes front-end loads and back-end loads. A front-end load is a sales commission charged as soon as you open the account and invest your money. A back-end load, also known as a deferred sales charge, is assessed on your money when you close the account. Back-end charges vary depending upon how long you have had the account.

I hope this information has helped you to familiarize yourself with mutual funds. Try to set aside some money for investing and start while you are still young. The earlier you begin, the more money you can potentially make down the road. Carefully examine the fee structure and investment strategy before investing and you should do fine.

Personal Wealth. Wealth Building. Stocks And Bonds. Retirement Planning. Day Trading.