All posts by Reece Mathews

Stock Trading

Five Tips to Choosing the Right Trading Charting Software

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An effective and well-tested trading system is perhaps your most important tool as a trader. It’s crucial to keep in mind though that even the most carefully plotted plan can still fail without supporting trading charting software.

It isn’t a secret though that lots of traders find it hard to make choices because there are too many. The problem becomes more complicated when you realize that all software makers say they’re the best. How can you pick from all these top products?

As you might have already guessed, your first point of assessment must be a product’s reputation in its niche or market. Determine what people are saying about it. The internet has made it very easy for anyone to post positive or negative feedback online so you’re bound to find a great deal of these on various sites including social sites.

Usually though, sterling reviews shouldn’t be the only basis for your choice. It’s always possible for any product owner to generate artificial positive feedback. Hence, you’d also have to look into other factors such as product longevity. Investment or stock charting software that’s been around for years says a lot about its performance. Common sense dictates that a product that has been able to stand the test of time is reliable simply because buyers or subscribers will not put up with an unreliable one for long.

Flexibility is also a hallmark of a good charting tool. For more experienced traders this means, having room to custom code their preferences beyond what a package provides as default options. Even if you’re just a beginner, you should steer clear of products that offer to do everything for you. Common sense should tell you that no auto tool can replace human judgment and capacity for analysis. Hence, you’re most likely headed into a bad situation if you leave everything in the hands of a tool.

Naturally though, it is vital that your tool be both flexible and automated. Although it’s ideal to call the shots, you’d also benefit from quick and instant results. For instance, you would want to be able to easily determine which stock options match certain predefined criteria. Excellent software with scanning abilities can allow that.

Another important trait to look for in a package is its ability to use different data plans. Some software makers offer cheap packages that quickly lure beginner traders. Later, they sell expensive partner data plans that are exclusive to their tool, thereby forcing traders to pay up. The best option is to buy a charting package and then use a separate data plan of your choice that you can use with it.

You can’t always make a decision even after careful and methodical research. If you find yourself in this situation, your next best option is to first list down the software options which you think are the absolute cream of the crop. Next, pick those that provide free trials. This way you can test tools at no cost.

There’s no beating trading when it comes to providing the opportunity for financial freedom. However, it’s equally likely to get you into a financial rut if you don’t have good tools so make sure you choose the best charting software.

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Stock Trading

How to Trade Like a Pro

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If you could wave a magic wand, you’d probably want to turn yourself into a pro trader. Sadly, you can’t do magic and you’ll have to learn to succeed on the trading floor the hard way. The good news is that it isn’t impossible at all to excel in it. You just need to follow a few good tips.

The first thing you need to make sure you’ve settled is the market you want to trade in. There are many different options for you to consider. You might be most familiar with stock trading but you can also go for Forex, commodities and options among others. Stocks however are the easiest for beginners. If you’re just starting out, try stock trading first before you move on to more complicated investment types.

With a market to start trading in, you then need to set in place a reliable trading system. What many traders find is ideal is to create custom systems. You also have the option though to simply take an existing and well publicized system, make adjustments to it and use it as your own.

Having a system is only part of your preparation done. You also need to spend time testing it. This is the only way you can ensure your plan isn’t flawed. The best way to go about this is through back testing. In this process, you use your system with various historical data. If it comes out a winner, it’ll be safe for you to conclude that it’ll work well for you in actual trading.

The best trading system should be able to do wonders for you. Sometimes though, the flaw lies not in the system but in the person. You’d be sabotaging your own success if you don’t have the discipline to let your system run the show. You should adopt the type of trading psychology that doesn’t interfere with a solid system even if it occasionally makes you lose.

With a system in place and the right mindset to accompany it, one final tool you’ll need is a charting package. Choosing one isn’t as easy as it seems though. There are simply so many to pick from and if you don’t know which features you need, it’s easy to get lost in a sea of options. To make sure you get the best tool possible, go for one that offers a free trial period. This way you can test it at no cost.

Obviously, you also need to pick a reputable licensed broker. You can either go for a full service or a discount provider. Those that offer full service can give you trading advice and tips while discount providers are likely to just place trades for you. If you’re confident that your system is a well tested one, there might be no need for you to get the services of a full provider. Your system will be all you’ll need to pick the right trades.

It doesn’t take a genius to figure out that it’ll probably take years of hard work and effort to become a professional at trading. For beginners though, these tips and tools should be more than enough to get you started the right way.

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Stock Trading

Four Top Considerations for Choosing Stock Charting Programs

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It should be obvious to you now that you need a stock charting program to excel in trading. As you might have already guessed though, making a choice is quite complicated. There are so many programs across different price ranges.

You don’t have to dish out a lot of cash to get a good piece of trading software. In a lot of cases, those software companies that sell expensive tools only do so to create the impression that their product is premium and the best that money can buy. In reality, charting tools do much of the same thing regardless of their price.

This is not to say though that you should buy the cheapest option there is. Some cheap packages have low prices to encourage traders to buy. They then tie up their more expensive data plan with the software, forcing traders to buy the plan as well.

Clearly, you should never look at just the price when shopping for a charting tool. There are a couple of other things you should be paying attention to when you pick a package.

One of things you should research about first is the duration that a tool has been around. How long has it been in the market? Some tools are here today gone tomorrow. Sadly, when they disappear, so will product and customer support. That’ll be a nightmare for you since you’ll get stuck with software that’ll essentially be useless in the long run. Hence, you should stick with packages with longevity.

It’s crucial to try to get to know the quality of the user base as well. Find out what software users are like and how many they are by going into message boards and communities. Having many users is a good indication of a tool’s reliability. Obviously, the more users, the more people think it’s an excellent tool. Also, these same users can serve as your backup support when you need help.

Have back testing in mind too when you scout for a charting package. Software should be compatible with back testing facilities so you can put your system through dry runs. It’s a must for any new system to be tested this way. You will not essentially be testing using real time data. Even with just historical data to work with though, these should be enough to help you determine if your system is likely to work when applied for real.

One last thing to assess is the setup for data plans. There are charting software that will force its users to settle for an exclusive plan and nothing else. This is not the best option for you considering that not all data plans have what you want or what you’re looking for. You should pick software that’s flexible enough to adjust to the plan you want to go for.

Just like any product, charting software can come in many different kinds and types. As a buyer it should therefore be your top priority to evaluate your options to make sure you get the best tool for your money.

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Stock Trading

Top Reasons to Steer Clear of Black Box Trading Plans

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People who’ve tried trading have one dream — to earn a lot. Obviously however, this is not something you can accomplish with the snap of a finger. You need to put in long hours and a great deal of effort. Also, you’re required to develop excellent analytical skills and instinct for good trades.

This is what makes black box trading systems attractive for some. These are essentially pre programmed systems that traders can use to gather recommendations on which stocks to trade. For beginners, it’s extra tempting to buy these because you don’t even have to break a sweat to find what to trade.

What isn’t easily apparent is that no good can come out of using these types of programs. One reason why it’s a bad idea to use them is because they don’t explain themselves. Black boxes offer suggestions on where to put your money but never tell you why. That’s almost as if all they’re doing is guessing which is never a good trading practice simply because you need to understand what goes on behind the scenes to be able to conclude if you’re taking a risk that’s reasonable or manageable.

It’s also worth noting that auto programs don’t think about the differences among individuals who use them. Differences among traders are actually major points to look into because people don’t share the same trading preferences or risk tolerance levels.

In summary, black box trading isn’t flexible enough to be helpful or useful. It also lacks the human factor that allows deep analysis. It’s as if all you have is a tool that can make guesses on what to trade. This implies that it’s simply not wise to trust a program with your hard earned money.

Rather than spend money on black boxes, you need to spend time and effort on creating your very own trading plan. Your personal plan or system serves as a guideline so you’ll know when you should start to trade and when you should leave a position.

Unlike programmed systems, a custom system takes into account human factors. The most important of these is your tolerance for risk. With a system that’s truly yours, you can ensure that you never lose more than you’re able to bear.

So how do you come up with your own system? You can make your very own unique plan or you can take someone else’s and make it your own. What this means is you can adopt an already successful system, make revisions to it so it fits your preferences perfectly and use it to guide your trading decisions. The Darvas plan is an example of a well known system used by others.

It can actually take time to find the right system for you. Many top traders have had more losing streaks than winning ones at the start because they took time to test various systems. In the long run though, it’s well worth pouring your resources into finding the best fit for you.

For sure, trading is the way to go if you want to save enough for your future and a comfortable life. You do have to make sure though that you don’t get tempted to try out what looks easy. A black box system just won’t make the cut for you.

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Stock Trading

Trading Success: Winning While You Are Losing

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Many novice traders are searching for that Holy Grail of trading success, which for them is finding the perfect indicator to achieve the perfect entry. Let me state emphatically that there is no such thing as the perfect indicator. Why do people believe that there is?

It’s been recommended that traders accept that being involved in the entry of a trade somehow implies they have control over the market. It’s correct that when you enter a trading position, you have profound control of the entry, but that is where your control ends. You have no control over the way the market will behave, since the market will simply do as it wishes.

It is not when you buy the stock that controls what quantity of money you make, but when you exit and what amount of money you put into the trade in the first place that determines how much money you will make. This is the core principle of wonderful money management as being followed by any Metastock expert.

With any trading system, there will be wins and there will be some losses. Many successful trading have success rates only of 30% to 50% and they are still highly successful overall. This is because their profitable trades far exceed their losses. Let me explain how this can happen.

You trading system may provide a profitable trade one third of the time. It is quite feasible that every profitable trade may be four times more profitable than the equivalent loss in the losing trade. A winning trade may generate, for example, a profit of $400 and the equivalent losing trade a loss of $100. Even though the system wins on average only a third of the time, the overall result is a profitable one.

The rationale is that each winning trade more than compensates for the losing trades. That is an element of the trading success. In this particular example, over 3 trades, there would be a profit made of $200.

Trading isn’t all about finding the perfect indicator to get the entry just right . You need to think about other things, for example proper cash management.

Money management is managing your risk. It is a set of rules and guidelines you set up to minimize your risk. Remember that each trade is individual and whether you win or lose has nothing to do with what has come before.

It’s vital to recognize that with any trading system that you create, a specific number of trades will go against you. There is no such thing as a system that is one hundred % successful, just as there is no perfect indicator which may give you the ideal entry ever single time.

In summation, no system gets it one hundred p.c right and each trade is totally independent from the previous trade. Wonderful money management rules make sure that your positions are tiny enough that you don’t blow your capital, yet are sufficiently big to maximize your profit. Get these rules to maximize your risk in place and enjoy the rewards of a well working trading method to reach your trading success. Look for a Metastock download to help you get began on the right track.

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