buy low sell high

buying low and selling high is the no brainer common sense method to trading. The concept of course is easy.

You buy a stock at a low price, and you sell it at a higher price than paid for. This is the theory of all profit wholesale/retail.

There are other options however, you can short stocks. Honestly I don't recommend this because I feel it is risky. Here is the concept.

You sell a stock (without owning it in the first place) at a higher price, predicting the price will drop...you then buy the stock back at a lower price....in essence you make a profit because you sold the stock for more than you bought it. It is the reverse method of low selling high.

So how do you know exactly when a stock is at a good price to buy?? There are several resources you can go by, and different strategies yield different results....of course I know you do not want to invest with a strategy that will lose you money. I don't blame you.

When you look for a good entry point, listen to what experts are saying about that stock. Most will tell you when to buy, when to hold, and when to sell. You could do your own research however...Try this, using technical analysis, look at different indicators.

1. Bollinger bands
2. MACD
3. simple moving average
4. RSI


Each one will tell you different things. With Bollinger bands, think of it as a wall that the stock bounces off of. I'm over simplifying things, but I'm trying to educate the complete novice in stocks, so bear with me advanced traders.

With bollinger bands, when a stock nears either the upper or lower wall, you can almost (not always) predict that it will "bounce" back in the opposite direction. There are times, however, will the price will break out past the wall and either keep climbing or descending in trend.....I strongly recommend you learn more advanced bollinger band strategies to predict how the stock works with this.

MACD (Moving average convergence divergence)  is composed of a couple lines. the EMA (estimated moving average) and usual 12, 26. If the MACD 12, 26 crosses the EMA below the 0 middle line in an upward direction, you can predict that the stock will start rising. The opposite is also true. If the 12, 26 crosses the EMA above the 0 middle in a down ward direction, you stock will decrease in price.

MACD is a good way to predict short swing trades. Same goes for Bollinger bands.

I won't go into the other two listed for times sake, but research them out.

Another thing is too look at the 52 week lows and highs....if you're stock is near the 52 week low, it might be due for a bullish move....however it could just continue to drop and produce new lows, so be careful not to rely fully on this.

I hope most of this was helpful. If you liked this, you might want to check this out. If you liked this, please comment, follow and sign the newsletter for updates on new blogs. =D

options in a nut shell

I'm not going to go into in depth detail about options right now. That will come later. What I want to inform you readers right now is the gist of what options are, how they work, and how they benefit you.

You see options are a special breed of investment. The main focus for you to think right now is leverage. Leverage is the ability to control a lot of something with a little bit of something.

There's a famous quote out there, "give me a right spot to stand at, and a long enough lever, and I can move the earth." This is true, leverage gives you power that you cannot yourself have.

before I go more into the leverage benefits of options, I want to explain exactly what options are. To you investors options are almost a must have in your portfolio. (remember, keep diversified) Options are a contract you have between your self and the contract writer. You buy 100 shares of stock at a fixed amount. If you are the one buying the option, then you are buying calls. 1 call = 100 shares of stock.

Now this fixed price thing. Let's say you bought 1 call of xyz company currently trading at $30.00 a share at a strike price (the price you buy at) for $31.00 (that's $3,100 value)  ok so now you are controlling  100 shares of stock for only 31.00 dollars. Once price of the stock exceeds the strike price, you're in profit. the stock say soars to $35.00 (that's $3,500 value) you sell the contract to someone willing to buy and you pocket $400.00 ($3,500 - $3,100 = $400)  if the contract expires worthless. (all call options have an expiration date) before you are profiting, you do have the potential to lose your initial investment (in this case, $31) The risks can be bigger or smaller depending on how you play it.

do you see the leverage there??? It's amazing. The fact that you  control 100 times the amount of shares at the cost of one.

There are a lot of variables, however, that determine whether or not the price of the call goes up or not. Time Decay, interest, etc. It's best you not stop learning about options with me. I'm just providing a quick overview, it's best you research a LOT more about options.

In fact if you are a new investor, chances are your brokerage will not let you trade options right away. You have to submit an application for it. Anyway, I hope all this was helpful to you in some way!

Remember to follow me, sign up for the newsletter, and comment!!! Peace guys

oil leak

Just as a quick note. It would probably be a good idea to check out some great oil stocks. The oil leak has been fixed and the experts are saying that oil stocks would be great to get into now. Penny stocks expert Peter Leeds, says BP oil stock should be a great pick. As with every stock, however, carefully research, research some more, and then research once again. Don't trap yourself. Be a responsible investor.

Let me know of any success you guys have in the next coming days! Follow me, and leave comments!

~TJ

stock simulators

Stock simulators are definitely an easy way to tell if you're getting up there with the pros. Use stock simulators to see how you rand with the s&p500 or to see if you are making profits off of your strategies.

I whole heart-idly recommend using stock simulators before you ever invest real money into stocks. You do not want to dump a bunch of cash, just to see it plummet down a drain. Once you have seen that you are making some money, you might be ready for the real deal.  

I use a few different stock simulators on the web. You can use yahoo finance for one. Virtually place stocks into your portfolio with how many stocks you purchase, at what price, what time, etc. Then the real time keeps up with the stock to see how you are performing. just go to the site, and click "my portfolio" to begin.

another site I like to use is how the market works it is a great site for just starting out.

these are just a couple suggestions. You should run a search and find a stock simulator or virtual trader to find one you like.

how to trade stocks. basics 101

Trading stocks, options, and forex is a big big very big world. There is a lot to learn and if you are a complete beginner than I advise you to please research the hell out of it all. You can lose money if you are not careful.
This blog is in its infancy so to begin I just want you to have a few tips on understanding what kind of trading you really want to accomplish. Once you picked a strategy, research it and make sure its a strategy you want to stick with.

1. Day trading. Day trading is the trading strategy that consists of waking up every morning, (sometimes at the crack of dawn) grabbing your cup of coffee, reading the latest trends, and start trading. You see day traders perform multiple trades throughout the day, sometimes 3 trades a minute, Maybe more, maybe less. The key here is they purchase multiple stocks and trade them on the short term. They won't hold their position very long and sell as soon as they reached a desired profit. The reason they buy so many stocks is to reduce the chance of losers and let the winners ride an up trend. A little tip about when to exit, when you see one stock reach close to a 25% gain, take profit and leave. Here's a tip for your losing stock, if your stock falls below 10% of the starting price, exit and take the loss. That is the beauty of day trading, it is a very stressful strategy, but can yield incredible results. It is not uncommon for a day trader to make over $500 a day...and that is an easy day. On the flip side of that, it is not hard to lose that much a day if you're not careful and patient. The key to this is to not be greedy.
2. Swing traders. Swing traders usually hold their positions for a few days. It is like day trading, but on a longer scale. Here you are looking for more of a trend that will develop in days not minutes. It is easier to use technical analysis with this trading strategy. Look for stocks that you think may rise in the next few days. There is a ton of information on how to identify stocks that will rise. The information is too great for me to go into detail in a short amount of time.

     3.  Long term investors. These are the people that are in it for the long haul. They are not persuaded by simple daily fluctuations. They watch the news regularly to see what is going to happen. If you plan on making good profits with this strategy, you need to invest a good amount of money into blue chip stocks (big companies like apple, ibm, etc) The profit increases on these companies don't rise very much, sometimes only a few dollars a stock a day, if you are lucky that is.

so that's the gist of the basics. There's a lot to cover though, and I plan on covering more every day in this blog.