Living Life Abundantly

Plan the Trade and Trade the Plan

Successful stock market trading begins with a winning trading plan. It’s as simple as that. If you develop a well-conceived trading plan to guide your actions in the stock market you will already have the advantage over most of your market competition. Put simply, it gives you the edge you need to win over the long haul when trading the stock market or forex market.

A stock market trading plan will not guarantee your success in the markets, but a good plan will enable you to work methodically toward your stock market trading goals while reviewing on a regular basis what is working and what is not. It will act as a roadmap for your trading journey. It will enable you to respond positively and constructively no matter what happens with your individual trades. And, most importantly, it will help you control the only thing a trader can control: his or her own actions.

Finally,stock market trading is a business. It can be a fascinating and sometimes thrilling business, but in the end it is a business. A trading plan helps you treat it as a business.

Here are some important elements of a trading plan.

1. Why am I trading? What are my goals?

The answers to these questions might seem obvious, but they usually are not. Take some time to ask them of yourself, and seriously consider the answers. You may be surprised by what you learn. And whatever the answers, you will have a clearer picture going forward of what this enterprise means to you, and that will help you survive any rough patches.

2. What markets am I going to trade and why?

It is often best to specialize, especially for beginning stock market traders. Many pros make a great living trading the same stock day every single day for years. Choose a market that is appropriate for your experience level and trading style. Consider other factors such as available margin, volatility and liquidity.

3. What is the concept or philosophy behind your trading methodology?

Your trading system must have a concept behind it. Whether you are a value investor like Warren Buffet or a trend trader like George Soros, you should understand why you are doing what you are doing, how your beliefs about the markets define what you will do as a trader.

4. What will be your specific method?

In other words, specifically how will you execute your trading ideas? Will you buy breakouts or pullbacks? Buy oversold or sell overbought? Or will you use specific technical setups such as moving-average crossovers or another indicator-based strategy? Under exactly what conditions will you enter? When will you know to exit?

5. How much money will you risk on any single trade? On trading in general?

This is critical. Of course, start small. But just as importantly, have a plan in place for how much you will risk, emotions don’t cloud your judgment when the time comes. The key is to find an allocation that doesn’t cause any stress but still makes the trade worthwhile financially. One of the biggest problems with newer traders is that they are trading way too big in relation to their account size. Like when you are forex trading. Trading forex at 100-1 leverage is like introducing your mistress to your wife. Yes, you can do it, but that doesn’t make it a good idea. Normally they don’t get along too well.

6. What will my trading rules be?

This is also critical. Your trading rules include entry and exit rules, rules governing maximum daily, weekly or monthly losses, maximum risk on any given trade, the maximum number of trades per week, etc., etc. These rules enforce discipline and keep you out of trouble. What stock price will enter at, what stock price will I will exit. Be discplined.

7. How will I record and evaluate my trading performance?

Allow me to repeat myself: This is critical. In fact, this might be the most important element of trading for new traders in the stock market. A new stock market trader who evaluates his trades, winners and losers, in an effort to learn what works and what does not, will make quantum leaps forward in terms of ability and profitability. If you have a working trading plan and evaluate every single one of your trades after you have closed it you have already beaten 95% of the competition.

8. What are my rules for managing profits?

What’s the problem with profits? Well, believe it or not there is one, and it’s a serious one. It’s called euphoria, and it clouds the judgment perhaps more than any other emotion related to trading. Start piling up the profits for the first time and it won’t be long before you are convinced you are king of the world. About 30 seconds later you’ll be broke, following a series of unwise and exceedingly risky trades. So have a plan for protecting closed profits when you have reached your goals for the week or the month. Don’t give them all back.

9. How will I reward myself for following my trading plan?

Don’t leave this out. Following your trading plan will bring rewards in the form of profits, but you should also consciously reward yourself for doing so because it is such an important part of successful trading. So if you finish the week or the month (or even the day) without having broken any of your trading rules, find a way to reward yourself. You deserve it. You are in rare company.

If you follow your plan you are improving your chances of becoming sucessful stock market or forex trader.

Happy Trading

About the Author

CFD FX Report is a real time tool for clients with an interest in the trading of stocks, indices and commodities globally.CFDs (Contracts For Differences) are one of the worlds’ fastest growing trading instruments that allows clients to profit from a rising and falling market. The CFD FX Report is a company comprising of expert traders that analyse the market daily and are able to make recommendations for the following day trades based on this analysis.

A well fact amongst the trading community is that 90 percent of investors lose money in futures and Forex tradin! This leaves 10%, which is then broken down to 4-6 percent break even and only 4-6 percent make money.

What Group Are YOU in?

Given the high numbers of clients that are unsuccessful, it is all the more important for investors to approach futures and forex trading in the right manner. So we have put together some rules that hopefully help you become a more successful trader.

Secret 1: Trade with Money you can afford to Lose

Now that you have decided to get involved in trading, sit down and asses how much money am I going to trade, investor, speculate on the market with. I understand that this is trading and therefore there is the chance that I can lose my money.

Secret 2: It’s Not how many trades: Do not OVERTRADE

So many new traders come to the market thinking, I am going to pick 8 winners out of 10 and make all of this money. Well it is possible to pick more winners but still lose on the market. Why because of risk and money management, so always put in equal amounts per trade. Eg: if you have $20,000 to trade, break it up into $2,000 trades, this will help with you staying in much longer and increasing your success to become a successful or a full time trader.

Secret 3: Run with the profits, and cut those losers.

If a trade goes against you, remember to cut it. No one can pick the market 100% of the time, so don’t think you are different. If the trade is going the wrong way cut it. Re look at the trade, there is going to be plenty more. Once they start going up, let them go, who knows how high they go. Remember always use trailing stop losses.

Secret 4: Feel Like you can’t pick your nose- Have a Break

It can be possible that you are just not picking the market right or there are strange market conditions if this is the case take a break. Walk away and then come back and look again.

Secret 5: Work like an Egyptian build pyramids

As the market moves up and you are long much earlier, you must learn not to double up your positions. Instead, reduce your positions each time you add to a position. If at first you had 10 contracts, the second should not be more than 5-6 contracts and the third should be 50% of your second (i.e. 3 contracts). An upside down pyramid will be top heavy and could wipe out all your hard-earned profits should the market reverse.

Secret 6 : Don’t Double Down- It just compounds losses

If start to add to a losing position by averaging down this is going to be very dangerous. Remember you are investing with “margin”. The contract is not yours; you merely paid a percentage of the total value. Averaging a losing position is equivalent to not admitting your mistakes, that you were wrong in the first place. Successful traders cut their losses short and realize that you can’t get 100% of winning trades. We all try, but we can’t. So cut losses.

Secret 7: WHO wants to be a millionaire? Don’t Put it all in One Trade

Use risk and money management to protect your capital, divide your trading capital into 10 equal parts and never lose more than 10 percent on one trade. If you lost the first trade, you still have nine more opportunities to be right. Putting all your capital on one trade is suicidal and you will go down.

Secret 8: NEVER MEET MARGIN CALLS – CUT THE $hit- Saves you Money

When you are wrong about the market, get out, admit it and move on. Once you start thinking, very often prices will go against your position, further triggering a margin call from your broker. A margin call simply means that you are wrong in the market and your position should be closed out. Margin calls are made because people do not want to admit being wrong and take a loss; they hope the market will eventually go in their direction and that they will get there money back. It will come back, I am not wrong. Yes you are.. Get out. To avoid this mistake, you should never meet margin calls. Just cut your losses and “get the hell out”.

Secret 9: Transfer Profits

Probably no more than 1% of traders have a rule to take profits out of their trading account. The few wise investors I know have bought their house, a car or simply put part of their winnings into a fixed deposit account, or into some long term shares, otherwise the chances are high that they may lose them all back.

Secret 10: James Blunt knows- Baby because I’ve got a plan Make a Plan

Lack of planning can only result in no plan, and without a plan you are gambling. Look at getting advice, from stock market reports, Great Broker look finding a great stock broker, use this site to see who they recommend.

HELP HINTS: Most traders should listen to the Kenny Rogers song The Gambler, there are aspects of that song that can learn from, mainly, know when to hold them, know when to fold them, and know when to ‘cut’ RUN

1. Know when and at what price you are going to enter the market. 2. Know how much money you are going to risk on each and every trade. 3. Know when and at what price you are going to get out when you are wrong. 4. Know when and at what price you are going to take your profits if you are right. 5. Know how much money you are going to make if you are right. 6. Have a safety stop in case the market does the unexpected. 7. Have an approximate idea of when the market should meet your objectives or when it should begin to make a move; and if it has not done so, get out.

FINAL WRAP UP

One of the most important things to take away are set a plan, has your risk and money management plan in front of you and stick to it. If you have that plan and it doesn’t work, re plan, that’s why if you start small you can soon build up to be whatever trader you want to be.

Happy Trading

Online brokers take an important role to play when you open an online trading account. Every broker can offer different services and features. You primary research all the online brokers to find the optimum broker to meet your needs. I have listed a large number of online brokers and placed their information for you to read in one easy-to-read webpage. This is a free, “no-cost to you” service for our valued reviewers and can be found on this link: Best Online Brokers or you can email [email protected]

What to search for in an online broker.

Brokerage House rates – this is the value at which you are charged for buying or selling through your online account. These rates are usually charged based on a sliding scale. The more units you purchase in a single transaction, the less the “cost per unit” you will pay. The correct sliding scale can vary and may sometimes be negotiable for larger buys. Comparability each broker and read the fine print within contracts. Selection the special that best meets your buying and selling style.

History fees – Look for sealed fees in account contracts within the terms and conditions. I of one broker who requires an extra $10 to transfer money out of an account “quickly” as against withdrawing money normally. Hardly a fairly fee, I’d say. All fees should be listed in the terms and conditions listed in opening an account.

Phone access – Online services can go down during hours of service. Gaps to broadband services, power outages and computer problems can stop you from accessing information you need at critical points. This is why you must experience phone access to your online broker. Do not even consider using an online broker if they do not provide phone access.

Access to your money – I opt making instant access to my money firm though it is held in a cash account by the broker. Most brokers will have a cash account facility that is linked to your trading account. My account is linked to a MasterCard account, which means I can access that money anytime through any ATM or make purchases as I would normally using a MasterCard. Don’t be misled into thinking you must only have a separate cash holding account with the online broker. There are lots of options open to you as a client and good online brokers will provide several options for your cash holding account.

Extra benefits – attempt out those brokers that give you extra inducements to open an account with them. Some offer a limited free brokerage period. Others will offer free reports on the markets you are interested in. These bonus offers can help you getting you account set and setup a profitable trading account. For more information on finding the best online stock broker feel free to visit our website.

The CFD FX REPORT is the real time traders tool, that gives you daily trading ideas, stock market and forex education.

This is the decision that can quiet often get overlooked, the entry decision. The other big decisions in trading and investing, such as how much to trade, or what your exit plan is, is the timing right etc.

But the truth is that whether you’re a trader the entry decision is crucial as without this decisions the other decisions cannot take place.

It is quiet often seen that new traders often worry about their first entry point, trying to make it perfect and there are some important points to be considered when you’re entering into a trade. It is therefore crucial to take a glance at this often overlooked subject.

Which brings to another important point, what platform are you looking to enter the trade through? The CFD FX REPORT has recently researched the CFD an Forex Brokers, looking carefully at the subject what company gives the best fill prices, no slippage to find out more visit the website or if you are looking for a forex broker or CFD provider email them at [email protected]

IT IS RIGHT TO ENTER:

Now for the bad news. Most traders believe there is no perfect entry point signal when it comes to trading. Sound Strange.

But there are certain things things to look for to help guide you towards the correct time. So lets take a look at the simple market rules.

Dust OFF the Charts:

You can base your entry decision using technical analysis, what this can do is increase your chances of entering the correct trade as the best time. It can be benefical to look at the sectors and what sectors are performing the best? Is your favourite trading company in a strong sector? Is the overall sector performing?

Most great companies belongs to a great sector, because it is very rare that a company’s stock price will move in the opposite direction of its overall sector for an extended period of time. They tend to follow one and other.

In an nutshell, you should use technical analysis to follow the underlying trend for your stock that you are looking to trade, especially when entering. The underlying trend is the most important consideration when entering a trade at the correct time.

Remember the old saying, Trend is your Friend.

Listen to the Facts-

Make sure it is very simple. Do not over complicate it.

Keeping it simply, is often the best strategy. How often do hear it . Thorough research, an understanding of what you want from your trades and a commitment to your trading strategy is so important when it come to trading and more importantly making money from it- but quiet often we want to make it seem difficult. Simple is simply the best.

Try not to over complicate it, why It’s no good trying to base a decision looking at numerous indicators crossing each other at various angles, changing colours, and a host of other useless information.

Of course, employ a technical analysis of the company in making your decision, but there is no need to go overboad.

After all, trading plans are easier to follow if they are simple.

If you are a long term trader is it not just timing the market, in this instance it is time in the market.

Remember use your rules, make it simple, and the profits should follow

Happy Trading

What did we learn from 2008? If there’s one that we have all learnt from 2008 is that the unexpected can happen. Who would have predicted a 40% fall on most major indexes? Now well most people, but at the start of the year? Not Many

The unexpected happens more than people think? No matter if we are in a raging bull market, or the bears have come out of the woods, we are in the stock market and the unexpected happens. Maybe that’s what we love about the stock market.

The Best traders will always work on the worst case scenario, why, it helps with the risk versus return, therefore increasing our ratio of success.

OBESSION, IT CAN BE A COSTLY EXCERSIE.

When we are trading the market there is always the unexpected happening, terrorism, rate cuts, higher than expected jobless claims, talk of recession, war, companies collapse. This has just been 2008. The list can be endless. Now there is no need to pack everything up and go and hide, but we have to factor in some risk, why to protect our capital.

Without some level of risk management we would be all billionaires.

If you’re holding a stocks or forex, you should be aware of the impact on your portfolio if the company goes into liquidation, what will happen to my money . This is why it is so important that we use stop losses, and where possible guaranteed stop losses, why it helps to protect our capital.

Now if you are looking for a forex broker that uses guaranteed stops then the CFD FX REPORT has recently researched brokers and they have found forex brokers that offer these stops, either visit there website or email [email protected] for more information on who they recommend.

Stock Market will crash, 1987, 1997, the IT bubble of 2000 and now 2008 and maybe 2009.

I am okay, these things don’t happen to me.That’s the way hide your head in the sand

Research has proven that the financial markets are subject to these events, and sometimes it impacts these greater than our lives. The reason that markets become so volatile is human emotion, as when the unexpected happens people will run for cover. When fear is present, people become fearful.

By us preparing for the worst we are in fact protecting ourselves for the future, some of these events don’t happen very often but when they do happen they can have damaging effects. These types of events only happen every so often, and quiet often we can have better times, hence why if we prepare for the worst when the great times come we are ready to make the best of these situations.

Happy Trading

What is the Singapore Stock Exchange (SGX?)

The SGX is Asia-Pacific’s first demutualised and integrated securities and derivatives exchange. The SGX was inaugurated on 1 December 1999, following the merger of two established and well-respected financial institutions – the Stock Exchange of Singapore (SES) and the Singapore International Monetary Exchange (SIMEX).

On 23 November 2000, SGX became the first exchange in Asia-Pacific to be listed via a public offer and a private placement. Listed on our own bourse, the SGX stock is a component of benchmark indices such as the MSCI Singapore Free Index and the Straits Times Index.

Home to Singapore’s leading listed companies, SGX is also at the forefront of exchanges globally in attracting international issuers and is rapidly emerging as Asia’s offshore risk management centre for international derivatives.

Which is making some Singapore companies look very attractive for overseas investments, which gives them a positive outlook for the future.

TRADING OPPORTUNITIES

It is reported that Singapore trades the 5th largest amount of Forex every day, for such small population this demonstrates the money in singapore. Which has seen a new wave of educational companies and Forex Companies opening up across Singapore, so who is highly recommended FOREX BROKERS the CFD FX REPORT recently looked at these brokers, so feel free to contact them if you are looking for a broker and they maybe able to point you in the right direction, email [email protected]

The Stock Market is now seeing a wave of CFD (contracts for difference) traders and brokers in Singapore. With the recent downturn in the global and local markets, the CFD traders have been doing quiet well as they have the ease of being able to go short using CFDs.

So who is the best CFD BROKERSin Singapore.the CFD FX REPORT recently looked at these brokers, so feel free to contact them if you are looking for a broker and they maybe able to point you in the right direction, email [email protected]

So it maybe just the time to start to look at trading in Singapore, or from Singapore.

Happy Trading!

Once new traders reach a certain level of proficiency in market analysis and trade execution the majority of their trading mistakes generally fall into two categories: trading psychology and trend-relativity errors. The first is an issue of self-control. The latter refers to an equally common problem: often a trade will look beautiful on one chart (in one time frame), but ill-advised at best on another chart (another time frame).

A market that looks like it is beginning an uptrend in the daily time frame, for example, may be only pulling back into resistance on the weekly chart, where the momentum and trend are down. The problem is magnified even further with intraday charts, where trends in multiple time frames often conflict with each other.

To combat this problem, trader and trading coach Alexander Elder invented the Triple Screen System, which he outlined in his now-classic book Trading for a Living. (Buy it. Read it. Study it.) The idea of the Triple Screen Trading System is based on the concept that the market moves in waves of energy, and every larger wave consists of smaller ones, which themselves consist of even smaller waves. To trade successfully a trader should choose to enter the market the moment when the waves are all moving in the same direction. This is when all of the market energy is aligned, and your chances of success are much greater.

If you are trading the daily chart, for example, you don’t want to consider only the daily chart, because you would only be getting a limited picture of what is going on with that market. You need to study the weekly chart also. And you need to study the hourly chart when the daily chart indicates it might be time to enter or exit the trade, or you risk a greater chance of being stopped out with a loss.

The triple screen trading system requires that the chart for the long-term trend be examined first. This ensures that the trade follows the tide of the long-term trend while allowing for entrance into trades at times when the market moves briefly against the trend. The best buying opportunities occur when a rising market makes a brief decline; the best shorting opportunities are found when a falling market rallies. When the monthly trend is upward, weekly declines represent buying opportunities. Hourly rallies provide opportunities to short when the daily trend is downward.

First Screen – Market Tide

The first screen is the highest time frame you will use. Most stock swing traders use the daily chart to find trades. In their case, the weekly chart would serve as the first screen. The first screen sets the overall market direction, or trend. The market tide, if you will. Always swim with the tide. Experienced surfers will tell you you’ll catch better waves when surfing with the tide.

Second Screen – Market Wave

For most traders the daily chart would serve as the second screen. The idea is generally to catch a ride on any wave in this time frame when it moves in the direction of the tide, or weekly trend. Your chances of catching a nice, long and smooth ride under these conditions are much more favorable than if you are swimming against the greater tide.

Third Screen – Market Ripples

This time frame identifies the short-term frame and is used primarily for executing entries and exits. This allows you to enter with more precision, enabling you to use tighter stops, while increasing the chance that the trade will move immediately in your favor.

Markets cycle through the same technical patterns in virtually every time frame, whether a monthly chart or a 1-minute chart. You can use these patterns or indicators on the third screen to execute trades that look good on the second screen (and are aligned, of course, with the trend on the first screen).

Elder recommends using time frames that are roughly 5 times higher than the time frames below it. The hourly time frame generally works for the daily chart, and the daily chart for the weekly. For intraday charts, for example, one might use the one-minute, five-minute and 30-minute charts. For charts of FX pairs which trade 24-hours a day, four-hour charts are commonly used to execute trades made from the daily chart.

Let’s look at an example using the GBP/JPY pair. This pair began a strong weekly downtrend in August and then pulled back into its 21-ema on the daily chart in October. At this point, having noted the weekly downtrend, we would be looking to short any rallies on the daily chart, that is any moves against the prevailing tide. When the daily chart reaches the area where we think resistance would be found, we turn to the 4-hour chart to look for a reversal in that time frame and to enter our short position.

CFD FX Report is a real time tool for clients with an interest in the trading of stocks, indices and commodities globally.CFDs (Contracts For Differences) are one of the worlds’ fastest growing trading instruments that allows clients to profit from a rising and falling market. The CFD FX Report is a company comprising of expert traders that analyse the market daily and are able to make recommendations for the following day trades based on this analysis. The CFD FX Report is released everyday at 6.30 p.m. (Singapore time) for review by the clients for the next trading day. We provide sms and email service for our trade ideas as well as full member support. The trading tool that traders needs. Free 1 week trial

The legendary commodities trader Ed Seykota, who turned $5,000 into $15 million over a period of 12 years, was teaching a course in technical trading to a college class many years ago when he decided to conduct an experiment to illustrate to his students the value of money management, or position-sizing – that is, determining how much money you will risk on any single given trade – to the overall success of any trader’s trading plan.

He told his class they were going to compete in a trading contest with each other. Each student would start with a hypothetical equity stake of $100,000. The winner, of course, would be the student with the most money at the end of the contest. However, there was a catch: Each student would buy and sell the same stocks at the same exact time, meaning those stocks would rise or fall exactly the same amount. In fact, Seykota pulled each “stock” out of a hat at the front of the room, and simply told the students whether it had gone up or down and by how much.

How do you conduct a trading contest when everyone buys and sells the exact same stocks at the exact same time? It is all about position-sizing – how much money you are willing to bet on each trade. After Seykota chose each stock, but before he announced whether it had gone up or down, each student was required to write down the amount of money he or she was willing to risk on that trade. They could risk as little or as much as they wanted.

The results of the contest provided quite an education for Seykota’s students – and should be remembered by anyone who puts their hard-earned money at risk in the market. By the end of the contest some of the students had lost their entire hypothetical stake and were completely “broke”. Others had come out about even, making a little money or losing a little money. But a few of the best students – the best traders – had turned that hypothetical $100,000 into over $1 million!

Think about it: Two traders start with the same amount of money and buy and sell the exact same stocks at the exact same time. One goes broke. The other makes 1,000%! Therein lies the secret to survival, and ultimately success, as a trader. All the great traders will tell you that position-sizing is the single most important factor in their success.

So how much should you risk on any single trade – in other words, how much should you be willing to lose? It is best to risk a fixed percentage of your account value on every trade, and not vary that percentage from trade to trade. What that percentage should be depends on several critical factors. The most critical are your win-loss ratio, the size of your average win and the size of your average loss. Given these three numbers, your position sizing will determine whether you live or die as a trader.

The point of position-sizing is to be sure that you don’t break the bank during a losing streak. Even a random coin toss can produce 10 tails consecutively, so make no mistake that even the best traders suffer through losing streaks of equal length. If you risk, say 10% of your account on every trade, and your average loss is 7%, a losing streak of 10 in a row could be devastating. On the other hand, if you are a day trader and your average loss is .5%, you can risk more money on each trade without worrying about a losing streak taking you out of the game.

Seykota says he never risks more than 5% of his account on any single trade. Many other highly successful traders think risking anything more than 3% of your account on a single trade makes you a “cowboy”. A good starting point for beginning traders is probably 1% of your account. The added advantage of lower risk for beginners is that it helps minimize the emotions that often interfere with good trading.

For a detailed discussion of position-sizing, we highly recommend Van Tharp’s book “Trade Your Way to Financial Freedom”. An internationally renowned trading coach, Tharp was profiled along with Seykota in “Market Wizards”, Jack Schwager’s classic collection of profiles of some of the most brilliant traders and trading minds of all time.

CFD FX Report is a real time tool for clients with an interest in the trading of stocks, indices and commodities globally.CFDs (Contracts For Differences) are one of the worlds’ fastest growing trading instruments that allows clients to profit from a rising and falling market. The CFD FX Report is a company comprising of expert traders that analyse the market daily and are able to make recommendations for the following day trades based on this analysis. The CFD FX Report is released everyday at 6.30 p.m. (Singapore time) for review by the clients for the next trading day. We provide sms and email service for our trade ideas as well as full member support. The trading tool that traders needs. Free 1 week trial