Trading in the financial markets, whether it be the Stock Market; the Commodities Market; the Futures Market; the Forex Market; or even the Options Market; is taking big risks on your hard-earned money.

You have to treat trading as a serious business whether you are trading full-time or part-time if you are ever going to succeed and hold on to your profits in the long run.

Yes, you heard me right.  You have to plan and manage it like a brick and mortar business. 

There is no other way to succeed in trading or speculations if you are not going to give the due respect that Mr. Market deserves.  If you don’t respect the Market, the market will not give you the reciprocal respect, in terms of taking money out of the markets and hold on to them.

Once you have this proper mindset, we can move on to other important components that make up your trading business.

Trading Plan

The first thing you need to do before you start a business is to have a Business Plan.  In this case, it is called a Trading Plan.

Now, this is the place to set your Goals that you want to achieve.  Be as specific as possible while being not to easily or impossible to achieve.  Set yourself a goal that is challenging to you without it being too big a goal.

Now, with your goal set, you have to break down this goal into smaller components of actions that will lead to achieving your goal eventually.  

This is your action plan.  Be detail and realistic.  If you are working full-time and you can’t always look at the market every minute, don’t put an action that requires you to monitor your trading positions every moment.  You get the idea.

Ok, you have set your plans, what next?

Trading System

In order to survive and prosper in the long run trading in the markets, you need to be consistent in your actions in the buying or selling of your market products, stocks as an example. 

You will also need a measure of what actions are right and which are mistakes.  Believe me, without such a standardized and formalized measure, you will always think all your actions are right, even when you are losing money!  That’s the default optimistic human nature in control.

What you need can actually be found in a System.  It is normally called a Trading System.  A Trading System consists of Setup, Entry, Exit and Money Management strategies. 

A Setup is a definitive set of patterns, ratios or conditions that you are looking out for when trading. 

An Entry is the actual point where you are to “enter” into the markets, be it a “Buy” or a “Short Sell”.

An Exit is as the label implies, the actually point or conditions when you should square-off/close your open trading positions.  It could either be a profit-taking exit or a loss cutting exit.

Money Management or more specifically called the Position Sizing strategies defines and answers the question of “how much” to buy or sell in entries or exits.  Contrary to common beliefs, this is actually the most important component of a Trading System.  It can determine whether you can make it your trading career.

The importance of a Trading System cannot be emphasized more.  You need a Trading System to perform consistently according to the changing markets as well as a guidance to tell you when your actions are right and when you are in great risk and danger.

There are two ways that you can have a Trading System.  You can either design it yourself if you have the vast amount of knowledge in the trading field required in designing your very own trading system which takes enormous effort and a long and tedious total commitment of your time, or you can order one such Professional Trading System that has been proven to have a win-rate of 71.9%, as tested by an internationally renowned third-party vendor as well as my own experience using it. 

Let’s take a look at what is required in designing such a Trading System mentioned above.

System Development

Firstly, you will need to determine how much time you are willing to spend researching the market as well as staring in front of your market price quotes.  This will determine what type of trading styles you are comfortable in. 

Decide whether you are going to do Day Trading, which requires your involvement in the market every minute; Swing Trading, where your open trades last from a day to a few days; Position Trading, where your open trades last anything from a few days to a couple of weeks; Long-Term Investing/Speculating which has the most minimal time requirement where your trades can last from months to years.  This is also the most difficult if you are going to watch the markets frequently and you are going to require huge amount of work and market data in order to test out your concepts.

Personally, I prefer Position Trading as it fits my time and activity requirements.  It keeps me busy enough yet at a relaxed pace while having ample data for constant refinements and testing of my concepts. 

I spoke of refinements of the Trading System.  Yes, that is required especially for new initial Trading Systems.  You need to go through a series of cycles of refinement and optimization of your newly developed Trading System whilst it is being tested in the markets in real life conditions, with your precious money at stake.

I am getting ahead of myself here.  Before we even think about refinements, there are many more things involved in designing and developing a Trading System.  Let us go back to the discussion on System development.

Once you have decided which Trading Style you are comfortable with, you will need to determine how you are going to carry such a style.  There are basically 3 categories of Trading Methods.  They are Technical Analysis, Fundamental Analysis and Intuitive or Mental Analysis.  These methods can be used in purity or can also be used in combinations.

Technical Analysis deals with Technical Charts and Graphs.  There are numerous technical indicators out there for you to design your System.  In fact, there are so many different formulas and variety that you may be overloaded initially.  Nevertheless, if you spend enough time reading technical books and about these indicators, you will be able to discern them into various categories like Oscillators, Moving Averages, Trends, Patterns, and Divergences.  Pick a number of these indicators to design your Trading System.

Fundamental Analysis deals with the financial ratios of a company as well as the fundamental conditions of a company or market.  You make use of such information in order to design a consistent and reliable Trading System.  You put reality of the market situation aspect into you Trading System.

Intuitive or Mental Analysis is the discretionary perspective of looking at the markets.  You make your own judgment from your subconscious observations or your past experience and do not involve mechanical formulas or fixed visual patterns in your analysis.  Though not all such intuitive insights can be formalized into your Trading System, there is no doubt it can be useful in designing your System.

Once you have designed your Trading Strategies, choose a financial market that you are more interested in.  It can be the Stock Market, the Index Futures Market, the Commodities Market, the Forex Market or the Options Market.

For now, just pick one.  You will have to go through the following steps before you can really confidently trade in your chosen market using your Trading System.  Be sure to make refinements along the way.  They are,

1)      Paper Trading.  Simulate your Trading System like you are trading it with real money.  Test it out using trading software or manually keeping track of it using historical data.  Refine your various System components until you are satisfied with the result, profit in this case.

2)      Trade in small lots/amount.  Once you have passed the Paper Trading step, you are more confident of your Trading System and you can start to actually trade very small amount of stocks or contracts in the market of your choice.  Don’t worry about losing for now.  Instead concentrate on executing your System properly and with discipline.  Further refine your Trading System here again as you will start to see the flaws in your System.  Make sure you test your System again after refinements.  Once you are very confident that your Trading System will make you money consistently, proceed to the next Step.

3)      Initial Actual Trading System trading in normal quantity indicated by your Money Management Strategies.  Make sure you follow with strict discipline in the execution of your trades according to your Trading System.  Be aware of the psychological challenges involved that are against your rules defined in your Trading System.  This is another opportunity to refine your Trading System yet again.  Until you are confident of your Trading System again, you should not rush to start your actual trading career.

4)      Actual normal trading.

Take control of your trading Psychology and adhere to strict discipline in trading your developed and refined Trading System.

So, as you can see, very much is involved in the designing and development of a Trading System.  I have personally spent 9 months just to design and develop the Natural Behavioural Cycle Trading System.  I have also made numerous refinements on it over many years of actual experience trading it.

I would suggest taking the easy way out and trying out this Proven 71.9% win-rate Complete Trading System, where everything has been researched, designed, developed and tested for you here,

http://www.howtotradeforaliving.com/order.php

Reviewing: INO TV’s Online Trading Education 

Learning in the financial industry is a lifelong process. The complexity of the global marketplace and the level of competition amongst traders and investors means on-going education is not an option but rather a necessity. INO TV has given me the online trading education I need to maintain and grow my skills. If you have been investing or trading for a while no doubt you have seen symposiums or other educational programs you have wanted to visit but couldn’t because they were too pricy or offered at the wrong time. In some circumstances you may be interested in learning a specific subject but cannot find a great resource. On INO TV you will find in excess of 1000 hours of online trading education resources in their digital library. INO TV is audio and video online trading education available 24 hours a day.

The educational material of INO TV is categorized into eleven channels tailored to a traders or investors interest. The Channels are:

Channel 1 – Beginners  

Channel 2 – Charts & Analysis 

Channel 3 – Currency Trading 

Channel 4 – Day Trading 

Channel 5 – Futures/Commodities 

Channel 6 – Money Management 

Channel 7 – Options Trading 

Channel 8 – Market Psychology 

Channel 9 – Spread Trading 

Channel 10 – Stock Trading 

Channel 11 – Trading Systems

Regardless of your motivation in online trading education its likely INO TV has programs for you. A search tool is incorporated into INO TV to help traders and investors find the material that interests them the most. In case you have a question or a problem their toll free support number is accessible to answer your questions. One quarterly or annual enrollement entitles you to their entire library and there are no hidden fees. If you want to evaluate INO TV for at no cost there are spotlighted videos you can watch to give you an idea of what INO TV has to offer. I would also encourage you to visit the INO TV Premium page and browse through the channels to see what’s available. This will give you an idea of the richness and depth of online trading education available on INO TV.

Learn about Free INO Online Trading Education Videos Here

Learn about Premium INO Online Trading Education here

Some of the experts I enjoy viewing are John Murphy, Martin Pring, Larry Williams, and Mark Cook but there are a variety of others. At last count I saw 138 professionals online and new programs are being added all the time.

Bottom Line: If online trading education is significantto you INO TV is the greatest resource you will find anywhere.  

www.sealionllc.com

The only consistent notion about stocks is that they are inconsistent. Investors that make decisions based entirely on emotional ‘gut feelings’ or make decisions based on desperation will only do about as well as they will at the casino. Planned, precise, and well thought out decisions make for strong trades. Online stock trading need not be a random roll of the dice.

Regardless of any pre-planned strategy with which an investor approaches the online trading world, there are two basic facets of any strategy. All trading is based on maximizing the profits while minimizing the risks. These two factors also tend to cancel each other out. The greatest risks usually turn the greatest profits while the smallest risks typically turn tiny but long term profits. This means that an individual investor needs to find their individual risk tolerance while building their strategy.

There will be losses. There’s no strategy in the world that can guarantee online stock trading without loss. Loss is part of the game no matter how serious the player. The most successful online stock traders in the world have one basic rule implemented into their trading strategy. They all have their stock portfolio divided into percentages. They have a predetermined percentage seeking high risk / high return stocks, a predetermined percentage seeking medium risk / medium return stocks, and a predetermined percentage seeking low risk / low return stocks. The predetermined percentages vary from investor to investor and some have the bulk of their percentages in low risk while others have the bulk in medium risk. Placing the bulk of the available funds in high risk stocks is a sign of either gambling or desperation, neither of which can be considered a very sound strategy.

The reason that these percentages are predetermined for the vast majority of successful online investors is to help maintain unemotional investing. If there is a set proportion of the available funds doing predetermined job, then the emotional highs and lows will not deflect the investor from their pre-determined strategy. Online stock trading can become emotional, and without discipline traders start making bad decisions based on their emotions. Keeping the emotion-led trading to a minimum is very difficult for many online traders, but it is a discipline that must be acquired.

Every individual investor’s strategy will vary to suit their needs, their risk tolerance, and their individual style. However, having a basic strategy before the account is even opened is a vital key to online stock trading. Investors without a strategy tend to lose more often than they succeed. Every individual investor’s emotional strings are different, and some will need firmer, more complicated rules before setting off into the online investment world. Others will do fine with a basic outline. While learning the ropes, it is best to dabble with small sums of money rather than place large chunks of money into any stock, no matter how good it seems. One of the most significant pros to online stock trading is the investor’s ability to go through the motions on paper without ever spending a dime while they keep an eye on the stocks they believe they are interested in. Over time, online stock trading can become a very healthy form of secondary or even primary income, but the investor has to start with a plan.

Bill Stewart is a work-at-home geek specialising in online options trading. For more information visit his website Online Trading Stock And Option

Knowing the difference between these two can help the average investor diversify their portfolio by learning about stock options and opening up a brand new investment avenue and income stream.

Stocks Versus Options

By definition, stocks are actually shares of a particular company that are bought and sold at market price, a price which is in constant fluctuation. You have the liberty to sell your shares or buy more stock anytime the market is open and someone is willing to trade the stock in question. If you happen to own shares of stock from a company, you are entitled to certain rights, which includes a profit share from earnings.

A stock option on the other hand, is not the stock or share of the company itself, it is actually the rights for a certain stock. A stock option allows you buy rights (call options) and sell rights (put options) to a company stock at a set price in a certain time period. The holder of a stock option However, you do not gain the profits from the company itself.

Take note that in doing transactions for stock options, there will always be a buyer and a seller, and this may not always hold true when compared to stocks. When you sell stock options, you are actually creating a certain degree of security for the company as well as for yourself. In this way, the parties involved can make sure that money is actually made to the frequent trade that happens.

Comparing The Benefits

In comparing the benefits of trading stocks and stock options, many experts would claim that stock options might be a promising gamble for companies and individuals, especially if you have adequate experience in the trading game and can substantially use very good strategies to survive. However, the same results might not be expected if you are only a beginner.

What makes a lot of experts prefer options trading is usually because in this particular trade, no matter what would happen to the underlying security, an option buyer cannot lose more than that of the initial price paid for the rights. Therefore, in trading options, there are fewer risks involved on the part of the buyer, especially when it comes to the possibility of losing a lot of money. And it may even give promises of profitable gains.

 But on the other hand, the seller may experience greater risks. There may be a possibility that one has to deliver or take deliveries of the stock shares. Unless the option is actually covered by a different option, then the seller may end up losing much more than the stock option’s original price.

And so, if you are not well skilled and knowledgeable about how you can prevent severe losses, then the best way for you to play the stocks trading game is to stick with the more traditional trading of stocks as this can be more straightforward and less confusing to beginning investors.

However, if you believe that you can manage options trading, you may garner promising positive results. Just make sure that you take the time to understand concepts and strategies behind stock options before you actually start trading.

More articles, tips, free ebooks and software for investing can be found at http://www.stockmarketbot.com

However, trading stock options can be a great way to leverage your investment. For a small fee, with a defined risk, you can control a large amount of stock. The primary thing to remember, options are a wasting asset. When expiration Friday arrives, the option expires. If the option is in the money, you can either use it purchase the stock or redeem the option for the premium value. If the option expires out of the money, you have lost your investment.

Most people try to guess which direction the market is going to move, will it go up or will it go down. If they guess wrong, they lose money. More people trade with call options instead of put options, because they understand going long on the market but do not understand going short.

The vast majority of traders do not utilize trading strategies such as straddles or strangles, much less condors or butterflies. As a result, they are taking on a lot more risk, with less chance of making a profit.

If the beginning trader would take the time to learn some of the various trading strategies, they would greatly decrease their risk and improve the odds of having winning trades tremendously.

Learning the complex option trading strategies is not that hard. First you learn about the simple puts and calls options. When you understand the basic building blocks, you move on to combining the various strike prices and expiration dates. Even the most complex stock option trading strategy is made up of simple puts and calls.

These strategies will reduce the risk to a much lower level. The down side to these trades is you lower the return on the trade. But if the trade goes bad, the strategy will minimize your loss. If you still have money, you can still keep trading. If you lose all of your capital, you are out of the game.

So the people that say day trading stock options is risky are correct. But if you take these simple steps, then you can lower the risk, and still maintain the leverage that trading options will provide.