1. Don't blame the market. You must take responsibility for your financial security and all of your actions.       2. Study and learn all you can. Choose one market to trade, many suggest the Dow Jones futures market, and become an expert in your area.   3. Be prepared for problems. Have a back-up phone ready with your brokers information in case of problems.           4. Have a notepad, pencil and calculator at hand to record trades.   5. Know the days and times when economic data is released.   6. Never let a winning trade turn into a loss. ... [read full story]

All of your trading, buying and selling, revolves around money. Therefore money management is about managing your business and maximizing your stock market trading profits. There are five key elements to good trading money management: 1. Trading Capital For every winner in futures trading there is a loser, this being so, you should consider trading as a battle and to fight the battle you need ammunition. Your trading capital (bank of money) is the ammunition you need to fight, if you run out of ammunition the war is over. You should keep your trading capital completely separate from living expenses, don't trade with the mortgage money. Only trade with money you can afford to lose and don't borrow money to trade ... [read full story]

To be successful with any investment strategy, you have to start out with an investment philosophy that is consistent in substance and one that corresponds not only to the markets you  decide to invest in but your to your personal and individual characteristics as well. What is an Investment Philosophy? An investment philosophy is a logical method of thinking about markets, how the stock exchange system works, how and when you should buy or sell and even the types of mistakes that you believe consistently underlie investor behavior. Most investment strategies are fashioned to capitalize on mistakes caused by some or all investors in pricing stocks. Those errors themselves are determined by far more canonical presumptions about human behavior ... [read full story]

It is pretty apparent to most people who observe people act and react that they do a lot of what they do based on moderately primal and/or emotionally motivated impulses. Many experiments have been conducted to check the impact that primal instincts and emotion-based thinking has on investing and stock market psychology. They have generally proposed that when people are presented with ambiguity their emotions can overtake their logical thinking, guiding them to resist speculative propositions. This raises the challenging hypothesis that people who are less fearful than other people may produce more proficient investors. Modern developments in neuroscience have emphasised exactly how biologically grounded our human brains are to require the quick dollar - and to neglect the risk of losing even more. By studying ... [read full story]

Did you know that income from your employment often helps you to diversify your investment risk? Much of the value in a young private business is the anticipated contribution of the principals of the business over the years ahead. The same applies to employees who allow for the value of their future earnings potential in making financial decisions (for example, in taking out a mortgage): prospective earnings reduce financial risk for any individual. This will have more value for someone who is young than for someone who is old, or for someone who is healthy than for someone whose future earnings are constrained by ill health. It has been recognised for some time that investment strategy should take account of the flexibility provided by future earnings from ... [read full story]

You finally opened your first stock market trading account. You analyzed a long list of stocks and spotted one you want to buy. But wait. First you need to know how to place a trade in the stock market and how to effectively use the different types of market orders you can execute. Basically there are 5 different types of order you need to know about:   Market Order A market order is a request to purchase or sell a stock at the current market price. Market orders are pretty much the standard stock purchase order. One thing to keep in mind with a market order is the fact that you don't control how much you pay for your stock purchase or sale; the ... [read full story]

Some preferred stock issues have a convertible feature that allows holders to exchange their preferred stock for common shares. The conditions and terms of the conversion are set when the preferred stock is first issued. The terms include the conversion ratio, which is the number of common shares the preferred stockholder will get for each preferred share exchanged, and the conversion price of the common stock. Preferred Stock Example For example, Company XYZ issues a new convertible preferred stock that is sold at $100 per share and is convertible into five common shares of XYZ Company. The conversion ratio is therefore 5:1, and the conversion price is $20 per share for the common stock ($100/5 shares). If the market price of the common stock ... [read full story]

A dividend reinvestment plan (DRIP) allows shareholders to reinvest their dividends in additional stock rather than receiving them in cash. These plans are offered directly by companies or through agents acting on behalf of the corporation. In the former case, a company issues new shares in lieu of a cash dividend. You also have the option of purchasing additional shares from the company. The advantage is that you pay no brokerage fees, although some companies charge fees for this service. The other type of plan is offered by agents, such as banks, that collect the dividends and offer additional shares to shareholders who sign up for the plan. The bank pools the cash from dividends and purchases the stock in the secondary market. Investors ... [read full story]