Millions of baby-boomers are now reaching retirement age. With the recent meltdown in the markets, many may be wondering what they can do to insure the lifestyle and income they once were planning for. In this article, I give you my favorite retirement income strategies.
First off, if you are still working, you should MAX out any employer-matched plans you may have at work. The closer you are to retirement, the more you should be contributing to these plans. If the markets scare you, then asked about any guaranteed interest option your employer may offer, and put as much as you possibly can in the plan.
Think about it, if your employer matches your contributions 50% or even 25%, where else can you get that kind of instant return on your money? NOWHERE! So, if you are not maxing that thing out (and most folks are not) you really need to start. Even if it means you have to cut back on your lifestyle right now.
Secondly, if you don't have an employer matched fund at work, what other options do they have? If you work for a school system you should look in the benefits of a 403(b) plan.
If you are self-employed, and have not saved anything for retirement, you may think seriously about working a few years for the school system and maxing out the plan.
My favorite retirement vehicle by far is the Roth. Either the Roth IRA and/or Roth 401k. These could well be the best wealth generating tools available for the average person today! In my opinion, many tax advisors, financial planners, and CPAs have given their clients bad advice in this area. I think every man, woman, and child in the US should have one of these accounts!
With a Roth, you can't take a full tax deduction in the year you contribute to it, as you can with a traditional plan. BUT, when you pull the money out, it is all tax-free with a Roth! So what would you rather have, a tax-deduction now, or tax-free income for life?
In a truly self-directed plan (again, I prefer the Roth if you qualify) you can invest money in the market, in real estate, in a business, and many other areas. With your plan at work, you normally have limited choices. Now you may not have a desire to be the next Donald Trumph, but you may get motivated to do a real estate deal or two if it could quickly beef up your retirement account. Remember, if that is a Roth account, all the growth is Tax-Free!
I've taught hundreds of folks how to trade the index, which is my next favorite place to generate retirement income. You can also do that inside of a Roth for tax-free cash flow! With a little practice and patience, you should be able to get good at it. If you do, you will have an unlimited retirement plan and income that no one can take away.
If you don't want to keep all of your retirement money solely in US dollars (not a bad idea these days with the debt the US is growing), look for investments with international interests. You don't have to trade currency to do it. For instance, any company that has worldwide interests (and most do these days) benefits from the currency market anyway. Think about McDonald's and the stores they have all over the globe. (just don't be fully invested in any one stock or market - and don't eat all your meals at Micky D's if you want to enjoy retirement long).
Two other areas to look at are ETFs, and MLPs. Both of these vehicles offer great income and earnings potential. You can even play foreign currency or about anything else you like these days inside of an ETF. This now makes it a whole lot easier to diversify.
With a little research and action on your part, you should have no problem creating the income and lifestyle you planned for in your golden years - even if you are already there!
Get my Free Audio Report on how to secure your financial future and retirement NOW.
Showing posts with label investor education. Show all posts
Showing posts with label investor education. Show all posts
Sunday, November 15, 2009
Thursday, October 8, 2009
Index Investing - Your Own Hedge Fund
With the Bernie Madoff fiasco, some investors feel that any hedge fund is just a scam. It is easy to see why you might feel that way. Savvy investors know that there are still some great hedge fund managers out there, but how do you find them?
In this article we want to talk a little about creating your own hedge fund using Index Investing.
When you invest in an index you are just wanting movement of that index, such as the dow, mini dow, S&P, emini S&P, Russell, mini Russell
Millionaires Are Made During Depressions and Recessions, and there are savvy investors that are making tons of money right now in the markets (and with Real Estate).
To create your own hedge, you need to learn how to make money when the market is dropping. Did you know that 80 percent of all investors have not plan for capitalizing on market drops? That is a MAJOR disadvantage, don't you think!
To really HEDGE anything you need to be able to earn money no matter what the market is doing. That is what the Wall Street insiders do, and that is what YOU should be doing too.
Stock Trading Vs. Index Investing
Most people who invest in anything look to the stock market. That's only natural, that is what you hear the most about. You have no doubt also heard things like "Stay away from futures or you will lose your shirt". My response to that is, look how many stock investors lost their shirts with the meltdown. Then many pulled their money out of the market (sadly - many had their cash in mutual funds - we like ETFs MUCH better) and missed the ride back up.
Wall Street hopes you get out at the bottom, and they want you to buy at the top. So, you are getting out when they are getting in, and when you are getting in, they are exiting!
It can be tough for most folks to make money with stocks when the market is tanking. Finding a company that you will bet against (by shorting their stock), in my opinion is harder than finding a good company to ride up with.
There are so many ways that these big corporations can cook the books. That should be more obvious after the melt down than ever.
We like trading the index, cause it is just as easy to short and ride it down as it is to ride it up. In fact, it is even easier on the way down because prices nearly always drop faster than they rise. It took Microsoft YEARS to reach is pinnacle, but only a few months to fall down to earth (with must of that drop coming within a couple weeks). The overall index acts the same way, only within minutes or sometimes seconds.
In my opinion, learning to trade an index, either long or short term is one of the best ways to hedge.
In this article we want to talk a little about creating your own hedge fund using Index Investing.
When you invest in an index you are just wanting movement of that index, such as the dow, mini dow, S&P, emini S&P, Russell, mini Russell
Millionaires Are Made During Depressions and Recessions, and there are savvy investors that are making tons of money right now in the markets (and with Real Estate).
To create your own hedge, you need to learn how to make money when the market is dropping. Did you know that 80 percent of all investors have not plan for capitalizing on market drops? That is a MAJOR disadvantage, don't you think!
To really HEDGE anything you need to be able to earn money no matter what the market is doing. That is what the Wall Street insiders do, and that is what YOU should be doing too.
Stock Trading Vs. Index Investing
Most people who invest in anything look to the stock market. That's only natural, that is what you hear the most about. You have no doubt also heard things like "Stay away from futures or you will lose your shirt". My response to that is, look how many stock investors lost their shirts with the meltdown. Then many pulled their money out of the market (sadly - many had their cash in mutual funds - we like ETFs MUCH better) and missed the ride back up.
Wall Street hopes you get out at the bottom, and they want you to buy at the top. So, you are getting out when they are getting in, and when you are getting in, they are exiting!
It can be tough for most folks to make money with stocks when the market is tanking. Finding a company that you will bet against (by shorting their stock), in my opinion is harder than finding a good company to ride up with.
There are so many ways that these big corporations can cook the books. That should be more obvious after the melt down than ever.
We like trading the index, cause it is just as easy to short and ride it down as it is to ride it up. In fact, it is even easier on the way down because prices nearly always drop faster than they rise. It took Microsoft YEARS to reach is pinnacle, but only a few months to fall down to earth (with must of that drop coming within a couple weeks). The overall index acts the same way, only within minutes or sometimes seconds.
In my opinion, learning to trade an index, either long or short term is one of the best ways to hedge.
Monday, August 10, 2009
You MUST Manage Your Risks To Win
If you want to stay alive long term as an investor, trader, or even in business, you MUST learn to manage your risk!
In business that might be your expenses, or knowing how much you will spend on advertising (especially with untested sources). You keep track of things so that you don't keep throwing good money after bad. In other words, if you track your advertising results (which you MUST do), and a certain campaign is not working - you scrap it and try something else. For those ad ideas that are working, you keep doing them, and stop when they quit being effective.
For those of us involved in index trading (or any type of market trading for that matter), it is even more simple. We MUST know before we go into a trade, how much we are willing to risk or lose on it to see if it works. Even if we are going to average, we still need to calculate it out. How many times will we average, what is my max loss. Once you know that figure, it may determine how many times you can average (place additional orders to improve your entry point).
The market may change and dictate that we get out early, but it MUST never dictate how big our loss will be. In other words, we NEVER let a small loss turn into a big one. It would be like throwing money away on advertising that does not work.
Most folks (especially those who have been ingrained with the buy and hold mentality) keep holding losing trades until they become catastrophic losses. A huge losing trade that wipes out their account (or 50% or more of it - which is exactly what happened to most stock investors with the mortgage meltdown fiasco).
Learn to keep your losses small and be ready to trade another day. Some traders shut down if they have two losing trades in a row (some days, you are just not in the zone!).
Risk To Reward Ratios
Most "experts" will tell you to calculate the risk-to-reward ratio before you get into a trade or investment. In my opinion, they are almost impossible to calculate. My first rule of trading is that in the market "Anything Can Happen at Any Time". So how will you know what a trade could do or what the potential reward is? Whose formula will you use to calculate it?
I've heard "experts" claim you need at least a 2 to 1, others say a 3 to 1, or even a 5 to 1 or better reward ratio, or you should NEVER even open the trade! That simply means that you should not enter a trade unless you can make double the money you may ultimately lose on it (for a 2 to 1 ratio). While it is a good idea in theory, it would keep me out of a lot of really good trades (for one thing, I know that nobody can be sure what the market will do - anything can and does happen).
While you should be looking for highly probable moves that have the potential to turn into NICE runs, the truth is, you NEVER know what is going to happen. I've seen traders take losses on trades that were once in profit simply because they were holding out until some arbitrary reward ratio was met.
We teach our traders to get into a highly probably move and then lock in some profit and see what happens! Once you have nothing to lose (by locking in some profit), and a HUGE potential upside, you can't really go wrong. As traders we should WANT to be in that position as often as possible. Sometimes we even get our targets out of the way and let the winning trade RUN! Forget about holding onto a trade until some calculated ratio is reached.
On any chart you look at there are floors and ceilings that are easy to see. You must take note of them and trade according to what "might" happen. However, if you lock in profit as soon as you can, you will be way ahead of the guy that is looking for some magical reward ratio.
Calculate How Much You Will Earn
Just as important as calculating your max loss on any one trade, is knowing when to shut down for the day. A daily profit goal can help. It can also help you to formulate your plan for trading.
It would be good if your max loss was less than your daily goal, then one loss would not ruin your day.
Sure, there will be days when you don't reach your goal, but there will be days when you surpass it, because you stuck to your plan, and locked in profit when you had a chance. Many days I have several little trades, and then one nice run and I'm done.
An Advanced Move
This is not for beginners. New traders should get in and take whatever the market is offering by locking in profit as mentioned above. However, once you account size has grown, it opens up more options for you, like the move I'm about to describe.
Let's say your goal is $1,000 a day in your trading. For this example, let's say you are trading the mini-DOW (my favorite index). The mini-Dow is worth $5 per tick. So, if you start with 10 contracts, you would need 20 ticks to get to your goal of a grand for the day (we will ignore the broker commissions since they are really small anyway).
First, you look for the highly probable set up you want. When it appears, you open the trade with 10 contracts. If it moves 20 ticks in your favor, you are done. However, if it moves against you (a back tick), you average up to 20 contracts (by adding 10 more contracts to your trade at a new entry point). Now with 20 open you will need just 10 ticks to get to $1,000. If you average up to 40 you will need just 5 ticks. If you go up to 80 you will need 2.5 ticks.
Again, to pull this move off, you would have to have the DEEP pockets required. You could do the same thing with a $100 daily goal and starting out with 1 contract. In either case you MUST have the risk calculated. At some point you could use averaging to get to your acceptable loss level.
Risk-to-reward traders would probably never do this move. However, if you have the experience, and account size it is fairly easy to do. Some days you could be through in a few seconds.
Whatever style of trading or business is right for you, learn to calculate your max loss on any one deal, and you will be MILES ahead of most folks who never think in these terms. Remember, you MUST manage risk to win at anything!
**********************************************
Doug West has taught hundreds of folks to pull from $100 to $1,000 or more daily from the markets, and you can too. Learn to make short-term trades and you will never have to second-guess the bulls and bears. Just learn to take what it gives you with his simple and easy to understand course on Index Trading
In business that might be your expenses, or knowing how much you will spend on advertising (especially with untested sources). You keep track of things so that you don't keep throwing good money after bad. In other words, if you track your advertising results (which you MUST do), and a certain campaign is not working - you scrap it and try something else. For those ad ideas that are working, you keep doing them, and stop when they quit being effective.
For those of us involved in index trading (or any type of market trading for that matter), it is even more simple. We MUST know before we go into a trade, how much we are willing to risk or lose on it to see if it works. Even if we are going to average, we still need to calculate it out. How many times will we average, what is my max loss. Once you know that figure, it may determine how many times you can average (place additional orders to improve your entry point).
The market may change and dictate that we get out early, but it MUST never dictate how big our loss will be. In other words, we NEVER let a small loss turn into a big one. It would be like throwing money away on advertising that does not work.
Most folks (especially those who have been ingrained with the buy and hold mentality) keep holding losing trades until they become catastrophic losses. A huge losing trade that wipes out their account (or 50% or more of it - which is exactly what happened to most stock investors with the mortgage meltdown fiasco).
Learn to keep your losses small and be ready to trade another day. Some traders shut down if they have two losing trades in a row (some days, you are just not in the zone!).
Risk To Reward Ratios
Most "experts" will tell you to calculate the risk-to-reward ratio before you get into a trade or investment. In my opinion, they are almost impossible to calculate. My first rule of trading is that in the market "Anything Can Happen at Any Time". So how will you know what a trade could do or what the potential reward is? Whose formula will you use to calculate it?
I've heard "experts" claim you need at least a 2 to 1, others say a 3 to 1, or even a 5 to 1 or better reward ratio, or you should NEVER even open the trade! That simply means that you should not enter a trade unless you can make double the money you may ultimately lose on it (for a 2 to 1 ratio). While it is a good idea in theory, it would keep me out of a lot of really good trades (for one thing, I know that nobody can be sure what the market will do - anything can and does happen).
While you should be looking for highly probable moves that have the potential to turn into NICE runs, the truth is, you NEVER know what is going to happen. I've seen traders take losses on trades that were once in profit simply because they were holding out until some arbitrary reward ratio was met.
We teach our traders to get into a highly probably move and then lock in some profit and see what happens! Once you have nothing to lose (by locking in some profit), and a HUGE potential upside, you can't really go wrong. As traders we should WANT to be in that position as often as possible. Sometimes we even get our targets out of the way and let the winning trade RUN! Forget about holding onto a trade until some calculated ratio is reached.
On any chart you look at there are floors and ceilings that are easy to see. You must take note of them and trade according to what "might" happen. However, if you lock in profit as soon as you can, you will be way ahead of the guy that is looking for some magical reward ratio.
Calculate How Much You Will Earn
Just as important as calculating your max loss on any one trade, is knowing when to shut down for the day. A daily profit goal can help. It can also help you to formulate your plan for trading.
It would be good if your max loss was less than your daily goal, then one loss would not ruin your day.
Sure, there will be days when you don't reach your goal, but there will be days when you surpass it, because you stuck to your plan, and locked in profit when you had a chance. Many days I have several little trades, and then one nice run and I'm done.
An Advanced Move
This is not for beginners. New traders should get in and take whatever the market is offering by locking in profit as mentioned above. However, once you account size has grown, it opens up more options for you, like the move I'm about to describe.
Let's say your goal is $1,000 a day in your trading. For this example, let's say you are trading the mini-DOW (my favorite index). The mini-Dow is worth $5 per tick. So, if you start with 10 contracts, you would need 20 ticks to get to your goal of a grand for the day (we will ignore the broker commissions since they are really small anyway).
First, you look for the highly probable set up you want. When it appears, you open the trade with 10 contracts. If it moves 20 ticks in your favor, you are done. However, if it moves against you (a back tick), you average up to 20 contracts (by adding 10 more contracts to your trade at a new entry point). Now with 20 open you will need just 10 ticks to get to $1,000. If you average up to 40 you will need just 5 ticks. If you go up to 80 you will need 2.5 ticks.
Again, to pull this move off, you would have to have the DEEP pockets required. You could do the same thing with a $100 daily goal and starting out with 1 contract. In either case you MUST have the risk calculated. At some point you could use averaging to get to your acceptable loss level.
Risk-to-reward traders would probably never do this move. However, if you have the experience, and account size it is fairly easy to do. Some days you could be through in a few seconds.
Whatever style of trading or business is right for you, learn to calculate your max loss on any one deal, and you will be MILES ahead of most folks who never think in these terms. Remember, you MUST manage risk to win at anything!
**********************************************
Doug West has taught hundreds of folks to pull from $100 to $1,000 or more daily from the markets, and you can too. Learn to make short-term trades and you will never have to second-guess the bulls and bears. Just learn to take what it gives you with his simple and easy to understand course on Index Trading
Tuesday, July 28, 2009
Is the Recession Over?
Newsweek announced yesterday that the Recession is Over! Are they right? Find out in our latest edition of OIO & how to cash in either way. And don't miss our OI Radio show today where you will hear:
The 7 Things You Must Do to Thrive in This Economy
as we interview Mark Monchek of PerformXcellence. To tune in go to:
http://opportunityinvestigator.com
and click on the Radio Show link at the top of the page to listen in Live at Noon EST today - Tuesday the 28th - or to listen to past shows.
Make sure you get a PDF copy of our latest issue of OIO. In it you will find:
* How To Invest in Washington's Biggest Federal Landlord –
and add income to your retirement or portfolio with a HUGE
Upside Potential
* Why Al Gore's Prediction of Climate Change May Happen
Within the Next 24 Months & What you can do to Protect Your
Family Now
* Could The Recession Be Over? Penny Stocks that Could Earn
500% in a few months or less!
* MLP's – Add Income To Your Portfolio with these High-
Paying Stock Alternatives
* Biz Opps that Could Be HUGE in the Months Ahead
* Simple Technique To Cash In No Matter What the Market or Economy Does
($ave $500 IF You Act NOW)
http://opportunityinvestigator.com/recession.html
Don't miss it. Download your copy now at:
http://www.nosecretincome.com/July09.html
That link will redirect you to the pdf file. If you
need help with downloading see:
http://www.kosoma.com/howtodownload.html
Watch a video on signs the recession may be ending HERE
There could be GREAT times ahead for index traders! If you have been considering enrolling in my index course there has never been a better time. For a limited time you can SAVE $500. Visit:
http://opportunityinvestigator.com/recession.html
For details. Have a great day!
The 7 Things You Must Do to Thrive in This Economy
as we interview Mark Monchek of PerformXcellence. To tune in go to:
http://opportunityinvestigator.com
and click on the Radio Show link at the top of the page to listen in Live at Noon EST today - Tuesday the 28th - or to listen to past shows.
Make sure you get a PDF copy of our latest issue of OIO. In it you will find:
* How To Invest in Washington's Biggest Federal Landlord –
and add income to your retirement or portfolio with a HUGE
Upside Potential
* Why Al Gore's Prediction of Climate Change May Happen
Within the Next 24 Months & What you can do to Protect Your
Family Now
* Could The Recession Be Over? Penny Stocks that Could Earn
500% in a few months or less!
* MLP's – Add Income To Your Portfolio with these High-
Paying Stock Alternatives
* Biz Opps that Could Be HUGE in the Months Ahead
* Simple Technique To Cash In No Matter What the Market or Economy Does
($ave $500 IF You Act NOW)
http://opportunityinvestigator.com/recession.html
Don't miss it. Download your copy now at:
http://www.nosecretincome.com/July09.html
That link will redirect you to the pdf file. If you
need help with downloading see:
http://www.kosoma.com/howtodownload.html
Watch a video on signs the recession may be ending HERE
There could be GREAT times ahead for index traders! If you have been considering enrolling in my index course there has never been a better time. For a limited time you can SAVE $500. Visit:
http://opportunityinvestigator.com/recession.html
For details. Have a great day!
Friday, June 26, 2009
Market Timing That Actually Works
Many people look for ways to time their entry back into the market. Even though their timing was lousy on the way out, they are still convinced that they can time their way back in!
Why did so many folks lose retirement funds in their IRA's and 401k's? Because they are still holding fast to the old buy-an-hold strategy.
In watching CNBC this morning I saw an example of the very thing I have been preaching about for years now. Mark Haines and Erin Burnett anchor their show "Squawk on the Street", from the New York Stock Exchange. They are always asking investors and corporate executives if it is safe to go back into the market yet. This morning Erin said something like, "With all these professionals trading and going in and out of the market, how does a regular person like me time their entry into ETFs or stocks? Does the buy and hold strategy even work anymore?"
The answers to her questions are not important here. Her statement reveals a LOT, and is what we have been telling folks for years. The Professionals are "Trading" their money. They don't buy and hold, so why should you?
During the meltdown, they were shorting the market and riding it down. During the rally they were riding it back up. The same thing we were doing as index traders. Yes, there is market timing involved, but not in the sense of "is it safe to get back in yet". That is a foolish game in our opinion. The short daily swings in the market are MUCH easier to predict than the overall long term direction. Even while folks are waiting during a several day rally for the right market timing to get back in, traders are riding it up or down many times on the smaller moves.
Sure, there are many things you could trade, and they all involve timing to some extent or another. In fact, the index trading that we do is all about timing. The big difference is that we are NOT looking for some magic moment to get back in the market and hope it keeps up trending for years to come. We will take whatever the market throws at us. That is market timing that really works. If it changes we can quickly get out and go the other way if we choose to.
You can do the same thing with your IRA, 401k, or other retirement account if you want (we like the Roth, so that all of your trading income can be Tax-Free). Don't wait for the magic moment to get back in, and get your account growing! Pick up some trading skills, and use the type of market timing that really works!
Why did so many folks lose retirement funds in their IRA's and 401k's? Because they are still holding fast to the old buy-an-hold strategy.
In watching CNBC this morning I saw an example of the very thing I have been preaching about for years now. Mark Haines and Erin Burnett anchor their show "Squawk on the Street", from the New York Stock Exchange. They are always asking investors and corporate executives if it is safe to go back into the market yet. This morning Erin said something like, "With all these professionals trading and going in and out of the market, how does a regular person like me time their entry into ETFs or stocks? Does the buy and hold strategy even work anymore?"
The answers to her questions are not important here. Her statement reveals a LOT, and is what we have been telling folks for years. The Professionals are "Trading" their money. They don't buy and hold, so why should you?
During the meltdown, they were shorting the market and riding it down. During the rally they were riding it back up. The same thing we were doing as index traders. Yes, there is market timing involved, but not in the sense of "is it safe to get back in yet". That is a foolish game in our opinion. The short daily swings in the market are MUCH easier to predict than the overall long term direction. Even while folks are waiting during a several day rally for the right market timing to get back in, traders are riding it up or down many times on the smaller moves.
Sure, there are many things you could trade, and they all involve timing to some extent or another. In fact, the index trading that we do is all about timing. The big difference is that we are NOT looking for some magic moment to get back in the market and hope it keeps up trending for years to come. We will take whatever the market throws at us. That is market timing that really works. If it changes we can quickly get out and go the other way if we choose to.
You can do the same thing with your IRA, 401k, or other retirement account if you want (we like the Roth, so that all of your trading income can be Tax-Free). Don't wait for the magic moment to get back in, and get your account growing! Pick up some trading skills, and use the type of market timing that really works!
Monday, June 15, 2009
Timing Your Way Back Into The Market
You hear much on the news these days about when and IF a person should get back into the market. Millions of folks who lost over half of their 401k and other retirement accounts are wondering the same.
My answer to that question is identical to what I was advising before the meltdown - and the answer is simple:
DON'T TRY TO TIME THE MARKET
At least not with your longer term investments anyway. I have been preaching that buy and hold is dead for some time now (yes - even before the big meltdown came). The only exception to this rule might be with MLP's (but that is a topic for another day).
As index traders, it is true, we are all about timing. We look for a high probable set-up and we jump in for some quick rides, and we get out just as quickly. The overall state of the economy does not really effect our trades, so we don't have to guess if it is the right time to get into the market.
What I'm suggesting - NOT to time - is a long term entry back into the market. If you are just wanting to get back into mutual funds and let them ride, there will NEVER be a good time to get back in the market (if you are still sold on mutual funds for your retirement accounts, do yourself a favor and soak up some knowledge on ETF's -Yahoo finance is a good place to start - look under the "Investing" tab at the top of the page).
Many investors are seeing this 2 month rally and are still setting on the sidelines wondering if it is time to get back in. If they knew how to trade (what do you think the big boys are doing with your money in a back office somewhere), they would have been making entries and exits all along. We ride it down and we ride it back up! No matter what the market is doing, we can take profit.
Statistics show that over 80% of investors have no plan for making money when the market is dropping. Why put yourself in that position? If you learn to make short-term trades, you will never have to second-guess the bulls and bears. Just learn to take what it gives you (and of course my favorite way to do that is with Index Trading), and don't try to time the market!
My answer to that question is identical to what I was advising before the meltdown - and the answer is simple:
DON'T TRY TO TIME THE MARKET
At least not with your longer term investments anyway. I have been preaching that buy and hold is dead for some time now (yes - even before the big meltdown came). The only exception to this rule might be with MLP's (but that is a topic for another day).
As index traders, it is true, we are all about timing. We look for a high probable set-up and we jump in for some quick rides, and we get out just as quickly. The overall state of the economy does not really effect our trades, so we don't have to guess if it is the right time to get into the market.
What I'm suggesting - NOT to time - is a long term entry back into the market. If you are just wanting to get back into mutual funds and let them ride, there will NEVER be a good time to get back in the market (if you are still sold on mutual funds for your retirement accounts, do yourself a favor and soak up some knowledge on ETF's -Yahoo finance is a good place to start - look under the "Investing" tab at the top of the page).
Many investors are seeing this 2 month rally and are still setting on the sidelines wondering if it is time to get back in. If they knew how to trade (what do you think the big boys are doing with your money in a back office somewhere), they would have been making entries and exits all along. We ride it down and we ride it back up! No matter what the market is doing, we can take profit.
Statistics show that over 80% of investors have no plan for making money when the market is dropping. Why put yourself in that position? If you learn to make short-term trades, you will never have to second-guess the bulls and bears. Just learn to take what it gives you (and of course my favorite way to do that is with Index Trading), and don't try to time the market!
Thursday, January 22, 2009
Learn To Love Down Trending Markets
I've been trading the indices going on 7 years now. As an index trader you will quickly grow to LOVE a down trending market.
During Obama's inauguration day Tuesday, I heard that the normal trend on inauguration day is down. BUT, this time it was the Worst drop in the market on ANY presidential oath day! I started the day with a small gain on a long move. Then had one trade go against me (another UP or long move) for a small loss that took all of my profit back and then some.
On our trading call (just like this morning) we talked about the patterns, and how it could possibly turn into a one directional down day. It sure did! I then made several little trades going down (short), and was able to climb back out of it, and get on top. Then we had a nice run, and I ended up with my goal for the day.
On Wed (my day off from trading) the market had a nice rally, and several of our traders were riding it up for nice profits.
Again today, we saw the signs of a one directional down-trending market. We discussed it on the call and most of us were taking small moves on the way down. Then came the NICE drop when the big board went below 8000 (DOW)! After that one great move most of us were done for the day, exceeding our goals!
If you enroll in my trading course, you will learn to LOVE down days too! While everyone else is depressed, you can be smiling all the way to the bank. What are you waiting for?
Enroll Here.
During Obama's inauguration day Tuesday, I heard that the normal trend on inauguration day is down. BUT, this time it was the Worst drop in the market on ANY presidential oath day! I started the day with a small gain on a long move. Then had one trade go against me (another UP or long move) for a small loss that took all of my profit back and then some.
On our trading call (just like this morning) we talked about the patterns, and how it could possibly turn into a one directional down day. It sure did! I then made several little trades going down (short), and was able to climb back out of it, and get on top. Then we had a nice run, and I ended up with my goal for the day.
On Wed (my day off from trading) the market had a nice rally, and several of our traders were riding it up for nice profits.
Again today, we saw the signs of a one directional down-trending market. We discussed it on the call and most of us were taking small moves on the way down. Then came the NICE drop when the big board went below 8000 (DOW)! After that one great move most of us were done for the day, exceeding our goals!
If you enroll in my trading course, you will learn to LOVE down days too! While everyone else is depressed, you can be smiling all the way to the bank. What are you waiting for?
Enroll Here.
Tuesday, December 30, 2008
Get Discipline or DIE as a Trader
I LOVE this article by Mack of Cannon!
I wanted to send it to everyone in case you somehow missed it. The only thing I would add is something Garth Brooks told me years ago when I had a chance to interview him about his success.
Garth told me "It is your dream, don't let anybody steal it from you".
If your dream is to become a world class consistent trader - don't let anyone steal it from you!
Thanks again for reading my blog!
Doug West &
Your Friends @
Kosoma
by Mack B. Stevens, Senior Broker, Cannon
Trading futures is an alluring business that allows an individual a lifestyle filled with many freedoms not available to most working people. This business requires traders to posses a unique set of qualities. The most critical quality a trader needs to have is discipline.
Discipline trumps knowledge. It trumps experience. In fact, without discipline very few traders survive to have enough experience to draw upon as an asset in their trading. The need for discipline is amplified by the very structure of futures trading. The leverage available in futures trading amplifies every decision that a trader makes. Every decision, good or bad!
Everyday life requires us to constantly make decisions. Do I buy the chicken breasts at $4.95 a pound, or do I buy the hamburger at $3.95 a pound. These types of decisions are non-leveraged decisions, so the impact overall is minimal. We are not buying or selling 400,000 pounds of hamburger as we do when we trade 10 contracts of cattle, while "paying" (margins) only a fraction of its total value.
In trading futures, one needs a trading plan. Some of these plans can be purchased for thousands of dollars. Some can be learned after attending a trading school for a week or so. Some can be developed by the individual trader after months or years of research. However one comes to his or her trading plan it is useless without discipline. Traders who have their plan and then stop using parts of it during the trading day are doomed to having increasing losses, usually large ones as typically the most discarded part of a trading plan is one of the risk control components.....stop orders and/or position size. A trading plan that is implemented with the proper discipline 75, 85, or even 95% of the time is doomed. For whatever reason, traders seem to have a breakdown of discipline at the most critical and damaging times. This is damaging to their equity and their psychological balance. The greatest trading strategy ever developed will prove to be disastrous to your account if it is implemented with a lack of total discipline.
This factor is what makes or breaks traders. We all know the difficulty in maintaining discipline in our everyday lives. Be it a diet, or an exercise plan, or even keeping toxic people out of our lives, constant discipline is very difficult to achieve. This is the key reason most traders are not realizing profits in their trading. As stated earlier in this article, futures trading amplifies our decisions in a way not seen in the rest of our everyday lives. Discipline is the single most important component in a successful trading strategy. So, rather than spending another $5000 on a new "black box" trading ideas, spend some time, and money if necessary, to learn more about yourself as a person so that you can better develop the strength to maintain trading discipline 100% of the time. This is a challenge to say the least but the difference in your life and in your trading account will be staggering! Good luck with making the change. The efforts in achieving this high level of discipline will be efforts that are exciting and rewarding. Let 2009 make your trading all that it can be!
IMPORTANT PLEASE NOTE: TRADING COMMODITY FUTURES AND OPTIONS INVOLVE SUBSTANTIAL RISK OF LOSS. THE RECOMMENDATIONS CONTAINED IN THE LETTER IS OF OPINION AND DOES NOT GUARANTEE ANY PROFITS. THERE IS NOT AN ACTUAL ACCOUNT TRADING THESE RECOMMENDATIONS. THESE ARE RISKY MARKETS AND ONLY RISK CAPITAL SHOULD BE USED. PAST PERFORMANCES ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
I wanted to send it to everyone in case you somehow missed it. The only thing I would add is something Garth Brooks told me years ago when I had a chance to interview him about his success.
Garth told me "It is your dream, don't let anybody steal it from you".
If your dream is to become a world class consistent trader - don't let anyone steal it from you!
Thanks again for reading my blog!
Doug West &
Your Friends @
Kosoma
by Mack B. Stevens, Senior Broker, Cannon
Trading futures is an alluring business that allows an individual a lifestyle filled with many freedoms not available to most working people. This business requires traders to posses a unique set of qualities. The most critical quality a trader needs to have is discipline.
Discipline trumps knowledge. It trumps experience. In fact, without discipline very few traders survive to have enough experience to draw upon as an asset in their trading. The need for discipline is amplified by the very structure of futures trading. The leverage available in futures trading amplifies every decision that a trader makes. Every decision, good or bad!
Everyday life requires us to constantly make decisions. Do I buy the chicken breasts at $4.95 a pound, or do I buy the hamburger at $3.95 a pound. These types of decisions are non-leveraged decisions, so the impact overall is minimal. We are not buying or selling 400,000 pounds of hamburger as we do when we trade 10 contracts of cattle, while "paying" (margins) only a fraction of its total value.
In trading futures, one needs a trading plan. Some of these plans can be purchased for thousands of dollars. Some can be learned after attending a trading school for a week or so. Some can be developed by the individual trader after months or years of research. However one comes to his or her trading plan it is useless without discipline. Traders who have their plan and then stop using parts of it during the trading day are doomed to having increasing losses, usually large ones as typically the most discarded part of a trading plan is one of the risk control components.....stop orders and/or position size. A trading plan that is implemented with the proper discipline 75, 85, or even 95% of the time is doomed. For whatever reason, traders seem to have a breakdown of discipline at the most critical and damaging times. This is damaging to their equity and their psychological balance. The greatest trading strategy ever developed will prove to be disastrous to your account if it is implemented with a lack of total discipline.
This factor is what makes or breaks traders. We all know the difficulty in maintaining discipline in our everyday lives. Be it a diet, or an exercise plan, or even keeping toxic people out of our lives, constant discipline is very difficult to achieve. This is the key reason most traders are not realizing profits in their trading. As stated earlier in this article, futures trading amplifies our decisions in a way not seen in the rest of our everyday lives. Discipline is the single most important component in a successful trading strategy. So, rather than spending another $5000 on a new "black box" trading ideas, spend some time, and money if necessary, to learn more about yourself as a person so that you can better develop the strength to maintain trading discipline 100% of the time. This is a challenge to say the least but the difference in your life and in your trading account will be staggering! Good luck with making the change. The efforts in achieving this high level of discipline will be efforts that are exciting and rewarding. Let 2009 make your trading all that it can be!
IMPORTANT PLEASE NOTE: TRADING COMMODITY FUTURES AND OPTIONS INVOLVE SUBSTANTIAL RISK OF LOSS. THE RECOMMENDATIONS CONTAINED IN THE LETTER IS OF OPINION AND DOES NOT GUARANTEE ANY PROFITS. THERE IS NOT AN ACTUAL ACCOUNT TRADING THESE RECOMMENDATIONS. THESE ARE RISKY MARKETS AND ONLY RISK CAPITAL SHOULD BE USED. PAST PERFORMANCES ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
Friday, February 15, 2008
Did You Get Your Check Yet?
President Bush was on the TV with what should be his last State of the Union speech Jan. 30th. The Pres. assured us all that we can grow our economy by spending more money. He even promised to send us each a few hundred to help us do that.
Let's see, if you are already in debt up to your ears - like the US government is, how is sending out free money going to stimulate the economy? And, how is that going to help the US government?
OH, don't forget our friends over at the FED. The Reserve! The agency that is owned by the bankers. That masquerades around like they are part of the government. What many folks still don't know is that they all pulled a fast one on us by sticking that word Federal in front of their name. The same thing the guy at Federal Express did when starting his company.
Frederick W. Smith founded FedEx. I clearly remember years ago when he was on 60 minutes, he said that by the time folks figured out that he was not part of the government his company would already be well on it's way to BIG MONEY! Can't blame his reasoning? What a PLAN! IT WORKED for the FED why not FedEx too?
Let's quote right from the FedEx web site:
"Federal Express was so-named due to the patriotic meaning associated with the word "Federal," which suggested an interest in nationwide economic activity. At that time, Smith hoped to obtain a contract with the Federal Reserve Bank and, although the proposal was denied, he believed the name was a particularly good one for attracting public attention and maintaining name recognition."
I'm sure Smith did want a relationship with the Federal Reserve - who wouldn't! These guys have the legalized right to print money! Think about it. It does not matter if it is a $1 bill or a $100 bill, it cost them about the same to make it (a few cents each). Then they "LOAN" that money at full face value to the US government. Full face value PLUS INTEREST!
So if you are thinking that Bush's plan to grow the economy by handing out $100 bills won't cost anything - Think Again! Where is that money going to come from? That's right - the good ol boys at the FED. These mystical folks seem to be able to pull money out of thin air! Just think, with today's high-tech world, the FED can just punch a button on a computer somewhere and release new funds to the world. Most of which never represents new bills being printed, but just credit in some bank or financial institutions account. Electronic numbers moving through nanoseconds of time and space.
Not only does the FED create money, they also have the ability to set their own interest rate! The Fed's Open Market Committee (FOMC), announces their interest rate decisions. This is NOT the interest rate that you and I can get money for, (why don't we all meet at the Fed Discount Window - wherever that is) but what the BIG boys who keep the whole world flowing receive. They in turn pump up the volume and pass the savings on to you and me right - WRONG! It could take weeks or even MONTHS after a cut to see any savings at the consumer level, if we ever see any at all. So why do the markets get so active after an FOMC announcement?
Well again, the BIG boys are the ones who really move the market right. We just want a small slice of it. That's all. Remember that when you are trading (or practicing the trade) an FOMC announcement. Don't get greedy. Get a quick profit, and either follow it with a stop, or just get out and smile! Remember that it could GAP past your stop too.
My guess is that this HUGE economic mess is no where near finished. Who knows, it might even lead into the Great Tribulation mentioned in the bible. No matter what happens, we can all do well with Simple Index Trading. I look for GREAT times ahead for our team. We might have to pay more for the things we get, but at least we can stay home and earn the money to get them!
If you have never traded LIVE on a FED announcement, you really need to practice it.
See a video on trading a Fed Play here:
How To Trade A Fed Play
For a great video on taking advantage of down trending economy moves visit:
http://nosecretincome.com
Come back to our blog here to read other tips on Index Trading Moves.
Have fun with it, and I hope to trade with you soon!
Doug
Let's see, if you are already in debt up to your ears - like the US government is, how is sending out free money going to stimulate the economy? And, how is that going to help the US government?
OH, don't forget our friends over at the FED. The Reserve! The agency that is owned by the bankers. That masquerades around like they are part of the government. What many folks still don't know is that they all pulled a fast one on us by sticking that word Federal in front of their name. The same thing the guy at Federal Express did when starting his company.
Frederick W. Smith founded FedEx. I clearly remember years ago when he was on 60 minutes, he said that by the time folks figured out that he was not part of the government his company would already be well on it's way to BIG MONEY! Can't blame his reasoning? What a PLAN! IT WORKED for the FED why not FedEx too?
Let's quote right from the FedEx web site:
"Federal Express was so-named due to the patriotic meaning associated with the word "Federal," which suggested an interest in nationwide economic activity. At that time, Smith hoped to obtain a contract with the Federal Reserve Bank and, although the proposal was denied, he believed the name was a particularly good one for attracting public attention and maintaining name recognition."
I'm sure Smith did want a relationship with the Federal Reserve - who wouldn't! These guys have the legalized right to print money! Think about it. It does not matter if it is a $1 bill or a $100 bill, it cost them about the same to make it (a few cents each). Then they "LOAN" that money at full face value to the US government. Full face value PLUS INTEREST!
So if you are thinking that Bush's plan to grow the economy by handing out $100 bills won't cost anything - Think Again! Where is that money going to come from? That's right - the good ol boys at the FED. These mystical folks seem to be able to pull money out of thin air! Just think, with today's high-tech world, the FED can just punch a button on a computer somewhere and release new funds to the world. Most of which never represents new bills being printed, but just credit in some bank or financial institutions account. Electronic numbers moving through nanoseconds of time and space.
Not only does the FED create money, they also have the ability to set their own interest rate! The Fed's Open Market Committee (FOMC), announces their interest rate decisions. This is NOT the interest rate that you and I can get money for, (why don't we all meet at the Fed Discount Window - wherever that is) but what the BIG boys who keep the whole world flowing receive. They in turn pump up the volume and pass the savings on to you and me right - WRONG! It could take weeks or even MONTHS after a cut to see any savings at the consumer level, if we ever see any at all. So why do the markets get so active after an FOMC announcement?
Well again, the BIG boys are the ones who really move the market right. We just want a small slice of it. That's all. Remember that when you are trading (or practicing the trade) an FOMC announcement. Don't get greedy. Get a quick profit, and either follow it with a stop, or just get out and smile! Remember that it could GAP past your stop too.
My guess is that this HUGE economic mess is no where near finished. Who knows, it might even lead into the Great Tribulation mentioned in the bible. No matter what happens, we can all do well with Simple Index Trading. I look for GREAT times ahead for our team. We might have to pay more for the things we get, but at least we can stay home and earn the money to get them!
If you have never traded LIVE on a FED announcement, you really need to practice it.
See a video on trading a Fed Play here:
How To Trade A Fed Play
For a great video on taking advantage of down trending economy moves visit:
http://nosecretincome.com
Come back to our blog here to read other tips on Index Trading Moves.
Have fun with it, and I hope to trade with you soon!
Doug
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