An important aspect of trading in the markets is to understand how to feel. It is generally wrist At the fair, this is measured by measuring the movements of selected stocks to let you know how the market is doing in general in various sectors. A man by the name of Dow came up with this concept and we still use his Dow Index for measuring the pulse of the market today. There are also a number of others out there, but another popular index of mostly technical reserves, the NASDAQ.
Bull Market - This describes a market where the overall market is rising. Typically, this is measured by the Nasdaq and the Dow Indexes. Experts recommend that you buy only during Bull Markets because the odds are more in your favor - this is true, but keep in mind there are plenty of shares plummet during Bull Markets also.
Bear Market - This describes a market where the overall market declines. As with Bull Markets, again we measure this by the Nasdaq and the Dow Indexes. Experts recommend that you use only short during Bear Markets because the odds are more in your favor - this is true, but keep in mind there are plenty of stocks that rise during Bear Markets also.
The main thing about using indexes to help your trading has been mentioned before. During Bull Markets, you can expect that 65% or more of all shares to rise - so if you're looking to buy during Bull Markets, the odds are very much in your favor. Of course, the opposite is true with Bear Markets. Another feature of these two markets is that Bull markets generally last 2-3 years, while Bear Markets last only 1-1 ½ years. So it's a very good idea for new traders to get into the habit indexes after the beginning of their learning. This gives give you a huge advantage.
Chuck Cox is a technical writer and Industrial Scientist by professional with a background in statistics. He used mathematical and statistical methods to invest and trade in the stock, futures and options markets. Chuck has several companies owned and currently operates several websites. To investigate a new idea stock trading visit his website, Online Stock Trading Reviews
Wednesday 30 April 2014
Tuesday 15 April 2014
Success Trading - Some Basic Terminology For New Traders
The world of trading can be very complex because the financial markets are complex. There are thousands and thousands of successful traders out there today. The amazing thing is that they all have their own niches carved and approach the market in a unique way. This would be great news for novice traders, because it shows that there are thousands and thousands of different ways to get a good in the markets. It's just a matter of discipline and find the approach that suits your style and personality. With all that being said, new traders start somewhere, so let's look at some basic concepts and approaches to the markets.
Going Long - This means that you bet on the instrument (stock, future, option, etc) to go up and you want to buy. You buy the financial instrument, watch rise and then sell it for a profit. Profits are realized when you buy low and sell high. It is also known as taking a long position.
Going Short - This means that you are betting on the instrument to go down and you want to sell or take a "short position". A short position is performed by buying those shares or "that" closed your position. This concept is very confusing for new traders because you have something that you do not even have to sell yourself. The thing is that you're still trying to buy low and sell high, you're just selling high and buying low first later. Think of it this way - you go to a car dealer and buy a new car, it charges you $ 20k and then looks to buy it for a lower price. This dealer has a "short position" on the transaction between you and taken him. We do not recommend new traders to take short positions until they know more about the market.
One thing to keep short and long positions in mind is that they are totally different in nature. There are far more traders out there to take over those short long positions. Human nature tells us that we buy with the expectation of rising prices. The concept of wanting prices fall is against human nature and short positions may be more erratic due.
Chuck Cox is a technical writer and Industrial Scientist by professional with a background in statistics. He used mathematical and statistical methods to invest and trade in the stock, futures and options markets. Chuck has several companies owned and currently operates several websites. To investigate, visit his website, Stock Trading Reviews a new stock trading idea
Going Long - This means that you bet on the instrument (stock, future, option, etc) to go up and you want to buy. You buy the financial instrument, watch rise and then sell it for a profit. Profits are realized when you buy low and sell high. It is also known as taking a long position.
Going Short - This means that you are betting on the instrument to go down and you want to sell or take a "short position". A short position is performed by buying those shares or "that" closed your position. This concept is very confusing for new traders because you have something that you do not even have to sell yourself. The thing is that you're still trying to buy low and sell high, you're just selling high and buying low first later. Think of it this way - you go to a car dealer and buy a new car, it charges you $ 20k and then looks to buy it for a lower price. This dealer has a "short position" on the transaction between you and taken him. We do not recommend new traders to take short positions until they know more about the market.
One thing to keep short and long positions in mind is that they are totally different in nature. There are far more traders out there to take over those short long positions. Human nature tells us that we buy with the expectation of rising prices. The concept of wanting prices fall is against human nature and short positions may be more erratic due.
Chuck Cox is a technical writer and Industrial Scientist by professional with a background in statistics. He used mathematical and statistical methods to invest and trade in the stock, futures and options markets. Chuck has several companies owned and currently operates several websites. To investigate, visit his website, Stock Trading Reviews a new stock trading idea
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