What Is Paper Trading
The definition for paper trading is little bit complex, but here it goes. Paper trading is sort of trading, where you pretend to buy or sell different kinds of stocks, futures or options at their present prices. This is where all people interested in trading should start, because no real money will be at stake. This is very good way to get your feet wet, to see whether in real life the deal would of been successful or a flop. clarify this, here’s an example. Lets say you just bought some Microsoft stock for $41, and if in the near future the stock prices would have raised to $45, then you would have earned a profit of (45 – 41 = 4) $4 per share.
So what is the purpose of paper trading?
Many people start from paper for various reasons, but the main reasons are quite similar.
To begin with, they perform it in order to improve their own investing knowledge. Inexperienced investors participate in paper in order to understand monetary markets and also to practice the right time to jump in on a stock, all of this without the risk of losing money, which in most cases they would lose, because they lack the knowledge and experience of the market. Some people learn all this in school or in university.
Probably the second reason to paper trade is to test a new strategy or a method. It doesn’t matter if you are a professional trader or a newcomer in this field, if one want’s to try out a new strategy, they trade it on paper, because you don’t want to lose a lot of money if the strategy doesn’t pay out. Some individuals use it to reboot their confidence, when they have hit a slump, by having many losing trades consecutively.
The next reason would be similar to the second, but still differ a bit. If a person wants to switch assets. For example if a stock trader would like to start options trading, he would paper trade first to know if his strategy he or she uses is still effective in the other field.
Even though many people like the idea of paper trading, because no money is at risk, there still are some experts who look paper trading as a waste of time. The main reason they point out is that paper never simulates the market close enough. Therefore any confidence you might get, is a false one and does not count in real life. Psychologically speaking on paper anyone can invest couple of hundred thousands, but in real life your mental state is different, and you might pull out some stupid mistakes, when you see a stock dropping. Usually these people suggest trading with real money, but in smaller scales, or even suggesting penny stock trading.
Just because some of these suggestions are quite valid, you shouldn’t start trading without trading on paper first, even if this is for a small amount of time. If you don’t succeed on paper, then you shouldn’t consider stepping up the game and start trading with real money. Sometimes when you even start trading with small stakes, you still need some capital, in some cases the capital isn’t as small as you think, and many people can’t afford it. Suggestions about penny stocks isn’t as good too, just because you can buy a stock for 5 pennies, doesn’t mean it’s a good idea to trade these stock, because the penny market differs quite a lot from the real stock market and penny stock companies can drop very fast from the list and go underground.
Best Trading Platform For Fast And Secure Trading
Electronic trading platform is most commonly used computer program/system to place orders for various financial products (stocks, currency, commodities, bonds, etc). These systems are used by banks, stock exchanges, brokers, individual traders and by many others. With these platforms people all over the world can execute trades without any delay. Because trades are executed withing seconds, they offer a great advantage over trading floors (where stockbrokers buy or sell financial commodities by communicating to one another) and phone trading.
These types of programs stream live market prices and offer users different trading tools to help them make better trades. Usually the tools they offer are charts and news feeds, but differentiates between platforms and providers. Some of these programs allow to gain access to specific markets, that could only be accessed by investing firms and banks. Some of these offer automatic trading, where you set the parameters and the program does the rest.
Different brokers have different platforms. Most brokers offer either a web-based (also known as browser-based) program or a program you have to download. Some offer both, some even offer Android and iOS versions too.
The browser-based system usually lacks the full customization that downloadable version offers, but still the user interface can be tweaked a lot. You can enable many charts at the same time, choose colors, have different indicators, layouts and etc. Trading is simple with the web-based system, to commence a trade you simply have to click few times on the chart and enter the parameters, where the trade should take place or commence the trade instantly. One of the biggest drawback of browser-based trading is the lack of ability to use EAs (Expert Advisors – automated trading systems).
The most used software (downloadable) in the trading field is MT4 (Meta Trader 4) or 5. the customization of this software is unlimited. Probably the thing you have on your mind can easily be achieved with this program. Even though MT5 offers some improvements over MT4 (more timeframes, larger indicator number), the latter (MT4) is the more popular version. Maybe the biggest factor is the EAs. EAs programmed for MT4 will not work with MT5. It would take a great amount of time to reprogram the EA and many traders don’t have time for that. Another big factor is custom indicators, like with EAs the custom indicators won’t work with the newer version either, so one has to redo them. Some people stay away from MT5 because it doesn’t allow coexisting opposite trades for the same commodity, stock or currency. So if you are thinking about hedging, then you should definitely stay away from MT5. Even though MT4 and MT5 look alike, the 5 has slightly larger buttons. Having a small screen and slightly larger buttons equal less room for charts. But this only a small inconvenience, because most traders have large screens, so they can have multiple charts opened at once.
Choosing the right trading platform varies whether one wants a downloadable program or they only want a web-based system. The web-based varies between providers, but most of them look a like. On the other hand if one wants fully customizable and wants to have different custom indicators and EAs then, there is no better than MT4.
Penny Stock Research Essential Guide To Making Money
Penny stock trading like any other kind of trading requires some effort. The difference between blue chip (national corporation stock) vs mini cap/small cap (small business) is that, mini cap stocks are considered a high risk. Finding profitable pennies takes usually more time than finding big corporations stats. 90% of your time will be spent on finding the stocks and the 10% will be spent on choosing the winners. This essential guide for penny stock research is for you to acknowledge the steps of becoming a pro.
Main reason for why stock is undervalued, is that people aren’t aware of them. So the first step on mini cap research should be about finding the stock. The next step is pretty obvious – gathering information. You should try to find as much information about the stock and where it might go. Finding the information is nowadays easier than it was in the old days. Google is your best friend on this. With all the information available online, you should try to make an educated guess on whether the price will go up or down, will the investment succeed or fail. Don’t put too much money on one stock, because often these companies fail to deliver.
So why invest, if often they won’t deliver and go out of business. Well with simple math we could answer your question. For example you have a budget of $1000. You will spent it over 10 companies. So to each company you will invest $100. Lets consider the average price of the share is $0,50. Now your portfolio includes 200 shares per company. You won’t hold the shares too long and you will let them go after a year. If 6 of the companies will fail, 2 will maintain their price and 2 will go up to $10 per share you’d turned the $1000 to $4200. With a profit of $3200. This is just to show how profitable these types of shares might be, but the problem is you might pick all wrong. And the truth is actually many people pick wrong stocks.
To fight this, you need to do a lot of penny research. Just because you found a list of good stocks shouldn’t mean you now choose random 10 and hope for the best. If this is your strategy, you are destined for doom, because odds are not in your favor. So if you have found one company, do research about the company’s officials and a background check of the company. If any of them will bring fishy results you should swipe the company off form the research list. Most of start ups will fail, choosing the right one is the essential key to success. Find as much information about the company as you can. Sometimes this means checking the location of the firm, visiting it, checking who works there. If you can, analyze their business model, do they advertise the company, and etc. Always to your homework before investing.
Penny stock research is essential to choosing winners over losers. Never jump in if you haven’t done your research. Research is the key to success, and having done it properly will put you ahead of the 90%. who have no clue about it.
True Penny Stock Egghead Review For People In Need of Honest Opinion
Penny Stock Egghead basically consist of weekly newsletter by Nathan Gold. Each week he recommends some penny stocks, that have a potential to increase their value significantly. Usually these newsletter are sent on on Thursday or Friday. Most of the times he recommends one good pick, but sometimes there might be several good picks. If you think that the emails have only picks in them, then you are wrong. Most of the times Nathan also includes extensive research, why this stock might go up, so you could make the decision, if it’s worth it.
Penny Stock Egghead Review
The most important thing about this strategy is the timing. Ability to anticipate the right moment, is key to being successful trader. There are a lots of people who make great money with the newslettters. Another big plus for micro cap is, that you don’t need a lot of money to try it out. Most of the shares are under a dollar, so a large investments are not needed. For example he recommended a while ago, a stock that was priced $0,0085 per share. The next day the price had been risen to $0,009. and before you know after couple of days the price had been lifted to $0,014 per share. That is almost a 50% increase in the value of the stock. Why it rose so much? Probably because many people jumped in, who saw a slight increase in the value of the stocks. So if you had invested $85 your portfolio at the end would have been worth $140. But if you had invested about $850 then the sums would have been about $1400, with a total profit of $550. Keep in mind all the trades Nathan Gold will advise, won’t be profitable. The main key is to have couple of good winners and the losers don’t matter.
Some pros and cons:
1. The information, that Nathan gives you is quite sufficient to make up, whether to you believe in this trade or not.
2. The newsletter course is quite affordable, but of course he offers 60 day money back guarantee, in case trading is not for you.
3. Nathan Gold has a good reputation and has helped quite a lot of people.
4. No monthly subscriptions
1. Nathan doesn’t offer investment course, so if you think that you will learn the ins and outs of trading you’re wrong. Nathan offers simply his expert advice on which trades to take part of.
2. Investing is a risky business, don’t expect to get all the winners. Some of the times you will lose, but the big idea is win big with the winners.
In conclusion the newsletters and advice Nathan gives is quite good. He has detailed reports on what and why to choose one. Most of the times the trades will go in your favor , but risk is always possible when investing. Whether to take part of the advice or not is your decision, no one can push you do the things you don’t want to do.
Binary Options 101 What Do These Terms Mean
Trading stocks is quite confusing to newcomers. A lot of terms to understand, strategies to learn and etc. Binary options offer a way to effectively start trading without much of the hassle. With these options, you can make predictions of assets, commodities and currencies, whether the price will rise or fall, at a certain time. In most cases there are 3 outcomes, trader will receive fixed income, trader will lose the investment or trader gets his investment back. Binary options is called a fixed return options(FRO).
Like with any other kind of trading, so does trading binary include some terms, for you to know.
Binary Options 101
Assets – Underlying instrument used to determine a contract. In most cases currency, stock, commodity(gold, silver, gas, oil) .
At the money – Neutral outcome of a trade. When the value of asset, after expiry, is the same as it was when the call or put was made.
Call – If trader thinks the price of the asset will be above the current price.
Put – If trader thinks the price of the asset will be below the current price.
In the money – When trader has made the right choice and the trade finishes in favor of trader. For example trader made a put and the price of the asset was below the purchase price.
Out of the money – When trader has made the wrong choice and the trade finishes in favor of the broker. For example trader makes a call, but at the expiry the price is lower than at purchase. Trader loses his investment.
Early closure – Available option to close ongoing trade, takes effect immediately. Helps to avoid huge losses or gaining profits, if trade doesn’t look that good as initially thought. If trader realizes that the trade is not in his favor, he might close the trade early and not lose all the investment. If trade is in his favor, but trader thinks trade will take different turn before expiry, trader may cash some profit.
Extend – Ability to extend the length of time of the trade. Usually used in case trader thinks he will get the profit, but it takes a little longer than initially thought.
Binary Options 101
Options trading offers higher risk than any other kind of trading. Simply because investor might be left with nothing, if trades outcome does not meet expectations. This is the case with most of beginners, they don’t have clear understanding and will lose the money. On the other hand people who are experienced in the field of stock, currencies, etc might easily profit from this system.
Having made a clear decision to start trading binary, should be followed by the next step – finding the best binary options brokers. The main things to look for from brokers are the websites interface (is it easy to use), does it have a lot of assets, which time frames it offers and of course the trade types. Also brokers reliability and trustworthiness plays an important role too.
In this review, I’ll show my favorite binary options brokers. Some of them I have used and can vouch for, some are gathered using extensive research and recommendations from friends. My list will include payout percentage, whether they are regulated or not, do they accept USA clients, what is the minimum deposit and for last, the first time deposit bonus.
1. 24Options – 24Options was founded in 2010 by the firm CBAY. They are located in Cyprus and are fully regulated. Like many others regulated brokers they do not accept US clients, due to regulatory reasons. They use TechFinancialsSowftware to run day to day trading. They don’t have the most extensive stock, commodity and currency list, but have sufficient enough list(over 100). Like most brokers they do offer very clean and user friendly interface. They also have mobile application for your trading needs. In most cases their payout is 89%, but they also offer 0 – 15% return on losing trades(dependent of the trade). For high yield trades, the payout might even reach 500%. The minimum deposit for creditcard is $250 and for wire transfer $1000. they offer four currencies to fund your account – USD, EUR, GBP and Yen. Deposit bonuses vary for this broker, some include $400 and some offer 20% bonus.
24 Options Review
2. StockPair – StockPair was created by Nextrade Worldwide Ltd in 2010. StockPair is considered to be the best, because of their custom platform can handle binary and pair options. The user interface is clean and easy to use. Stock pair has large number of time frames from 150 days to 60 seconds. Recently StockPair became fully regulated, but unfortunately they do not accept USA clients anymore. Payouts depend on the time frame you choose, but mostly they stay in the 85% range. This is for fixed payouts. But for floating option the percentage might exceed even 200%. the minimum deposit for StockPair is $200, and they do accept USD, EUR and GBP. They offer up to 50% bonus with the first deposit.
3. EmpireOptions – Is fully regulated binary options broker and is based in the Republic of Uruguay. It’s also the only broker that accepts US costumers, that I have reviewed. The company uses popular SpotOnion platform to run their service. You can trade over 200 stocks, currencies and commodities. Most of their payouts are near the 75%, but they offer 10% refund rate on losing trades. The minimum deposit is $100, but they only accept USD and EUR. They offer up to $100 dollar deposit bonus.
Choosing the right broker or the best broker isn’t an easy choice, mostly it comes down to preference. What user interface appeals you more, where you live and how many different commodities they offer.
Seven Crucial Steps To Safe Investing
Investing intimidates ordinary people like you and me. Sometimes even professions worry about their decisions, whether they should have sold or bought the stock or not. But ordinary people like you and me worry more about trivial things – what to wear, should I buy this, will I ever get promotion, etc. But the real question arises, can I manage my investing account without much worry. Sure you can, you don’t need to spend countless of hours of panicking and worrying. With just couple of hours a week you can manage a portfolio. With these crucial steps to safe investing, you should be able to really understand what makes difference between a rookie and a professional.
Steps to follow:
1. Stay Cool – You must not worry about market fluctuations. Market is volatile, has been and always will be. There is no need to get rid of all your stock just because the price has fallen. If the company hasn’t had major changes, then it is probably market fluctuation.
2. Spread the Money – Spread your investments across multiple companies and sectors. Having spread the money between many companies gives you bigger return possibilities. Avoid investing huge amounts in equity alone, spread it to others sections like future markets and to options.
3. Have an Emergency Fund – Sometimes it’s good to have set some money aside just in case dark times approach. You shouldn’t invest this money, keep it safe in the bank or wherever. The amount shouldn’t be too big, but it always a good idea to have living expenses for three to six months.
4 Always Have a Reason – Before making any commitment, have a clear reason on why you choose this. You shouldn’t just invest because stock has steadily grown for months or years. Determine the reason why has it risen and whether it will rise more, otherwise, you’re just gambling. Follow a clear strategy and stay of impulse and your investment purchases should be in good hands.
5. Manage Your Expenses – In most cases buying and selling stocks also include a brokerage fee. This could be a turnoff, if you are interested in small gains. Always calculate how much you have to make before the trade is profitable.
6. Long Run Over Short Run – Don’t make the mistake of seeing stock market as an opportunity to make quick cash. While it’s possible to make a lot of cash in short term, but many people lose all their investment due to this. I you pump a lot of money on short term, you’re speculating, while you should have been investing. Sometimes it makes only one wrong speculation to give away your hard earned profits. Historically speaking long term stocks have had more success than short term stocks. Predicting what a stock will do on any given day is next to impossible.
7. Keep True to the Strategy – If you have chosen a strategy, don’t change it in the mid season. This is a recipe for failure. Changing strategies often will result in no gains, because many strategies are meant for long term not for short term. You should choose a strategy, that you aren’t comfortable with, this will always increase the risk of changing.
There aren’t certain fixed steps to investing. Sometimes it’s just better to make your own rules. Keeping true to your rules and not letting your emotions take control, is what professionals do.
What Is Binary Options Trading And How To Become A Trader
Binary options trading has only been in the spotlight for few years. The reason why they weren’t quite popular before, is quite simple. Trading options were only available to big banks with huge sums of money for trading. Nowadays you can start trading with as little as $100 or for even less on some occasions.
With these types of trades you need to know, whether the price will go up or down. Buy a call when market price will rise or put, if the price will fall. There are two outcomes, you either win or lose.
Why are binary options getting more and more popular? Well you know how much money you will risk and how much money you could make in a specific time frame. Due to their short duration you usually have time frames of few days to few minutes. After it closes you know whether you lost or won instantly. For example lets say you make a call(above current price) on a Facebook share. Assume the time frame is 1 hour and the current price is $62. After one hour, if the price has risen to $62.01 you’ll win. If the price stays $62 you’ll get your money back, if it’s lower, you’ll lose. If you win, the sum will be put on your account immediately.
Trading binaries is quite different from other kinds of trading . Rarely they are traded on platforms regulated by SEC or any other regulated agency. In most cases trades are executed outside regulations, thus increasing the risk of fraud. So it’s quite important to find a reliable firm. Usually there’s no refund policy. So if you are not sure what you are doing, you should definitely stay away from these types of trades. Because if options time frame closes and it’s not in your favor, you lose all the investment. On the other hand, if you know what you’re doing and know when to jump in, this might be one of the fastest money earning methods. Hope this helped t clarify what is binary options trading.
When investing money, there are a lot of options, but few of them, have greater potential profits than buying stocks. Even though this is true, people usually tend to stay away from them.
A lot of beginners make mistakes. Why? They are driven by greed. They see a stock, which price is under $5 (per share) and they assume it only can go up and hence the’ll buy them. Here is, where they are wrong. Like with any investing, one needs to know how to buy penny stocks and where to buy them from, before jumping in.
But first let me explain why some of micro cap stocks might be valuable. The reason is quite simple some of today’s big names were once undervalued pennies themselves. In other words tomorrow’s stock leaders might be today’s underdogs.
Concur Technologies (CNQR)
CNQR has a colorful history. Concur is a global business, that develops travel and management software. Currently more than 4000 companies have chosen them for managing expenses. So how much were the companies shares worth? On March 2001, CNQR traded as low as $0,30 per share. Now they are worth about $100.
American Axle & Manufacturing(AXL)
On 2008 when the market collapsed, many companies were nearly wiped out. AXL was one of the few that managed to avoid bankruptcy. Axle makes components for automotive industry and that many big car companies were near bankruptcy, it’s not hard to see why the shares were worth only $0,40 on March 2009. Since then AXL has had significant increase in revenue and is currently trading near $20.
We could go on with these examples for hours, because there are a lot of success stories. Of course there are negative stories too. Companies priced below $5, that have lost all their value. Probably down to zero list would be much longer than the success list and that’s why small or micro cap are one of the most riskiest stocks.
Nine out of ten times, companies, whose value is under $5, are based on single product or an idea. If the idea or the product fails, so fails the company. This is the sole reason, why penny stocks are a risky business. Usually when a stock is worth less than five dollars, companies annual revenues are also quite small – averaging $5 million or less.
In order to evaluate a stock, one has to follow these simple rules:
1. Products appeal – Is there a need for this product in the near future, does it appeal to you or would you buy it. This is the first and most important step of the evaluation process.
2. Business model – Does the company have quality staff. You need to do a research about the firms chief officers, business mangers and financial officer. This way you can determine, whether the company is correctly structured and does what it supposed to do.
3. Effective advertising – If the product is not correctly advertised, probably the product will never succeed.
4. Rise in the price – Company, which has a steady growth in price and trading volume may be a good sign for success. Staying away from highly volatile companies is a good way to protect your investment. Usually highly volatile stocks are used for scams. Some group or person buys a lot of them, making the price increase significantly, soon a lot of people too start to buy them. After the increse the group starts selling them, making the price go down.
These are the basic tips on how to buy penny stocks. Like with any any investment so does investing in micro caps involve a risk. Taking advantage of these tip, will make your first investment is worthy of your time. Take time to do research and based on that, make the buy call.
What Are Penny Stocks And Why Haven't I Heard About Them
Chances are quite big, that you have heard the term penny stock mentioned by someone and how they were able to gain huge returns on his/hers investment. Now your greed may have kicked in and you’re interested in investing yourself. But hold your horses, it’s quite important to know what about them first, before getting your feet wet.
A penny is considered to be a stock that has a low value. Usually these types of stocks have a value of of a cent to few dollars. This doesn’t grasp the full definition. The main difference between a penny(mini cap/small cap) and a large company’s stock(blue chip) is the price. They are simply share prices of smaller companies, like start ups. What allures most people is the price. With just couple hundreds of dollars you can start investing and earning pennies.
What Are Penny Stocks And Why Haven’t I Heard About Them
What Are Penny Stocks And Why Haven’t I Heard About Them 1
Now that you have a fair idea about what they are, lets talk about benefits. Usually when a low value stock experiences a move, it will be a significant move. Meaning you probably will either make a lot of money(percentages) or lose, dependent on your choice.
Starting investing in mini cap or small cap stocks is considered to be the best way to get your feet wet. With small investments you learn the tricks and tips of the trade and even if the investment goes south, the losses aren’t that great. For example if you buy 100 $0,40 stocks and trade doesn’t go your way, your loss would only be $40.
Like with any investment there are no guarantees. You might lose your investment in matter of minutes, hours or days. There’s a rule – If you can’t take a loss, then don’t trade. Also you need to be careful, because these types of shares are quite vulnerable to manipulation. Being careful and cautious is the number one rule. You might take a look at my guide on how to buy penny stocks. Choosing honest and real organizations with potential is key to success. These types of companies might earn you your biggest profits(double or triple your investment).
Investing is risky, you might lose, you might win. The key to success is choosing your battles. You can never have all winners, but the key is to cut the losses and let the winners reach their potential.