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A Few Random Thoughts about Trading -- By: Bill Kraft
Copyright 2009, Makin' Hay, Inc., All Rights Reserved
Bill Kraft
Editor |
At times, it is a struggle to come up with a new and specific
subject for an article every week. As I was thinking about what I
should write this weekend, it occurred to me that trading is a part of
life and in life we see ourselves do many things without a conscious
intention.
Supermarkets are great examples that use our natural tendencies
to add to their sales. As we go to a check-out, look around at all
the last minute things we can buy just by reaching out a hand.
Tabloids with enticing headlines abound. Have you ever been tempted to
read that article about the boy who was abducted by aliens only to
return with an astonishingly high IQ or the article about the
celebrity who is having affairs around the world. Even if that
doesn't get us to buy, there are many who pick up the paper just to
glance at the tantalizing article. So, too, are there tempting bars
of candy and the all so necessary breath mint.
As we know, these displays set us up for the "impulse" buy. We
may not need it, but the suggestion may lead us to buy it. Have you
ever noticed that in your trading or investing? A friend or a broker
might suggest a stock, for example, and we just buy it. We do no
fundamental analysis and certainly may fail to look at a chart to see
whether there is an opportune entry or, probably even more
importantly, whether there is a handy exit. While an impulse buy of a
candy bar may not be terribly devastating, an impulse buy of stock
might be.
Just like at the supermarket, if we think about things and do
even a little analysis, we may pass on the stock as we would on the
tabloid. We might see that the stock price is pretty far from a
logical exit or that the reward to risk potential may not be what we
ordinarily plan.
Generally, the wiser supermarket shopper makes a list and
doesn't go shopping on an empty stomach. They have a plan and the
plan has eliminated much of the impulse buying since a growling
stomach isn't suggesting additions to the cart and the list has set
pre-determined choices based upon the shoppers needs.
Perhaps the trader would be wise to follow some of those cues.
Having a plan in the first place would help eliminate candidates that
fail to meet the trader's requirements. As an example, a trader who
is interested in entering a bullish trade might demand that any
potential entry be above the 50 day moving average and he might
discipline himself to understand that he need not be invested in
bullish positions when a market is decidedly bearish. I've found that
most of my selection process with stock and options is one of
elimination rather than selection and only when I no longer find a
reason to eliminate am I ready to add to the portfolio.
I hope you have a wonderful weekend.
Good Trading!
Bill Kraft
Success Trading Group -- by Success Trading Team
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Option Trader -- by Bill Kraft
Our Option Trading Service is for conservative traders that understand leverage principles and enjoy the challenge of options trading. We focus on powerful option trading strategies that place volatility and momentum in your favor. And we pride ourselves on always minimizing our losses!
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Here's a look at a trade Bill is currently working on:
Fresh Del Monte Produce Inc. (FDP)
This one has just formed a double bottom and may be ripe
for a bullish move. I'm considering the possibility of selling some
Jan 20 naked puts for around 40 cents.
Good Trading!
Bill Kraft
Editor of $10 Trader, Option Trader and Trend Trader
"Trade Your Way to Wealth" by Bill Kraft is an Amazon.com best seller!
"Smart Investors Money Machine" is Bill Kraft's most recent publication.
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Trend Trader -- by Bill Kraft
Trend trading as we try to practice it is a form of momentum trading. We prefer to try to capture profit out of the middle of the trend rather than try to catch reversal at bottoms and tops.
Here's a look at a trade Bill is currently working on:
Progressive Corp. (PGR)
Worth watching as it is now at the top of a channel with
rising MACD. It's anybody's guess whether the resistance will hold or
we'll see a true breakout. While the best guess may be a retracement
within the channel, this one could be ready to move.
Good Trading!
Bill Kraft
Editor of $10 Trader, Option Trader and Trend Trader
"Trade Your Way to Wealth" by Bill Kraft is an Amazon.com best seller!
"Smart Investors Money Machine" is Bill Kraft's most recent publication.
"Trading for Keeps: Making Money with Low Risk Option Trades" a trading DVD by Bill Kraft
Try our Trend Trader Real-Time Alert Service
and Get $50 off our Normal Website Rate!
$10 Trader -- by Bill Kraft
We really enjoy trading stocks that are $10 and under. Often they provide the chance to enjoy high percentage gains and, of course, at worst, the risk is limited to what we paid for the stock.
Here's a look at a trade Bill is currently working on:
Cedar Shopping Centers Inc. (CDR)
CDR is another stock near the top of the range initially
established in late October. It might be attractive on a move above
$6.15 particularly when we consider that it has been paying dividends
around the 7% mark.
Good Trading!
Bill Kraft
Editor of $10 Trader, Option Trader and Trend Trader
"Trade Your Way to Wealth" by Bill Kraft is an Amazon.com best seller!
"Smart Investors Money Machine" is Bill Kraft's most recent publication.
"Trading for Keeps: Making Money with Low Risk Option Trades" a trading DVD by Bill Kraft
Try our Under $10 Trader Real-Time Alert Service!
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Our Dividend Trader service focuses solely on the "best of the best" dividend paying stocks. We trade these stocks for short-term gains and we will also buy these stocks for their powerful dividend producing income with a purpose to make capital gains as the stock increases in value.
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