Posts tagged Day Trading

Stock Trading Blunders To Avoid

Dec 15th

Posted by Investor in Stock Investing

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Stock trading blunders to avoid.  There are a million and one ways to mess up when trading stocks and new traders are finding more everyday.  This article covers the five major blunders that many traders make.  If you know about them, you can avoid them.

Stock Trading – Avoid The Five Major Blunders

Anyone can loose money in the stock world. It makes no difference whether you are an amateur or a veteran. Stock gurus will tell you that losses occur owing to lack of knowledge of certain fundamentals of stock trading, poor discipline, and wrong decisions.

Though trading is trader specific, there are a few generalized rules that apply to all traders. If you are losing money in stock trading, you should look back and see whether you are indulging in any of the five major blunders while trading in stocks.

*Trading against a trend- this is considered as the most common mistake in stock trading. Experts recommend that you should never wait for a stock to hit an absolute low or high. Rather you should seek out established trends that will guide you in the right direction. Going against a trend means sure doom in stock trading.   –more


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Trading Options On Leveraged ETFs

Dec 14th

Posted by Investor in Options Trading

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Graph of the Case-Shiller index values through...

Image via Wikipedia

How to Trade Options on Leveraged ETFs

Before I start with how to trade Leveraged ETF options, let me remind you that I believe we are at the start of an etf creation bubble, in which retail investors are getting exposure to financial instruments that they don’t need– the capital base is not large enough to warrant that sort of exposure (Case Shiller ETF??). Also, many of these etfs have structural issues that cause them to consistently underperform the instrument they claim to track — see USO and UNG for examples.

But there are some advantages with trading leveraged options. First, let’s take a look at the downside:

Leveraged ETFs go through a daily rebalancing, and that causes them to underperform over time just from their mathematical calculations. Unless there is a strong trend in price and volatlity, it is very difficult for these instruments to outperform in the intermediate term. The problem was so bad that Direxion did a reverse split in FAZ/FAS to encourage trading again.   –more


The original video of this part (1) was taken down by youtube due to a copyright issue with NBC… which must have been related to the section of video I used showing useless car parking and drivers as a background in parts, just to fill the visual space.

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