Option Trading Strategies

When we talk about option trading, it is usually about short term trading. Short term trading means we will rely heavily on technical analysis. Technical anaysis is based on price history. Those history is reflected through charts. Technical analysis tells us when price will likely to move.

Chart pattern in technical analysis is used because we assume that trend tend to repeat itself. Chart pattern is a formation on stock price which show signs of future price movements. It shows the relation between price and time. There are many types of charts like line chart which only shows closing price, bar charts which shows high, low, opening, and closing price.

There are a lot of chart patterns that you can learn. You might hear about these patterns: Hanging man, Shotting star, Inverted hammer, Bullish and Bearish Engulfing, Bearish and Bearish Harami, Pearsing Line, Dark cloud, Abondoned Baby, Three White Soldiers and Three Black Crows. If not don’t worry, I don’t know much about them too. I don’t use them. It’s like having lots of weapon, but don’t know which to use. I rely more on support and resistance line.

Support is a price level that the price of a stock will tend to stop going down and resistance is a price level that the price will tend to stop going up. When the price breaks the support line, it usually will go lower, and when price breaks the resistance line, it will usually go higher. Most of the break out are for real, but you should also be careful of false break out.

In addition, you also needs to learn about chart indicators like Williams %R, MACD, the Relative Strength Index (RSI), Stochastics and Fibonacci Retracement Lines to help you in your trading decisions. These indicators will act as confirmation for your trading.

Important Guidelines on Online Trading for Beginners

Are you new to trade, investments, stock trades, etc. and don’t know where to start?

Trading accounts were the initial vehicles for investing in India; but with the facility of the internet online trading now enables you to trade from the comfort of your home or your office. Online Trading in India has picked up pace with various companies offering services for online trading. Angel Broking is one of the top broking companies in India. Now offering online opportunities customers can NOW avail online trading facilities. Other top broking companies in India include Kotak Securities Limited, Reliance Money, India Infoline, Indiabulls, Sharekhan, etc. These companies offer online trading accounts whereby trading can now be done online.

Online brokers are also available who charge less commission than full-service brokers to help you trade online.

The key benefits of trading online are many. To start with, understanding how the market works and the financial terms can be simplified with the help of online investment platforms that are available on the internet for the early investor. Understanding the market has been made easier with the facility of the internet. With a plethora of online books explaining how to trade, how the Indian stock market works, share tips, etc. there are immense benefits the young investor an avail through online investing. The Indian market is prone to go up and down – there is high unpredictability in it; so it is important to make wise and good judgment of investments.

There are three important things that you need to keep in mind when investing online; you firstly need the computer, a stable internet connection and a subscription to a 3-in-1 online investing account with a service provider.

Online trading is far simpler as you can transact with merely a few clicks of your mouse. You can find a stock picking service or program online that could help you to identify and choose the winning stocks – in order to invest properly. While stock investing involves a lot of fluctuations of stock prices there are certain ways that you can shape your investments through Internet Stock trading. Online trading also relieves you of the manual hurdles you may encounter investing otherwise such as- lack of tools, having to make endless calls, deluge of paperwork, being dependent on other people, maintaining bank and de-mat accounts (separately and manually), etc. The internet provides you with a wealth of information besides analysis and tools which can help you to make informed decisions. You can multi task and invest in different asset classes like equity shares, mutual funds and IPOs all at one time. Besides that, you are provided with up to date information and analysis in an investor friendly format.

Before you plunge into investing online be sure that you first register as a member for an integrated 3-in-1 online trading account with a service provider. The three accounts usually are:

1) Online Trading account – where you can transact online
2) An internet enabled bank account whereby you can transact payments through an online bank account.
3) A demat account – a place where your shares will be deposited

When you choose an online investing account keep in mind the following:

• Check the credentials of prospective trading partners: It is very important to check the credentials of prospective trading partners – Various websites such as D&B ( http://www.dnb.com ) can help check the background of an established business. It is of utmost important that before you engage in any online trading activity o do your research!

• Speed of execution: While deciding on your investing account, it is important to have a fast pace account. You should be able to place your equity orders and receive quick order confirmations even during the peak times.

• Customer Care: Ensure that you’re online investing account has a dedicated customer care cell that will help take care of your queries and problems. Some additional features offered by certain accounts such as SMS alert, intraday trading in equities, ability to sell shares next day before receiving delivery, etc all which are based on your investment needs all add a bonus!

• Quality of information: You should opt for those accounts that offer the best of information, research support and tools – all of which are user friendly and the information should also be up-to-date.

• Safety & Security of the site: It is important to check all the inbuilt security features that are built in your system.

Now that you have some basic tips to follow before you start online trading you can start your daunting task with confidence!

Forex Trading Strategy – The Number 1 Mistake Most Forex Traders Make

Know what the number one problem most people make when it comes to Forex trading? They jump in head first without doing any research and without figuring out what they heck they want to do in the markets. In fact, I’m willing to bet that at least 50% of the people reading this article RIGHT NOW have already dove foolishly into currency exchange at least once in their life. Don’t lie to me, I know it’s true.

The key to success with Forex trading is having a strategy. There are many different proven strategies out there, all that matters is you choose one of them and stick with it. Chart out a plan of action and, here’s the kicker, STICK TO IT!

You need to figure out how you’re going to work the markets before you jump in there. Why before? Because once you are in the markets you are going to get really emotional and you will stop thinking clearly. We get emotional due to both success and failure, and both cloud our decision-making. Emotions are great! Just not when it comes to currency trading.

A lot of people don’t put together a plan because they are scared to. They feel worried that they aren’t smart enough to figure out how to act. But if you aren’t smart enough to figure out a strategy when you have time and space to do so, how well do you think you’re going to strategize when in the heat of the moment?

The fact of the matter is you don’t need to be smart to succeed at Forex. You don’t need to be smart to come up with a plan for trading currencies. Just follow the strategy of another Forex trader who was successful before you.

For example, using a strategy that revolves around trends is a great idea. Lots of people have made lots of money by noticing signals that correspond to a possible gain or loss in the market and then acting accordingly. Basically this strategy revolves around attempting to predict future movements by learning from pasty movements. Remember that old saw about history repeating itself? Might as well make some money from that insight.

Technical analysis also offers a practical avenue for Forex trading. Basically with this strategy you’ll just be making note of the crossover, the upsides and downsides of the market, to get a good idea of when to buy and when to sell.

No strategy that you could choose is going to perfect. You are going to lose some money no matter what, but with the right strategy you’ll gain a lot more. What’s most important is that you pick a strategy and you stick with it, no matter what happens in the market!