Friday, August 31, 2007

Financial Careers In Demand

A career in the financial industry has many benefits and perks. The financial service industry has always been an exciting and in demand industry to be in. No day is the same in the financial markets. Economic data reports, market volatility, bull and bear markets, interest rate changes, new laws and regulations, all have an effect on the life of every person when it comes to their personal finances.

Managing finances is important for everyone. From their investments, taxes, insurance, finances for most people are too complex and time consuming to deal with. Advice and support of a professional to analyze a financial situation and make the right decision has always been in demand and will only continue in the future. With issues in personal finances that are linked to changes in the market, the value of a financial advisor simply grows over time. Along with managing other peoples money, you'll learn to manage your own money which is even more important.

American Investment Training provides some of the best investment and financial training for all NASD licenses including the series 7 exam. American Investment Training is used by many investment firms across the country.

American Investment Training offers licensing and broker training for the Series 7 Exam. They offer training for the Series 65 Exam and all other NASD Exam Courses. AIT has study course training for the CFA Exam also. AIT also provides Group on-site NASD and Sales Training to firms all around the world.

Firm Element Securities CE online can be taken by individuals and firms.

For Insurance, visit their virtual universities for Insurance Pre License Course Training or Insurance Continuing Education Credits can also be found. Financial exam training begins and ends with AIT.

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Thursday, August 30, 2007

3 Key Highly Profitable Trade Setups

Called an ABC Trade Setup.

There is a Trading Software called MTPredictor that looks for low risk high reward trade setups using the ABC Trading Method Strategy. What do I mean by low risk high reward? I'm talking about a potential trade that has more reward than loss in it. This is key to staying in the trading game as losses will be inevitable, so you want to keep those losses small so your gainers can outperform your small losers.

Professional smart money traders are always looking for 3:1 Reward to Risk Ratio or more on considering opening a live trade into the market. Anything less than 2:1 is not worth the risk. Sometimes the markets are offering different amounts of risk and reward. Staying out of the market when its showing high risk compared to the reward available is key to preservation of cash and not throwing away money needlessly.

MTPredictor uses 3 Key Elliott Wave Analysis Trade Setups to look for consistent low risk high reward trades.

Why the 3 key Trade Set-ups? Automatic Simple ABC trade set-ups.

The 3 main MTPredictor™ set-ups are all a simple ABC or 'zig-zag' correction-to-a-trend - a simple part of Elliott wave theory. The software finds corrections with a clear 3-wave pattern which is against the direction of the trend - also found by the software.

The ABC correction is human psychology

For example, after a strong rally, sellers bring the price down (Wave A). Then, traders who missed the initial rally or who think price has fallen enough, buy in (Wave B). After this, traders who missed the first sell opportunity (Wave A) or who think price is too high again, sell out (Wave C). Finally, sellers are exhausted and traders who either sold higher or who missed the initial strong rally re-buy - the uptrend resumes.

ABC Trade Setup
Entering a trade at the end of a potential ABC correction enables the trader to position for the trend re-start - with strong Risk/Reward odds

MTPredictor's End-of-Day and Real-time software automatically identifies the three trade set-ups when they are at a critical price level and showing signs of price reversal.

Full risk/reward details and automatic profit targets complete the job

The Risk/Reward ratio at each profit target for the set-up is displayed.

Wave Price Targets (profit targets used for Risk/Reward analysis and exit plans) are placed on the chart of the set-up - evaluate your Risk/Reward outlook and visually confirm your exit stop policy.

Trading a group markets, the Trade Scanner finds the opportunities for you

This leaves the trader ready for the crucial assessment of potential return vs. initial risk of loss and position size.

All of the essential information is at hand to evaluate a trade quickly and decisively, BEFORE deciding whether to take it!

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Wednesday, August 29, 2007

More Damage from Subprime Katrina

By Susan C. Walker Elliott Wave International

Everything about the ongoing subprime mess evokes the delayed reaction to Hurricane Katrina in the summer of 2005. First, New Orleanians thought they had dodged the bullet, and then the floodwaters started pouring through the levees. Here's what I wrote recently in a column for

"Remember, too, the finger-pointing and blaming that started as soon as the rest of the nation realized that the U.S. government was not doing enough to help New Orleans? The editors of The Elliott Wave Financial Forecast recognize a similar change in attitudes toward Wall Street:

'The unwinding process will be sped along by a flood of revelations about illicit hedge fund and investment banking activities. Just as Enron, Tyco and a host of other primary beneficiaries of the late 1990s bull market run became the focus of scandals, hedge funds and the banks that enabled them are starting to become a focal point for scrutiny.' (The Elliott Wave Financial Forecast, July 2007)

"Then will come the final installment. Just as the U.S. government was slow to come to grips with the disaster in New Orleans so that people were left to fend for themselves, so too will investment bankers and investors have to fend for themselves. They may find themselves clutching their worthless paper and wishing someone would bail them out from the rooftops of their now-worthless homes."

Today, with the Dow down 280 points and markets becoming more volatile, we see even more clearly how the subprime floodwaters have spawned a financial and economic disaster. Here at Elliott Wave International, Bob Prechter writes about the coming financial crash with impeccable logic in the September Elliott Wave Theorist, which he released early this week. He titles his piece, "Fasten Your Seat Belt" -- here's an excerpt:

Economic Contraction Approaching

Three things signal an approaching economic contraction:

(1) The yield curve is racing back to normal after being inverted for over six months. The February issue explained in no uncertain terms why that condition was bearish for the stock market, and now that short rates are falling back below long rates, we know that the demand for short-term loans is down, indicating a cooling economy.

(2) Silver topped out over a year ago and remains weak. Silver is an industrial metal, and along with copper leads changes in the economy.

(3) The stock market seems to have begun wave c in July. That’s all you need to know to forecast an economic contraction.

Economists are nearly unanimous that things are fine. If our Elliott wave interpretation is right, the economy is heading not just into recession but into depression. The size of the stock market decline will determine the extent of the contraction. The bigger it becomes, the deeper the contraction will be.

Forecasts for depression are suddenly not confined to the pages of infrequent books such as Conquer the Crash. Real people (but not economists) are using the word, too.

Find out how to order this blockbuster issue of the Theorist by clicking the "More Damage from Subprime Katrina" title link above.

Friday, August 24, 2007

Trade System Criteria

We'd like to shed some insight on what you should really be striving for when you're building a mechanical system. And perhaps more importantly, we'll look at some things that most people worry too much about when building a trading system.

When it comes down to it, there are really only a few criteria that are used in judging the merits of a trading system. The most obvious one is profitability - does the system work? But really, there's more to it than just that. The number of wins versus the number of losses is important too, but there's a lot of latitude there if the profitability is high. The size of the average win versus the size of the average loss tends to be held as important, and it is. However, that criteria is correlated to the number of wins and losses, so again, there's a lot of leeway there. The one thing that is too often overlooked is the consistency of a system. The fancier term for this is 'drawdown', but we call it consistency...and you'll see why below. Today we'll just briefly go over our thoughts on each of these four components, and look at some of the common mistakes made when folks start building trading systems.

1) Profitability. You wouldn't think this would be tough to figure out, but building a system that actually works over a long period of time isn't easy. But what you really want to make sure of is that your software is running a hypothetical portfolio the same way you trade. Your software should allow you to specify a dollar amount for your total portfolio, and a dollar amount or a set number of contracts for each trade. That allows you to allocate just a portion of your portfolio, say 10% per trade, into the trading system to give you some real-life trading results. The thing you absolutely must do is factor in commissions into your trading. Most software can do that, but if yours can't, then do it manually. Once that's done, the final test is this.....does your system beat the market. or would you be better off in an index? Or, if the market is losing ground, is your system at least profitable to some degree.

PITFALLS: Many system builders run a hypothetical trading system over a long period of time (like the last five years) to make sure the system is an 'all-weather' type of system. Rather than run a system over five years, run it over five separate one-year periods. Why? You may find that one of the years is VERY profitable, and the other four years are losers. Your system can't be a one-trade-wonder. It has to be profitable in many environments.

2) Win/Loss Ratio. This is just an extension of the pitfall mentioned above (about systems applied to a long-term timeframe). One winning trade and nine losing trades may have been (net) profitable if your win occurred in the red-hot tech rally in 1999. That one win was the fluke though. The other nine trades are most likely what you're going to experience on an ongoing basis. So what should your win/loss ratio be? Some new traders think you need to win on at least half of your trades to make it worthwhile. Others think you need to win at least 2/3 of the time. If only!

The reality is that even the best traders win less than half of the's just that their winners are much bigger than the losers (we'll get to that in a second). I'd say shoot for a system that wins about 40% to 50% of the time. Is your tested system showing wins more than 65% of the time? That's great, but I'd be skeptical of those results. We've been doing this a while, and when the success rate of a system starts to outperform everybody else's by that much, there's usually something very unique about it.....and it's usually something that won't be part of the equation going forward. In other words, if it's too good to be true, it probably isn't. This is often the case when a system is tailor-made for a certain timeframe or certain chart. All the criteria and parameters of a system are optimized for all the little nuances and unusual movements that occurred during that specific period. Those nuances and movements, though, may never occur again. If you're winning 40% to 50% of the time, and you're doing so in several different timeframes (as mentioned in the 'profitability' comments), then you've got a good system.

PITFALL #2: An acceptable win/loss ratio and average win/average loss ratio are inter-dependent. If you can win up to 50% of the time with your system, then you may not need to have your winners be enormously bigger than your losers. If you're winning less than 40% of the time, you'll probably need your winners to be three times a big as your losers. If you're serious about building a system, you have to know and respond to both numbers.

3) Average Win/Average Loss. How big is the typical winner compared to the typical loser? Obviously, winners need to be bigger than the losers for the system to be worthwhile. At a minimum, your winners should be at least twice as big as your losers. That may sound easy, but it's not.

PITFALL #3: A lot of traders have high win/loss ratios and strong average winner/average loser ratios with their systems. Unfortunately, they may only get to trade about twice a year. Unless they're putting their entire portfolios into that one trade (which is crazy), the system doesn't do them much good. Make sure you're getting a high enough trade count to fit your trading style and desired activity level.

PITFALL #4: Make sure you understand that most of your winning trades will be very small wins. You'll only have a handful of mega-winners, but they will significantly pull up the size of your average winner. That's ok. Even the best of systems can't predict how big the win will be - they can only guess as to which direction the market will take. Even if the system doesn't result in a homerun on a particular trade, as long as it doesn't wipe you out, it's a good system. You only want your system to get you in a trade when there's a chance of a big win, and it should get you out of the market when there's little to no chance of a big move. Most trades will just be mediocre.

4) Consistency (Or drawdown). This may be one of the least mastered components of system trading. In a nutshell, 'drawdown' just refers to the biggest string of dollars lost at any given time using the system. For example, say you started with a $100,000 account, and built it up to $160,000. Along the way, say you took the balance from $150,000 back down to $120,000 before it went up to that $160,000 mark. Your drawdown would be $30,000 ($150K minus $120K). Or, in terms of percentages, it would be a 20% drawdown ($30K/$150K = 20%).

Why is that important? Trading gurus disagree on the issue. Some would argue that you have to limit your drawdown as a defense against losing any capital - a mathematical rationale. However, if you've created a system that is (1) proven to be profitable, (2) has a good win/loss ratio, and (3) the winners are a lot bigger than the losers, than the drawdown shouldn't matter. After all, a good system will always overcome short-term losses. We'll argue that the most important reason to understand drawdown is inside your head. How much loss can you stomach before you give up on the system?

I know we're going to create some disagreement with this, but I contend that you should worry less about the degree of drawdown, and more about the total number of consecutive losing trades the system will probably produce. This recognizes that even with trading systems, which are designed to take emotion out of the decision, there's still an emotional impact. Even if your losses and your drawdown are small, how many losing trades are you really going to accept before turning the system 'off'? Four? Five? Ten? Try three. Yes, three. There's something about the number three that humans seem to respond to (three strikes in baseball, The Three Musketeers, "three's a crowd", etc.) If your system results in three consecutive losing trades, odds are that you'll abandon it. For that reason, I recommend striving to limit your total number of consecutive losers in your backtest to two. THIS WILL BE TOUGH TO DO! If you stick with the system, then the profitability will take care of itself, but you have to make sure it's a system you can tolerate. Two losers is the limit for most people.

OK, as a review...
1) Systems should be profitable in several distinct timeframes
2) Between 40% and 50% of your trades should be profitable
3) Average wins should be at least twice as big as average losses
4) Worry less about dollar drawdown, and more about limiting consecutive losers to two

Hopefully we've given you a specific set of criteria to shoot for. If you're not yet using a trading system, we highly recommend you start applying one. It will take your trading success to the next level, if applied properly.

Click the "Trade System Criteria" title link above to review Top Ranked Trading Systems.

Good day, good 2007, good investing and trading!

Wednesday, August 22, 2007

Elliottwave Trading Software Reviews

Review and Trial for FREE the finest in Elliottwave Trading Software's for Stocks Futures and Forex.

Elliottwave identifies and manages low risk high reward trade setups. These are chart patterns and trade setups that consistently provide lower risk, and higher reward profit and loss ratios. Typically 3:1 and more. Sometimes as high as 15:1 reward risk ratios can be found. Now that's exponential returns!

Why try to count the waves manually? You don't have the time when the market is moving, and don't need the hassle and headache of incorrect manual Elliottwave analysis. Automate your trading by automatically knowing your entry, take-profit, and stop-loss targets before you enter the trade!

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Good day, good 2007, and good Elliottwave Investing and Trading!

Tuesday, August 21, 2007

Free Week US Stocks Intraday Forecasts

Stock investors and traders. Starting today is FreeWeek of Elliottwave International's professional-grade intraday U.S. Stock Market forecasts.

Click the "Free Week US Stocks Intraday Forecasts" image below or title link above for the free Club EWI sign-up to review the forecasts plus many other free valuable investing trading techniques, reports, articles, and videos.

Free US Stocks Intraday Forecasts

Elliottwave is a low risk high reward trading model and strategy. Keeping risk low and reward high in the markets is vital. Elliottwave identifies low risk high reward trades and investments in any time frame, be it by the minute, hourly, daily, weekly, and monthly.

FreeWeek is really free to anyone with a Club EWI User ID and Password. Free sign-up for a Club EWI account.

During FreeWeek, you get complete access to the U.S. portion of EWI's Stock Market Specialty Service that includes labeled price charts, detailed analysis and intraday forecasts of the S&P, DJIA, and NASDAQ.

Anyone who needs to know the direction of U.S. stocks will find this Service invaluable, especially intraday and day-traders.

Plus, you'll get access to EWI's Subscriber-Only Extras, including:

Subscriber-Only Message Board Q&As, where you can read our analysts’ replies to dozens of tough questions and submit your own comments

The Subscribers’ Lounge, with four of Bob Prechter's classic Theorists, historic TV interviews and much more

Free 90-minute online video, Basics of The Wave Principle

FreeWeek at begins at noon EDT on Wednesday, August 22, and ends at noon EDT on Wednesday, August 29.

Join Club EWI so you are ready as soon as FreeWeek starts August 22!

It’s easy, and it’s free!

As a Club EWI member, you’ll also get complete access to great Club extras -- exclusive articles, interviews, online Elliott wave tutorial and Crash Course video, Independent Investor eBook and much, much more.

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If you already have a Club EWI membership, you're all set -- just use your Club EWI User ID and Password to log in to the Subscribers Area to access your FreeWeek of intraday U.S. Stock Market forecasts between August 22 and August 29.

Thursday, August 16, 2007

Free Elliott Wave Trading Techniques Articles

The Elliott Wave Principle is a very interesting trading system. The Elliott Wave Principle identifies low risk high reward trading and investing opportunities.

Click the "Free Elliott Wave Trading Techniques Articles" title link above to review the Free materials.

The Elliott Wave Principle Basic Tenet

"The Wave Principle is governed by man's social nature, and since he has such a nature, its expression generates forms. As the forms are repetitive, they have predictive value."

Below is a more in-depth article on Elliott Wave.

In the 1930s, Ralph Nelson Elliott, a corporate accountant by profession, studied price movements in the financial markets and observed that certain patterns repeat themselves. He offered proof of his discovery by making astonishingly accurate stock market forecasts. What appears random and unrelated, Elliott said, will actually trace out a recognizable pattern once you learn what to look for.

Elliott called his discovery "The Elliott Wave Principle," and its implications were huge. He had identified the common link that drives the trends in human affairs, from financial markets to fashion, from politics to popular culture.

Robert Prechter, Jr., president of Elliott Wave International, resurrected the Wave Principle from near obscurity in 1976 when he discovered the complete body of R.N. Elliott's work in the New York Library. Robert Prechter, Jr. and A.J. Frost published Elliott Wave Principle in 1978. The book received enthusiastic reviews and became a Wall Street bestseller.

In Elliott Wave Principle, Prechter and Frost's forecast called for a roaring bull market in the 1980s, to be followed by a record bear market. Needless to say, knowledge of the Wave Principle among private and professional investors grew dramatically in the 1980s.

When investors and traders first discover the Elliott Wave Principle, there are several reactions:

Disbelief that markets are patterned and largely predictable by technical analysis alone.

Joyous irrational exuberance at having found a crystal ball to foretell the future.

And finally the correct, and useful response. Wow, here is a valuable new tool I should learn to use.

Just like any system or structure found in nature, the closer you look at wave patterns, the more structured complexity you see. It is structured, because nature's patterns build on themselves, creating similar forms at progressively larger sizes. You can see these fractal patterns in botany, geography, physiology, and the things humans create, like roads, residential subdivisions and as recent discoveries have confirmed in market prices.

Natural systems, including Elliott wave patterns in market charts, through time, and their forms are defined by interruptions to that growth.

Here's what is meant by that. When your hands formed in the womb, they first looked like round paddles growing equally in all directions. Then, in the places between your fingers, cells ceased growing or died, and growth was directed to the five digits. This structured progress and regress is essential to all forms of growth. That this punctuated growth appears in market data is only natural Robert Prechter, Jr., the world's foremost Elliott wave expert and president of Elliott Wave International, says, Everything that thrives must have setbacks.

Basic Elliott Wave Pattern

The first step in Elliott wave analysis is identifying patterns in market prices. At their core, wave patterns are simple; there are only two of them: impulse waves, and corrective waves.

Impulse waves are composed of five sub-waves and move in the same direction as the trend of the next larger size (labeled as 1, 2, 3, 4, 5). Impulse waves are called so because they powerfully impel the market.

A corrective wave follows, composed of three sub-waves, and it moves against the trend of the next larger size (labeled as a, b, c). Corrective waves accomplish only a partial retracement, or "correction," of the progress achieved by any preceding impulse wave.

As the figure to the right shows, one complete Elliott wave consists of eight waves and two phases: five-wave impulse phase, whose sub-waves are denoted by numbers, and the three-wave corrective phase, whose sub-waves are denoted by letters.

What R.N. Elliott set out to describe using the Elliott Wave Principle was how the market actually behaves. There are a number of specific variations on the underlying theme, which Elliott meticulously described and illustrated. He also noted the important fact that each pattern has identifiable requirements as well as tendencies. From these observations, he was able to formulate numerous rules and guidelines for proper wave identification. A thorough knowledge of such details is necessary to understand what the markets can do, and at least as important, what it does not do.

You have only just begun to learn the power and complexity of the Elliott Wave Principle. So, don't let your Elliott wave education end here. Join Elliott Wave International's free Club EWI and access the Basic Tutorial: 10 lessons on The Elliott Wave Principle and learn how to use this valuable tool in your own trading and investing.

Have a great day riding the Elliott Wave!

Wednesday, August 15, 2007

Trading Options

Originally published in Stock Futures and Options magazine.

Stock option traders have always been faced with the additional work of not only correctly predicting the underlying security's price, but then also choosing the appropriate option strategy. But most stock traders mistakenly figure they can easily make the transition from stocks to options. As easy as falling off a log, right? Maybe not. There are differences that traders need to keep in mind when making the transition to options.

Stocks Don't Expire. Options Do. Plan Accordingly.

In order to make money in options on an ongoing basis, a trader needs to understand the major difference between stock and option trading and that is the impact of time on stock and option positions. With stocks, time is a trader's ally, as the stocks of quality companies tend to rise over longer periods of time. However, with options buying, time is his "enemy." As each day passes without any significant change, there is a decline in the value of the time premium. To top it off, the value of the time premium declines more rapidly as the option approaches expiration.

The important factor that option traders should assess is the amount of time that is expected for a move in the stock to take place. Buying near a stock's low may be helpful as a strategy, but if the trader has to wait too long in an options position, the loss of time could more than overwhelm a moderate gain in the underlying stock. Given the accelerated impact of time decay the closer the options are to expiration, option buyers would be well advised to buy more time before expiration than will be needed. Having at least one month before expiration to spare when the position must be closed out is preferable. This allows the option buyer to avoid the especially painful time decay, which occurs in the final month before expiration.

On the other hand, the option seller seeks to benefit from the time decay that occurs most rapidly in the final month. As a consequence, the expiration month chosen for sellers should be aligned to reach expiration in conjunction with the time that the expected holding period is reached.

The Most Important Statistics for Option Traders to Watch

In addition to knowing the expected holding period, option traders should be aware of the percentage of profitable trades they expect to generate, as well as the size of the average profitable trade compared to the average losing trade. By multiplying these two statistics, an option trader can get a sense for the advantage gained compared to an average system.

An average system could be assumed to occur with random selection, such as a coin flip, in which 50 percent of all outcomes are winners, and the size of the average winner and loser is the same, amounting to a 1.00 ratio. As a result, this random combination yields a product of 0.50 (50-percent profitable times 1.00).

If you develop a system with 75 percent of trades profitable, and a 2.00 ratio of average win/average loss, you would have a product of 1.50 (0.75 X 2.00) , amounting to a 3-to-1 edge versus the random model. A 3-to-1 edge could also be created by a 30-percent profitable and a 5.00 ratio of average win/average loss. The higher the profitable percentage, the less the average winner has to outdistance the average loser.

By the same token, a high ratio of average win/average loss means the trader still can have a meaningful edge with a relatively low winning percentage. It is this 3-to-1 edge or higher that we seek when creating equity trading systems, as it has resulted in systems that can work well for option trading since the magnitude of the edge is substantial. This substantial edge allows factors like slippage (the difference between a system's price and the ultimate execution price) to be incorporated, with a meaningful edge remaining.

A couple of caveats. First, these statistics are most relevant with a meaningful number of samples. Twenty trades are preferred in a system to deem these performance statistics significant. So, make sure the method is well tested. With fewer trades, one large losing trade can downwardly bias the average win/average loss figure if it is the only loser, even if all of the other trades are winners. In addition, commissions must be factored in to the testing to closely simulate real-world results.

Finally, realize that the "slippage" (difference between the trader's paper-trading tests and his real-world entries and exits) on options systems is magnified due to the leverage of options relative to stocks. The more contracts the trader is trying to get filled, the greater the slippage will be on momentum-based systems. (Our models often prefer to spot breakouts in the underlying stocks and then acquire the options on re-tests of these stocks' support or resistance lines, to minimize slippage and liquidity issues.)

Options Traders: Focus on Volatility or Trend?

Most options analysts will tell traders to focus on the volatility assumption within the options pricing model, as that is the only factor the standard options model assumes to be unknown. The stock price is assumed to be basically unchanged, except for a carrying cost equivalent to the short-term interest rate. This assumption is due to the Efficient Market Theory notion that stock prices incorporate all available information and cannot be predicted into the future. We believe, however, that trends occur and can be predicted and, thus, this options pricing model assumption creates a good opportunity for option traders.

First, focus on the expected movement in the underlying stock's price, as the average off-the-floor option trader gets a much bigger impact from a given percentage gain in the stock than from the same percentage change in the volatility assumption. Let's look at the example of an XYZ Company June 60 call option with approximately 10 weeks until expiration:

As you can see, the 10-percent gain in the stock price amounts to a 101-percent gain in the option price, while the 10-percent jump in volatility leads to a 12-percent gain in the option price. If these events are equally probable, then the trader has about an eight-to-one edge in focusing on the stock price change relative to the volatility change. Looked at another way, the 10-percent change in volatility would have to occur eight times for every one time the stock price changed by 10 percent for there to be no edge in focusing on expected stock price over volatility.

While floor traders and big institutions may get a great deal of value out of monitoring daily changes in volatility, most individual option traders will find much more value in focusing on expected stock price. And, the bigger the expected trend, the bigger the trader's edge versus the standard option pricing assumptions.

Determining the Best Option Strategy: You Have a Choice

Many times traders are way too optimistic in the scenarios they input, and a way to moderate this is by employing one of the following two tactics: Traders wanting to use more conservative tactics can either 1) buy one strike further in-the-money or 2) buy the next expiration month further out than they think they'll need.

Option traders, or any traders or investors, for that matter, will always be faced with being wrong no matter what they do: if the position is a winner, they feel like they should have bought twice as much or, if the position loses, they feel as if they should never have bought it. This is human nature, of course. While a trader can always second-guess himself, he will be better positioned over many trades by taking a more conservative approach to mitigate those situations that could knock him out of the game entirely?as opposed to worrying that some profits have been left on the table by choosing a less leveraged option.

As a result, I tend to encourage option traders to prefer in-the-money options, which derive their name from the fact that there is already some part of the option that has intrinsic value.

For example, if XYZ stock is at 53, the September 50-strike call trading at 5 will have 3 points of intrinsic value (the current stock price of 53 minus the right to buy at 50), also known as being 3 points "in-the-money." The remaining 2 points of the option's premium are known as the "time value." If the stock stays stuck at 53 at expiration, these 2 points of time value would be lost, but the 3 points of intrinsic value would remain intact. So the "in-the-money" option trader gains more stability by trading an option with some element of intrinsic value.

Stock traders would be wise to spend a little time looking at some of these idiosyncrasies before they assume that they can make the switch from stocks to options in a flash. Are they tough? No. But do they present a few challenges? By all means. Options hold a great deal of potential, but they are different investment animals than stocks. Don't forget it.

Have a great day options trading.

Options University

Monday, August 13, 2007

Sabotage Trading

Some Thoughts About Self Sabotage; Are You Sabotaging Yourself?

by Dr. Van K. Tharp

I thought it would be interesting to do another exercise to help you look at some of your own self-sabotage. To do so, consider the following six items.

Meditation Exercise:

Spend about twenty minutes just watching your breathing. When you watch your breathing, you may notice that thoughts come into your head. When they do, simply notice them and release them and then return to watching your thoughts. When you keep that up for 20 minutes, you might notice a number of interesting things. First, you might notice that you have a lot of thoughts to release. Great, you are now aware of that and you’ve had the opportunity to release that. Second, you might notice that you fell asleep. Great, you were tired and needed a nap. And third, you might notice that you went into the space between your thoughts. And you might find that doing so is a wonderful experience, filled with insight. No matter what happens, however, just try the exercise.

Once you’ve finished the exercise, ask yourself the following questions. Was the exercise beneficial? Did you enjoy it? Most people overwhelmingly respond to this question with a positive answer. And if you agree, then ask yourself, “would it be useful for me to do this exercise every day for 20 minutes?” Would my performance improve as a result of doing it. And once again, most people come up with a positive answer to this question.

If you didn’t come up with a positive answer, then simply notice the beliefs you have about the exercise. What kind of reality are you creating and is that useful to you? If you did decide that the exercise was positive, then you might agree that not doing it everyday is an act of self-sabotage.

Regular Exercise:

Spend 20 minutes three times each week exercising. Keep the practice up for at least two weeks. At the end of two weeks, ask yourself. Do I feel better? Is my performance better as a result of doing this?

Once again, most people will respond with an affirmative answer. And if you believe that you would benefit from doing such exercise regularly, then make a decision to do it regularly. And if you make that decision and then stop, is that not an example of self-sabotage?

Develop a Business Plan for Trading.

Read Chapter Three in "Financial Freedom Through Electronic Day Trading." That chapter is all about developing a business plan for trading. I have not met anyone who has read that chapter who has not agreed that their trading would not be better if they had such a business plan. You’ll probably agree.

If you do agree, then make a resolution to develop a business plan for your trading. And if you don’t follow up on that business plan, then you might agree that this also is an act of self-sabotage.

Health Improvement.

Read the three interviews that I did with Bruce Du Ve' in Market Mastery. Afterwards consider this; do you agree with anything he says? If not, then you might take a look at the beliefs that are behind that. On the other had, perhaps you agree with a lot of it.

If that is the case, then ask yourself, “Have I started the basic diet?” Do I plan to do that? And if I haven’t and have continued to consume foods that are unhealthy, then isn’t that an act of self-sabotage?

How to Increase Your Income by 1000%.

If you have attended our Infinite Wealth Course or at least listened to the tapes recorded from a prior course, you have been exposed to my program to increase your income by 1000%. Once you’ve listened to that do you agree that following that program will increase your income by 1000 percent? We’ve never had anyone in the course who didn’t agree that it would work.

Now ask yourself, “Do you want to increase your income by 1000 percent?” And if the answer is “yes,” then ask yourself if you are following that program. Are you doing all of those wonderful steps every day? If the answer is “no,” then is that also not an example of self-sabotage?


Do you agree that you in some way create your own life, either through your beliefs or through some other means? For example, do you believe in the material in this article? And, interestingly enough, no matter how you answer, you verify the model.

However, let’s assume that you do believe that it is important to look at your beliefs because they might just be creating your life. Are you spending time doing that? Do you keep any sort of journal to examine what happens to you? Do you write down your beliefs regularly? Do you do any regular introspective work?

If not, then you might agree that you’ve chosen to remain "asleep" and unaware of your creative potential. Is that not an act of self sabotage?

Working on Self-Sabotage.

I’ve just suggested six ways in which you might be going through self-sabotage. There are a lot more, but that was just a sample. How many examples applied to you? Three? All six? How many?

And if your answer is at least one, then what do you plan to do about it? Will you continue with your self-sabotage? Or do you plan to do something.

Steps you could take to work on self-sabotage include:

Going through the Peak Performance Home Study Program in detail one more time (or have you skipped that one as another form of self-sabotage?). Notice the areas you resisted and spend a lot of time working on those areas.
Sign up for our retreat in Ireland. I thought it was so significant that I elected to do it again and bring my wife and niece to it. We probably still have one or two slots left if you are reading this before July 15th.
Sign up for Peak Performance in October and Advanced Peak Performance in November. These are IITM’s core courses on self-sabotage.

Click the Sabotage Trading title link above to learn more about my teaching methods and training courses.

Have a good weekend. Until next week’s tip, this is Van Tharp.

Thursday, August 09, 2007

Choosing The Right Trading Software

Compare Trading Software

Market Trading Software & Systems Comparision - Free Trials

Click the market trading banner above to review the trading software platforms we've test driven, and put our rating on.

If you’re interested in getting started in playing the field in trading, then you will find that there are a large number of software programs available. Whether the software programs you need are desktop based or web based, either one can be used in your trading. There are many brokers who offer their clients software packages free of charge or they can be a part of opening a trading account with a particular brokerage. Normally the software that will come with your open trading account is the very basic model, with the bare minimum of what you can use, or even need. Occasionally, these brokers will offer extra features at a cost. So when you’re considering which broker to open an account with, you may want to consider what software packages they offer to correspond with your account. There are many web site’s that offer free demo accounts, allowing you to download different packages so you can try before you buy. Using a free demo account will give you a better idea of what software you would like to use and will help prevent buyers remorse.

The basic software’s available are the desktop and the web based. Which ever one you choose will depend on your preference and other technical constituents. The market is obviously very dynamic which means that you will want to get the software that is the most reliable and up to date connection to the data as possible. Now, let’s talk about your internet speed connection. Your internet speed connection is a very important factor and if you plan on playing the trading game, you will need to go from dial up to either DSL, even broadband if you can afford it. The faster it is, often the better. Your internet connection speed is a major factor when considering what trading software to use.

Another great consideration would be one of online security. Most web based software is generally more secure than the desktop based software packages. If you choose the desktop software, then all of your information and your data are stored in your hard drive, making all your valuable information vulnerable to a number of security infractions. If a virus invades your computer, then all of your personal data and the integrity of your trading system can be jeopardized. If you’re hard drive crashes, then all of your important data will be lost forever. Another threat would be those hackers who can hack their way into your computer and gain access to all of your personal information and trading systems.

If you decide to go with the web based trading software then most of the maintenance and security issues are handled by the provider of the package. The internet based foreign exchange systems are readily hosted on secure servers, like the servers that credit cards are processed on. This will give you more protection, with less hassle, as your data is encrypted. Along with this protection, your software provider will protect you from losing data by providing mirrors and backups of your account data.

You may also find that internet based software is more convenient, aside from the extra security when you’re considering on what software would best suit your needs. Moreover, the software will run on your regular web browser, so there won’t be any software you would have to download, meaning you will always have access to the most current features and versions of that software. In addition, if you frequently travel, you are sure to appreciate being able to log in to the internet from any computer and have all of your information immediately accessible.

Whatever option you decide to use, choose the trading software that you personally find easier to use. Just because particular software works wonders for your friend or colleague, doesn’t mean it will work the same for you.

If you’re new to the trading game, then it would be best to have two accounts, one with your software of choice and one demo account. Considering that you learn as you play the trading game, you can keep one account that you will actually use to trade real money; and the demo account, to use to test any alternative moves. You can also use your demo account to overshadow the trades in your real account so you can see if you are being too conservative.

Have a good day trading your favorite trading software package!

Wednesday, August 08, 2007

Volcone Analyzer PRO Review

"GUESSING About Whether The Options You're About to Buy are Under or Over-Priced.

This Review You Must Read BEFORE You Even Think About Trading in Options…"

From: The Review Desk
Product: Volcone Analyzer
Last Updated: August 8th, 2007
Product Type: Options Trading

Volcone Analyzer PRO is the newest technology in evaluating volcone graph in real time. It’s a powerful tool to assist traders determine if a particular option is over-priced or under-priced. The concept behind it is very simple, it lets you decide which one you should be buying or not at any given time. Any type of trader, especially the ones at the beginning stage, is recommended to purchase this.

Risk, as we all know is a very involved concept in the trading market and industry. There are only two things that could happen to any stock investor when he makes an investment, either he loses or gains a profit. But the worst that could happen is to take risks on something you have no clue about. All successful traders are not born, they are made.

So relying on helpful tools such as Volcone Analyzer is not bad. More often than not, tools such as this one solve most of the dilemma and decreases wasted time spent on decision-making and analysis. As mentioned earlier, this one is perfect for both the professional and occasional traders.

To see whether this one will work for your advantage, I have listed some of the great things about this product:

* It can keep you out of bad trades.
* It is so easy to use. No complications and perfect for everyone.
* This brilliant software will guide you to determine the actual volatility of your option; it will almost do all the work for you.
* You will know when the option has good potentials or not.

It’s important to study well which trading weapon will suit your taste and trading attitude. So we’ll not rush you. But if you’re not impressed yet, then here’s more:

* Volcone Analyzer has no monthly fees.
* It’s visually attractive and user-friendly.
* It comes with instructional videos that will direct you through the whole process so there’s no time to feel frustrated.
* By just looking at the red dot, you will know immediately whether the option is cheap or expensive. Person of any age can navigate this product. It is that simple!

There are also a number of other advantages, but I won't cite them here in this review. You'll need to pony up the cash and get your own copy of Volcone Analyzer.

Overall, this software is remarkable because not only it's trouble-free to use, it does saves you time and money too. You just need to key in your favorite stock symbol, click a few buttons, and within seconds your Volcone graph is calculated and created in real-time right before your eyes!

Other add-ons are free upgrades for life, bonus trading videos, and bonus live tele-seminar. How’s that for one package? Top Rated = Recommended!

To find out more about Volcone Analyzer PRO Click Here or the banner below.

Have a great day Options Trading!

Options University

Tuesday, August 07, 2007

Elliott Wave Trading Software

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Monday, August 06, 2007

Six Figure Income

Networking Marketing
Six Figure Income

Since 1998, SFI has been leading the Internet income revolution with its cutting edge affiliate program that empowers even average people to earn $20, $50, even $100 per hour working from their home computer. SFI has shown millions of men and women from over 200 countries worldwide how to cash in on the Internet. In fact, our system is so successful that over 8000 people join SFI every week.

Saturday, August 04, 2007

Valuable Real Life Business Skills

As Robert Kiyosaki says, "In the network marketing industry, its not the money, its not the products, its the education, training, support and mentoring system thats the most valuable."

Some of the more important real-life business subjects network marketing companies teach are:

1. An attitude of success.

2. Leadership skills.

3. Communication skills.

4. People skills.

5. Overcoming personal fears, doubts, and lack of confidence.

6. Overcoming the fear of rejection.

7. Money management skills.

8. Investing skills.

9. Accountability skills.

10. Time management skills.

11. Goal setting.

12. Dressing for success.

The successful people I have met in the network marketing business have developed these skills from the network marketing training programs. Regardless of whether you reach the top of the network marketing system or make much money, the training is of great value for the rest of your life. If the educational plan is good, it can improve your life for the better, maybe forever.

Wednesday, August 01, 2007

Real Life Business School

Continuing where I left off yesterday about Robert telling us that skills make us rich, and not theories.

Building a worldwide business and losing a worldwide business was definitely not an education based on business theory. For me, it was a priceless education, the ultimately made me rich, but more importantly, it was an education that set me free. I did not want an education that would have turned me into a job-seeking caterpillar with an M.B.A.. After the crash, rich dad said to me, "Money and success make you arrogant and stupid. Now with some poverty and humility you can become a student again."

The reason I titled this book, "The Business School For People Who Like Helphing People, is because what many network marketing business are. The are business schools for people who want to learn the real-world skills of an entrepreneur, rather than the skills of an employee who wants to become a highly paid mid-level manager in the corporate world.

By attending some of the network marketing businesses training, I got to meet the leaders who were real-world business owners that started their businesses from scratch. Many were great teachers because they were teaching from experience and not from theory. Sitting through many of the business seminars, I often found myself nodding in agreement with their straight talk about what it takes to survive on the streets of the real-world of business. However, more important than teaching just the real-world of business skills, the leaders taught real-world mental and emotional attitudes that are required to be successful in the world. The education I found in some of the seminars was, priceless . . . absolutely priceless, especially for anyone who wants to transform into a butterfly.

Click the "Real Life Business School" title link above to review a global online business opportunity that provides exponential passive income. Free Sign Up.

Have a good day empowering yourself with real-world education, to do, and to teach to others for you all to have a great life!