Types of Market Orders (Part II)

By Ahmad Hassam

Stop Loss Orders: Stop loss orders are critical to your trading survival. The traditional stop loss order does just that. It stops losses by closing out an open position that is losing money. Stop loss orders are used to limit losses if the market moves against your position. If you dont use stop loss orders, you are leaving yourself at the mercy of the markets. A dangerous proposition!

Stop loss orders are on the other side of the take profit orders but in the same direction. If you are long, your stop loss order would be to sell but at a lower price than the current market price. If you are short, your stop loss order would be to buy but at a higher price than the current market price.

Trailing Stop Loss Orders: A trailing stop loss order is a stop loss order that you set at a fixed number of pips from your entry rate. The trailing stop order adjusts the order rate as the market price moves but only in the direction of your trade.

Suppose you are long on EUR/GBP at 1.2654. You set the trailing stop loss at 30 pips. The stop order will become active at (1.2654-30=) 1.2624 initially. As the market moves higher, the trailing stop loss order continues to adjust itself higher. Suppose the EUR/USD rate goes up to 1.2674, the stop adjusts itself. Now the stop order will become active at 1.244.

Your trailing stop will be 30 pips below the top when the market puts in the top. The trailing stop loss order will be triggered and your open position closed if the market ever goes down by 30 pips. So in our example, you are long at 1.2654. You set the trailing stop loss at 30 pips and it became active at 1.2624.

If the market never ticks up instead goes straight down, you will be stopped out at 1.2624. If the market first rises to 1.2664 and then declines 40 pips, your trailing stop loss order would have first risen to 1.2664-30=1.2634. Thats where you would be stopped out.

You must have heard the saying often while trading: Cut your losses and let your winners run. A trailing stop loss order allows you to do exactly that. The idea is that in case of a possible winning trade, you wait for the market to stage for a reversal. The trailing stop loss order takes you out of your trade instead of you picking the right level to exit on your own.

Use of stop loss orders is critical in money and risk management. Never ever, trade without the stop loss orders! So the key to successful trading is to cut losing positions quickly and let winning positions run. This function is nicely performed by the trailing stop loss order. - 23199

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading and currencies. Discover a revolutionary new Forex Robot. Learn Forex Trading!

It Is Not Too Late To Profit From High Volatility

By Chris Blanchet

For investors who survived the past two years, it will not be much of a surprise to learn that market volatility, as measured by the Chicago Board Options Exchange, has risen from a modest 16 to a little over 79, the highest level ever reached.

In fact, after the attacks of September 11, 2001, volatility jumped to just 33. They closed the markets as a result of the uncertainty! Today, the markets feel subdued, yet are registering volatility in the range of 30. This presents plenty of opportunity for investors to profit.

The first thing investors need to do when it comes to taking a run at profit is to distance themselves emotionally from their investments. Trading software that provides signals on when to buy and sell can help in this regard, but this is something most individual investors are unable to accomplish. Think about it: we all work hard for our money and we hate to see it wasted. This is a benefit that money managers have -- they haven't worked hard for the money you invest, so if they lose, they lose your money, not theirs.

Secondly, the investor should have a good understanding of volatility. Reviewing the charts at Yahoo! Finance by typing "^VIX" in the quote box is a good start. Another essential is to understand the definition of volatility, which is simply "rate of change of the deviation from the mean." The higher the volatility, the more quickly will stray from its mean.

Lastly, investors need is to hold back from being consumed by greed. This poses an immense challenge for most people as short-term gains often hint at larger longer-term returns. Trading system can help in this regard as well since they so effectively strip the emotion factor from any trade by focusing solely on statistical figures like volatility, momentum, relative strength and so on. Individual investors, on the other hand, focus on the potential of profit or loss.

To summarize, taking emotion out of the investment equation and relying on technical measurements that give strong probabilities as to the direction of a stock, traders can use volatility to profit. Used properly, a trading system can assist with the emotional side of a trade and can provide strong signals for entry and exit points. - 23199

About the Author:

Chris has more than 15 years of experience in the financial services industry as a Financial Advisor. For recommendations on trading systems and analysis, visit Online Trader Today.com where Chris is a Technical Advisor. As well, you can visit his debt-free blog at How To Repay Debt.com

Trading Strategy - Descending Triangles Upside Breakout

By Jeff Cartridge

The descending triangle can be traded very successfully on the long side entering the trade as the stock breaks out to the upside. The pattern forms when the two boundary lines that contain the price movement converge to a point. The top line slopes down toward the bottom line which is horizontal.

Descending Triangles, Ok To Trade

Descending triangles are one of the most predictable patterns that are available to trade short, but also can perform on the upside. Just 43% of the patterns break upwards and can deliver good returns when they do. The average gain is 0.87% in 8 days with half of the breakouts (41%) being profitable. There are better patterns to trade on the long side, but selecting the right conditions can make trading descending triangles attractive.

Improve Your Trades

A break to the upside works better in a rising market or sector environment. By using filters that require the market and sector to be in a consolidation or an up trend you can improve the results. Because the upper line is sloping down the stock will be in a short term downtrend. Profitable entries tend to occur as a pull back in an up trend.

Descending triangles that breakout early in the pattern, produce inferior results. A breakout is better if it occurs after the pattern gets 30% of the way to the point of the pattern. Shallow patterns are also best avoided, where the pattern height is less than 2% when compared to the stock price.

Descending triangles with two highs at the same price or two closes at the same price should be avoided, as this usually occurs in an illiquid stock. If the volume supports the breakout the results are better. Supportive volume means the volume on the way up is higher than the volume on the way down.

Trading Descending Triangles Can Be Profitable

You can improve your trading results by using a series of simple filters that have been outlined here. This select group of descending triangles delivers an average profit of 1.45% in 10 days and is profitable on 51% of the trades. Overall this makes descending triangles attractive to trade.

Note: Statistics for this article have been provided by Patterns Trader after analyzing over 60,000 chart patterns on the Australian market from 2000 - 2008. - 23199

About the Author:

Jeff Cartridge is a private traderand created the website LearnCFDs.com Discover Patterns of Success

How to Attend a Live Marketing Event: Three Tips to Ensure You Get the Most Bang for Your Buck

By Ben Moskel

Do you ever wonder why you spend thousands of dollars on a seminar but feel like you return home empty handed?

Seminars, conventions, and other live events will tax your wallet, energy and resources. Here are several tips to help you create a positive return on your seminar investment.

First, come with questions and goals written down. Each year I attend several events and spend tens of thousands of dollars on my marketing education. For a few weeks before each event I keep a notebook at my computer to think of questions to ask or really specific things I want answered at the upcoming seminar. Perhaps you have a question about how to use Google's Website Optimizer tool. Maybe there is a colleague you want to meet in person.

It is so easy to get distracted at a seminar and completely ignore the reasons you bought your ticket in the first place. That is why having the notebook handy will help remind you about your questions and goals.

The most important tip is to make sure you are assertive especially if you consider yourself to be a shy person. Many times you may find yourself intimidated by the so called experts or gurus in the crowd. Resist the urge to hole up alone in your hotel room. Keep in mind that others also feel apprehensive about meeting new people and making conversion. I guarantee you will get infinitely more value from these rare networking opportunities than if you keep to yourself.

Remember also that these events are rare. Often an event is only held once per year. When will you have personal access to these types of high level entrepreneurs outside of these events?

Most successful business people will confirm that just a single contact can help you add thousands of dollars in profits to your company's bottom line.

Third, implement, implement, implement! It is tempting to form a habit of attending seminars because it makes you feel like you are working and adding value to your business. However, if you are only taking notes, but nothing more, you may as well stay at home! These same people often get home and immediately begin looking for the next event rather than execute the highly value creating techniques they discover at the last seminar.

I call the lack of execution "seminar intoxication." While you are at the event you have grand ideas of executing all of the ideas you learned. However, once you get back home with all of the typical distractions and the seminar "buzz" has worn off, it is difficult to execute these same ideas.

The one way to combat this destructive cycle is to execute one small idea at a time. Begin with just one idea, execute and then move on to the more advanced processes. Most of the marketing principles are time tested so they will be applicable even if not executed right away. You may also consider getting some inexpensive labor to help execute some of the techniques. This is especially true for highly technical type tasks or any activity you either dislike are are not proficient.

The idea is to be honest with yourself. If you know you are not ever going to teach yourself complicated java script coding, but need it to implement a new strategy, then find somebody who will do it for you. Consider posting the project on outsourcing boards like elance or hiremymom.com.

If you find yourself spending thousands of dollars, plus time energy and resources to attend seminars but do not get your money's worth, then apply these tips and you will certainly see a more profitable return on your seminar investment. - 23199

About the Author:

Ben Moskel is the author of The Online Entrepreneur available at amazon.com and Barnes & Noble. Ben Moskel is a full time Internet Entrepreneur and consultant. Ben has generated several million dollars in online revenue for many large retailers and service providers.

Learn Forex Trading Tips

By Bart Icles

Many people these days make extra money through forex trading. If you are one of the millions who have been lured by the rewarding yet unpredictable world of forex trading, it is important that you learn forex trading tips before you start dealing with real money. Although the forex market can allow you to make money easily, it can also take away all your investments in under a minute. As a beginner, it is important that you keep your distance from the forex market and learn the most that you can about it before you finally decide to start engaging in currency trading.

One of the most valuable tips you will have to remember about forex trading is to learn forex trading techniques at length before you step into the market. One false move and you easily destroy your trading career forever. Learning about forex trading techniques will help you a lot in making your income levels soar as you engage in this volatile yet profitable market.

It is important that you are able to follow the different trends that occur and are practiced in the forex market. By following these trends, you will be able to determine when the market is going to experience a decline and when it will start to rise again. This can also help you judge when to join and when to exit trading. The market trends will also form the basis for your strategies that will differ according to the different scenarios that the market can pose.

There are also certain house rules that forex investors observe. You can learn more about these rules through enlisting yourself to forex courses. There are different forex courses online, some of which are free of charge and some will cost you a small amount of money. Whatever form of investment your forex education will require from you, be assured that it will help much in making you familiar with the basics of forex trading, as well as how you can develop different strategies for different circumstances.

If you learn forex trading tips, you are actually taking the first few steps in ensuring that your trading career will be worth your while. It is important that throughout your learning process until the time that you are already actively engaging in forex trading, you are able to keep your senses keen and alert. This will help you absorb information as you come across them, and you will also be able to make immediate responses to the different changes that can happen in the forex market. - 23199

About the Author:

Your forex trading training starts with a desire to learn and a drive to become a great trader. Using free forex training takes dedication and a good teacher. But once you learn how to trade and do so successfully your life will change and you have options and financial resources you never had before.