Here’s how to blow up your trading account: Buy up on as many different stocks as you can until you run out of funds. Only impatient desperate greedy little investors will put their money in jeopardy with such a gamble.

It’s impossible to watch and manage multiple stocks at the same time. One stock in your portfolio goes up and you don’t worry about it. But that successful stock may distract you from taking corrective action on another stock you should disown because the lost from it neutralized all your winning stocks’ profits. (more…)

Your decision to start learning to trade commodities will give you a completely new insight into the whole world of commodity futures trading. This could be within a specific sector such as grains or precious metals or perhaps across the whole spectrum of global commodity markets. Now doubt you have heard concerns about energy security and the crude oil trade on the New York Mercantile Exchange, and of how the price fluctuations can be caused by a whole range of factors. And what causes price movements in gold, silver and other precious metals and why should cocoa or coffee futures prices suddenly surge?

These are exciting markets to study, so finding a top quality commodities training provider is so important. How do you go about learning to trade commodities? What are the key areas you need to master with confidence so that you feel comfortable entering the global commodity markets? Firstly, if you are learning to trade commodities find where to do the commodity trading courses that may be on offer. Either start your commodity education at home using study materials with an online training package or attend a top quality trading school where students cover all aspects of commodities and futures. (more…)

There are a variety of answers to this question, but the simplest answer is to never risk more than 5-10% of your account on a given trade. I enjoy watching YouTube videos where the traders are trading hundreds of contracts at a time, and the videos always show them making a great return on a one or two point move. Oddly enough, the videos of these high rollers never show them getting blown out of the bottom side of a trade. I have to assume that they ALWAYS pick winning trades since those are the one type of trades they publish.

And that is the silly thing about videos showing traders making $10000 a trade. In my world, you would need about a 2 million dollar account to risk that sort of capital on a single trade. Now there are plenty of traders out there with far more capital than two million, but they aren’t posting their trades on YouTube. Why would they? (more…)

A stochastic shows a stock’s (or any trading instrument) ability to trade in the upper or lower part of its price range relative to the analysis period. Stocks that are in the upper part of the range (above 70) and the lower part of the range (below 30) are exhibiting signs of strength and weakness respectively, in relation to recent performance. This strength or weakness can be exploited by short term traders.

While a stochastic reading at these levels (above 70 or below 30) is often considered overbought or oversold, strong stocks will spend more time in the upper half of their range and weak stocks will spend more time in the lower half of their range. This means that we can take advantage of strong or weak stocks at points when they are showing above average strength or weakness. I call this movement a “stochastic follow through”.

The Strategy: In an up trending stock, buy when the slow stochastic line crosses above the 70 level with the fast line still pointing up. Sell a down trending stock when the slow stochastic line crosses below 30 with the fast line still pointing down. Cover longs when fast line crosses below slow line, and cover shorts when fast line crosses above slow line.

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