Sunday, April 20, 2008

Right now I have a close watch on the agriculture names. There is a great ETF to look at on a pull back. I look MOO it is the agriculture exchange trades funds and has most of the big agriculture names. For those of you who do not know what an ETF is google exchange traded fund. I like MOO on a pullback to $60.00. If it holds $60.00 and then show some strength a good entry point would be about $60.25. Make sure $60.00 holds. If it falls through $60.00 let it come back up through $60.00 to get in or let it drop down to 55.00. I also like coal and steel. Again, these have had a huge run the last several weeks. Look to buy on a dip (pullback). If you have questions about these concepts please let me know. Also, I think the refiners are due for a run. However, I like OIH (Oil ETF) on a pullback just in case the refiners do weaken you a lot of diversification in this ETF! If you like to trade stocks and not ETFs. A good place to start is to look at the top holdings in the above ETFs. This will help you build a list. Later this week I will try to cover support and resistance to identify an entry point on these stock. The entry point is crucial. Remember my last post when I said you need to become the house. A good entry and exit strategy will help give you a winning edge.

Thursday, April 10, 2008

How do I trade stocks? The better question should be how do I trade stocks and make money? First don't buy a stock trading system! Most systems cost a lot of money. You are starting in the hole. You can use this money as trading capital. There is plenty of free information out there to get you started. Then once you understand the basics and have researched the different systems it may be beneficial for you to purchase a system.

Always remember if it is too good to be true it is probably not true!

The key to making money trading is good money management. Cut your losses quickly and let your winners run. Think about it in terms of odds making. If you have 1 to 1 odds that means you can win 1 dollar for every 1 dollar that you bet. That means you need to win 50% of the time to break even.

For example in the game of black jack if you beat the dealer you will win what ever you bet. If you bet a $10 chip. You will win $10 if you beat the dealer. Let's assume you bet $10 for 10 hands(games). You bet a total of $100. If you win 5 games you will win $50 and if you lose 5 games you will lose $50 thus breaking even.

The problem with black jack is that statistically it is impossible to win 50% of the time. A good black jack player may win about 48% over time. That is how the huge casinos are built along the strip!

When you trade stocks you can have the odds in your favor you can be the house. Let's take a look at your game. Trading Stock! However, when you lose for every dollar you bet you are going to lose only $.25. When you win you will win $1 or more. For every 4 times you lose, you only need to be right 1 time.

Ponder this for a while. It is the key to successful stock trading! I will talk about in more next time!

Welcome to The Stock Oracle

Welcome to The Stock Oracle Blog. This will be a blog for all those looking to understand how to trade stocks as well as those already trading stocks and other financial instruments.

My goal is to have a blog to help the average person who wants to trade make some money. I have been trading for a long time and have spent a fortune on different systems. I finally figured out how to trade successfully on my own through a lot of trial and error. This has been my best year ever. Several of my accounts are up over 100% over the last 3 months.

There are hundreds of stock trading systems out there. Have you purchased one? Only to get very poor results. Is the system so complex that you need a PHD to understand it? Is the system mechanical? We will discuss the different systems out there and the different ways to trade. In addition we will discuss why most of them do not work for the average person consistenely.

The biggest problem with trading is it is overcomplicated. I subscribe to the KISS theory (keep it simple stupid). Trading is overly complicated. Thousands of indicators MACD D, Fibonacci, Stochastics, Moving Averages, Bollinger Bands, Oscillators. These indicators usually give mixed signals and cause a trader to have paralysis by analysis.

The next post I will share with you the main strategy that I use to make consistent money trading. Hint (It is more about money management than picking the right trades). This will likely suprise you and my guess is you have not heard of it with any of the systems you have purchased.