Posts Tagged ‘common’

Perazzim Capital Management, Inc Releases Breakthrough Backtesting Results of Three Common Stock Options Trading Systems

Las Vegas, NV (PRWEB) May 5, 2006

Perazzim Capital Management has released the breakthrough backtesting results of three common stock options trading systems. These common systems are directional as well as sideways (non-directional) in nature. As many trades that fit the criteria of these stock option trading systems for 2005 were tested. Stock option traders that use option trading systems or option trading strategies need to know if these common systems result in a net profit or a net loss for our current 2005/2006 slightly trending market. Additional insights are reported from the study of how the number of recommended trades a software scanner reports each day varies with the Nasdaq index. Traders that use option trading strategies can gain important insights with these results.

The results are available at http://www.breakthroughbacktesting.com

Company Vision – Perazzim Capital Management strives to give you the confidence to trade stock option trading systems that have a high probability of profit based on backtesting with lots of samples.

U.S. Government Required Disclaimer – Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the options markets. Don’t trade with money you can’t afford to lose. This book is neither a solicitation nor an offer to Buy/Sell options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in this book. The past performance of any trading system or methodology is not necessarily indicative of future results.

Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the most of the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity, slippage, or intra-day price swings. Backtested systems in general are executed with the benefit of hindsight. The author has taken exhaustive steps to determine the expected return (profit or loss) of certain options trading systems. However, no representation is being made that any account will or is likely to achieve profit or losses similar to those shown.

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Ian Cooper Options Trading Pit – 6 Common Options Trading Newbie Mistakes

Ian Cooper Options Trading Pit

Are you about to put one toe into the world of options trading? Have you started on options trading and made some initial losses? This article is written just for you. Ian Cooper Options Trading Pit

After 6 years of professionally mentoring beginners in options trading, I noticed that there are a few mistakes that keep showing up, causing initial losses. Good thing is that I always make sure my students start out options trading using virtual trading or paper trading in order to harmlessly get through these initial mistakes and to learn from them.

These mistakes have been responsible for most of the initial losses that I see options trading newbies make and having an understanding of them would certainly help you avoid these mistakes and avoid the initial frustration of losing money.

Mistake 1: Choosing the wrong (usually out of the money) options

Many options trading newbies prefer to buy “cheap” out of the money options the reason being why buy expensive when cheaper options would also profit if the stock moved up (for call options). Well, that one decision alone has resulted in much of the initial losses when a stock moved up insignificantly and the position remains in a loss. Out of the money options are only good if you expect the stock to move strongly in that direction. If you expect to profit from relatively small movements, at the money or in the money options should be what you should buy. Buying out of the money options is also the reason why many options trading beginners lose all their money in one go. This happens when the options they bought never got in the money all the way up to expiration.

Mistake 2: Making complex positions as your first few tries at options trading

Many options trading newbies start out making complex positioning strategies such as iron condor spread or butterfly spreads as their first few options trades and then totally screw up as they did not know how to maintain the position and some don’t even know how to set up the positions properly. If you are new to options trading, stick to making a few simple call or put options trades using a small amount of money (or money you can afford to lose) in order to have a feel of how it works first before moving on to more complex strategies. Complex strategies are only good when your trading experience is as comprehensive as they are. Ian Cooper Options Trading Pit

Mistake 3: Buying options that do not conform to your expected trading horizon

Most options trading beginners have no idea what an expected trading horizon is in the first place and commonly find the options they buy expiring before the underlying stock made the move they expected it to. If you expect a stock to be a mid to long term performer, make sure you buy options that are half a year to a year out. If you don’t know how a stock is going to behave, make sure you give yourself plenty of time by buying options with no lesser than 3 months to expiration.

Mistake 4: Placing the wrong orders

Yes, when under pressure, especially when real money is involved, beginners tend to make silly human errors such as clicking a wrong button, buying a wrong option, buying a wrong expiration month or placing a wrong stop loss order that got the position sold off immediately. Such newbie human errors can only be reduced through an extended period of virtual trading practice on your chosen options platform and then progressively practice using only very little money in order to get used to the feeling of trading real money. Sadly, we are all human, while experienced options traders tend to make lesser of such mistakes, they still do sometimes. However, it is more prevalent in newbie trades and certainly hurts trading confidence. Always give yourself a few months of virtual trading practice on your chosen platform before going on real money.

Mistake 5: Trading with borrowed money (or money you cannot afford to lose)

There is a saying “you can’t afford to win if you can’t afford to lose”. This is exceptionally true in trading, not only options trading, but any kind of trading. If you trade using money that you cannot afford to lose, the mental pressure will reduce your odds of winning when your odds of winning are already very low as a beginner. This is why we always advise people to trade only with money they can afford to lose.

Mistake 6: Trading without guidance

Would you learn to drive a car without anyone guiding you? Why then would you learn to trade without anyone guiding you? Yes, a mentor or a teacher is extremely important to beginners in options trading not because they can give you “tips” but because they can shed light on your situation and reveal weaknesses that you may not have noticed. Newbies trading without guidance typically repeat mistakes over and over again, and if you have traded options before, you know it don’t take many of those mistakes to wipe your account out. Ian Cooper Options Trading Pit

More Options Trading Articles

The 3 Most Common Mistakes in Money Management

NonDirectionTrading.com – FromTimothy Stevens – The Forex Options Guy who provide valuable Forex Options Training. I will like to offer you a Free “Getting Started Trading FOREX with Options” course when you subscribe to my newsletter on Non Direction Trading. You will get your instant access at http

Forex Trading Advice – 4 Common Sources of Advice Traders Take and Lose

There are some sources that give forex trading advice and they shouldn’t be trusted and here we will look at what may seem good advice but is not, here are 4 examples…

Here they are in no particular order of importance – there all important!

1. Advice in A Forex Forum

The only people who hang around forums giving advice are, losing traders who just want to make themselves feel better, or vendors hoping to sell there products. If you want bad advice, a forum is a great place to go – steer clear.

2. Product Reviews

How can you independently review a forex product when you’re selling it and have a vested interest in making it look good to make money?

Click most of the reviews and you see and you will normally go a site, where the writer gets a commission on the sale. There are loads of them on the net and the most popular ones involve the following:

- Day trading scalping courses or systems

Day trading and forex scalping doesn’t work by its very nature and you should steer clear of them. You get presented with a track record (simulated in hindsight on paper not real money) but you wont win, ask for a real track record and see if you get one.

- Forex Robots

Again you get a simulated track record and the person normally tells you have to get used to the system, practice it and make it work. Strange that – if it’s a robot, shouldn’t you just plug it in and make money? Huge amount of these on the net and most will wipe you out.

3. News Stories From Experts

Don’t those CNBC and CNN reports sound convincing?

They are and there well put together – but they won’t make you any money.

Markets don’t move on fundamental news (which is instantly discounted) they move on investor sentiment and future perception. Will Rogers once said:

“I only believe what I read in the papers”

He was joking – but there are huge amount of people, who believe what they hear from so called experts. Don’t be drawn in by tempting stories, you will lose.

4. Brokers

Sure they do a good job placing orders etc but if they were any good at trading they wouldn’t be brokers. A broker assisted account or broker news and tips, is unlikely to make you any money

So What is Good Advice?

Get down to your local bookstore or Amazon and stock up on some books from traders who have walked the walk, rather than talk the talk. You wnat people who have traded you can learn from, not just follow blindly.

Use the above and free resources online, to build your own forex trading system, based on forex charting.

Get a forex trading strategy you are confident in and this means building it yourself and it’s a lot easier than many forex traders think.

At the end of the day, the best advice is your own from your trading signals generated from your system. In fact, it’s the only forex advice that can lead you to long term currency trading success.

Forex Trading Gone Bad – 6 Common Mistakes to Avoid in Currency Trading

There are much more losers than winners in currency trading and do you want to know how to be at the winners’ side? A wise guy learns from his own mistakes but a smarter guy will learn from the mistakes that other people have made. So I have done a thorough research on the common forex trading mistakes that most people make and now you can learn from it as a personal development to be a better trader.

Mistake #1 – Over leveraging. It is true that leveraging is one of the advantages of a forex strategy. But at the same time, if used incorrectly, it will be a disadvantage because of over leveraging. Many people does not consider how much risk they will be taking when they decide to trade big using high leverage on small trading capital.

Although you have the potential to win more on the trades but the risk is much more as one highly leverage trade that loses can wipe out a small trading account. One should only risk at the most 5% of his trading capital for per trade.

Mistake #2 – Over trading. Often, over trading occurs when traders use forex scalping method. They would try to find opportunities to trade even though there is no quality opportunity for them. In the end, there are more losses than the gains.

It does not only happen to forex scalping, it involves other forex trading techniques as well. So to avoid this mistake that many people make, you should follow the rules of your forex trading system and trade only where necessary.

Mistake #3 – No Patience. Currency trading is an activity that will really test your patience and if you don’t train yourself to be patient, then surviving in this market is very tough. Long time ago, I thought I can maximize profits by rushing into a trade when the forex trading signals have not shown.

But most of the trades ended in losses because I was not patient enough to wait the forex indicators to confirm the trading signals. So if you can follow the rules of a good trading system, then definitely you have good patience.

Mistake #4 – Chasing after the price. If you have noticed, this mistake occurs when you have no patience. Traders feel uneasy when they missed an opportunity to trade and then chase after the price. The price rebounded back and triggered their stop loss. A forex tip for you is, never trade too far from a low value Moving average (e.g. 6 EMA), trading opportunities will always come.

Mistake #5 – Too greedy. Once you have a trading plan, stick to it and don’t modify it because of your greediness. If you have a risk to reward ratio for profit taking, then be it. Don’t aim for higher profits when your hunch tells you so. Even breakeven is considered as winning in currency trading. As long as you do not lose big and profits are more than losses, you are considered successful if you maintain this consistency.

Mistake #6 – Forex Scalping means fast profits. If you let me choose a forex day trading strategy and forex scalping, I will definitely drop the latter. I have never seen many traders got high success using that forex strategy because valid support and resistance does not work in such a small time frame.

There is no free lunch in trading, so you do not expect fast and huge profits in a short period of time. Any huge gains will definitely take some time to build even if you have a marvelous forex trading system.

Out of the many business opportunities out there, forex trading can be a very lucrative home business for those who want to be their own boss. However, to succeed, you must have the discipline to follow a good trading system, control your emotions, learn from your mistakes and never to repeat them again.

Investing In Forex Trading – Answers To Some Common Questions

Trading in currencies of the world, which is the essence of foreign exchange trading is one of the growing markets, as countries open up the various locks that only allowed Governments, banks, and financial institutions, duly authorised to operate currency trading. Since it involves more than 2 trillion dollars a day, obviously controls are necessary.

If this author is correct, Donald Trump, the legendary millionaire made his millions from trading in currencies. But then he must have had the required licence. Many countries do still have laws that prevent individuals from the market of currency trading.

Currency trading is only dealing in currencies, that is buying and selling various currencies, and while it is exciting, it is also exhausting. You buy dollars when it is low and sell at a higher price to a country or another broker in a distant country who requires dollars. You thus gain some money in an overnight trade. Currency trade never stops. It’s like getting on a treadmill that continuously rolls on.

With newer communication technologies, markets are always open, and the authorised institutions all over the world run their trading desks twentyfour hours a day, and throughout the year. Further development of various software helps these traders to buy, bid, sell, currencies, depending upon the parameters that have been preset and can be reset time and again.

If you want to get a feel of how it is to do forex trading, you need to get some good software, which allows you to learn the rules of the game, how it works, why do countries do currency trades, what cautions are necessary, and the other rules of the game.

This gives an hands on experience, as you and buy and sell currencies in a ‘mock-up manner’. Most of the real genuine software prepared by the experts would guide along the way, and then leave you after you have got the hang of things (by means of a simple Q&A Session), and then retreat into the background, while you play the market. At the end of your session, you would get a report of where you went right and where you were wrong.

Forex trades are somewhat similar to stock trading. An investor in stocks watches the various indices of the stock markets, and how the stocks held are performing, what the quarterly results, how changes in the economic scenario in the country, and the world is shaping up, and accordingly decides to stay put, or pull out. Obviously this also happens when you need cash urgently, and therefore you may cash in your stocks to get that extra cash.

In forex trade, the signals that one watches out for, as a trader, is the performance of the othr country, the trade surplus or deficits, the economic signals such as good or poor growth, the rising or declining inflation, which signals when that economy is likely to get into a deficit or surplus on the trade account – goods and services. When there is an imbalance between the two, as the US currently has, the country having the healthy balance is on a platform which offers the dollars to America itself! And America buys, because it must pay for its imports! Instead of reading company reports, you read country reports.

The best way for you to get into forex market trades is through a banker, or a financial institution, who act as brokers for you, and have dedicated funds which trade in currency markets. Some offer a mix of currency trades, and stock trades. If you wish to invest wisely, and use the arbitrage opportunities in forex market trades, the first choice should be to havea mix of stocks and currency trades. You can move on to solely currency trades after you have reports that point out whether you are earning more from currency trades or from stocks. It’s a difficult choice, and you would be well advised to consult your banker or investment institution. Even then they can make mistakes and so be prepared to lose as much as you are likely to gain. Expert advice is one way of hedging your exposure.

Can you practice as an individual? Most countries restrict invividuals from forex trade. Or, there are conditions that restrict the amount of trades you can do. It is best to get legal advice, or read up a good, authoritative book. This author always recommends going back to the basics, which means that you can use your child’s grad school book on finances, and get the basics right first. Then you can move on and find a good book for let’s say an MBA student who is going to specialise in finance. These are prepared by academics, who have the academic orientation, and also some experience in the markets, and since they write for students, it is the right choice for you. After all, in a new forex trade you are entering, you ARE a student!

Currency Trading for Beginners – 10 Common Held Beliefs That Will Slash Your Profits

It’s a fact that 95% of traders lose money in forex trading, here we will give 1o beliefs most of these losers hold. Currency trading for beginners can be hard as there are a lot of myths promoted online so learn them, avoid them and join the elite 5% of winners…

Here are your ten beliefs that will slash your profits.

1. You can predict forex price direction

Probably one of the biggest myths out there, prediction is another word for hoping and guessing and you don’t get rewarded for this in life, let alone forex trading.

Only act on the reality of price change and don’t predict.

2. Buy low sell high is a great way to make money

Not in forex trading – the best and biggest trends come from breakouts to new highs or lows. Wait to buy low and sell high and you will miss these big moves. If you want to make the big money learn to buy and sell breakouts.

3. Markets move to scientific formulas

Really related to point 1 and loved by the far out crowd who think the scientific systems of Gann, Fibonacci and Elliot will help them win but the fact is if markets did move to a scientific theory, there would be no market as we would all know the price in advance.

Common sense really, but its surprising how many people fall for this myth.

4. Complicated systems are best

The reverse is true – simple systems are best as they are more robust, with fewer elements to break in the brutal world of trading. Over complicate a system and it will have too many elements to break.

5. You can follow experts and the news and win

News and experts reflect what the majority who lose believe and furthermore, markets don’t move on news stories they move on human perception of them. It is how a news story is perceived by the traders that determines the course of events.

If you could trade on news and expert stories a lot more people would win and they don’t. Will Rogers once said – “I only believe what I read in the papers” He was joking of course – but its surprising, how many people see a story on NBC or CNN and think it will help them win.

6. You can day trade and win

No you cant – the time period is to short and the data is not valid! Same goes for forex scalping. You can’t get the odds in your favour so you can’t win – period.

7. The more effort you put in the more you get out

If you work in a shop maybe – but in forex trading, the only criteria you are judged on is how accurate your trading signal is. It can take you 5 minutes and make a bundle or 10 hours and give you a thumping loss.

The key to winning at forex is to work smart not hard.

8. You need to trail stops closely to lock in profit

Trail it too closely and you will never follow the big trends and make the big money. Most traders try to restrict risk so much, they actually create it and guarantee they will lose.

Take calculated risks at the right time and you will win. Keep in mind you have to take dips in open equity to make money longer term.

9. You can follow a forex robot with simulated track record and win

Lots of them on the net all with track records that look great and are simulated. Trade one of these and your odds onto lose.

10. Forex trading is easy

Learning the basics is easy but trading to win is much harder. You would of course expect it to be with the rewards on offer. So do your homework and you could make yourself a huge or even life changing income.

Just remember you need to put in effort.

So there you have 10 common myths to avoid and make part of your forex education. This finishes this article for forex trading for beginners.

In part 2 we will give you 10 beliefs that could make you a super trader and put you on the road to big forex profits.

Forex Trading Education – 5 Common Accepted Ways to Make Money not to Learn

Many traders work hard at their forex trading education but simply fall victim to the myths and scams that abound online. If you try and learn ideas that are proven to failure, then of course you are going to lose – but 90% of new traders do this!

Here is your list of things that you definitely don’t want to learn.

1. Forex Day Trading

You can try as hard as you want to learn methods and systems but you won’t win because the logic is dumb. You cannot predict what millions of traders will do in a day and all volatility is random.

If volatility is random, you can’t get the odds on your side and you can’t win.

2. Forex Scalping

This is simply a dumber version of day trading instead of judging within a day the time periods can be minutes! Steer clear.

3. Scientific Theories of Prediction

The logic here is that human nature is constant so we can predict what humans will do with scientific accuracy.

There is a huge industry in selling the secrets of such legends as Fibonacci, Gann and Elliot – but leaving aside they made no money with their theories, it’s obviously not true…

If markets moved to a scientific theory, we would all know the price in advance and there would be no market – pretty obvious really.

Leave these theories to the far out investment community, the naïve and lazy traders and see forex for what it is a game of odds.

4. Don’t Learn a Complicated System!

Many traders are very clever and try and use there brain to build complicated systems.

They normally fail, because in forex you need to keep your system simple there is no link between complexity and success.

Simple systems work best, because they have fewer elements to break and are more robust.

You get judged on only one criteria in forex trading and that’s your market timing and the accuracy of your trading signal – that’s it, and to be accurate you don’t need to be complex.

5. Learn Constantly

I read all the time you have to keep a log of your trades and study each losing trade and learn from your losses. What for?

If you forex trading system is logical, then what do learn from a loss?

You lost!

Big deal, losses are part of the game. Once you have a system you are happy with, you simply need to apply it with discipline and if you want to keep learning, you will end up chasing your tail, in search of the perfect system that doesn’t exist.

I use the same forex trading strategy, I learned back in 1988 and have never changed it.

Sure, it isn’t perfect but it makes money long term and that’ the aim of the game.

So if you have read the above, you will know what not to learn and save yourself some time in your forex trading education and get the right education and win.

Learn Forex Trading – 6 Common Mistakes the 95% of Losers Make

If you want to learn Forex trading make sure you don’t make these common mistakes made by the vast majority of losers or you will join them. Avoid them at all costs, learn Forex trading correctly and enjoy currency trading success – here they are…

1. Trusting $100 Forex Robot

Want to lose money? Then this is simply one of the best ways to wipe out your money.

The cheap, heavily promoted Forex trading systems you see online, have never been traded and only have back tests that are made up in hindsight. They have made no real gains, despite claiming you will make some if you use the system.

Think you will make money with one? Try it and see the market doesn’t allow you to make up your track record in real time.

2. Scientific Theories

These are loved by the wacky far out crowd and the theory goes like this …

Human nature conforms to some mystical law which means there is a scientific theory and if you follow it you will win.

Well of course there is no such theory that works – because markets don’t move to science! Markets only move to odds and if there was a scientific theory that worked, there would actually be no market, as we would all know the price in advance.

This doesn’t stop traders though they love theories like Gann, Fibonacci and Elliot Wave which claim to be scientific but are not.

3. Prediction

Goes with the above you have lots of predictive theories that tell you they can spot price changes in advance but they will about as accurate as your horoscope, as prediction is just guessing.

If you want to win trade the reality of price change and don’t guess!

4. Day Trading and Scalping

The dumbest way of trading you can get – let’s try and predict what millions of traders will do in minutes or hours – hard job? It’s impossible!

Sure you get lots of day trading systems that say they can make money – but guess what? There track records are all simulated backwards.

5. Trading Breaking News

The traders who do this need to learn the following – markets move to perception of the news not the news itself and how far it is already discounted. Markets always crash when the news is most bullish and rally when its most bearish and trying to trade on the back of it is a waste of time.

6. Not Understanding the Importance of Discipline

Most traders are followers and hate responsibility for their own financial destiny and never have confidence in what there doing.

When they hit some losses they cannot trade with discipline let their emotions take over and lose. Trading discipline is vital – if you have a trading system, you must execute it with discipline or you will lose.

Understand this and Win!

Most traders believe the rubbish they are told that Forex trading is easy and its obvious its not and they fail to understand that success is built on a solid forex education and confidence in what their doing which leads to discipline.

If you understand the above, you can achieve currency trading success and avoid the losing majority

Currency Trading Education – 6 Common Novice Mistakes That See Traders Lose

Currency trading education is all about getting the right information but most traders believe myths or base there trading strategies on logic which is not correct and lose. Here we look at some common mistakes, you must avoid to enjoy currency trading success…

One of more of these mistakes are made by the majority of novice traders so lets take a look at them, there in no particular order of importance to avoid – there all important!

1. Forex Robots and Expert Advisors make Money

You have seen them advertised, promising to double your money each month with no effort and all you do is pay a hundred dollars or so for an income for life.

They don’t work and if you use one these systems you will lose very quickly. If making money was as easy as the robot vendors claim, no one would work and everyone would trade for a living.

2. Day trading and scalping Work

All short term volatility is random and there is no way you can get the odds on your side and win because of this. Trading short term moves is a loser’s game – it looks low risk but you are guaranteed to be wiped out.

3. Markets can be Predicted

Prediction is hoping or guessing and you won’t get far doing that in any venture in life and that includes Forex. The far out investment crowd love the theories of Elliot and Fibonacci which claim they can predict the future – but if they can do this, why do they ever get a trade wrong? Never predict, trade the reality of price change and you will have the odds on your side.

4. You can Trade breaking News Stories

News is discounted by the market instantly.

The news itself is not important it’s the investor’s view of the news which is and everyone may see the same facts but they all draw different conclusions from them. Markets always fall when the market is most bullish and rally when it’s most bearish so never trade news stories.

5. Working Hard or Being Clever Guarantees Success

Forex trading suits a simple approach as it’s an odds based market. Over complicate your trading and your Forex trading strategy will have to many elements to break. Don’t work hard, work smart – effort may make you more money in a normal job but not in Forex.

6. Leverage is the Key to Big Gains

Yes it is but more novice traders wipe themselves out due to over leverage than any other reason. You can get 200:1 leverage with any broker now but novices should start with NO leverage at all, until they are comfortable with there trading and use no more than 10:1 after that.

Work Smart and Win

The above are all common and avoidable mistakes, so if you want to enjoy currency trading success, avoid them and get a good solid currency trading education which is based on sound logic and avoids the myths of Forex.