Stock Market Trading Strategy
Traders need to remember that as a trader, deciding not to trade is also a trading decision. Traders are all too eager to jump into positions just because we feel we need to trade The truth is that we must remain patient and save your capitol. You should only enter positions when you have found a trade opportunity that offers low risk, high money making potential, and also a high probability that the trade will work. If you are a short term trader making buy and sell decisions on a five minute chart without paying attention to where price is in the larger time frame, normally your losing money. Trading with proper low risk, high reward, and high profit trading and investing is having a complete view of both the larger and smaller time frames of the market.
Many times the ability not to trade is as valuable as trading ability. There are a lot of funds with a lot of movement who need to do something between now and year end. If you have the option of being very selective and picking your trades, you've got a competitive advantage that traders should employ. The basic look at investing in Treasury bonds (NYSEARCA:TLT) is they are "risk free." But with the possibility of a debt default by the US government and the threat of higher interest rates damaging the value of bonds further, many people are learning the Treasury market has plenty of problems. The 10-year US Treasury yield (NYSEARCA:IEF) surged more than fifty percent over the past year, but the yield is still just at 2.62%. That means that someone with a four percent withdrawal rate on their investments is eroding their principal.
By using this technique, not only is it possible to collect dividends from the underlying ETFs, but income can also be generated from the options. And in the case of gold, it's possible to convert a dead asset that generates no dividends into an incoming-producing asset. The best combination of ETF covered call options to sell. Given liquidity is the opposite of volatility a large order will move a thin stock there is a case to be made that the massive liquidity injection by the government has quelled, or will quell, forward volatility. That may play through, although market veterans will tell you that the most dangerous four words in finance are "this time is different."
Many times the ability not to trade is as valuable as trading ability. There are a lot of funds with a lot of movement who need to do something between now and year end. If you have the option of being very selective and picking your trades, you've got a competitive advantage that traders should employ. The basic look at investing in Treasury bonds (NYSEARCA:TLT) is they are "risk free." But with the possibility of a debt default by the US government and the threat of higher interest rates damaging the value of bonds further, many people are learning the Treasury market has plenty of problems. The 10-year US Treasury yield (NYSEARCA:IEF) surged more than fifty percent over the past year, but the yield is still just at 2.62%. That means that someone with a four percent withdrawal rate on their investments is eroding their principal.
By using this technique, not only is it possible to collect dividends from the underlying ETFs, but income can also be generated from the options. And in the case of gold, it's possible to convert a dead asset that generates no dividends into an incoming-producing asset. The best combination of ETF covered call options to sell. Given liquidity is the opposite of volatility a large order will move a thin stock there is a case to be made that the massive liquidity injection by the government has quelled, or will quell, forward volatility. That may play through, although market veterans will tell you that the most dangerous four words in finance are "this time is different."
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