Financial Trading Product Reports

The Master of Commerce

When I studied the principles of investing in college taught me that the price of a stock reflects the value of the company. With fundamental analysis, there are many methods of how to analyze companies' financial statements to determine whether an action is a good or a bad investment. You can make horizontal and vertical analysis on standardized tests financial statements, which are just fancy terms for comparing numbers. You can calculate certain financial ratios to obtain a better understanding of a company's liquidity, working capital management, its ability to stay in business long-term profitability.

I applied these concepts when he began to operate the stock market. I soon discovered that if he wanted to trade in shares in less than three months, decisions based on these tests were not useful. I did not want to buy shares to receive dividends only. I wanted to change capital gains.

I was not satisfied with my knowledge, tools and methods that I have had to operate in the markets. With my desire to negotiate a shorter period than three months and my belief to strengthen that emotions have great impact on trade, I started looking different approaches to buying and selling shares.

I went to one of my textbooks in college. I wanted to know how else I could analyze markets. From the passage I read, I learned that one can analyze the market in one of two ways: fundamental analysis and technical analysis.

I found a newspaper ad one day at a trade seminar. While reading through ad that I saw the words: technical analysis. An expert trader was to talk about exactly who was interested in learning. It was a free seminar and everyone was welcome to come. So I called my friend and asked if I would be interested in attending this seminar business. He was.

The seminar was organized by a business selling trading courses: courses to teach people on how to operate the stock market. When we arrived, we were taken to a room small. There were about thirty people. The spokesman was apparently a veteran trader who has written two books on trading. We will call for the purpose Bauer of this article. Bauer had a very strong presence. It was a big man, tall, with a shaved head.

I was in the front seat trying to listen and understand every word of this man, he said. It was his teachings that planted the seeds of the way that eventually grew as a trader in recent years. Often I heard his voice in my head, reminding me of the lessons he learned from his books and the lessons I learned from him that day. I'll try to enumerate the lessons I learned of this man to help the way I helped.

This man had my attention from the beginning. "The market share is a game where People try to steal other people's money. That is the goal of the game and is legal, "he began. I wondered what Wall Street professionals have thought of that statement, if you hear it. I smiled. I liked it already.

He continued: "If you will be part of this game, are essentially given permission to steal money from other people and, instead, you're either with them stealing your money too. Some of the brightest people in the world is going to play with you. Therefore, if you go to war and fight an army with real weapons, you better make sure they are not going there with a plastic gun. "

He said that people rush to markets to lose their money. It sounded ridiculous but I think it was the only conclusion we can draw from the fact that most people begin to operate without sufficient preparation and educate themselves. Of course, most of us do not put in a trade with the hope of losing our money, however, that is what we are doing effectively when the market without adequate preparation.

"They just can not wait to lose their money. Do not bother to learn about the market first. They think it is easy. Most people know they need training before they can fly a plane or perform surgery, but do not know why they think it is easy to make money trading, "he exclaimed. I was very excited about it.

"Trading is difficult," he said. Only about than 5% of people know how to be profitable. And so the probability of finding someone who knows what they are doing is very, very small. "No No trust only on the advice of their brokers, their fund managers or anything else. His best hope of success is to educate yourself. The sooner you do, the better you become. "

"When it comes to buying and selling shares, there is no such thing as investment. What people usually refer to: the trading and investment long term for me. "When people cling to their investments for five or more years with the intent to sell later, so anything that is negotiating effectively doing … only with a longer time frame.

"Do not buy stocks solely for the payment of dividends. We offer paltry rewards "He said." Trade not only in order to make money from capital gains. Buy low, sell high and it is there to do your gain. "

At that time, I was juggling between the concepts of short-term trading or investing for the long term. I did not know if I was taking the right approach to seek short-term benefits. He made his stance on the matter vigorously.

We asked if we knew what drove prices up or down. Recalling what my teacher said in college, I answered, "the price moves up and down near the intrinsic value of action."

It turned his attention to me and asked: "What part are you trading?"

"XYZ (I changed the name to the effects of this article), "she replied, very happy. Maybe you could squeeze a tip or two from him about the actions.

"You know what intrinsic value of XYZ company, "he asked.

I nodded my head to one side and whispered, "no."

"I tell you what the value of XYZ is … is zero! "He barked.

I was surprised by his response. Zero? So what are we paying money for when we buy a share? I thought. Then he clarified himself.

"The price is only a perception – which is the people's perception of what they think that the value of the stock price is. "

"The key to success in trading is the psychology," he continued. Psychology? I thought. How psychology get into this? "The stock market is like an opinion poll. It is a measure of what people think will happen. If they think the price will go up, you will see an upward movement in the table because there are more buyers to sellers increase their price because some of these buyers are willing to buy at higher prices, "he said.

He then used an example to explain the behavior of a typical operator when trading without a system. As he explained, I recognized my own behavior on her show.

All this was a revelation to me. When I was buying and selling actions I wondered what kind of people were on the other side of the trade because collectively, they were very intelligent. Now I know. It was people like Bauer, who were in the Across these operations, doing exactly the opposite of what he was doing, using similar methods as those he was using. Sought in market share with a philosophy and approach that were totally alien to me. Merchants like him were making all the money and traders like me, were missing.

Refused his head in disbelief that other people saw things the way they did. I was thrilled to learn that there was no alternative, another approach to analysis markets.

"What you need is to develop your own trading system." Exclaimed everyone around the room. "Without a trading system that will fail. I guarantee it. The trading system should be something that is right for you and only you. Even if I give you my trading system I am sure you will no longer make money, because my system is not designed for you. It is designed for me. That's why you need to learn how to use tools and acquire the skills necessary to be an operator. "

I accepted his advice without fully understanding the concept of matching a trading system to adapt the personality of the trader. He did not stay in my mind for a long time. The wisdom of his advice became apparent to me while gradually learned more about nature of negotiation.

Bauer diverted our attention to the graphics on the screen projected from his laptop. All I saw were lines curves, rectangular boxes and wavy lines. The tools of a professional trader: I thought. I was showing the tools that are adversaries to my market "have been using to "clobber" me with all this time. My heart was beating faster than usual. I was amazed. I wanted those tools.

I asked Bauer what program is used to analyze markets. He told me. I also asked how many of the indicators used. I had read enough about the technical analysis of the time to know that technical analysts use indicators to monitor stock prices. There are many indicators to choose so I wanted to know how many are used by professional traders. He began to count fingers. "Seven" he said.

I think a lot people had not actually read up on technical analysis, but I had done my homework and then I was more or less the only person in dialogue with him, asking him questions. I wanted to win so much knowledge and wisdom that is willing to give me.

Then I heard one of the most important lessons I learned how to minimize my losses in my early years of negotiation: "so small that it is the trade almost a waste of time. Suppose that trade Next will be the first of a thousand trades that are going to do in your life. Although profits are lower, its losses are smaller as well. No need to rush. Do not worry about getting rich very quickly. "

He was suggesting that novices like me to negotiate with the small position. That means that to buy small numbers of shares in the output. I was intrigued. I did not know that a person should trade 'small'.

Finally, the seminar ended. I picked up pamphlets and brochures delivered by the staff. In one of these pamphlets was the name of the program you use. They were selling software with the courses offered. I could not afford the whole package, but I knew I had to buy the same software used graphics Bauer. I decided to learn as much as I could about how to use charts and graphs to analyze the market. I needed to develop my own trading system.

As for me friend told me I had a car loan to take care of first. He would take care of trading of the shares later when he had a little more money aside.

A couple of days later I received a call from the organizer of the seminar, saying that from the questions I had been asking for that night, I was the kind of person who would most benefit from their education package. Bauer was asked to demonstrate the need for trading education because it listed on the stock. In the process, which was selling the courses as well. Bauer seemed knowledgeable and experienced. It has enlightened me and probably several people others in this room how much he had to learn. I was sold. I could not afford the courses at the moment but I loved them so much that I asked to the sales person at the other end of the line if he could work for them to change course.

I did not get to do the course, but I bought the software from a distributor other than a cheaper price. I also bought the two books he wrote Bauer. I figured it could acquire the skills and wisdom through self-education. I learned a lot from those two books and using the software. Having that opportunity to attend the seminar was a "godsend" as far as I'm concerned. Estés where you are, Bauer, I appreciate it. You – and others like you – have made me recognize the value of the transfer of knowledge and experience for others to follow.

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