All about investment

by: Shaun Rosenberg

Selling calls on long term stocks can produce great income. The strategy works great for stocks that you are long term bullish on.

When you sell a call on a stock you already own you are making a covered call. You would get the premium of the call option. In exchange you will have to sell the stock at the calls strike price if that price is met or exceeded.

In other words you are limiting your potential gain from the stock for some quick cash. This is why if you like a stock for the long run you may only want to sell calls with a strike price that will probably not get you called out of your stock.

The best time to sell a call in this case would be when your stock is pulling back. If your stock pulls back down at resistance or breaks support then you could decide to sell a call above those lines. The money you make on the call option could help you feel better about staying in the stock during a pull back.

The worst time to sell a call if you are long term geared would be during extremely bulls markets. If your stock is making huge gains, then you do not want to be selling calls. This would limit your gain to the upside.

If you do end up selling a call on a stock you own and the stock moves up past the strike price of the call then you have two options. You can choose to do nothing. In this case you will have to sell the stock at the strike price of the option.

That may not always be a bad thing. If you were in the stock for a couple years then that price might be far more then you originally paid for it. You may decide you can find better investments out there and would be happy selling this stock.

If you still like this stock and want to hold onto it you can choose to buy the call option back. Because the stock went up your call option would be more expensive then what you sold it for. In this case you would lose a little on the option in order to keep your stock.

In general, selling calls will produce a great gain on stocks that you are holding. Unlike dividends which might pay off 4-5% in a year covered calls can pay off 4-5% in a month.

For more information on how make covered calls visit http://www.stocks-simplified.com/covered_calls.html

For more information on how to trade in the stock market visit http://www.stocks-simplified.com

If you have at least a few months that Forex came into your life you have surely heard of Fibonacci levels in Forex charts. But what is Fibonacci?

Fibonacci sequence is a series of numbers. Every number is being produced by adding the last Fibonacci number to the previous. The first numbers of Fibonacci sequence are 1,2,3,5,8,13,21,34,55,....etc

But what has Fibonacci sequence to do with Forex Trading? IF you divide two sequential numbers you get the result 1,618. The square of 1,618 is 1,27. The inverse number of 1,618 is 0,618. The inverse of 1,27 is 0,786. These numbers are called Fibonacci numbers because they result from Fibonacci sequence number's analogies.

The 1,618 number was called 'Golden Mean' by ancient Greeks and other ancient cultures. They called it so because they observed that this number is found everywhere in nature. The result of creations, living organisms to space galaxies, that have this number embedded is symmetry.
But enough with maths and science! Let's see the use of Fibonacci numbers in trading. Since the beginning of investment industry, traders have noticed that prices tend to change direction in levels that are very close to these numbers I mentioned above.

For example in an unptrend the prices will go up and then swing down to a level that is a Fibonacci number before continuing the uptrend. These levels are called Fibonacci Retracement levels. The most common Fibonacci levels in Forex market are 0.382, 0.5, 0.618 and 0.786.

Nobody knows why prices tend swing in these Fibonacci levels. And nobody knows at which exact Fibonacci level will the price change direction in advance.

How could you use this knowledge to improve your trading?
Well, you should know that prices tend to reverse at Fibonacci retracement levels. A lot of novice traders use the exact point of a fibonacci retracement level e.g. 0.618 as a trade entry. Experienced traders know this fact and wait for other traders to get their stop loss hit and then enter the market. Fibonacci retracement levels should be used as an indication of entry and not as the exact point of entry. Moreover the bulk of traders use 0,618 and 0.386 retracement levels. Experienced traders know this tendency and wait for other retracement levels not widely used like 0.786 or 0.707 in order to enter a trade. Use these Fibonacci retracements as well. Make the difference!

But how would you know at which Fibonacci retracement level will the price change direction? Fibonacci retracements, like other technical indicators are more valid when they are calculated for a greater time value. Do not pick minor swings to calculate Fibonacci retracements. Pick greater price swings instead. Moreover, a Fibonacci level becomes more valid when it coincides with another technical indicators such as trendline resistance or support, MACD or RSI divergence and so on. The most valid retracement level should be choosen keeping in mind that further confirmation from other technical indicators should be taken into account. You wouldn't like to put your money on risk with only one reason, would you? So choose the Fibonacci retracement level that coincides with other reverse signals.

Last of all let's see the use of Fibonacci numbers in trading time analysis. Pick a significant hi or a low in a daily chart. Then calculate trading days (excluding weekends) from that point and on using Fibonacci sequence. You would have the first, the second, the third, the fifth the eighth trading day and so on. Watch that in trading days that are Fibonacci numbers, prices tend to reverse direction! Isn't it amazing? Add this tool to your chart analysis and you wont lose!
After all these years of trading experience and research I have found that Forex charts iclude some special price patterns created by price swings. These patterns are formed under certain price relations between their swings. My trade system will provide you with low risk and hi reward trading entries.

Think smart. Learn more:

Author

Delija Crnovrsanin is a recognized authority on the subject of Forex Industry, His web sites: Forex.DelijaWorld.com provides a wealth of informative articles about Forex Trading Strategy, Forex Trading Platform and News in Forex Market...

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Illiquid stocks usually have bigger ticks than more fluid stocks, but generate larger gains with less volume. Less volume means that it takes less to push a stock up than it does to push a heavily traded stock. Trading illiquid stocks can help improve your trading and make a trader more knowledgeable on the effects of volume. Illiquid stocks can help investors reach trading goals much faster as each movement is much larger than the movements in high volume stocks.

How to Generate Profits

Proven strategies for profiting from illiquid stocks are gap strategies. Low volume stocks are much more prone to gapping, and thus, strategies for gapping up and strategies for gapping down are much more effective in trading these stocks. Technical analysis can be more difficult to apply to low volume stocks, but is much more profitable on moves than high volume. Technical analysis indicators are choppier and less fluid than on high volume securities.

Less Data More Decisions

If you’ve ever taken a look at a stock chart of a low volume stock, you’ll see that technical analysis doesn’t apply as well. Moving averages can be as volatile as the price itself, and momentum indicators are less accurate. Custom indicators with longer data timeframes and special weighting can help smooth out the ups and downs and give a better picture of future direction.

Back to the Basics

The basic trading fundamentals, such as earnings reports and price to earnings ratios, are much easier to comprehend and apply to these stocks than technical analysis. Fundamentals work over the long term much better, as they show real value of a company rather than the day to day trading range. While not completely custom indicators, a long term PE reference will help you determine if the stock is oversold or overbought much better than the technical analysis counterpart, the RSI.

Lower Volume Can Be Better

Low volume stocks need less attention than the ever changing favorites like the QQQQ or common ETFs. The price action of penny stocks, low volume stocks, and other illiquid investments is much more contained and infrequent, allowing a trader time off in between trades. Proven strategies like earnings reports and fundamental analysis works well on the lower volume stock, and for long-term investors, the most illiquid stocks are the best.

Leroy Rushing is an active, professional day trader; trading coach; and author. He is the Founder and CEO of Trading EveryDay, a distinguished provider of educational trading products and services that are available worldwide. Trading EveryDay also has many articles with unique perspectives on day trading.

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Chris Fletcher’s page features more about new and used Pressure Washer Financing and other finance topics.