I find myself in a series of trade and investment focus groups and forums on the Internet, thanks to years later and who never ceases to amaze me how little attention is paid to risk management. If stocks, currencies, commodities, futures or other instruments that traders concentrate most fans will continue to trade on company records. In my experience, most of the problems of those who have no experience on how to get the next hot stock or the best trading system for trading shares, currencies or commodities. Everyone is waiting for some big winners are doing just surfing the Internet to have some hot tips. Or they think that the system can exchange heat that will make them a millionaire in no time. Or, if they focus on trade in the short term, they hope to learn a trading system, give the victory to 90% and profits month after month. E 'in the financial sector to address these parameters, with numerous books and trading systems. Brokerages want accountability, so you can sell minded and better in the stock market, while padding their own accounts for commissions. The discount broker, to sell the idea that huge profits with the help of their trading platforms and with some technical indicators. And, of course, the biggest fraud by professional fund managers nonprofit that knowingly and repeatedly to investors is the pledge of shares. We just made the biggest fraud of all, running with a potential of $ 50 billion U. S. Ponzi scheme asset manager Bernie Madoff former reputation. because it was well known on Wall Street, Madoff has been unable to hundreds of investors, convinced that it was profitable every month. The whole time he was simply seeking new funds to be paid by the original investors and older. There are many examples like these, but fraud Madoff is clearly the greatest fraud of all time. and ultimately, there is no such thing as the Holy Grail of trading! There is no method or system that is negotiating huge profits for those who produce, year after year. The story is embellished with hundreds of examples of legends that are most important commercial and then crashed and burned. The best traders go through periods of underperformance, and accept him because they know that in the long term, their methods of negotiation offer high yields. However, do not expect that 100% on their money every year and do not expect to make money daily, weekly or even monthly. Very few have such a situation there, and those who are not their own strategies with the public! professionals, not a trading system, the law 100% of the time to worry. They know that this is impossible. All we have is to find an advantage to be profitable over time affected. On the other hand, most amateur traders are worried about being right, rather than profitable. They can not stand the idea of a loser. Professional operators know that the trades are part of the losing party. We are all better players have in common is that they know how the risk! Because they know that the markets from May to turn against them at any time, are more about managing risks in their portfolios, rather than specific projects and flows in models commerciali.operatori focus most fans can not seem to have already 's idea is not original trade entry or selection as the most important part of a business model. This is what after you enter a trade and this is important. And perhaps even more important to know where the exit is to learn to manage risk. A popular concept in the commercial world, the idea is to minimize the risk to 1% or 2% of the equity in your account on a particular job. For example, if you have $ 100,000 in your account, you will have a risk of $ 1,000 or $ 2,000 for each route. If you buy shares of XYZ at $ 20 and it was decided that you exit the trade when it comes to $ 19, so you have more than 2000 trading in azioni.E 'a good start, but not the end of the risk inherent in the administration. Can be used to limit the risk to 1%, if you will, but if you do not have the discipline to respect the rules of negotiation, and make trades, you will lose again, and forgive quickly! This is just one example of not controlling the risk. The following is a list of things to do and not do when it comes to risk management.
1 rather than commercial. This may involve the risk of too high a position or trade too much, simply for the thrill. In this sense, if you develop the entry and exit rules for the system, it takes! Not include transactions that are not reported, only because you must feel betrayed
2 are not traded in markets that are closely related at the same time, if you make a sort of trade expansion through the purchase of a market and a short-circuit the next. Also be wary of markets that are inversely related. For example, when the Japanese yen during the Nikkei is down, just buying yen and the Nikkei! They are too easy to double the bet!
3 Do not add positions when the markets become more volatile? Some trading systems for the benefit of long-term view of trends and achieve positions of the pyramid of higher profits. Only a qualified dealer must groped, because usually, when trends are present for some time, tends to increase volatility.
4 If the volatility in your trading positions has increased dramatically, rising to examine some of your positions.
5 Do not start the hope of transforming a position in one winner. You should check your emotions at the door, as you enter your room for negotiations. He himself never married, one position. If you have a profitable strategy, is very busy during the time that will bring these benefits, not a winner.
6 Absolutely Positively know when you leave a job before a new job!
7 Absolutely Positively how your stops on your position will be
8 If you have a bad day of trading, the week's trading, month or trade, take a break! If you do not pause for a certain period of time, our trading partners will be tarnished verdict, and we begin to break rule number 1. When you subscribe to this is time away from the trading floor for a while '.
9 If you are on a losing streak, and the capital is reduced, it reduces the risk!
10 Finally, if you take some profit taking from your trading account and diversify your investments! Although he could have done a diversified portfolio of exchange system, we must also invest in different markets, such as real estate, bonds, art, commodities, or even another company. Once you learn the importance of risk management to be a big step closer to a profitable service.
A look at the short sale uptick article
There was discussion lot lately about short selling and "short sales have been." In fact, some believe that the measures taken to restore these rules have helped increase the stock of late. What is the uptick rule and why the mere mention of the abolition of the rule may be the creation of a rally? Let's take a look.In First, a quick little reminder 'on short selling. The definition of a textbook is when an investor sells a security that he / she has not. The seller of the securities on the stock market investors to sell to investors. Finally, the seller has the same number of shares sold short sales (as we know) to "bring to the dealer. Money is made when the stock was sold is lower, purchased at a lower price. For investors normal "retail" short selling a stock must have a margin account, and their brokers must "borrow" the stock margin account of another customer along - - So, in some cases, no stock available soon , and the dealer is actually able to do so. Number of professionals and institutions and hedge funds, etc. were not included in this method of "borrowing" in many cases, keeping in recent years, but that is for another article . Let us now turn our attention to the rule a bit. 'Article slight increase was launched in 1938) (with the reforms after the 1927 crash and the Great Depression, says that the shares may be sold if the market just before the sale was at a price below the short sale is executed. In short, short selling is allowed only if the stock ticks higher. The purpose of the rule slight increase was short-sellers of capitalization and precipitate a downward trend in order. Please note that the uprising did not invest in certain types of vehicles, including: having an exchange market Futures Traded Funds (ETF), the single currency and futures (futures, however, the rules of course - and limit the tie-break rules will be the subject of an upcoming article.) "Why the SEC, the repeal of the rule? The reasons for the repeal of the rule was apparently a test to see" from the SEC, sales effectiveness "bare." They will probably go like this, there was great pressure from financial institutions, they have increased. The general rules of the SEC and its responsibilities during the early years, which probably helped. based on the table above, you can fill out the "test" does not work very well. Many people have a rapid decline that many stocks in the financial sector due to lack of recovery seen one - but it is a rather complicated by other factors. However, the Recent Fed Chairman Bernanke has suggested that the test once again the introduction of the rule and the Congress acted recently (March 10th, no less), have restored the rule very quickly. see table below for these events, market news. Bottom Line: Regardless of the actual effectiveness of the uptick rule for short sales (and if they can be manipulated and / or retailers) are ignored, the performance of the market for the repeal in 2007 and from March 10, plans restoration are very striking. Also, remember that as a small investor, you can lower the side of speculation and coverage, without the sale of shares from the options made short ETFs, options and strategies. "Scott Downing,
