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Stocks and Shares: Crucial Advice for the Novice Trader

Trading stocks and investing can be difficult to get into. There are plenty of guides and tips online, and you could attend classes to study for it, but they can never prepare you for the real-world situations that occur on a daily basis for traders around the globe. To get you started, here are some tips that are proven to help improve your success and turn your curiosity into a job you can do from home.

Don’t Trade With Money You Can’t Afford

It sounds like a gambling tip, but it applies to trading as well. Never trade with money that you can’t afford, and never take big risks that you can’t afford to take. Always set aside money that you’ll keep for your retirement or another goal, and use a smaller amount of money to deal with trades and investments.

You should never make huge gambles when trading. Always focus on small trades and always pull out when a situation looks dire. A successful trader gains income not by making huge investments with a lot of pay, but by knowing when to pull out of a losing battle. Always set an amount of money for the day and never go beyond it. You need to be disciplined and you need to work up the ladder slowly, never take great strides and don’t treat it like gambling.

Quality vs Quantity

Make sure to concentrate on a few stocks at a time. You don’t need to own hundreds of cheap stocks that you can’t keep track of. Instead, you should focus on safe investments that have a high chance of giving a good return. Never bite off more than you can chew, and always stay on top of your investments.

Once you’re comfortable with trading and you can keep tabs on multiple stocks, you can start to take on bigger investments and start to reel in more profits on a daily basis.

Be Patient

Income from trading has to be accumulated over a long period of time. You can’t expect to start trading and make huge profits like you do in gambling. Focus on small and profitable trades, and make sure they are safe low-risk trades. If you want to invest in a risky trade, then don’t pour all of your money into it and treat it like an all-in bet.

Experience is also a major factor when it comes to trading. You shouldn’t hate yourself for failing to a make profit after the first week or if you invested into a trade you thought was safe but ended up going bad. Learn from your experiences, and stay motivated. There are many websites where you can look at other people’s experiences, such as The Fortunate Investor. You can learn from professionals that have made trading their main source of income, and the insight they offer is invaluable to your success.

Relax and Take Care of Yourself

Trading can be stressful just like any other job. In fact, when it’s your personal money on the line, it can be even more demanding than your regular day job. Make sure to stay healthy, exercise regularly, eat proper meals, and always prioritise your health over the job. Your money can come and go, but your health will always stick with you.

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Taking Stock In Your Company: The Rules For Business Trading

If you are interested in being a successful trader in business, there are a set of rules that it is recommended to stick to. I could give a lot of general advice in this article about “cutting your losses”, or “work the market”, but it is not conducive advice to give general platitudes. So, what I aim to do is to give you some ground rules to follow. If you are a new business, startup or SME then this information would benefit you greatly.

To be successful in trading, following set rules that have helped with a diverse amount of trading account sizes. Each rule alone is important. But when they combine the effects are much stronger. Trading with these rules can greatly increase the odds of succeeding in the markets.

Use A Trading Plan

To the uninitiated, a trading plan is a written set of rules that details  a trader’s entry, exit and money management criteria. Using a trading plan allows traders to do this well.

A way to test if a trading plan has legs, is to apply what is called backtesting. This is applying trading ideas to historical data. Doing this allows traders to determine if a trading plan is viable, and also shows the expectancy of the logic of the plan. Once a plan has been developed and backtesting shows good results, the plan can then be used in real trading. The best approach is to stick to the plan. Taking trades outside of the trading plan is considered poor trading, even if it is a successful trade. This destroys any expectancy the plan may have had.

Learn All You Can From The Markets

Traders need to remain focused on learning more and more each day. A lot of trading concepts require prior knowledge. So, it is important to remember that understanding the markets is an ongoing, lifelong process. If you are new to the markets, start with the basics. Use a site like Invested Reviews to give you a basic understanding before you progress. Or start with small fry, like penny stocks. Trading with smaller amounts can give you that confidence to build up experience and knowledge.

Know When To Stop Trading

Like when you are at the roulette table on winning streak, you need to know at what point you are going to walk away from the table. An ineffective trading plan can be the cause of this, and the other cause can be the trader themselves.

The trading plan may not be up to muster because of a change in markets, volatility in a trading instrument or simply the fact that the plan is not good enough.

If the trader is being ineffective, this could be due to external factors, for example, stress. A trader needs to be functioning at a high level to be able to cope with these external issues. A solution may be something as simple as taking a break and coming back to the table with a fresh perspective.

Using these basics, you can start to trade with confidence.

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How Successful People Make the Most of Their Limited Funds

There’s a common misconception that only people with the most money can make successes of themselves. That really isn’t the case, and many businesses started out with nothing in the early days! The brains behind these operations have used smart techniques to make the most of their money along the way. When disaster has stared them in the face, they’ve been able to get around it. When opportunities have presented themselves, they have found ways to take them without spending over the odds. Read more

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4 Ways to Manage the Growth of Your Digital Business

Do not wish freewheeling growth for your digital business. Any kind of growth should be carefully managed. If your company grows too fast, you will struggle to keep up with the demand and will eventually lose customers. Likewise, if your company grows too slow, you will lose potential customers and disappear from the public’s eye. You should grow your company moderately, attracting new customers, and addressing concerns of existing customers at a rate that your employees can handle. Here are a few tips to manage the growth of your digital business: Read more

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Great Resources To Learn More About Penny Stocks

When it comes to penny stocks, there is just so much to keep informed on. Even if you’ve been in the business for longer than you can count, there are always new things to learn. Check out this quick guide to 7 great resources where you can learn everything you need to know.

Penny Stocking 101

Timothy Sykes has been trading in penny stocks for more than 15 years. Over on his website, he has a great guide for beginners. It’s free and is a great refresher even if you already know the basics. Alternatively, because it’s so accessible and simply written, it would be great to send to any friends or family members who want to know more. The guide has sections including “Your Penny Stock Trading Mindset” and “Penny Stock Terminology”. You can find Timothy’s guide here.

This Huffington Post Article

Once you’ve checked out Timothy’s advice on his website, head over to The Huffington Post. Here he has written the article “The 10 Best Stock Market Books You Should Be Reading”. The list includes a book on the unusual success story of Nicholas Darvas. It also features “Confessions of an Economic Hit Man” by John Perkins, which apparently took 20 years to write. This list was only just compiled in November 2015, so will be current.

Market Watch

Market Watch is a very reliable name and brand. They produce some of the handiest articles, news pieces and guides out there. They range from beginner level, and articles like “10 Ways To Trade Penny Stocks” to business and investment news.

How To Trade In Penny Stocks For Dummies

If you like your information the old-fashioned way, in the form of a hard-back book, you’ll like this. The Dummies brand is well-known for its sense of humour and comprehensive coverage of topics. This book promises “guidance on identifying growth trends and market sectors positioned for rapid growth” and more. A word of warning, though; the most up-to-date version of this was printed in 2013. So, while this book is fine for a general overview, you may want to look online for more current trends and information.

Money Morning

Over on Money Morning, you’ll find an entire section dedicated to Penny Stocks. Here, you’ll find a comprehensive list of some of the best articles being written. These articles are also up-to-date, something that is crucial. “How to Pick the Best Penny Stocks in 2016” is one such example of this.

Financial Times

One of the biggest names in the financial world, the FT is a one-stop shop. Not only will you find Penny stock information, but you’ll also find a whole world other related resources. There are sections for topics like Personal Finance, Emerging Markets and Global Economy. These will help widen your knowledge of the marketplace even further.

And, finally…

Right here at Club Penny Stock, of course!

Club Penny Stock has been in the game for ten years. You can get a free subscription to our

Penny Stock Alert Newsletter; there is more info on this page.

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The Sloppy Investor: Common Investing Mistakes And How To Avoid Them

The world of investment is a dangerous place. Yes, there is a real chance that you can make a lot of money and get rich. But, there is also a chance that you could lose everything. The last statement is not supposed to scare you from making an investment, far from it. What it is supposed to do is make you aware of the hazards of making the wrong decisions. There are plenty of cases where potential investors get it wrong because they make mistakes, and you don’t want to be one of those people. Here’s how you can avoid the mistakes and make your investment successful. Read more

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China Telecom Shares Fall Amid Probe Into Boss

Hong Kong (AFP) – Shares in China Telecom dropped as much as three percent Monday after news its head was under investigation, the latest high-profile target in a corruption crackdown.

The firm, one of China’s big-three telcos, saw its shares trade as low as HK$3.62 ($0.47) on Hong Kong’s bourse compared to the previous closing of HK$3.73.

At Monday’s close the drop had narrowed to 1.34 percent, with the shares ending at HK$3.68.

The probe into Chang Xiaobing for “severe disciplinary violations” was announced by the Central Commission for Discipline Inspection, the watchdog of the ruling Communist Party.

The term is normally a euphemism for graft.

Chang had been “taken away”, according to an article in the respected business magazine Caijing, adding that he disappeared just days before a meeting of the state-owned company planned for December 28.

Chang’s phone was switched off and he had not responded to multiple calls, it added.

“Since last year, when the authorities were probing oil companies, we knew they would be doing this for other sectors. Now it’s telecoms,” financial analyst Jackson Wong from the brokerage firm Simsen Financial group told AFP.

Wong said investors were moving cautiously pending further details of the probe.

Authorities have been pursuing a hard-hitting campaign against allegedly crooked officials since President Xi Jinping took office in 2013, a crusade that some experts have called a political purge.

After a stock market rout this summer, the nation’s financial sector was under the spotlight with several high-level executives reportedly being hauled in.

Billionaire Guo Guangchang, dubbed China’s Warren Buffett, disappeared from public view earlier this month amid reports he had been detained by police in Shanghai.

He briefly resurfaced afterwards but his conglomerate flagship Fosun confirmed the 48-year-old was “assisting in certain investigations” by Chinese authorities.

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A Reverse Approach To Choose The Right Penny Stocks – Part I

Okay, here we go! I was recently listening to a video of Tim Ferriss talking about how to learn things better and faster by looking at the learning process in a different way. In his discussion, he noted that chess champ Bobby Fischer learned how to truly master the game by starting from then end–playing a King and a pawn against another King. In the same way, Tim himself learned how to excel at tango by not learning the male’s moves, but by learning the female’s moves instead.

So, I’m going to take a completely new way of looking at penny stocks: I’m going to learn how to LOSE money first!

I think that if you can learn how to lose money first–and learn all those mistakes that people make when getting into penny stocks–that that information will be the MOST firmly imprinted in your mind. Think about it: if you’re like 99% of the population, you’re at least intrigued by “get rich quick” schemes, of which I’ve heard penny stocks are a great example. But, at the same token, there must be money to be made at penny stocks or else nobody would trade them, right?

That’s my working hypothesis, which dovetails with my other hypothesis, that people that lose money at penny stocks are beginners who focus too much on the “get rich quick” part and are drawn in by the lure of big bucks fast.

So, back to the beginning: if we learn how to lose money and what NOT to do, and that’s more heavily imprinted in our brains by learning those facts first, the chance of losing money is going to be much, much lower.

Next, having to learn what NOT to do, we need to learn WHAT TO DO. In order to accomplish that, I’m going to subscribe to Tim’s idea of breaking the task–choosing what penny stocks to buy–into “minimum learnable units” (MLU’s), that is, the chunks of the task that are easily definable and can be separated into different units. I hope to be able to pick out maybe 5 o 6 MLU’s in the analysis, but no more than 10. Then, I’m going to use Pareto’s Principle (20% of the effort gives 80% of the results, so focus on that key 20%), to figure out which of that handful of MLU’s is key to giving the 80% of the results and learn that first.

My thinking? If we can learn what NOT to do when picking what penny stocks to buy and then learn what few elements are the absolute key to getting an 80% result and learn that element or elements very, very well, we’ll be able to make some money!

Think I’m on to something? Or just think I’m crazy? Respond below and let me know what you think.

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Where To Look For The Best Penny Stock Picker Reviews?

Several investors are turning to broadcast, print and online media for information about investment strategies and best penny stock picker reviews. These resources are providing investors with excellent analysis and expert advice to make them stay on top of the trends and ahead of everyone else on the curve. The task of determining which kind of stocks is the most progressive and most picked is more challenging. A stock investor will have to gather as much information as he could from numerous reliable resources and sites before he could finally paint a clearer picture of what is going on.

Without the counsel and advice of a good stockbroker, the very first avenue where several investors search for good stock picks is the powerful Internet. There are numerous websites whose primary purpose is to provide stock investors updated information regarding a company’s opportunities, challenges, business plans and finances. These sites offer users a day-to-day update of stock trends with highlights on “hot” stocks. These websites’ best feature, by the way, is an exclusive access to discussion forums and chat rooms. Read more

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A Reverse Approach To Choose The Right Penny Stocks – Part II

Today, I’ve done a lot of review on my previous topic, how to lose money with penny stocks. To recap, my hypothesis is that if I learn what NOT to do first, that is, learn how people lose money with penny stocks, I will have that firmly imprinted in my mind as I go forward with actually learning what penny stocks to buy.

First and foremost, there really isn’t a lot of information out there in terms of how people lose money at penny stocks. Granted, there are a lot of cautionary tales of woe, with folks losing a fair amount of money, but when it comes down to the details of how and why, the information is lacking.

The few sites I was able to find, along with a somewhat useful YouTube video, are linked as you read through this post. Here’s what I learned from my research:

Penny stock scams are abundant. You need to be very cautious when choosing what penny stocks to buy!

A very reliable site, investopedia, provided a rather basic article with some insights on penny stocks, including a bit of useful information on scams that pervade penny stocks. The first of these is the biased recommendation. It seems that struggling companies will pay people to recommend a certain stock (i.e. their stock!) which is clearly a biased recommendation and a conflict of interest. A second scam is the struggling company will sell their stock to an offshore broker (which exempts the company from having to register their stock with the SEC), and then the offshore broker calls potential investors and uses high-pressure tactics, akin to a used car salesman’s techniques, to pressure folks into buying the stock.

Ugh! No wonder penny stocks have a bad name.

Trendshare.org also has an article with a bit of information regarding people losing money with penny stocks. They highlight the “pump and dump” scam, which I’ve at least seen before. As the article defines it, essentially in a pump and dump scam, a worthless stock is “pumped up” through recommendations, and utilizing the group psychology technique of “not losing out”. This “not losing out” idea holds that people tend to follow the herd and people don’t want to lose out on a potential opportunity. Then once the stock price rises, the person at the source (the “pumper”?) sells all of his shares at a profit, leaving these other folks holding a really worthless stock. The article also notes the ubiquitous penny stock newsletters, which promise the “hot stock tip” or the “insider tip”, which usually is a crappy recommendation.

The most useful article, however, comes from Michaelsincere.com, which is an interview with a penny stock trader (and author) Timothy Sykes. Tons of useful information in this article on why people lose money with penny stocks. Here’s the ways people lose money:

Relying on penny stock newsletters, as I noted above. Sykes notes that the fine print of these newsletters usually reveals an SEC-mandated disclaimer that specifies the conflict of interest! Amazingly dishonest!Being greedy. This is apparent in any investment, in that if you see a 10% or 20% return, you immediately want a 30% or 40% or greater return, and will hold onto a stock longer than you should, instead of exiting, taking profits, and looking for the next penny stock to buy. You have to not be enamored with a stock and look at it 100% objectively and go with your hard analysis, not your emotions. Especially difficult can be the idea that “I failed because I lost money on this stock”. That thought needs to be stricken from your consciousness as each loss is not failure, but an opportunity to learn. I’ve been guilty of this before, so this is something I’m going to have to watch out for myself.Listening to information from the companies themselves. Since penny stocks don’t have to adhere to the same regulations as larger-cap companies who are listed on the major stock exchanges, there’s ample opportunity for companies to outright lie and manipulate their data. Easy enough to avoid.Trading stocks that have limited volume. Let’s say you own 2,000 shares of a stock that has a share price of 10 cents, for a total investment of $200, and the average volume of shares traded is 10,000 shares per day. If that stock drops in price by a cent or two, that’s a huge move, and now you want to sell your shares quickly. But, now you own 20% of the average trading volume. How are you going to be able to find enough people to buy your 2,000 shares of a stock that’s dropped in price by 10% or 20%? You’re not. So, simply avoid trading more than 10% of a stock’s daily volume and trade stocks that have at least 100,000 shares per day traded. Easy enough

The last resource I’m listing here is a video from pennychase.com which lists many of the same things I mentioned above, but is somewhat interesting to listen to. Remember, however, that this is a video made to sell Penny Chase’s service, so there’s a sales pitch starting at the 3:30 mark of the video. I certainly don’t endorse their service nor do I plan to use them for their service, but the information in the first 3:30 of the video I think is useful enough to listen to.

So, that’s it for now. I’m going to distil this all down into a quick reference “How To Lose Money” Post in the Resources page. I plan to have this printed out and available whenever I’m going to actually choose what penny stocks to buy so that I have that idea of what NOT TO DO right at the forefront.