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Every trader has tried to force trades at one point or another.  They make trades because they feel they need to.   However forcing trades can be the fastest way to lose money in the stock market.

                Every trader has tried to force trades at one point or another.  They make trades because they feel they need to.   However forcing trades can be the fastest way to lose money in the stock market.

                Anyone who has ever been involved in the stock market has had one of those I wish moments.  I wish I would have bought Microsoft, I wish I would have got into stock XYZ before this big jump, we all  get them.

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Keeping your losses small is a very important part of trading.  Small losses can easily be overcome by large winners.  However many traders gain let their losses run wild.

                Keeping your losses small is a very important part of trading.  Small losses can easily be overcome by large winners.  However many traders gain let their losses run wild.

                Too many traders will not exit there trades when they start to turn against them.  They will hold onto their stocks and hope it turns around.  They might even turn this short term trade into a long term trade.  Bad idea, if you enter a trade as a short term deal you cannot switch it to be a long term trade all of a sudden.  That mistake can be the death of most traders.

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There are a few different types of stock orders that can be helpful to an investor.  These orders can fit well for different objectives.

                Having so many different orders types available can be confusing.  How do you know which order is right for you and your specific goals? Well first you should learn what all of the orders do. 

1.       Market Order, This Order simply tells the broker to buy or sell a stock at whatever price the stock is trading at.  This can be beneficial if you just want to get in and out of a position.

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Leaps have many advantages over other strategies in the stock market.  This is because they give the buyer both high leverage and a long term approach to the market.

                Leaps have many advantages over other strategies in the stock market.  This is because they give the buyer both high leverage and a long term approach to the market.

                Leaps like options give the owner the right to buy a given stock on or before a given date.  But unlike options however the date at which it expires is farther out.  Instead of an option contract which might give you a couple months before it expires, a leap will give you a year or two before it expires.

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It seems that people start ignoring again the accumulated debt. This is what I was thinking about when I was telling you that the financial debacle is not here yet. The average investor is an irrational specimen. When everyone buys he jumps on board as well and when the sell off amplifies he sells all his portfolio holdings and starts complaining about the incurred losses. You probably know that you have to buy when most people hesitate or are scared and sell when everybody around you is excited about the big potential profits. Easier said than done! As an economist I always watch the fundamentals of the markets to figure out the big picture. It helps me catch those long term waves which are the most fruitful ones. But to make money in the short term there is nothing better than the technical analysis. Take as example the current situation! It is obvious that nobody can live on credit all the time. At one point the borrower will hit the wall and the creditors will not only refuse to lend but will put pressure on him to repay his debt. He will see himself obliged to work harder and cut his expenses for repaying the loans or to go bankruptcy. The last option is the worst case scenario as after a bankruptcy he will loose his assets in covering his liabilities and he should start from zero without been able to borrow. The United States are in such a position now. However, there are many short term factors which will postpone the end of the happy borrower. Here comes the technical analysis to help us figure out how long yet we can enjoy the current bull. More on this in my next commentaries.

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