Management

Look for good management.  A company where insider ownership is high shows that management has a financial stake in the stock.  This can mean that they are highly motivated to make smart decisions for their shareholders.

Even if the company is struggling this insider ownership can signal a CEO that is working to turn the company around.  If the company succeeds he succeeds, especially in the value of the stock he owns in the company.

Find Out Who Owns the Majority of Stock – It Matters

However, make sure that you know who actually controls the stock.  If family members own more than 50% it is harder for management or outside activists to push for change.  If the family management starts to act in a detrimental way to the shareholders there is little that can be done. Family majority stock holders push value investors away.

How Is Management Compensated?

Compensations is important to attract and keep management that can really make a difference in the company.

Check the insider ownership positions in the proxy statement.   Look for the bonus and commission structure.  Make sure that management and shareholders’ interests are properly aligned.

Currencies are always traded in pairs. For example, the US dollar against the Japanese yen, or the English pound against the euro. Every transaction involves selling one currency and buying another, so if an investor believes the euro will gain against the dollar, he will sell dollars and buy euros.

The potential for profit exists because there is always movement between currencies. Even small changes can result in substantial profits because of the large amount of money involved in each transaction.

The FOREX market handles a huge volume of transactions 24 hours a day, 5 days a week. The market opens Monday morning Australian time and closes Friday afternoon New York time. Trades can be done on the Internet from your home or office.

Daily exchanges are worth approximately $1.5 trillion (US dollars). In comparison, the United States Treasury Bond market averages $300 billion a day and American stock markets exchange about $100 billion a day.

Anyone can enter the Forex market. With a $300 mini account you can trade lots of 10,000 units. One lot of 10,000 units is equal to 1 contract. Each “pip” or move up or down is worth $1 gain or loss. With a standard account and $1000 you can control over 100,000 units of currency an each pip is worth $10.

In the Forex market you can profit in a bull or bear market.

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Because of the size of the Foreign Exchange Market, investments are extremely liquid. International banks are continuously providing bid and ask offers and the high number of transactions each day means there is always a buyer or a seller for any currency.

There is no possibility of insider trading in Forex. Currency fluctuations are usually caused by changes in national economies and news about these changes is available to everyone at the same time.

The Forex market can be a relatively safe market for the individual investor. There are safeguards built in to protect both the broker and the investor and a number of software tools exist to minimize loss.

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You need discipline, focus and the right mental attitude. If you don’t approach trading with the right attitude then 95% of the time you will be ruled by fear. And if that happens you will lose.

A good trader learns not to get greedy when things are going his or her way(pigs get slaughtered) and not to let their trades be ruled by fear when things go south. Fear is a leading cause of traders pulling the trigger too soon or too late.

The right mental attitude will allow you to be confident in your trades and to be disciplined enough to pull the trigger before you suffer any major losses.

If you are:

• not feeling well,
• have a personal problem in the family,
• didn’t get enough sleep
• have other negative energy in your mental attitude…

… then you will not trade well. It’s as simple as that. When you are in any kind of negative frame of mind you should go away and trade another day.

A consistent winner develops a trading plan and sticks with it. You can’t predict the market but you must be focused enough to understand what is happening in the market on any particular day. But it is your state of mind that will determine your results not more or better analysis. In fact, too much “analysis” can lead to “paralysis.”

Your attitudes and beliefs about your ability to win, make good decisions about money is what will determine your success. So work on those things before trading.

The best traders have a strong mental attitude that allows them to trade without fear. That makes them able to refrain from distorting information and from jumping into or out of trades recklessly or staying in trades too long and hoping for the best.

You must learn to be in the flow and not worry about what may or may not happen. Trading Mind has a great mental training tool for traders:

Smart investing can bring you the lifestyle that you want for you and your family. But, if you don’t do your homework before you invest you can bring a lot of personal stress into your life. And as we have seen in recent months investing can be deadly if you don’t pay attention and watch your investments.

Here are some simple tips to get you thinking:

No matter what your age you can start investing today. Of course the younger you are the better since you will have more time to accumulate wealth. Money you use to invest while you are young has a much higher return. But no matter what, find something to invest in no matter how old you are. We all need a little cushion during our lifetimes.

Buy Safe Investments

When you first start investing it can be overwhelming. There is so much information that it would take a lifetime to learn all of it. As you are learning put your money into something safe. You will gain confidence in your decisions as you watch your money grow.

Use a broker

When you are first starting out you need someone to talk to about your investments. Having a broker is the best way to learn faster. Brokers can explain things clearly, will introduce you to investing and guide you in the right direction. They can help you set up accounts like an IRA or education savings plan. They can even set up an automatic investment plan so contributions will automatically withdraw from your banking account each month. This is also good for someone who has a hard time dedicating money to investing.

Learn to trade for yourself

After you have learned about investing and when you have the basics down you can use the internet to do some online trading. It is fun and you have more control over your money when you act as your own broker. And, besides, you won’t have to pay those high broker commissions and fees. You will have to pay trading fees though. But today there are so many online trading platforms that charge very, very small fees to trade.

Before you jump head first into the stock market, you should spend some time testing the water. There are a couple of ways you can do this. You can start by investing and trading penny stocks. Penny stocks give you experience, let you use investment tools and make decisions based on news without a large initial investment. However, some have deemed penny stocks riskier, but they are a good way to get your feet wet.

You can also use a trading simulation service. You can invest virtual money in a virtual stock market that is based on the real stock market. You will be able to learn to use tools, become familiar with the different types of investments and weigh your risk with no real danger of losing your money.

This is different from day trading where the trader goes into and out of one or more trades each day and rarely leaves his position on overnight.

Swing trading is better for a new trader in order to give some time in a trade to get their “feet wet” before venturing into day trading.

Of course leaving your positions on overnight, as with swing trading, is not always such a good idea so make sure you have a stock that has potential for growth. Markets fluctuate so much, especially today, that anything could happen to your position overnight.

So as with all stock trading you must do your research diligently. Watch your stock charts and learn all you can about the underlying financials of any company whose stock you plan on swing trading.

Most traders or investors think of stock trading as “going long”, i.e. buying stocks in the anticipation that the price will rise and they will make a profit.

Short selling is the opposite. You profit from the decline in the price of the stock or bond. With shorting you are basically borrowing the stock to sell it. If the price decreases the short seller can buy the borrowed stock back at the lower price and pocket the difference.

Say XYZ Company stock is currently being sold for $10 per share. As a short seller you can borrow 100 shares of XYZ (or more depending on your capital and risk tolerance) and sell them immediately for $1000. If the price of XYZ stock to say to $5 per share you would buy back 100 shares at the lower price. You give back the 100 shares to the owner of the stock and make a $500 profit.

However if the shares of XYZ rise in price say to $20 then you would have to buy back the 100 shares for $2000 and you would lose $1000.

Short selling is often considered to be a positive market force. An important point to consider is that an investor involved in short selling may be prone to a short squeeze.

SHORT SELLING BASICS

• You can borrow shares based on shares up to 50 percent of the shares value. So you must deposit 50 percent of the shares value in cash in your brokerage account.

• You sell the shares and the proceeds are credited to your account at the brokerage firm.

• You must “close” the position by buying back the shares. This is referred to as covering. If the price drops, you make a profit. If it rises you take a loss.

• You return the shares you borrowed to the lender.

When to Sell Short

Sell short only during what you believe is a developing bear market, not a bull market. Bear markets occur about once every three years, and when they do, the decline occurs at a much faster pace than previous rise. In a bear market there are only two things you can do: either sell most or all your stocks and get out, keeping your money in cash or money market funds, or short sell stocks.

It is best to time your short selling with the action and movement of the general market averages. After they show definite signs of weakness, only then does it become a question of the selection and timing of the individual stocks to sell short.

Ask Price – The lowest price that a dealer will sell a stock for. Also known as the offer price.

Bear Market – A stock market in which sellers dominate, resulting in falling prices.

Beat the Street - When a company reports quarterly earnings that come in above what brokerage firms and analysts expect.

Bid Price - The highest price that a buyer will to pay for a stock.

Break Down - When a stock drops below a specified moving average.

Breakout - The end of a trend, signaled by a stock’s price increasing or decreasing past the price at which the trend began; when a stock rises above a specified moving average.

Bull Market – A stock market in which buyers dominate and where prices are on an uptrend.

Call Option – A contract that gives the buyer of the option the right, but not the obligation, to purchase a stock at a specific price within a specified period of time.

Capital gain - The amount by which an asset’s selling price exceeds its initial purchase price. A realized capital gain is the profit resulting from the sale of an investment. An unrealized capital gain is an investment that hasn’t been sold yet but would result in a profit if sold. Capital gains generally receive more favorable tax treatment than ordinary gains. Depending on your tax bracket and on how long you held a capital asset, you may pay about one-third to one-half less tax on a capital gain than you would have paid on the same amount of ordinary income.

Capital loss - The loss that results from the sale of a capital asset. Ordinary income can be offset with capital losses up to a maximum of $3,000 per year and excess capital losses can be carried forward indefinitely until exhausted.

Close - The end of a market’s trading day; further trading is not conducted until the open of the next trading day, although there is activity during after-market trading for several hours through electronic computer networks.

Closing Price - The price at which a stock finishes at the end of a trading day.

Common Stock – Common stock is a form of corporate equity ownership, a type of security. It is called ‘common’ to distinguish it from preferred stock. In the event of bankruptcy, common stock investors receive their funds after preferred stock holders, bondholders, creditors, etc.

Consolidation - A period of limited price fluctuations following a period of more pronounced price fluctuations, signaling a relative balance between supply and demand.

Day Trader – A very active stock trader who buys and sells the same security very quickly, executes a large number of trades each day, and generally closes all positions at the end of each trading day.

Divergence - When two or more averages or indices fail to show confirming trends.

Dividends – Dividends are payments made by a corporation to its shareholders. It is the portion of corporate profits paid out to stockholders. Usually made in cash but can sometimes be made in the form of additional stock.

Dow Jones Averages - Averages of prices for categories of stocks traded on the “Dow,” such as the “Dow Jones Industrial Average”, the “Dow Jones Transportation Average,” or the “Dow Jones Utilities Average.”

Down - The downward movement in the price of a stock, bond, commodity or market.

Earnings Per Share - The amount of a company’s annual profits or earnings attributable to each ordinary share of that company. Usually associated with that company’s fiscal quarter.

ECN - Electronic Communications Network – independent execution systems set up by brokerage firms, matching new retail limit orders with compatible orders already in the system.

Equity - Ownership interest in a corporation in the form of common stock or preferred stock. It can also be expressed as total assets minus total liabilities, referred to as “shareholder’s equity”, “net worth” or “book value”. In the context of a futures trading account, it is the value of the securities in the account, assuming that the account is liquidated at the going price. In the context of a brokerage account, it is the net value of the account (the value of securities in the account less any margin requirements).

Execution - The actual buying and selling of stocks, bonds, and commodities – most often conducted through a stockbroker.

Fill - An executed order; sometimes the term refers to the price at which an order is executed.

Forex - The international exchange market, the market for conversion exchange operations of specified amounts of one country’s currency into the currency of another country according to an agreed rate for a given date.

Futures – A futures contract is a contract to buy or sell a specified commodity at a certain date in the future, at a market determined price (the futures price). The contracts are traded on a futures exchange.

Gap Down – An opening price that is below the prior day closing price.

Gap Up – An opening price that is above the prior day’s closing price.

High - The highest price paid for a stock during a particular time interval.

Historical Data - A series of past daily, weekly or monthly market prices (open, high, low, close, volume, open interest).

IPO - Initial Public Offering. A company’s first sale of stock to the public. Companies making an IPO are seeking outside equity capital and a public market for their stock.

Leading Indicators - Systems used to predict the direction of a stock or the market.

Limit Order - A trader’s instructions to a stockbroker to buy or sell at a particular price or better.

Liquidity - The relative ease at which a stock can be bought or sold; also, the ability of a stock to be traded at high volume without its price being substantially affected.

Long - Means the purchase of a stock with the expectation that it will go up within a particular time frame. When the stock reaches a higher price, the trader can sell it at a profit. Of course, if the trader “went long’ on a stock which happens to go down instead of up, the trader can lose money.

Low – The lowest executed price for a stock during a particular time interval.

MACD – Moving Average Convergence/Divergence – the crossing of two exponentially smoothed moving averages that are plotted above and below a zero line. The crossover, movement through the zero line, and divergences generate buy and sell signals.

Margin - The percentage paid by an investor on the total price for shares of stock; the balance is advanced by the broker. If the stockbroker determines that the customer’s equity in a margin account drops below a minimum standard, the broker can issue a margin call – a demand that the customer send additional money.

Market Maker - A brokerage firm that specializes in creating a market for a particular stock by actively buying and selling shares of that stock.

Meet Expectations - When a company reports quarterly earnings that are the same as what brokerage firms expect.

Moving Average - An average price for a stock figured through a certain number of days. A new average is calculated for the stock each trading day and plotted on a price and volume chart.

Mutual Fund - A mutual fund is a professionally manager diversified portfolio of securities invested on behalf of a group of investors. Individual investors own a percentage of the value of the fund represented by the number of units they purchased and thus share in any gains or losses of the fund.

NASDAQ - National Association of Securities Dealers Automated Quotation system. The NASDAQ is an electronic network of stock quotation display devices. It provides current price quotes for many stocks that are traded over-the-counter (OTC), meaning that they, for the most part, are not listed on exchanges, but rather are traded through brokers and dealers. The NASDAQ carries mostly “high-tech” stocks, such as those of Internet-based companies and computer manufacturers.

NYSE - The New York Stock Exchange – the largest exchange in the United States. It lists most of the largest best-known companies and also many smaller ones.

Open - The start of a market’s trading day.

Opening Price - The price at which a stock begins trading at the start of a particular time interval.

Option - Contract between a buyer and a seller that gives the buyer the right—but not the obligation—to buy or to sell a particular asset (the underlying asset) at a later day at an agreed price.

OTC - Over-the-counter; stocks that, for the most part, are not listed on exchanges, but rather are traded through brokers and dealers. NASDAQ stocks are traded over-the-counter.

Paper Trading – The ability to simulate a trade without actually putting up the money for the purpose of gaining additional trading experience. The best type of trading for a new trader to use to gain experience in the markets and to prevent them from making costly mistakes.

P/E Ratio - Price/Earnings ratio – given by the price of a stock divided by its earnings per share. Also called earnings multiple or market multiple. A stock selling at $100 with earnings of $5 per share has a P/E of 20.

Portfolio - The securities owned by an investor or company. A portfolio may include many different categories and types of stocks and bonds.

Position - A trader’s holding of a particular security. Also, a trader’s plan on how to implement an investment strategy.

Price - The amount of money for which a share of a particular stock can be bought or sold.

Put Option – A contract that gives the buyer of the option the right, not the obligation, to sell a stock at a specified price within a specified period of time.

Preferred Stock – Stock with a claim on the company’s earnings before payment may be made on the common stock and usually entitled to priority over common stock if the company liquidates. Also referred to as preferred shares or preference shares, it is typically a ‘higher ranking’ stock than voting shares. Its terms are negotiated between the corporation and the investor. They usually don’t have voting privileges but do receive dividends, which are usually paid to the preferred stock holder before the common stock holder is paid.

Resistance - The highest price in a trading range.

Risk – The level of uncertainty involved in a particular trade. The term risk refers to the deviation between expected and realized profit, as well as to the possibility of losing some or all of your investment. Levels of risk, of course, vary among investments.

SEC – Securities and Exchange Commission. The federal agency that regulates activity in the securities markets, and protects the public against malpractice by broker-dealers.

S&P Stocks – Refers to those stocks listed in the Standard & Poor’s 500 Stock Composite Index. Standard & Poor’s, a publisher of financial and investment reports and services, calculates the index based on each listed stock’s aggregate market value – its price times the number of shares. It is therefore value-weighted, not price-weighted as is the Dow Jones Industrial Average (DJIA). The S&P 500 comprises four separate indexes: 400 industrials, 40 utilities, 40 financial companies, and 20 transportation companies.

Short - A trading technique typically used when a stock is expected to go down in price. A “short” sale occurs when an investor sells borrowed stock with the expectation that the stock’s price will fall. If the investor’s expectation proves correct and the stock’s price falls, he can then buy the shares back at a lower price, return the borrowed stock, and keep the profits, less the commission to the broker from whom the investor initially borrowed the stock.

Short Cover – A buying back of stock – hopefully at a lower price – that was sold earlier in the day by the same trader. If the stock goes down after the trader executes a short sell, the trader makes a profit when he buys back those shares. If the stock goes up, such a short sell can result in a loss. See also “short”.

Spread - The difference between the “ask” and the “bid” price of a particular stock.

Stock - The capital raised by a corporation through the issue of shares entitling holders to an ownership interest (equity.) When you buy stock you own shares of the company’s stock. The percentage of stock that you own determines your power and liability within the company.

Stock Broker – A regulated professional who charges a fee or commission for executing buy and sell orders submitted by an investor.

Stock Exchange – Marketplace where brokers and dealers meet to buy and sell stocks of publicly traded companies on behalf of investors. Major US stock exchanges include the New York Stock Exchange (NYSE), the NASDAQ, the Tokyo Stock Exchange, the London Stock Exchange and the American Stock Exchange.

Stock Market – A market where securities are bought and sold. Its basic function is to enable public companies, governments and local authorities to raise capital by selling securities to investors.

Stop Loss – Also known as a “stop order” or a “stop-loss order.” An order placed with a broker to buy or sell a stock when the price reaches a specified amount. The broker then executes the trade by buying or selling at the market price. A stop order is often used to limit the extent of possible loss.

Stock Split – An increase in the number of a company’s outstanding shares. A two-for-one split by a company with 500,000 shares would result in its having 1,000,000 shares outstanding. An investor who holds, say, 500 shares before such a split would have 1,000 shares after the split, although the overall value of the investor’s holdings isn’t immediately affected. A company sometimes declares a stock split after the market price of its stock has increased significantly, and the halving of the price per share would then make the stock more attractive to smaller investors.

Support – The lowest price in a trading range.

Swing Trading – A trade that is held for days, weeks, or even months.

Symbol – The letters that represent a company’s name.

Ticker Symbol – A system of letters used to uniquely identify a stock or mutual fund. Symbols with up to three letters are used for stocks which are listed and trade on an exchange. Symbols with four letters are used for NASDAQ stocks. Symbols with five letters are used for NASDAQ stocks other than single issues of common stock. Symbols with five letters ending in X are used for mutual funds.

Trend – The general direction of price variations in a stock or market.

Volatility – The relative rate at which the price of a security moves up and down. Volatility is found by calculating the annualized standard deviation of daily change in price. If the price of a stock moves up and down rapidly over short time periods, it has high volatility. If the price almost never changes, it has low volatility.

Volume – The number of shares, bonds or contracts traded during a given period, for a security or an entire exchange.

$1,000. That’s what Nathan Gold uses as the starting point of a stunning 5-step “trade-wave” that he’s just added to his already popular website.

Penny stocks are usually junk, right? I’d certainly say so. And Nathan feels the exact same way. 97% of penny stocks are garbage that he would not even recommend to his worst enemy. You know he’s right, if you’ve done your research.

However, Nathan is a self-proclaimed “numbers nerd” and his strategy is to look for high quality penny stocks and trade one super stock per week. He finds these superstars by forcing them to survive a “hell-week” inside his proprietary 17-point analytical gauntlet before he gives them to you.

He follows the market almost 24/7 and the rare stocks that fight their way to victory on his list aren’t just primed to deliver cash-dumps to early investors. The stocks that receive Nathan’s blessing are undiscovered, overlooked and undervalued by Wall Street.

This means “the masses” haven’t not jumped on them and pushed the stock artificially skyward.

But the stock also has to pass even more tests. It must prove to Nathan that it has strong potential to quickly shoot skywards. Which means you’re not getting grey hair waiting for gains… …you’re seeing them within a couple months, a couple weeks, or even a couple days.

Inflation is soaring. Gas and food prices are careening higher by the day. And taxes, well you know where I’m going… If you are like most people in this recession you can’t afford to “buy and hold” for 20 years.

He’ll show you how to bank early profits and then play with “house money” from there on out. And, avoid careless risk. He details risk-avoidance tactics that mean you’re always acting like a savvy trader who knows better than to risk the farm.

Nathan isn’t going to swamp you with trades that you need to stay on top of. Eating up precious hours from your day. Subscribers are not overwhelmed with tens of picks a month like many other services do. He knows you have better things to do than be tied to your computer like a stressed-out day trader.

His picks are quality over quantity. You get one thoroughly-vetted penny pick per week. That way you need only give a few minutes a week to securing your nest egg. Or to collecting “spend-ready” investment income.

Make one smart trade per week!

If you get 3 or 4 a week from some other service it’s a waste of your time and money. You’ll have to monitor them endlessly and you’ll have all those trading fees eating up your capital. The sensible thing to do in this economically shaky time is to trade the best picks possible and do it with focus, one trade at a time.

On occasion Nathan has gone two weeks between picks. During one such period he let us know that he was deep in the “numbers” trying to find a mega-pick. He came up with IOGH…. a penny stock that soared from 2 cents from his alert to his members all the way to 25 cents. That was a 1,150% gain 3 months later. That was well worth the wait. And this happened not in “the best of times”… but deep in the agonizing middle of the Great Recession!

To see similar gains from decades-old “blue chip” stocks you might have to “buy and hold” for years if not decades.

For a ridiculously low one-time investment. With no monthly charges. No extra fees you become a lifetime subscriber of weekly stock picks.

And, you don’t need tens of thousands to invest. You don’t need anything like that. You can get started for as little as $200 seed money.

As Nathan says: “Out of slumps like we’re in now rise tomorrow’s Titans.” A ton of giant companies sprung up out of historically tough economic times very similar to what we’re living through now.

And not just any companies…

A delivery “goliath.”

A software “tower of power.”

Even burger “royalty.”

You get a granite-strong 100% Money-Back guarantee. And, if you start by paper trading first it’s 100% risk-free way to see if it will work for you.

It’s to your benefit to take a long look at how simple Nathan makes it to see quick and often triple-digit gains on your money, even in this sluggish economy.

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For example, for good info on MGM (casino stock), type in “las vegas newspaper”.

Once you have found the newspaper’s website, go to the search box on the home page and type in the stock symbol or company name.  You will likely find very recent articles that may not be linked up from the company’s Yahoo finance page or similar

<strong>How do you find the hometown for a company?</strong>

Go to finance.yahoo.com and type in a stock symbol  You will then find the hometown for the company, which you can use for your google search.

Using mathematical algorithms he finds the best entry and exit points that will give the investor the highest possible return on their investment.

With Connelly’s working algorithm he can predict solid gains in the market within 24-48 hours before they happen.

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He developed a formula using Psychological Support Levels (PSL). This is nothing new in the trading world. It simply means that there is certain activity of human behavior that can cause a stock to be sold at well below its actual worth. This is how you can discover under-valued stocks.

Using an algorithm that uses PSL he can identify and predict human behavior and its influence on a winning stock.

This isn’t hocus pocus. You probably know how scientists use mathematical formulas to predict how human behavior affects population growth, crime and even terrorism.

On his site he shows how he tested his strategy over a period of 30 days and experienced an average gain of 28% on over 11 trades.

In addition to his own indepth research he also mines all the other penny stock picking newsletters out there and gives you picks from those colleagues he trusts the most.

He gives his subscribers the best penny stocks to trade with a highest probability of profit. And, No monthly fees.

Now the truth is that there are a lot of trading systems out there that you can use to make great money. But you have to realize that even if the product is foolproof you are only human and can screw this up. You always have to adjust your trade settings correctly. But if you work hard to use the system you can definitely turn a tremendous profit.

James does not guarantee that each stock he picks will skyrocket. No one can do that. Nothing is 100% perfect. But he does guarantee that you will make money.

But let’s be honest if you are not a disciplined trader, or don’t have a fast broker, or don’t have experience trading then you will lose money! This type of trading is not for the faint of heart. Don’t trade with money that you need for rent or mortgage or food. You can’t be a calm trader if you are trading with money you can’t afford to lose. That is a sure fire recipe for failure.

James will provide you with a quick start guide so even if you have never traded stocks in your life you can start trading alongside James Connelly within 24 hours. But I would highly recommend that you paper trade for a while to see how you do before you invest your money. He offers a lifetime subscription so you can afford to wait and see how you do before you trade live.

He also offers an 8 week money back guarantee so you have nothing to lose by trying his system. So take Penny Stock Prophet for a spin, if you don’t make money get your refund and you haven’t lost a thing.

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