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Random Thoughts on Trading -- By: Bill Kraft
Copyright 2009, Makin' Hay, Inc., All Rights Reserved
Bill Kraft
Editor |
The other day it occurred to me how much I really like trading. It
has given me a quality of life I never dreamed I would enjoy. In my
former lives I practiced law for many years and then ran a photo
processing business and portrait studio. The law practice was
interesting and relatively lucrative but came with heavy burdens of time
and obligations to courts and clients. Many times my work day began at
6:00 A.M. and didn't end until 10 or 11 at night. I don't mean that as
a complaint, only as a fact to be compared to my trading experience.
The photo business came about as a result of my passion for
photography. The only problem was that it was a retail business and as
anyone who has been or is in a retail business knows, you are a slave to
it.
As I have written in "Smart Investors Money Machine" and in "Trade Your Way to Wealth" , trading changed my life completely. Once I
advanced through the learning curve, my time became my own. I am no
longer beholden to clients or customers and my calendar is not set by
the courts or the needs of others. I can pretty much do what I want and
when I want to do it. Rarely does my trading day extend beyond a couple
of hours and I can do it anywhere in the world that I can hook up my
computer. It has given me the ability to travel, spend more time with
my family, and live life as I choose.
Of course, I do perform functions that take up some of my time. I
edit the three alert services (Option Trader, Trend Trader, and $10
Trader), and I write this Newsletter article each week, but I am able to
do those things because I choose to rather than from any financial
need. I take on the occasional coaching student because working with
people who are interested in trading helps keep me sharp and introduces
me to some fascinating folks. Trading enables me to do these things
that I enjoy and have fun doing. If there is a time when they are no
longer fun, trading has enabled me to be in a position where I can just
stop doing them.
As I write in "Smart Investors Money Machine" , I have learned, and
in that book I share a variety of ways to create streams of income that
are at least somewhat independent of the constant use of my time. I've
learned that almost anyone can add substantial income with relatively
little effort once they have made an effort to learn what to do and how
to do it.
Maybe that's the rub. All too many come to trading thinking it
will be easy and the truth is that it isn't easy. Successful trading
can be simple, but that isn't the same as being easy. Before trading
can work for any individual I am convinced that the person must make
serious efforts to understand that it is a business and as such requires
knowledge, a specific plan, and practice. Successful trading also
requires self-knowledge and understanding. One of the greatest battles
we seem to fight in reaching the ultimate status of becoming a winning
trader is against ourself. We must learn to achieve a level of
discipline that removes as much as possible the elements of greed and
fear from our trading decision making process. All of these things
involve real effort and without that effort it is difficult if not
impossible to become a really good trader.
For most, question becomes is it worth it? For me the answer has
been a resounding yes. One of the best trading teachers I have ever
known once said something like: "If you are willing to do for 6 months
or a year what others won't, you will be able to do for the rest of your
life what others can't." That thought has stuck with me for more than a
decade of trading now and it rings as true today as when I first heard
it. When I began, I spent about 5 or 6 hours a day studying and I did
that for at least 4 months. At that point, I had no job so I was able
to devote the time. I understand that most readers simply can't devote
that much time a day to study, but most could afford an hour or so on
the average. Maybe it would be a great trade-off in the long run to
give up an hour of TV a day in exchange for a better quality of life not
too far down the road. Sure, it will take longer devoting only an hour a
day to study than it took at 5 hours a day, but in the end the rewards
can be unbelievably great. Imagine a life where someone could work half
the time and make three or four times the money. Would that be worth
the effort? Only you can say. Trading and investing definitely isn't
for everyone. It involves risk and oftentimes risk that an individual
may be unwilling to take, but armed with appropriate knowledge risks can
be managed and controlled.
Anyway, that's my ramble for this weekend and I hope it provides
some food for thought. Personally, trading has been very, very good to
me and maybe it could be to you as well.
Good Trading!
Bill Kraft
Success Trading Group -- by Eric Aafedt
Our Success Trading service delivers quality trading ideas for the elite investor that has the financial wherewithal and market nimbleness to profit on small moves in a stock's price. Become a member and you will be provided with email and/or PDA alerts intended to provide you with the opportunity to make many, many profitable trades.
Here is a play from the Success Trading Group:
MDU Resources Group Inc. (MDU)
Our Success Trading Group scored another winning trade this week by trading
in and out of MDU Resources Group (Ticker: MDU).
Have a great weekend and we'll trade next week.
Success Trading Group Team
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Option Trader -- by Bill Kraft
Our Option Trading Service is for conservative traders that understand leverage principles and enjoy the challenge of options trading. We focus on powerful option trading strategies that place volatility and momentum in your favor. And we pride ourselves on always minimizing our losses!
The Option Trader service utilizes standard trading in Puts and Calls as well as strategies using Leaps, Straddles, Credit Spreads, Calendar Spreads, and Naked Puts. But no matter how sophisticated a strategy may be, we ALWAYS know our downside potential on every trade.
Here's a look at a trade Bill is currently working on:
Sotheby's (BID)
Option Trader notched a before commission gain of 78% in 8
days by creating a synthetic long position on Sotheby's. The stock has
given some indication that it may retrace and I am looking for a
retracement followed by an upturn for the opportunity to jump on board
once again.
Good Trading!
Bill Kraft
Try our Option Trader Real-Time Alert Service
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Trend Trader -- by Bill Kraft
Trend trading as we try to practice it is a form of momentum trading. We prefer to try to capture profit out of the middle of the trend rather than try to catch reversal at bottoms and tops.
Here's a look at a trade Bill is currently working on:
QLogic Corp. (QLGC)
This stock has been trending up and on Friday broke above
resistance in an ascending triangle formation. I see that move as a
positive, but since stocks breaking resistance often fall back during a
test of that resistance, I would like to see some confirmation before
entering.
Good Trading!
Bill Kraft
Try our Trend Trader Real-Time Alert Service
and Get $50 off our Normal Website Rate!
$10 Trader -- by Bill Kraft
We really enjoy trading stocks that are $10 and under. Often they provide the chance to enjoy high percentage gains and, of course, at worst, the risk is limited to what we paid for the stock.
Here's a look at a trade Bill is currently working on:
InnerWorkings Inc. (INWK)
This stock has continued in a trend up offering potential
entries on retracements to the uptrend line. This past week I closed a
5 day trade for a 3.5% gain. I am watching for a re-entry opportunity on
a dip to the trend followed by a bounce.
Good Trading!
Bill Kraft
Try our Under $10 Trader Real-Time Alert Service!
Dividend Trader -- by Eric Aafedt
Our Dividend Trader service focuses solely on the "best of the best" dividend paying stocks. We trade these stocks for short-term gains and we will also buy these stocks for their powerful dividend producing income with a purpose to make capital gains as the stock increases in value.
With these trades we attempt to get in and get out quickly. Once we buy, we immediately set an exit point of 3% above the buy price. We have had great success in the past. In fact, we have put together a string of 61 positions in a row that have hit our 3% target subsequent to the buy alert!
While we titled this service a "trader" service, we also invest in these dividend-paying stocks from time to time for the long-term. We will buy these stocks for their powerful dividend producing income with a purpose to make capital gains as the stock increases in value.
Many of the stocks that we will be "investing" in have had a history of raising their dividends almost every year. Year after year. This can be powerful. Building up your dividend income in a tax deferred account such as an IRA can siginficantly boost your account over the years.
Feel free to sign-up for a free 30-day trial. During such time you can review our Trade Tables and see the type of stocks we are buying. You will also receive in real-time all the new trading and investing alerts we send during your trial period!
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