life ideas

August 31, 2007

Foreclosure’s Costly Tax Implications

Filed under: Uncategorized — manoftoday @ 9:13 pm

 

Forgiven but not forgotten
In many cases, the tax problem associated with a foreclosure arises from a seemingly benevolent move — the lender forgives some of the loan. This happens when a lender and a borrower negotiate a reduction in loan amount. It also happens when the lender forecloses on the property and sells it for less than the outstanding mortgage.

In both instances, the difference for which the borrower is no longer responsible is usually considered cancellation of debt, or COD income. It also is called discharge of indebtedness income or discharge of debt. Regardless of the name, under the tax code, it’s all taxable income. The tax on COD is calculated at ordinary rates, which range from 10 percent to 35 percent depending upon your income.

Possible Congressional help: As for taxes on foreclosures, there might be some legislative relief from D.C. on the way.

Back in April, Rep. Robert E. Andrews, D-N.J., introduced the Mortgage Cancellation Tax Relief Act of 2007 (HR 1876). On the other side of Capitol Hill, Sen. Debbie Stabenow, D-Mich., introduced an identical version, S. 1394. Both measures would amend the tax code to make debt forgiveness on principal home mortgages nontaxable income.

Since the bills were introduced back in the spring, they have been languishing. No hearings, nothing, by either the Ways and Means or the Senate Finance committees.

But given what’s going on, and likely to keep going on for a while, with mortgages and unexpected taxes, that might soon change.

Foreclosure’s Costly Tax Implications

Source: Foreclosure’s Costly Tax Implications

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财籽 :: 阅读主题 – Emini

Filed under: Uncategorized — manoftoday @ 9:11 pm

 

Emini
Future


Lets take NQ, nq is the emini futures for ndx, e mini means it is 0.2 of a full nasdaq futures contract, for a full nasdaq futures contract, one trading size is ndx times 100 == $130500 as of today, so a nq trading size is 0.2X130500=$26100, but for futures, you only need 10% of the trading size as margin, basically, it means you only need $2610 to start one NQ futures, that’s why futures trading is a highly leveraged game, basically you are using $1 to bet a 10$ win/loss.
as for the gain, once you buy a NQ, whenever ndx move 1point, you move $20. If you are very good at market directions, your gain could be very high annurized.
ES is for emini, similar as NQ, it’s 0.2 of a full spx futures contract, but since the full spx futures contract goes $250 for each point of spx move, so the ES contract move $50 for each point spx move.
ES daytrade margin 2.5k, hold overnight margin 7.5k
EMINI 基本上可以被看成是上了margin的ETF (例如 NQ 可以认为是大约8倍杠杆的QQQ).
slow market, 没有区别, fast market, future变化的比指数要快, 显的跟凶猛一些

Source: 财籽 :: 阅读主题 – Emini

OPTION STRATEGIES

Filed under: Uncategorized — manoftoday @ 8:11 pm

 

KEY OPTION STRATEGIES


> BULLISH > very bullish >> buy call
> moderately bullish and you are sure the price will not fall >> bull spread
> moderately bullish and you think the price will not fall >> sell put
> BEARISH > very bearish >> buy put
> moderately bearish and you are sure the price will not rise >> bear spread
> NEUTRAL > you hold stock and expect no movement >> sell covered call
> VOLATILE > you expect prices to be very volatile >> buy straddle
> you expect prices to be volatile >> buy strangle
> you think the price will not fluctuate much >> buy butterfly
> you expect prices to be moderately volatile >> sell butterfly

BUY CALL
WHEN TO USE. You are very bullish on the stock. The more bullish you are, the higher the strike should be. No other position gives you so much leveraged advantage with limited downside risk.
PROFIT increases as stock rises. At expiration, break-even point will be option strike A plus premium paid. For each point above break-even, profit increases by an additional point.
LOSS is limited to the premium paid. Maximum loss realized if the stock ends below A. For each point above A, loss decreases by additional point.
RISK: Limited. REWARD: Unlimited. MARGIN: Not required.
TIME DECAY. This position is a wasting asset. As time passes, value of position erodes toward expiration value. If volatility increases, erosion slows; if volatility decreases, erosion speeds up.

BUY PUT
WHEN TO USE. You are very bearish on stock. The more bearish you are, the more out-of-the-money (lower strike) should be the option you buy. No other position gives you as much leveraged advantage in a falling stock (with limited upside risk).
PROFIT increases as stock falls. At expiration, break-even point will be option exercise price A less premium paid. For each point below break-even, profit increases by additional point.
LOSS limited to amount paid for option. Maximum loss is realized if the stock ends above option exercise A. For each point below A, loss decreases by additional point.
RISK: Limited. REWARD: Unlimited.
TIME DECAY This position is a wasting asset. As time passes, value of position erodes toward expiration value. If volatility increases, erosion slows; if volatility decreases, erosion speeds up.

SELL NAKED PUT
WHEN TO USE. You are sure that the price will not fall. Sell lower strike options if you are only somewhat convinced; sell higher strike options if you are very confident the stock will stagnate or rise. If you doubt stock will stagnate, sell at-the-money options for maximum profit.
PROFIT: limited to the premium received from sale. At expiration, break-even point is strike price A less premium received. Maximum profit realized if stock settles at or above A.
LOSS: increases as stock falls. At expiration, losses increase by one point for each point stock is below break-even. Because the risk is open-ended, this position must be watched closely.
RISK: Unlimited. REWARD: Limited. MARGIN: Always required.
TIME DECAY: this position is a growing asset. As time passes, value of position increases as option loses its time value. Maximum rate of increasing profits occurs if the option is at-the-money.

BULL SPREAD
Call option is bought with a strike price of A and another call option sold with a strike of B, producing a net debit.
OR
Put option is bought with a strike of A and another put sold with a strike of B, producing a net credit.
WHEN TO USE: you think the stock will go up somewhat or at least is a bit more likely to rise than to fall. Good position if you want to be in the stock but are unsure of bullish expectations. This is the most popular bullish strategy.
PROFIT: limited, reaching maximum if stock ends at or above the higher strike B at expiration. If call spread used, difference between strikes minus initial debit. If put spread used, net initial credit.
LOSS: maximum loss if stock at expiration is at or below A. If call spread used, maximum loss is net initial debit. If put spread, difference between strikes minus initial credit.
RISK: limited. REWARD: limited.
TIME DECAY: if stock is midway between A and B, no time effect. At B, profits increase at fastest rate with time. At A, losses increase at maximum rate with time.

BEAR SPREAD
Put option is bought with a strike price of A and another put option sold with a strike of B, producing a net debit.
OR
Call option is bought with a strike of A and another call sold with a strike of B, producing a net credit.
WHEN TO USE: you think the stock will go down somewhat or at least is a bit more likely to fall than to rise. Good position if you want to be in the stock but are unsure of bearish expectations. This is the most popular bearish strategy.
PROFIT: limited, reaching maximum if stock ends at or below the lower strike B at expiration. If put spread used, difference between strikes minus initial debit. If call spread used, net initial credit.
LOSS: maximum, if stock at expiration is at or above A. If put spread used, maximum loss is net initial debit. If call spread, difference between strikes minus initial credit.
RISK: limited. REWARD: limited.
TIME DECAY: if the stock is midway between A and B, no time effect. At A,profits increase at fastest rate with time. At B, losses increase at maximum rate with time.

SELL COVERED CALL
Call option against the stock holding is sold.
WHEN TO USE: you are sure that the price of the stock you hold will not fall. Sell lower strike options if you are only somewhat convinced; sell higher strike options if you are confident stock will rise. If you think stock will stagnate, sell at-the-money options for maximum profit.
PROFIT: limited to the strike minus the market price plus the premium received.
LOSS: similar to that incurred with ordinary stock ownership, only partially off-set by the option premium received. Main loss could be the opportunity loss if the market rises strongly.
RISK: unlimited. REWARD: limited.
TIME DECAY: This position is a growing asset. As time passes, value of position increases as the option loses its time value. Maximum rate of increasing profits occurs if option is at-the-money.

BUY STRADDLE
Call option and put option are bought with the same strike A – usually at-the-money.
WHEN TO USE: you firmly believe that the stock moves far enough in either direction in the short-term. Buy higher/lower strike options if the position can encounter different probabilities of bullish or bearish movements of the stock; buy at-the-money options if those probabilities are almost equal.
PROFIT: increases as the stock rises or falls. At expiration, break-even points will be option exercise price A +/- prices paid for options. For each point above upside break-even or below downside break-even, profit increases by an additional point.
LOSS: limited to the amount paid for options. Maximum loss realized if stock ends at option exercise A. For each point above or below A, loss decreases by additional point.
RISK: limited. REWARD: unlimited. MARGIN: not required.
TIME DECAY: This position is a wasting asset. As time passes, value of position erodes toward expiration value. If volatility increases, erosion slows; if volatility decreases, erosion speeds up.

BUY STRANGLE
Put option is bought with a strike A and a call option is bought with a strike B.
WHEN TO USE: you strongly believe the stock will move far enough from the predefined range. This strategy is similar to the buy straddle but the premium paid here is less. Buy higher/lower strike options if the position can encounter different probabilities of bullish or bearish movements of the stock; buy at-the-money options if those probabilities are almost equal.
PROFIT: unlimited andincreases as stock rises above B or falls below A. At expiration, break-even points will be option exercise price A – prices paid for options and option exercise price B + prices paid for options. For each point above upside break-even or below downside break-even, profit increases by an additional point.
LOSS: limited to amount paid for options. Maximum loss realized if stock ends between A and B. For each point above B or below A, loss decreases by additional point.
RISK: limited. REWARD: unlimited. MARGIN: not required.
TIME DECAY: This position is a wasting asset. As time passes, value of position erodes toward expiration value. If volatility increases, erosion slows; if volatility decreases, erosion speeds up.

BUY BUTTERFLY
Call option with low strike bought and two call options with medium strike sold and call option with high strike bought. The same position can be created with puts.
WHEN TO USE: you believe that the stock price will fluctuate in a narrow range.
PROFIT: limited, reaching maximum at a high strike. If call version used, downside break-even=low strike – net cost of spread, upside break-even is at high strike + net cost of spread.
LOSS: maximum loss realized if stock ends below low strike or above high strike and limited to net credit paid. For each point above low strike or below high strike, loss decreases by additional point.
RISK: limited. REWARD: limited.
TIME DECAY: This position is a combined asset. As time passes, value of position increases/erodes toward expiration value. If volatility increases, increase/erosion slows; if volatility decreases, increase/erosion speeds up.

SELL BUTTERFLY
Call option with low strike sold and two call options with medium strike bought and call option with high strike sold. The same position can be created with puts.
WHEN TO USE: you believe that the stock price will move substantially.
PROFIT: limited to initial credit received.
LOSS: limited to the difference between the lower and middle strikes minus the initial spread credit.
RISK: limited. REWARD: limited.
TIME DECAY: This position is a combined asset. As time passes, value of position increases/erodes toward expiration value. If volatility increases, increase/erosion slows; if volatility decreases, increase/erosion speeds up.

BUY CONDOR
The condor takes the body of the butterfly—two options at the middle strike—and splits it between two middle strikes rather than just one. In this sense, the condor is basically a butterfly stretched over four strike prices instead of three. Call option with low strike bought and two call options with two medium strikes sold and call option with high strike bought. The same position can be created with puts.
WHEN TO USE: you believe that the stock price will fluctuate in a trading range.
PROFIT: limited, reaching maximum between medium strikes.
LOSS: maximum loss realized if stock ends below low strike or above high strike and limited to net credit paid. For each point above low strike or below high strike, loss decreases by additional point.
RISK: limited. REWARD: limited.
TIME DECAY: This position is a combined asset. As time passes, value of position increases/erodes toward expiration value. If volatility increases, increase/erosion slows; if volatility decreases, increase/erosion speeds up.

SELL CONDOR
The condor takes the body of the butterfly—two options at the middle strike—and splits it between two middle strikes rather than just one. In this sense, the condor is basically a butterfly stretched over four strike prices instead of three. Call option with low strike sold and two call options with medium strikes bought and call option with high strike sold. The same position can be created with puts.
WHEN TO USE: you believe that the stock price will move substantially.
PROFIT: limited to initial credit received.
LOSS: limited to the difference between the lower and middle strikes minus the initial spread credit.
RISK: limited. REWARD: limited.
TIME DECAY: This position is a combined asset. As time passes, value of position increases/erodes toward expiration value. If volatility increases, increase/erosion slows; if volatility decreases, increase/erosion speeds up.

帖

Source: 财籽 :: 阅读主题 – KEY OPTION STRATEGIES

IBD Stock Checkup

Filed under: Uncategorized — manoftoday @ 6:57 am

http://www.investors.com/yahoofinance/YahooCheckup.asp?t=OVTI

Link to IBD Stock Checkup

07年十全十美省税法 (ZT)

Filed under: Uncategorized — manoftoday @ 6:03 am

 

07年十全十美省税法
多维社记者陈玮报导/许多会计师都一至认为美国税法可能是世界上最为复杂的税法。一是种类繁多。例如,不同的人口、不同的年龄、不同的收入的人税率不同。二是经常变化。国会经常通过新的法律,国税局就要做出相应改变。面对2007年,美国会计师乔治(George Saenz,)与群飞注册会计师事务所会计师陈晓飞、胡原会计师事务所共提供十点建议,告诉你怎样报税省最多。

1.善用累积所得税的优惠虽然我们还不知道美国国会有关税法的最新进度,但是可确定的是长期资本利得(Long-term Capital Gain)和合格股息(qualified dividend)优惠税率延长到2010年。长期资本利得(capital gain)和合格股息(qualified dividend)优惠税率为5%(2008年降为0%,一般所得10%和15%)和15%(一般所得25%以上),这条文原来只适用到2008年,新法延长至2010年.
陈晓飞会计师在报税季节接受多维记者访问时即表示,美国税法年年在改变,例如今年开始慈善捐款需要收据方可抵税、电话税也可抵税等。所以可以在今年就开始累积你的所得税,整理你的支出,就是省税第一步。

2.请找专家解惑如果碰到税法上难解的问题时,找专家询问还是最好的方法。不单是合格的会计师、税法人员可以帮到你,领有执照的财务分析师也是很好的选择,专家可以告诉你应该怎样省税与报税,绝对有帮助。乔治表示,很多人一方面是想省钱,一方面是不知道原来还有好多省税的方法,所以都想自己填写报税单,轻松了事就可,这样容易因小失大。

3.定时检视退休账户退休账户及基金缓税数额有增加。2007年新税法规定可放入退休金的数字增至到$15,500,年龄达50岁者可增至 $20,500。SIMPLE IRA达$10,500,年龄达50岁者可增至13,000。REGULAR IRA对结婚的来说收入至$10,300就PHASE OUT(开始减少)。此外,Roth IRA的调整后总收入相应门坎2007年也有所变化。个人单独报税者为9万9000美元和11万4000美元;夫妇联合报税者为15万6000美元和16 万6000美元。

4.仔细管理税单,留心天然灾害的优惠2006年美国遭受多项天然灾害的侵袭,所以国税局扩大飓风受损人的优惠,飓风损失不再局限于Hurricane Katrina,亦包括Rita, Wilma等暴风的受害者。优惠条款包括提早提取退休金可免除罚款,向公司退休基金贷款的限制取消,额外损失税务限额之取消,增加续付受害员工的薪资抵税额(仅限第一个6千元的40%),双倍教育抵税额的优惠,三年平均收入法则的应用,慈善捐献的限度放宽,免税数额增加及标准哩数减额的增加等等。
陈晓飞会计师还建议,仔细整理近年来所收到的各项缴税证明、慈善捐款证明、贷款文件等,都可以帮助你在新的一年省税。

5.开设公司比用个人所有权公司可省税个人所有权公司(sole proprietorship)是指用个人名义经商。个人所有权公司是由一个人拥有的责任无限的公司,它是一种最简单的公司形式。陈晓飞会计师在接受多维社记者采访时表示,这类公司的拥有人自行作出决定,享有全部的利润,缴纳全部的税款,赔偿所有的损失,承担一切风险。
换言之,公司拥有人对公司经营所引起的法定责任承担无限的连带责任,公司或个人的全部财产都可被法定地用来清偿债务。相反地,注册公司(incorporated)则需向各州政府申请注册,各州政府收取的注册费也不尽相同,介于几十美元到几百美元之间。陈晓飞会计师说,注册公司的好处是许多费用可以折算入经营费用,一但经营有问题,也不会影响到个人财产。另外如果你是自雇者,考虑开立一个小商业退休计划,可以减税或延期付税,最高可以放 44000元在SEP户口。

6.保险也是省税的方法俗语说天有不测风云人有旦夕祸福,请记得不论如何都要给自己或是家人甚至房子一个保险。保险可以帮助你在碰到紧急灾难时,最直接的救助。另外按照联邦税法,个人的工资收入需要同时交纳社会保险工薪税和个人所得税。由雇主交纳的医疗保险费不必交税。自我雇用的私人业主,医疗保险费用的 25%是免税的。

7. 1099也可有多项抵税措施很多行业的人都会收到1099MISC的报税单,像是业务、记者、计算机工作人员等等。陈晓飞会计师表示,纳税人可以在报税期间,检视每年的信用卡账单,或生活支出,看看有哪些是因为这份额外工作所必要支出的花费,例如业务的车费、电话费用;计算机人员的网络费用、买计算机的钱等,都可以申请抵扣。陈晓飞建议,如果不知道哪些可以抵税,建议可以开始找个会计师咨询一下,会发现像是在家中设有办公室者,大概都还可在抵销约 10%左右的税款。

8.请将收入挪后费用提前资深会计师胡原在接受多维社记者访问时建议,纳税人要尽量将收入挪后,将费用提前。举例来说如果你在未来几年可能会有额外的收入,如买了GOOGLE股票等,请把这部份的收入报税挪往往后几年,像是2010年等;再来把现有的需要支付的费用如房贷等提前缴交,如在每年年底缴交 13甚至

14个月的贷款,如此都可以省税。胡原会计师表示,因为就现今的税法来看,如果没有变动,到2010年时,长期的资本利得可能不需要缴税,所以如果将收入挪往后几年,将可省下一笔税款。胡原会计师建议,纳税人可与会计师好好商量。

9.儿童税(Kiddy Tax)提高年龄到18岁胡原会计师说,很多父母会替未成年的孩子开户存教育基金或把增值的财产放在未成年子女名下,利用子女的低税率来省税。胡原提醒纳税人注意,新税法规定未满18岁以下的小孩投资收入如股息、利息收入等,金额超过$1,700部分要用父母的税率申报,这就是所谓的kiddy tax,金额在$850到$$1,700间税率为15%。

(开户存教育基金---如果用在qualified education expense, should not pay tax.)

此外,529免税教育储蓄账户也是为孩子筹措教育基金的好帮手,一个529投资账户中可以为一个孩子投入的金额,各州并不一样,以纽约州为例是一万美金。所以每年父母可有最高一万元抵扣金额。胡原会计师说529只适用于高等教育,且限定每对父母的免税金额,但是可透过祖父母或是外公外婆,另外开设529账户,如此也可省税。

10.不要拖到最后一天才报税最后省税小秘方就是请提早准备报税,通常越靠近截止报税日期,你的会计师一定是最忙的时候,所以无法有充裕的时间,聆听你的需求。此外越靠近报税时间,才开始准备报税数据,最容易出现遗漏状况。不论你是自行报税,还是委托专家,都请早早准备好数据,才可以简单完成报税程序。

Source: 07年十全十美省税法 (ZT) – 文学城: 热点论坛 web.wenxuecity.com

HSA成为除401K/IRA之外又一个省税的工具

Filed under: Uncategorized — manoftoday @ 6:00 am

 

由于法律的变化,HSA已经成为除401K/IRA之外又一个省税的工具。


Health Savings Account(HSA)并不是什么新东西,其实就是Flexible Spending Accounts中的一种。就是把税前的一部分收入放在HSA里用来支付与医疗有关的费用,这样这部分与医疗有关的开支就可以免税。
HSA以前并不是很有用,主要的问题是这部分钱必须当年用掉,不然的话这笔钱就白扔了(use it or lose it)。再有就是IRS对放入HSA的钱的数量和方式有很多限制,最主要的就是放钱的最高额不能超过你的医疗保险每年Deductible的数额。
近几年HSA的法律有了很大的变动,特别是布什刚刚(06年12月)签署了一个法案叫做Health Opportunity Patient Empowerment(HOPE)。这些变化主要有:
1. 把use it or lose it变为 use it or keep it。就是说你现在放到HSA里的钱如果用不完的话可以继续存下去,不会作废了。
2. 如果你看病/拿药/整牙什么的都不需要花钱的话,那这笔积攒起来的钱在你达到65岁以后可以取出来,只不过取出来时要根据当时的税率缴税。直接地讲就是:HSA里的钱(税前没交税的)以后只要使用在与医疗有关的开销上就永远也不用交税。如果看病花不了,退休后可以取出来买什么都行,但取出时要交税。这样HSA实际上已经是和IRA/401K等等退休基金一样了。
3. 2007 HSA 里放钱的最高限额是:$2850/single, $5650/family。而且原来‘不能超过deductible’的法律也取消了,现在可以直接放最高额了,这是07年1月1日刚开始执行的法律。
HSA 是和医疗保险一起开的,感兴趣的朋友可以去找你单位管医疗保险的人问问。下面是我的HSA administrator的连接,可能能提供更多信息。

http://www.hsaadministrators.com/about-health-savings-accounts.asp

Source: 由于法律的变化,HSA已经成为除401K/IRA之外又一个省税的工具。 – 文学城: 热点论坛 web.wenxuecity.com

如何看level 2 (转载)

Filed under: Uncategorized — manoftoday @ 12:59 am

 

Level2 看起来就象下面的link:
http://daytrading.about.com/library/weekly/aa092099a.htm#LevelII
左边是bid, 右边是ask. 每行是一个order. 包括MM的代码, 价位, 和手数. 同一价位的单子用同一颜色来表示. 哪边同样的颜色靠下, 哪边的单子下得多, 一目了然.
Island的数据类似. 但是没有MM的代码, 却有数字在左右栏下面, 说明除了列表内的单子, 还有多少下单.
我总是也只能用最苯的方法来观察, 但还是要综合起来考虑:
1. 如果哪一边的单子多, 说明哪一边的力量大. 这是self explain的.
2. 但是要看每一笔的手数. 单笔单子数额大, 更有可能是大户或庄稼在出货或吃货. 狼少有一篇关于观察单笔成交的贴子, 请谁找到了帖在这里. Smile
3. 还要看单子数目的变化. 如果一边单子多, 但另一边在增加, 说明看多或看空的人逐渐在增多.
4. 如果卖单多于买单, 不论单笔手数多少, 但价格并不下降, 而且缓慢攀升, 说明有人在吃货, 后市看好. 反过来则看跌.
5. 如果下降缓慢, 但有迅速拉高, 特别是在几秒钟内在某一价位(比如$30的股票, $30~$30.50)的单子全部被吃掉, 即便今天不涨, 转天必定跳空高开.
6. 如果成交缓慢, 而且bid/ask之间价差(spread)较大, 要等. MM还没决定何去何从.
7. 骗线. 如果卖单里有一笔超级大单, 卖单也很多, 但股价下跌并不多, 而且当买盘逼近这个卖单的时候, 这个单子突然被撤掉了. 往往是庄稼的”盖板”. 货还没吃够. 往往这时候股价会上一台阶, 然后再照此办理.
8. 但小心如果这个大单是被逐渐吃掉的, 买力很强而股价变化不大, 是庄稼出货.
9. 如果大单被一口吞掉, 则情况如 5.
10. 结合实时图表, 可以互相辅助判断是骗线还是真实形态.
11. 通过MM代码可以观察从某一MM的进出情况. 但肉眼不容易判断. 从同一个MM出来的单子不一定都是机构自己的, 如果MM是broker, 会有其客户的单子. 但机构的单子往往会比较大, 要结合单笔成交来判断. 最好是有程序.

Source: 财籽 :: 阅读主题 – 如何看level 2 (转载)

August 25, 2007

24 Essential lessons for investment success

Filed under: Uncategorized — manoftoday @ 7:21 pm

today by 400 major US institutions. With decades of investing xperience, the author shares the lessons he has learned in a simple question-and-answer ormat, for those who may be first-time investors getting their feet wet, and to improve the prformance of those who may have been playing the market for some time. Learn commonsense
strategies, know when to buy and sell at the right time, and successfully manage your own portfolio. Your journey to financial security and freedom begins here.

Lesson 1. What Every Investor Should Know Going In
• Cut your losses early. It’s like buying fire insurance.
• Always cut your losses at 8% below your purchase price.
• Be persistent. Learning to invest doesn’t happen overnight. It takes time, effort, and
experience.
• Always sell your worst performing stock first, not your best-performing stock.
• Do not make emotional decisions. We tend to get attached to our trading decisions and
cannot admit our mistakes.

Lesson 2. Getting Started: There’s no time like the present!
• You don’t have to wait until you have the right job or reach the right age, start now and
gain experience over the years.
• Decide whether you want a full-service broker or a discount firm.
• Research on the stockbroker you’re considering. Where do they get their information?
Are they truly interested in products that are right for you? How much commission do
they get if they are a discount brokerage? Do not go with low commission firms.
• Open a cash account first, and then after a few years’ experience, consider a margin
account that lets you borrow money from your broker.
• Each week you must spend time tracking your investments. Learn to read charts so you get the facts, not opinions.
• As a beginner, avoid volatile investments, such as low-priced stocks, futures, options,
and foreign stocks. Most of the outstanding companies to invest in should be between
$15 to $150 a share.
• It only takes $500 to $1000 to get started. Add to your investment account from savingsfrom your salary.
• If you have $5,000 concentrate on owning up to two high-quality stocks. You should ownno more than six to ten stocks if you are in the $100,000 up range. There’s
no reason to own more than 20 stocks because you simply can’t keep track of all their
progress.

Lesson 3. Follow a system rather than your emotions
• Do not get emotionally involved with your stocks. Follow a set of buying and selling rules.
• Do not buy a stock under $15 a share. The best companies that are leaders in their fields simply do not come at $5 or $10 per share.
• Learn from history and study the best stock market winners.
• Always conduct a post-analysis of your stock market trades so you learn from successes and mistakes.
• Of the best-performing stocks of the last 45 years, the average share price before they
went on to double or triple was $28 a share.
This is a historical fact. Cheap stocks involve
far greater risk. You get what you pay for.

Lesson 4. Fundamental analysis or technical analysis?
• A combination of fundamental and technical investment styles is essential to picking
winning stocks.
• Fundamental analysis looks at a company’s earnings, earnings growth, sales, profit
margins, and return on equity.(ithink free cash flow is important)
It narrows down your choices so you are only dealing withquality stocks.
• Technical analysis involves learning to read a stock’s price and volume chart and timing your decisions properly.
Volume, or the number of shares of stock trades per day or per week is a key to
interpreting supply and demand correctly. It is a signal that big institutions may be buyingor selling your stock, which could impact price positively or negatively.
The bestinstitutional investors use both fundamental and technical analysis in their
purchase decisions.
Most of the big winners have Return on Equity ROE (an indicator of financial
performance) of 20% or more.
Most have management ownership or the management
owns a percentage of the stock.

Lesson 5. First among fundamentals: Earnings and Sales
• Microsoft, Home Depot, and Cisco Systems were among the big winners in the 80’s. All
their stocks had enormous gains after posting their sales and earnings figures.
• The ROE’s of Microsoft, Home Depot, and Cisco were 40%, 28%, and 36% respectively.
• Rule of thumb: Look for stocks with annual earnings growth rates of 30% or more and
ROE’s of 17% or higher.
• To make big money, you have to buy the very best companies at the right time. Microsoftwas up 266% in only 30 weeks in 1986, following the 6 months after its IPO
or initialpublic offering. Home Depot was up 912% in less than 1 and ½ years
from 1982, CiscoSystems and Price Co. advanced 2,000% and 750 % respectively since 1990 and 1982.
• Strong sales and earnings are among the most important characteristics of winning
stocks.
• Buying a stock as it is coming out of a price consolidation area or base is crucial to
making large gains.

Lesson 6. Relative Price Strength: a key technical tool
• Relative price strength is one key technical indicator that shows you what value the
market itself places upon a stock.
• We calculate Relative Price Strength by taking a stock’s price 1 year ago and its price
today, calculating the percent change and then comparing it to all other stocks over the
same time period. The result should be on a scale of 1 to 99 with 99 being the highest.
• If a stock’s relative strength falls, do not buy any more shares. If the stock price drops 8% below your purchase price, sell all of your shares. This way you protect yourself from
large losses.

Lesson 7. Know a stock by the company it keeps
• Always pick stocks from leading industry groups or sectors. The majority of past marketleaders were in the top industry groups and sectors.
• Historically, the drugs, medical, computer, communications, technology, software,
specialty retail, leisure, and entertainment groups have supplied more big winners than
most other groups.
• When Microsoft was an outstanding winner, so was PeopleSoft, Dell was doing well at
the time Compaq was too. Home Depot, Wal-Mart, and The Gap were all major retail
winners. The same time Schering-Plough and Bristol-Meyers Squibb were leading, so
were Warner Lambert and Pfizer. When buying stock, look at the group strength.
• The Industry Group Relative Strength Rating can help you identify stocks in top
industries.

Lesson 8. The importance of volume and sponsorship
• Institutional investors account for 75% of the buying of better quality stocks. When you’re selecting stocks, daily or weekly trading volume is how you measure demand.
• Volume is the actual number of shares traded daily and is available in most newspapers.
• Sponsorship is when large institutional investors buy into a stock.
Stocks never go up by accident. There must be large buying, typically from big investorslike mutual funds and pension funds.
• Use Accumulation/Distribution rating to find out if stocks are beingbought or sold by biginstitutional investors. It is available for every stock, every day and the Acc/Dist Ratingtracks the last 13 weeks of trading volume for a stock and tells you whether
it is underaccumulation (institutional buying) or distribution (institutional selling).
Provided on an Ato E rating system, an A or B means stock is being bought, a D or E means stock isbeing sold and should probably be avoided for the time being, while C
indicates a neutralamount of buying and selling.
• It’s important to know what stocks the best mutual funds are buyingand selling.
Sponsorship Rating helps you determine whether your stock has quality institutional
sponsorship.

Lesson 9. How to buy at just the right moment
• In studying the greatest stock market winners over the past 45 years, there can be foundspecific base patterns. These bases were formed just before the stocks broke
out intohigh ground in price and went on to make big gains.
• The most common pattern is a “cup with a handle” named so because the chart shows aresemblance of the pattern to a coffee cup. The end of the handle signifies the buying
point.
• The optimal buy point of any stock is its “pivot point” or the point at the end of a basingarea when the stock price is breaking out into new high ground.
• On the day the stock breaks out, volume should increase 50% above
its average.
• Buy a stock when it is breaking into new high ground. 98% of individual investors never
buy this way, and that’s why few will ever own big stock winners. The idea is not to “buy
low, sell high” but “buy high and sell higher”.
Increased volume from the prior day/week with the price moving up isgenerally a positivesign.
• Increased volume from the prior day/week with the price moving down is generally anegative sign.
• A decrease in price on decreased volume indicates no significant selling.

Lesson 10. How chart patterns lead to big profits
• Aside from the “cup with the handle” pattern, a “double bottom” or a “W” pattern on a
chart shows a potential good stock
before it advances in a huge way. American Power
Conversion’s 39-week pattern in 1990 resembled a letter W. The end point ofthe W or
Point G was the correct buy point at $22, the stock advanced 800% in the following 22
months from Point G.
• You want to buy a stock exactly at its pivot point as it breaks out of a sound pattern.
Don’t chase it up more than 5% past its pivot.
• Short bases of 1 to 4 weeks in duration are very risky and usually fail. Avoid them.
• Patterns that are abnormally wide or loose in overall appearance aremore risky. It is
safer to buy tighter, better-contained patterns with less wild price fluctuations.
• Stocks that shoot up straight from the bottom of a pattern into new highs without any pullbacks or handles are risky and frequently have sharp sell-offs.
• A base breakout with no real increase in volume should be avoided.
• Laggard bases. The last stock in a group to break out to a new high is weak and a
laggard and should be passed up.
• Handle areas that are too wide and loose (down 20% to 30%) or handles that wedge upalong their lows rather than drift down along the lows are faulty and frequently fail.
• After a stock has had a long advance, the fourth time the stock forms a base (“fourth
stage” base) is usually too obvious to everyone and will probably fail.
• When choosing stocks, look for “cup with the handle” patterns, “double bottom” patterns,and “flat base”.

Lesson 11. How to read stock charts like a pro
• Most successful stocks build a number of bases as they make their way up in price. Eachone creates a different “stage” base. Third and fourth stage bases are prone to failure.
• Chart price and volume action frequently can help you recognize whena stock has
reached its top and should be sold.
• Study chart patterns of past winning stocks. History always repeats itself in the market.
• Look for handles that from in the upper half of the base.
• A sound base should usually have more weeks where the price is up on greater-thanaverage volume than weeks down on greater-than-average volume.
Most big stock market leaders breaking out of a sound base will go up 20% in 8 weeks or less from the pivot point. Never sell a stock that does this in 4 weeks or less.

Lesson 12. How to gauge the stock market’s health
• For an individual investor investing in common stocks, the key stepsto follow are:
1. Develop buying selection rules that let you pick the best stocks and use charts todetermine the right time to buy.
2. Have a set of selling rules that tell you when to sell and nail down a profit, or cut
short a loss to avoid a possible larger loss.
3. Have a specific method to tell you when the general market averages are topping
and headed down, and when they’ve hit bottom and turned into a new uptrend.
When it comes to the stock market, remember:
• It’s better to get off the elevator on one of the floors on the way up than to ride it all the
way down.
• The general market is represented by leading market indices like theS&P 500, Dow
Jones Industrials, and the Nasdaq Composite. Tracking the general market is key
because most stocks follow the trend of the general market.
• Ignore personal opinions about the market. Study the day-to-day price and volume
changes in leading indices instead.
A typical bear market will decline 20% to 25% from its peak price. Anegative political or economic environment could cause a more severe decline.

Lesson 13. How to spot when the market hits a top
• Knowing when to buy or sell a stock is key.
• Because three out of four stocks, regardless of how “good” they are, will eventually followthe trend of the general market, it is important to learn how to spot when the market ishitting a top.
• After 4 or 5 days of distribution within a 2 to 3 week period, the general market will
normally turn down.
• Distribution is indicated by the index closing down on increased volume or a day’s attempted advance stalling on greater volume than the day before. At this time, review the stocks in your portfolio and look for individual selling signs that
indicate you should cut back or sell them.

Lesson 14. How to spot when the market bottoms
• Bear markets create fear and uncertainty. When stocks hit bottom andturn up to begin
the next bull market loaded with opportunities, most people simply don’t believe it.
• At some point on the way down, the indices will attempt to rebound or rally. A rally is anattempt by a stock or the general market to turn up and advance in price after a period ofdecline.
• Bear markets normally come in two or three waves, interrupted by several attempted
“false” rallies that usually fizzle out after one to three weeks and occasionally five to six
weeks or more.
• Eventually, one of the rallies will “follow-through”. A “follow-through” occurs when one ofthe indices closes up 1% or more with a jump in volume from the day before. This
confirmation will usually happen on the fourth to tenth day of the attemptedrally.
• The Dow, S&P 500, and Nasdaq indices, along with the IBD Mutual FundIndex are your
best sources for analyzing the market’s condition and determining if a top or bottom hasoccurred. Also, observing how leading stocks are acting can be another indicator of a
market top.
• Most technical market indicators are of little value. Psychological indicators like the Put-Call Ratio can help confirm changes in the market’s direction.

Lesson 15. Putting the stock-picking puzzle together
Once you determine that you are operating in an uptrending general market,
here are the factorsyou need to consider:
• Is the company’s current quarterly earnings per share up at least 25%?
• Are the percentage increases in profits accelerating compared to recent quarters?
• Does it have six to twelve quarters of significant earnings increases up 50%, 100%, even
200% or more?
• Is the next quarter’s consensus earnings estimate up a worthwhile amount?
• Have earnings in the past few quarters been higher than expected?
• If it’s a growth stock, is each of the last 3 years of earnings up an average of 25% or
more per year?
Is the company’s Earnings Per Share Rating 80 or higher?
If it’s a turnaround stock, does it have two quarters of strong earnings increases or onequarter that is up so much that the 12 months earnings per share are back to
their oldpeak?
• If 2 or more quarters have turned up, are the trailing 12-month earnings near or abovethe peak of the prior couple of years?
• How much are the consensus earnings estimates up for the next 2 years?
• Does the company have six to twelve quarters of strong sales growth?
• Has that growth rate accelerated in recent quarters?
• Is the current quarter’s after-tax profit margin at or close to itspeak?
• Has there been a general trend of profit-margin improvement over many quarters?
• Are the company’s margins among the best in its industry?
• Is the annual pre-tax profit margin 18% or more? (For retailers it’s alright to have lower
margins)
• Is the return on equity 20% to 505 or more and is its ROE among the very best in its
industry?
• Is its Sales+ Profit Margins + ROE Rating an A or B? That would place it among the top
40% of all stocks in terms of sales growth, pre-tax and after-tax profit margins, and returnon equity.
• Does the company’s management own the stock?
• Is the stock in a quality price range? Quality comes at 16$ to 150$ for Nasdaq stocks and20$ and above for NYSE stocks. Leaders like Cisco Systems, Wal-Mart, Microsoft,
PeopleSoft and Amgen broke out of their beginning chart bases many years agobetween
30$ and 50$ per share – before they had giant price advances. Price is a basic reflection
of quality.
• Is the stock part of a historically winning industry group such as retail, computers,
technology, drug and health care, or leisure and entertainment?
• Is it in one of the Top 5 groups? Check the “52-Week Highs and Lows” feature on the
Industry Groups page for the top 5 performing groups.
• What broad economic sector is the market favoring? Consumer or high-tech? Growth orcyclical? Defensive (food, utilities)? New or older more established companies?
• Does the company’s product save money, solve a problem, or savetime with new
technology?
• Is it a new drug or medical technique?
• Is it widely needed or liked?
• Is it a product that encourages repeat sales?
• Is the company’s backlog of unfilled orders expanding?
• At what percent capacity is the company operating?
• What is the company’s expected rate of future expansion?
• Have one or two of the smarter, better-performing mutual funds
bought the stockrecently? Better institutions do extensive research before buying.
• Do you really understand and believe in the company’s business? Have you seen or
used its product or service?
• Potential winners will have strong earnings and sales growth, increasing profit margins
and high return on equity (17% or more) and will be part of a leading industry group.
• Check Daily Graphs Online to spot which of your prospects are forming a sound patternand are under accumulation or professional buying. They must be near a
proper buypoint.
• Analyze the week-by-week price and volume action. Write down the price at which you
will begin buying the stock. After your initial purchase, identify a price area (maybe whenit goes up 2.5 to 3%) at which you will add a small amount as a follow-up buy if itcontinues to perform well.
• If the stock drops 8% below your exact initial buy point, protect yourself against a
possible larger loss by selling at the current market price.
• You want an increase of 50% or more in trading volume on the day youbegin buying withthe stock breaking out of a sound base.
• Is the chart pattern a “cup with a handle”, “double bottom” or “flat base”? If it is not any ofthese, it may be faulty and failure-prone.
• Is its Relative Price Strength Rating 80 or more? Is the relative strength line on the chart
in a definite uptrend?
• Keep adding to your best-performing stocks and reduce or sell your worst performing
ones.
• Check a long-term monthly chart to see if stock is also emerging outof a long-term baseover a number of years.

Lesson 16. How to find new investment ideas
• Scan “The Markets” summary for the prior day’s closing prices of the S&P 500 and the
Dow Jones Industrials, the Nasdaq and the NYSE volume, all can be found on the front
page of IBD
• “To the Point” gives the busy reader a quick, time-saving review of all key business newsof the day.
• Check out “The New America” page for new companies. Study How to use IBD
SmartSelect Corporate Ratings box found at the beginning of the main NYSE
andNasdaq stock tables.
Avoid companies where the EPS (Earnings per share) Rating and RS (Relative Price
Strength Rating) are less than 70.
The best companies should have at least aB on all
three ratings.
• Stick to stock purchases among leading groups or sectors by checkingtheir Industry
Group Relative Strength Rating.
• Sales + Profit Margins + ROE (SMR) Rating combines 4 fundamental measurements
(sales growth, before and after-tax profit margins, and return on equity) into one easy
rating.
• The Accumulation/Distribution Rating identifies whether a stock is under professional
buying or selling over the last 13 weeks. A = heavy buying, B = moderate, C = equal
amounts of buying and selling, D = moderate selling, E = heavy selling
• Look for stocks in the stock tables with boldfaced type. This indicates that a stock is up
1$ or more for the day or is making a new price high. This is a good starting point for
more research

Lesson 17. Growth vs. Value Investing
• There are two kinds of investors: growth stock investors and value investors.
• Growth stock investors seek companies that show consistent earnings and sales growth,usually 20% or more each year for the past 3 years or 5 years. Companies
such asSchering-Plough, Paychex, Cisco Systems, and Microsoft would be considered
growthstocks in the 1990s.
• Growth stocks have a high-quality, repeat-type product or service that generates superiorprofit margins and return on equity of at least 17% to 50%.
• Value investors search for stocks they believe to be undervalued. They evaluate a
company’s balance sheet and profit-and-loss statement, looking for hidden value like anunusually large amount of cash in the company or property carried on the books at cost,which is below the current market value, etc.
• Value investors look for a bargain and like to buy stocks with a low P/E ratio
(Price/earnings) or low price-to-book value. They look to buy a business
franchise at alow price. Value investors wait for the market to recognize their stock’s
value for it to goup in price. This takes a long time, and sometimes does not happen at all.
• Studies have shown the new market leaders had P/Es that significantly exceeded the restof the market (31 times the average) before they made their big advance.
• Mutual funds are a great investment as well. Pick strong performing funds from Investor’sBusiness Daily’s “Mutual Funds” page, and remember the key to success
with mutuals isto buy and hold forever.

Lesson 18. Don’t try to be a Jack-of-all-trades
• Keep it simple. Concentrate on a few good high-quality common US stocks. Domestic
stocks or mutual funds are best. The more types of investments you own, the harder it is
to keep track.
• You get what you pay for on the market. Low-priced stocks are usually cheap for a goodreason. They may be performing poorly.
• Options are risky because investors do not only have to be right about the direction of thestock but also about the time frame in which they believe the price will go up or down.
• Futures, due to their highly speculative nature, should be attemptedonly by people with
several years of successful investment experience.
• The US has the greatest stock market in the world. There are more than 10,000 commonstocks to choose from. If you can’t learn to profit investing in US stocks,
you aren’t likelyto profit in the commodity market or buying foreign stocks.
• Many foreign stocks are unstable due to their government’s history,corruption, and
unsound systems. Most individual investors do not know all they need to knowabout
foreign countries.

Lesson 19. What’s the right mix for your portfolio?
• Concentrate your eggs in fewer baskets, know them well and watch
them carefully.
• With $5,000 invested, you may own no more than 2 stocks.
• With $10,000 invested, 2 or 3 stocks is appropriate.
• With $25,000 invested, 3 to 4 stocks is appropriate.
• With $50,000, 4 to 5 stocks
• With $100,000 5 to 6 stocks
• It is not advisable to hold more than 20 stocks. You cannot keep track of all these
investments properly.
• Stagger your buying over time. Never buy all five stocks at once. Let your stocks make
some progress before you get 100% invested.
• Buy only half of your $20,000 position ($10,000) in one stock as your initial buy. If the
stock goes down in price, don’t buy any more. If it goes down 8% from your buy price,
sell all of the stock at once to cut your loss. If the stock moves up 2 to 3% in price from
your initial buy and if it still looks like it is performing well, follow upand buy $6,500 more.Buy another $3,500 worth if it makes another 2 to 3% advance, and then stop.
Sit backand give it time and room to grow.
If you already own the maximum number of stocks but want to add a new stock to yourportfolio, sell the least profitable stock to get money for the new one.

Lesson 20. Sell rules every investor should master
• Cut your losses short and do it early. We repeat the old 8% rule. If a stock falls 8% below
your purchase price, sell it.
Don’t sell and take a profit if your market leading stock is up 20% to 25% in only 2 or 3weeks. That’s a sign of real power, and you may be holding a big winner.
• Don’t let yourself lose money on a stock you had a reasonable profit in.
40% of stocks will pull back near the initial buy point, sometimes in big volume, for 1 or 2days. Don’t let this shake you out of your stock.
• 30% of market leaders will peak after many months of advance by having what is called a“climax top”. The stock will run up at a much faster rate than in prior weeks. Look for thestock’s greatest 1-day price advance since the beginning of the move up. This usually
means that everyone is excited about the stock, which makes its price rise dramatically.
Because the market often moves contrary to mass opinion, it is a good idea to sell your
stock when this happens.

Lesson 21. More sell rules every investor should master
• Sell a stock if the earnings per share shows a major deceleration ingrowth for two
quarters in a row.
• If your stock advances a significant distance over many months and has formed severalbases during the process, the fourth time the stock breaks out of a base (“
fourth stage”base) it probably should be sold.
• Sometimes you should sell a stock because it consistently moves up in price less than
another good stock you’re holding. The money can be used in the better performing
stock.

Lesson 22. How to make a million with mutuals
• A diversified US stock fund, whether growth or value, is your best choice.
• Never sell a domestic growth stock mutual fund. Hold it and watch ts growth compoundover the years ahead. If you need income, just set up a monthly or quarterly
withdrawalplan to take out 7 or 8% each year.
• Don’t buy too many funds. Extensive asset allocation will just dilute your overall returns.
• Compounding over long-term is the key to making a million in mutual
funds.

Lesson 23.
• Scan IBD’s Top 10 new stories and “The Markets” summary box, “To
the Point” and readonly the brief summaries you find important.
• Scan “The New America” for dynamic entrepreneurial companies with
new concepts andproducts, “Leaders & Success”, “Business & the Economy”, “Computers & Technology”.
• IBD is really a daily computer printout and evaluation of the entiremarket. It provides
relative scores, ratings, and special screens, based on extensive stock market research,
of the most relevant factors in winning stocks.
• IBD stock tables do 80% of your research for you in a lot less time.
Before selecting your stocks, you must be able to gauge the general market. “The BigPicture” on the “General Market & Sectors” page will show you what is going on in themarket now.

Lesson 24.
• The Internet is a convenient and time-saving research tool and can help you when you
know exactly what you’re looking for, but it can also overwhelm you and youcan easily
get lost in cyberspace if you are just randomly surfing for ideas and
looking for hugeamounts of data.
• Consider that information providers on the Internet are potentially
biased.

August 23, 2007

stock swing knowledge

Filed under: Uncategorized — manoftoday @ 11:39 pm

http://www.swing-trade-stocks.com/stock-trends.html

Pick stock

Wait until the stock market sells off hard for a few days. Now go through the stocks on your watch list. Which ones are up for the day that the market has sold off? Those stocks have relative strength and those are the ones that you should trading. Why? Because these stocks will be the ones that will move first when the market recovers and will make the most significant gains.

Pick Industry

Also, look at charts for the various industry groups. Which ones are up on big down days in the market? Those industry groups have relative strength and those are the ones you want to be in.

This is completely the opposite on the short side. On big up days in the market look for the industry groups and stocks that are down for the day. These are weakest and the ones that you should be focused on for shorting.

Do not underestimate the simplicity of this technique! If you mainly trade on the long side of the market, use the down days in the market to go through your watch list. Find the stocks that are up for the day, showing relative strength. Then wait for the right time to enter the stock.

August 17, 2007

Advanced Orders Guide

Filed under: Uncategorized — manoftoday @ 6:05 am

Create a Bracket Order

Bracket orders are designed to limit your loss and lock in a profit by “bracketing” an order with two opposite-side orders.

A BUY order is bracketed by a high-side sell limit order and a low-side sell stop (or stop-limit) order.

A SELL order is bracketed by a high-side buy stop (or stop-limit) order and a low side buy limit order.

The order quantity for the bracketing orders is the same as that of the original order. By default, the amount off the current price to which a bracket order is set is 1.0. This offset amount can be manually changed on the order management line for a specific order, or you can modify the default offset amount using the Default Order Settings box.

In addition, if you display the OCA Group field on your order line, you will see that the two child bracket orders are automatically put into an OCA group. This means that when one of the orders executes, the other will automatically be cancelled.

Note that if you attach a bracket to a working order, you will need to transmit the child orders manually. However, the system does recognize that the parent and child orders are designed to work dependently, which you can see by the matching values in the Trailing Key field if you display this field on your order line. If you attach a bracket to a working order and modify the parent, when you re-transmit the parent order the children are then transmitted automatically.

To create a Bracket order

  1. Click the “Ask” or “Bid” price of an asset to create an Order Management line.

      • Click the Ask Price to create a Buy order.

      • Click the Bid Price to create a Sell order.

  1. 2.  On the right-click menu, select Attach and then select Bracket Orders.

  2. 3.  Verify that the order parameters are correct.

  3. 4.  Transmit the order.

NOTE: The “bracketing” or “child” orders are not transmitted until the original or “parent” order has executed.

 

 

Create a Trailing Stop Order

A trailing stop sell order sets the initial stop price at a fixed amount below the market price. As the market price rises, the stop price rises by the trailing amount, but if the stock price falls, the stop price remains the same. When the stop price is hit, a market order is submitted. Reverse this for a buy trailing stop order. This strategy may allow an investor to limit the maximum possible loss without limiting possible gain.

“Buy” trailing stop orders are the mirror image of sell trailing stop orders, and are used in falling markets.

NOTE: We do not recommend using trailing stop orders, as there is no guarantee that your order will be filled at or near the designated stop price, which is especially dangerous in rapidly rising or falling markets. In addition, trailing stop orders will accentuate volatility in rough markets.

To enter a trailing stop order

  1. Click in the Ask Price to initiate a BUY order, or the Bid Price to initiate a SELL order.

  2. Click in the Type field and select TRAIL.

  3. Enter values in the following fields:

    1. Aux Price (Trailing Amt) field. Use the dropdown to choose Amt or %. The trailing percent is calculated off the current best bid/ask.

    2. Limit Price – this value defaults to the current best bid/ask. The limit price will move with the trailing stop price based on the delta between the two prices (initial stop price – initial limit price = limit delta). If the limit price and stop price are equivalent, they will move together with a zero delta.

    3. Stop Price – This field is optional. By default, the workstation calculates the initial stop price using: market price – trailing amount(for sell order).  You can modify the stop price, but if it is lower than the calculated value, it will be discarded when the order is submitted. Note that the value you enter may display in the Stop Price field even if it is not used. { I think, If it is buy order, stop price=market price + trailing amount  }

    1. To transmit the order, click the red “T” in the Transmit field or the Transmit icon on the trading toolbar.

 

 

Create an Auto Trailing Stop Order

You can attach a trailing stop order to a limit order. The attached stop order is automatically activated when the limit order is filled.

To attach a trailing stop to a limit order

  1. create an limit order and Right-click on a limit order.

  2. Select Attach and then select Auto Trailing Stop.

    • To modify the trailing amount, use the Aux. Price field.

    • To modify the stop trigger method, right-click on the attached trailing stop order and select Modify and then select Trigger Method.

    • The initial stop price is calculated using the (parent order limit + trail amount) for Buy orders, and the (parent order limit – trail amount) for Sell orders. To modify the initial stop price, display the Stop Price field by right-clicking in the column headers and selecting Customize Layout. From the Order Row list check Stop Price. Note that the value you enter may be displayed in the Stop Price field even if it is not used.

  1. transmit the limit order in fisrt step. When the limit order executes, the trailing stop order is submitted.

 

Create a Stop Limit Order

A Sell Stop order is always placed below the current market price of the security or commodity. It is typically used to limit a loss or protect a profit on a long stock position. A Buy Stop order is always placed above the current market price. It is typically used to limit a loss or help protect a profit on a short sale

A BUY order is Current Market Price < Stop price < Limit Price.

A SELL order is Current Market price>Stop price > Limit price.

You can attach a trailing stop order to a limit order. The attached stop order is automatically activated when the limit order is filled.

Link to User’s Guide

http://www.interactivebrokers.com/en/trading/orderTypesMatrix.php

August 1, 2007

ZT:官场经典语录

Filed under: Uncategorized — manoftoday @ 6:13 am

 

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Source: ZT:官场经典语录 – 文学城: 热点论坛 web.wenxuecity.com

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