Posts tagged with: Getting Started

Market orders, limit orders, stop-on-quote orders … what does it all mean?  In this episode, I start with the basics of order flow and execution: what happens behind the scenes when you buy or sell stocks and ETFs.  Then I go through the various order types, from simple to complex, to help you understand your choices.  You’ll get examples of situations where you might use one order type over another.

 

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Section 1: How Securities are Traded

Bid and ask prices

Market depth

Exchanges and other trading platforms

Order routing

National Best Bid and Offer (NBBO)

Price improvement

Brokers often get paid for order flow – is that fair or are we getting ripped off?


Section 2: Basic Orders and Conditions

Market orders

Limit orders

Conditions: All-or-nothing (AON), Fill or Kill, good ’till canceled (GTC), good ’till date (GTD), day orders, market on close (MOC), limit on close (LOC)

Stop orders

Stop-on-quote

Trailing stops


Section 3: Complex Orders

One Cancels Other (OCO)

One Cancels All (OCA)

Conditional orders

Pegged orders


 

References

Scottrade: Anatomy of an Order (PDF)

TD Ameritrade: Order Execution FAQ

SEC Investor Publication – Trade Execution


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Are you ready for the next financial crisis?  No one knows for sure when the crash will happen, but here are some sensible steps everyone should take to keep from being caught off-guard when it does.  I also tell you what signs to look for that will foreshadow the next crisis, so you can be calm and confident while others panic.

 

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Section 1: What Will the Next Crisis Be Like?

A brief review of the last few major financial crises

Signs and signals to watch for, this time around


Section 2: How to be Safe During Normal Times

Cash

Diversification

Alternative assets

Hard assets

Know your goals and risk tolerance, and keep your assets in alignment with them

Multiple income streams

Preparedness outside of the financial world


Section 3: Getting Defensive When Risk is Elevated

Move to a conservative asset allocation, as I have already done with my own assets

A little-known tactic to avoid getting trapped within your retirement account

Protecting a portfolio using options without selling the stock

What to sell

What not to buy


Section 4: What to do When the Crisis Arrives

From smoke to fire: The stages of a crisis, and the actions you should be taking in each

Embrace risk as others are becoming the most fearful of it

Follow trustworthy news sources; stay away from mainstream media as much as you can


References

Episode 15: How to Get a Return on Cash

Washington Post (April 2, 2007): Huge mortgage lender files for bankruptcy

The Survival Podcast – rational preparedness without the prepper mania

ZeroHedge – Why the Fed is Trapped: A 1% Increase In Rates Would Result In Up To $2.4 Trillion Of Losses

Battery1234 – Steven Harris’s website on how to make your own home battery bank for emergency power


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Trading and investing are all about information: Accessing it, processing it, and turning it into an action that makes you money.  In this week’s episode, I go through my favorite learning tools, data sources, news providers, and more to help you locate the most beneficial info and toss out the rest.

 

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Section 1: Market News, Commentary, and Data

Newspapers: Wall Street Journal, Barron’s (subscription required to view articles)

Online: Reuters for high-quality reporting on breaking news

Television: Bloomberg TV

http://www.dailyspeculations.com/ – Vic Niederhoffer’s blog

Economic articles & blog posts: Financial Sense, Monetary Metals, Keith Weiner Economics, Armstrong Economics, Let’s Talk Bitcoin

Podcasts: Financial Sense Newshour

Live prices in various futures markets around the world at Marketwatch.com

Live currency cross rates

Calendar of economic data releases and other important events

Daily historical prices for stocks, ETFs, and indices: Google Finance and Yahoo Finance

Live prices and stock charts: TD Ameritrade, Scottrade, Fidelity, Google Finance and Yahoo Finance

Economic data series from the St. Louis Fed

Historical oil price data from the Energy Information Administration

Various data series that can be imported into R, SAS, Python, and other advanced statistical tools

Cryptocurrency price charts


Section 2: Learning Advanced Topics

For serious students, I still think books need to be a part of your study plan.  Here are my ten essential books for traders and investors.

Spreadsheet skills: Microsoft Excel courses on Lynda.com from LinkedIn

YouTube – here’s one of my favorite presenters of high-quality technical analysis

Live streamers on Twitch.tv – a very new but promising niche

Personalized instruction and coaching, customized to your goals


Section 3: Sources to Avoid

“Hot stocks” from email newsletters, pump-and-dump scammers, or social media groups

Poor-quality, overpriced garbage like Online Trading Academy – you’re paying $4,995 for what exactly??  Their obnoxious radio & junk-mail ad campaigns?

Instructors who promise massive returns overnight, turning $1k into $1M in three simple steps, etc.  Don’t get scammed.

Anything you use to get blind recommendations – always do your own diligence before making investments.


What are your favorite sources for news, commentary, data, and education?  Please share!  Leave a comment below.


Resources

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Today, I’ll present another simple strategy that new and experienced traders can use right away.  The idea here is to find stocks that have extended too far in one direction and are lined up for a short-term bounce or pullback.  I show you how to filter down a long list of potentially good setups into the ones that are most likely to succeed.

 

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Section 1: How to Setup Your Chart

  • Choose timeframe
  • Bar chart with OHLC (open-high-low-close)
  • How to read a bar chart
  • Green OHLC bar

Section 2: Support & Resistance Lines

  • How to spot a trend
  • Uptrend

    Uptrend: Moving averages in alignment

  • Drawing support & resistance lines
  • Slope
  • A trading range
  • Narrowing vs. expanding formations
  • Why it works
  • How to select the best setups

Section 3: Momentum Oscillators

  • What is momentum?
  • Overbought and oversold levels
  • My favorite momentum oscillators

Section 4: The Mean-Reversion Strategy

  • How to do it
  • Why it works
  • Momentum crossovers
  • How to select the best setups

Section 5: Trade Management Basics

  • Protective stops
  • Taking profits

Examples

Example 1 - Macy's (M)

Uptrend within a channel: 1 buy signal, 3 sell signals


Example 2: CMG

Price reaches major resistance level, and conditions extremely oversold: good short-term buying opportunity – but a tighter stop-loss would have been needed to preserve profits.


Example 3: T

Strong buy in AT&T signaled as price reaches long-term resistance AND prior support lines, along with highly oversold conditions


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Today, I’ll present two simple trend-following strategies that new and experienced traders can use right away. I explain two easy methods for trend trading along with my top tips for profiting from these strategies.  I show you how to filter down a long list of potentially good setups into the ones that are most likely to succeed.

 

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Section 1: How to Setup Your Chart

  • Choose timeframe
  • Bar chart with OHLC (open-high-low-close)
  • How to read a bar chart
  • Green OHLC bar

Section 2: A Basic Pullback Strategy

  • How to spot a trend
  • Uptrend

    Uptrend: Moving averages in alignment

  • Trend persistency
  • Wait for a pullback
  • Trade entry
  • Why it works
  • How to select the best setups

Section 3: Moving Average Pullback Strategy

  • What is a moving average?
  • Which moving averages to select
  • Daylight
  • Trade entry
  • Moving average pullback example

Section 4: Trade Management Basics

  • Protective stops
  • Trailing stops
  • Taking profits

 


Resources

The Layman’s Guide to Trading Stocks, by Dave Landry

 

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If you’re totally new to self-directed investing, or you’re expanding beyond basic retirement accounts, now may be a good time to open a new account.  Here’s what you need to know to get started, including: where to go, how much to deposit, position sizing, and some investment ideas.

 

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Section 1: The Brokers I Currently Recommend


Section 2: Opening an Account


Section 3: Trading Ideas


Resources

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In this episode, I introduce the US income tax provisions that apply to personal investors and traders.  I’ve got 10 years of experience compiling and filing my own tax returns on these activities, so I’ve got the real-world know-how to help you make sense of this complex topic.  Over the years, I’ve dealt hands-on with such topics as: wash sales, PTPs, K-1s, options exercise and assignment, qualified dividends, Section 1256 contracts, and more.  This is the first part of a multi-part series.

Important disclaimer: I recommend you consult a tax attorney or CPA for advice on your personal tax situation.  I am neither a tax attorney nor a CPA.  Furthermore, I can’t possibly know all the details of any listener’s unique financial and tax situation.  Therefore, I’m not in a position to provide personalized recommendations and this podcast is not to be construed as such.

 

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Section 1: Why Is This So Important?

  • You’re responsible for your tax return, even if you hire someone to do it
  • Brokers and tax preparers make mistakes; check their work
  • The benefits you get when you understand the tax consequences of your trades

Section 2: Basic Principles

  • Type of account
    • Taxable accounts: the main focus of this series
    • Tax-preferred retirement accounts
  • What is income?  Four types
  • Amount vs. timing

Section 3: How Will I Be Taxed on My Investment Activities?

  • Mutual funds
  • Most individual stocks and ETFs
  • Section 1256 contracts (e.g. futures)
  • Precious metals ETFs (e.g. SLV, GLD)
  • Publicly traded partnerships (PTPs)
  • Master limited partnerships (MLPs) and royalty trusts
  • REITs
  • Am I a professional trader?

Resources

IRS Topic 429: Traders in Securities

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Real estate packs a powerful punch for your portfolio.  By purchasing shares of a real estate investment trust (REIT), any investor can easily gain access to this vast and powerful asset class.  REITs are especially good for younger people or renters who lack any exposure to real estate.  In this episode I’ll teach you the basics of investing in REITs, what to watch out for, and how to get started.  I also go through a list of my favorite choices to help you find some that may be right for you.

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Section 1: Background & Basics

  • What is a REIT?  How is a REIT different from a stock?
  • Listing types
  • Types of investments held within REITs

Section 2: What Determines the Price?

  • Fundamentals
  • Other financial conditions
  • Societal trends & demographics
  • How to pick a good time to add to, or to reduce, your REIT holdings

Section 3: Why You Should Own REITs

  • Exposure to hard assets that produce good cash flows
  • Income
  • Diversification

Section 4: Areas to Examine When Selecting a REIT

  • Equity REITs vs. Mortgage REITs: Very different!
  • Debt: levels & maturities
  • Exposure to troubled entities
  • Concentrated portfolios
  • Geography
  • Management
  • Tax treatment (United States)

Section 5: How to Begin Today

Resources

Background on REITs

REIT industry financial snapshot

Jeffrey Gundlach betting big on mortgages

 

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Gold is the one and only investment that I strongly believe every investor needs in their portfolio at all times.  However, don’t go overboard and don’t fall for sales pitches that are meant to frighten you into buying gold.  In this episode I’ll teach you the basics of investing in gold, what it can and cannot do for you, and how to get started if you don’t yet have any gold in your portfolio.  I also discuss how to use fundamental and technical analysis on gold to find the best buying opportunities.

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Section 1: Background & Basics

  • History of gold as money
  • Who owns it, and in what form?

Section 2: What Determines the Price?

  • Fundamentals: global supply & demand
  • Financial conditions: Supply of money and credit, interest rates (real and nominal), inflation rate, health of the credit markets, and the rates at which these are changing
  • How I create my forecasts

Section 3: Why You Need Gold – The Rational Arguments

Section 4: Risks, Downsides, and Common Mistakes

  • Keeping too much of your money in gold, silver, or mining companies
  • Buying based on fear or panic
  • Buying from a less-than-reputable dealer
  • Buying at the top of the market
  • Security concerns
  • Tax treatment (United States)

Section 5: How to Begin Today

  • Take stock: How to determine if you are ready to purchase now, or if you should wait
  • Choose what form(s) of gold to buy – or, whether to start with silver because it’s more affordable
  • How to buy gold coins
  • How to buy gold bars in fractional/unallocated form (vaulted storage)
  • How to buy “paper gold” (e.g. ETFs)
  • How to buy shares of gold mining companies
  • Advanced strategies for earning cash flow from gold holdings

Resources

JM Bullion: The dealer I trust

BullionVault – secure vaulted storage and online trading of precious metals

Blade Digital Pocket Scale – for weighing coins

History of gold & silver as money

Infographics on the world gold supply and production totals

Above-ground gold reserves by country

Episode 7: Anyone Can Learn Technical Analysis to Boost Profits

Inflation, Deflation, and Your Portfolio

 

Historical gold price chart:

 

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In this episode, I go through the most common goals that investors seek to achieve and teach you how to use the financial markets to achieve them.  Most investors will want to pursue several of these goals, with one being a higher priority than the others.  Traditional retirement, early retirement, income, capital preservation, and fun are very different goals that each require a unique approach to investing.

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Section 1: Capital Appreciation for Traditional Retirement

Section 2: Capital Appreciation for Financial Independence or Early Retirement

  • Use retirement accounts, but you’re usually better off if you DO NOT max them out
  • Direct more capital towards alternative investments like: your own business, rental real estate, REITs
  • Use options to generate income, including more aggressive strategies
  • Be a more active investor – trade the intermediate-term cycles for extra profit potential

Section 3: Income

  • Appropriate for someone who already has reached, or is very close to, financial independence or retirement
  • Stock selection
  • Preferred stocks
  • Use options to generate income, but conservatively

Section 4: Capital Preservation

  • Laddered portfolio of bonds
  • Preferred stocks
  • Stock selection
  • Use options to limit downside and sell some upside

Section 5: Fun!

  • Futures, FOREX, small-cap stocks, day-trading, etc.
  • Anyone can have an aggressive trading account as long as the risk to the personal balance sheet is kept under control

 

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