Forget Business Week and Read Psychology Today

Don't forget Business Week as they are a respected publication, but Business Week won't make you as much money as a publication like Psychology Today. Most information expressed in periodicals like Business Week, and others are already priced into the financial markets by the time it's available to the public. Trading Method is about getting tactics and psychology personalized for your success in financial markets. All investors and online traders are privy to virtually the same information, so your edge must come from your Trading Method.

The real news are Economic Reports published by the U.S. government and released at the same time to The big traders and the small investors alike. Economic Reports like unemployment, retail sales, housing starts, consumer sentiment and store sales are some of the important economic reports to help you get a handle on the health of the financial markets. These reports are simple to understand as a rising unemployment rate is good for the bond market and increased store sales is good for the stock market. You can look back 12 months or more and identify trends and measure the magnitude of change if any. A 0.1% increase or decline in a report may be reacted to by the financial markets short term but a 0.1% change isn't significant in most cases.

What You Should Read

Investors Business Daily is an excellent source for solid financial reporting that will improve trading. IBD is a teaching newspaper that improves your knowledge of trading using methods developed by the highly respected William J. O'Neil.

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Free Interpreting Economic Reports Ebook

Download Pocket Book of Economic Indicators. click here

Financial Tools & Expert Stock Analysis

Covered Call Calculator

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Option Spread Calculator

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Why No One Tells The Truth About Trading Method

Trading method can be as confusing and conflicting as financial markets themselves. Stock trading, swing trading, daytrading, forex trading, futures trading and options trading and all the other trading instruments create complexity making it difficult to find the best trading method for your specific situation.

Then there are the financial institutions, pundits, media personalities, and gurus that make trading methods and financial markets a fuzzy picture. The media reports trading methods and financial markets as an endless sporting event which they use as an advertising vehicle to sell to a prized demographic.

The government has acknowledged the shenanigans of the above mentioned groups by enacting legislation to protect the public from unscrupulous trading methods. Unfortunately, legislation has become a foxhole for many financial institutions to make “legal transactions” like credit default swaps or CDO's that are wrong but legal with full protection from the barrage of lawsuits that would otherwise follow. Learn your own trading method by doing independent research which you can find in abundance on the web, libraries, seminars, etc.

Trading Method Explained

It is imperative that investors and traders develop their own trading methods. In an age when the CEO of Merrill Lynch Stan O' Neal receives $161.5 million dollars after losing customers $2.24 billion dollars demonstrates the point. The bankruptcy of Bear Stearns, Lehman, AIG, and Washington Mutual further make the point that you must guarantee your own financial future. Investors must research and develop their own trading methods so money won't be lost due to the incompetence and exorbitant compensation of the Wall Street executives. Trading Methods must be based on trading psychology, money management and a trading strategy:

Trading Psychology - Perhaps the most often forgotten component. Most of us aren't mentally wired to be an effective investor or trader. It is learned through self assessment and constant personal introspection. This highly personalized knowledge is the cornerstone of any trading method. It is often said that a great strategy with poor psychology will lose money, but a mediocre strategy with good trading psychology will make money. With market volatility at a record high it is imperative that anyone with money invested in financial markets understand the importance of their own trading psychology.

Money Management - Money Management is the second leg of the stool. You have no chance of having any sort of stability without it. Many view money management as an afterthought that gets too little attention. Thoughtful analysis needs to be done around how many dollars you can afford to risk in a trade, and if that fits you both psychologically and financially along with the other considerations. Two people with $100,000 trading accounts will answer this question differently because every trader has a unique situation.

Trading Strategy - This seems to get the most attention, but it really is the wrong focus initially. There are infinite trading strategies that can make you money, but only after it is personalized to your own trading psychology and money management.

The Real Economic Data

Any trading method is only as good as the data available for analysis. It's easy to be overwhelmed by the rhetoric we are bombarded with by every media outlet including television, print and internet sources. Fortunately this can be reduced to economic reports published by the U.S. government that you can easily interpret for yourself. They are released at the same time to big institutions and small investors making it fair for all. Economic reports like unemployment, retail sales, housing starts, consumer sentiment and store sales are some of the important economic reports to help you get a handle on the health of the financial markets. These reports are simple to understand as a rising unemployment rate is good for the bond market and increased same store sales is good for the stock market. You can look back 12 months or more and identify trends and measure the magnitude of change if any. A 0.1% increase or decline in a report may be reacted to by the financial markets short term but a 0.1% change isn't significant in most cases. The latest economic reports can be found here.