| These days everybody wants to know how to | | | | uptrend, and short sell weak stocks in a downtrend. |
| make the money back that they lost in the stock | | | | The question is how do you determine if the stock is |
| market. Clearly the answer isn't to trust a financial | | | | weak or strong. One of the easiest ways is to go to |
| adviser because they are likely the person who lost | | | | the Investors Business Daily website and use their |
| your money to begin with. Seventy-percent of | | | | stock grader. When you type in a ticker symbol the |
| mutual funds under perform the S&P 500 and over | | | | site will give you a letter grade from A-E. You want |
| the last two years most of them are down double | | | | to buy stocks that are a B+ or above and short sell |
| digits. So you may have considered learning to invest | | | | stocks that are a C+ or lower. |
| your money on your own. Surely you couldn't do any | | | | Buy Stocks When They Drop, Short Sell Stocks |
| worse than the so called expert advice that you've | | | | When They Rally |
| already received you think to yourself. Amidst all the | | | | Most times even a strong stock that is an uptrend |
| doom and gloom it's easy to forget that there are a | | | | will pull back and take a breather, likewise a weak |
| handful of savvy people who make money in the | | | | stock in a downtrend will usually have a few days |
| markets whether they are going up, down or | | | | when it rallies. This is when you want to enter the |
| sideways. | | | | stock at either a support or resistance level. You can |
| The Power of Compounding | | | | find some handy tools at a website called Trading |
| The first thing you need to understand is how the | | | | Markets that will help you to determine when to |
| stock markets can make you rich and why your job, | | | | enter a stock. |
| unless you are the CEO, or have lots of stock | | | | Putting it All Together |
| options, almost certainly never will. Einstein called | | | | So how does one make money in the stock |
| compounding the eight wonder of the world. | | | | markets? |
| Everybody has heard this riddle. Which one would | | | | 1. Determine the trend of the S&P index |
| you rather have $10,000 or a penny that doubled | | | | 2. If the stock market is in an uptrend buy stocks, if |
| everyday for thirty days? Most people choose the | | | | it's in a downtrend short sell stocks |
| $10,000 never stopping to do the math on the | | | | 3. If you are buying stocks, buy the strong ones with |
| doubling penny. Because for the first twenty days | | | | a grade of B+ or better. If you are short selling, sell |
| the growth is slow and you only have just over | | | | weak stocks with a grade of C+ or lower. |
| $5,000, but by the end of the thirtieth day you have | | | | 4. Buy weak stocks on a pullback, short sell weak |
| just over $5,000,000 and that is the power of | | | | stocks on a rally. |
| compounding. So unless you are getting some very | | | | Making Money in Sideways Markets |
| large pay raises the chances are that you're pay | | | | So the only question left is how does one make |
| check grows linearly, while your earnings in the stock | | | | money in sideways markets? Well the simplest |
| market, if you are doing it correctly can grow | | | | answer is to use options. Most people think that |
| exponentially. | | | | options are very risky and complex, but the truth is |
| Find the Trend | | | | that if you don't know how to use options you are |
| One of the most important lessons to know about | | | | ignoring one of the most useful tools there is in the |
| the stock market is to not trade against the trend. | | | | financial markets. By using a combination of easy to |
| The question is how to determine the trend. One of | | | | learn trading techniques such as covered call writing, |
| the simplest ways is to use a 200 day moving | | | | credit spreads and iron condors it is easy to make |
| average (DMA) . If the market is trading above the | | | | money whether the markets go up, down or |
| 200 DMA the market is in an uptrend, if it's below | | | | sideways. |
| the market is in a downtrend. So you first want to | | | | If you want to find out more about how to make |
| find the overall trend of the S&P. If it is in an uptrend | | | | money in the stock markets, credit spreads, iron |
| you want to look for stocks that are also in an | | | | condors, or covered calls, please click on the link |
| uptrend to purchase. If the S&P is in a downtrend | | | | below. |
| you want to look for stocks that are in a downtrend | | | | Palmer Owyoung is the Founder of website |
| to short sell. | | | | dedicated to helping the average investor earn 5-15% |
| Buy Strong Stocks, Sell Weak Stocks | | | | a month. |
| Obviously you want to buy strong stocks in an | | | | Free lessons, and free forecasts. |