People have asked me how I make a profit on the stock market when there seems to be a Global Financial Turmoil going on. In case you haven’t noticed, 2008 has been one of the toughest years global stock markets have seen for generations. Traders and investors all over the world have been losing huge amounts of money, with the markets showing no mercy. So how am I making a profit on trades?

Renting Shares With Collars - This Works For Me

I have personally been using something called “Collars” while Renting My Shares. It’s a very simple strategy and it works great for me in this current market. I learned how to do this from Andrew Dimitri at Planet Wealth. His latest Free Online Webinars are now showing people how to do this.

The markets are falling. So, is the worst behind us? Who knows! Trying to pick the bottom of the market is a foolish and often very expensive quest. Even if we are near the bottom, it certainly appears as though the volatility will be here to stay for some time. And that is great for an options trader. I only Rent Shares as a sideline and it does bring in some handy extra cash. Volatility in the markets works well for this strategy.

Learn The Strategies Now

Whether you are a novice investor or you’ve already lost a bundle, you can still make some serious money. You just need to use strategies that work for the current market environment. Even in these tough times, you can still generate a healthy income each month, but you need to know how to do it smartly and safely!

As you may already know, my friend Andrew Dimitri at Planet Wealth trade a variety of different strategies, but one of his favourites right now is a new portfolio: Collars

Collars: The only way to Rent your Shares!

Collars can not only provide a regular income, but they also provide protection against large drops in the share price. That’s crucial to long term success, especially in these turbulent times.

But don’t take my word for it. Here’s a summary of the actual trades for November 2008, which members of the Planet Wealth Trading Diary had copied to their account.

Keep in mind that over the same time frame, the Australian All Ords index went down 11.4%…!

• The Planet Wealth Account Size = $70,000
• Number of Trades = 6
• Average Capital Protection Level = 80%
• Income = $9,030
• Return on Investment = 12.9%

12.9% ($9,030) in One Month

That is 12.9% Return OnIinvestment in a month when the stockmarket index went down 11.4% !!!

This should give you an idea what anyone can achieve by using an intelligent strategy, even when the market is getting pummeled. An income of $9,030 for one month - when the market went down over 11% - is an awesome result by anyone’s standards.

Remember, these aren’t simulated trades - they are real-life trades placed on the Planet Wealth account, and can be copied by members of the ‘Protected’ Renting Shares Trading Diary automatically using a unique service called AutoTrader.

And now, for the first time ever, Planet Wealth are holding a series of FREE Introductory Sessions so everyone can learn, understand and implement the Collar strategy for themselves.

These Sessions Are FREE

The FREE sessions will be run by the founder and chief trader of Planet Wealth, Andrew Dimitri. He will show you..

1. Exactly how the Collar strategy works.
2. Why it is the only way to Rent your Shares (especially right now!).
3. How you can easily start generating a substantial income virtually immediately.

Your Income Guarantee - 100% Money Back

And even better, Andrew will introduce the new “Income Guarantee” - where Planet Wealth gives you a 100% Money Back Guarantee on your Trading Diary subscription costs if you don’t earn sufficient income.

Planet Wealth will be holding several Introductory sessions, starting on December 6. You simply choose the session that suits you best. All sessions are held online, so you simply log in via your computer to see and hear Andrew’s presentation LIVE.

Places are limited and will fill up fast, and you must register to be a part of it. It’s first in, first served, so get in quick and register now:

Register for the FREE Intro Session here << Click this yellow link to book your spot

Session Times

Sunday 7 December 2008, 1pm (AEDST)
Monday 8 December 2008, 7:30pm (AEDST)

Yes, you really can make considerable profits in any market, which is something the members of the Protected Renting Shares Trading Diary have already discovered. Now you can take a close look at this wonderful resource, with no obligation and no cost.

Register now - you won’t regret it!

Register for the FREE Intro Session here >>

May the wealth be with you

Sean Rasmussen
Stock Market Investor
Planet Wealth Blog © 2007 - 2008

P.S. These are the FREE Introductory session times:

Sunday 7 December 2008, 1pm (AEDST)
Monday 8 December 2008, 7:30pm (AEDST)

You only need to submit a name and email to get access to the Webinar. Book Here >>

Bookmark this:

The Planet Wealth Blog has had a big break. My blogging commitments just haven’t been with the stock market of late with the massive economic downturn on global markets. My writings have been more focused with my Internet Marketing commitments and the Bullhunter blog where I’m currently doing a series on The Federal Reserve. Hold onto your hats, bankers! (I nearly replace that first letter everytime I mention Bankers. Nothing personal…)

Planet Wealth Blog Articles

Right now, I’m writing a huge series of Planet Wealth Blog Articles based on the books of Andrew Dimitri. Stay tuned for the upcoming bonanza of stock market article that will hopefully satisfy your hunger for more knowledge in trading the markets. With a new US President due to take office, maybe, just maybe, we can see some upside to the world economic situation…

May the wealth be with you

Sean Rasmussen
Stock Market Investor
Planet Wealth Blog © 2007 - 2008

Bookmark this:

As promised, here is the flip side to my post on Investor’s Logic. Here we discuss, Gambler’s Logic.

If I toss a coin and heads turns up five times in a row.
Which side is more likely to turn up the next time?

Heads? Five heads in a row is a pattern - the trend is likely to continue.

Tails? Six heads in a row is unusual so tails is more likely.

The above answers are examples of gambler’s logic – the perception of patterns in random data.

So which is the correct answer?
Neither - every coin toss has an even chance of turning up heads or tails. It never varies.

There is not much more to say on this topic, as gambling is gambling. I believe if you are randomly picking stocks out of a newspaper to trade on, it is the same as randomly picking a horse out of a newspaper and putting your money on it, it’s gambling.

So which one are you…?

That’s all for now,

Happy trading and remember…

Mums the word

Marketmum
Stock Market Investor
Planet Wealth Blog © 2007

Bookmark this:

Today I thought I’d follow on again from my recent Trading Psychology posts, this time focusing on our emotions and how they can very well upset an otherwise profitable strategy, including the Planet Wealth Strategy as well as any other you choose to trade

Before you can manage your emotions it helps to understand what causes them. Our brains and endocrine system are a veritable narcotics factory, producing an array of natural chemicals that act as stimulants, depressants or pain-killers:

• adrenaline prepares the body for fight or flight: your heart starts pounding, your pupils dilate, you start to sweat and
  get “butterflies” as your digestive system switches off;
• endorphins, natural pain-killers many times stronger than morphine, are released by the pituitary gland;
• dopamine, released in the middle area of the brain, is chiefly responsible for pleasurable sensations;
• anandoline, a canabinoid, stimulates the appetite;
• PEA, a natural stimulant, performs in a similar manner to amphetamines such as speed;
• melatonin controls your sleeping patterns and stimulates the immune system; and
• serotonin is believed to play important roles in a number of areas: sexuality, anxiety and depression.
• More than 30 different neurotransmitters have been identified, some very specialized; some performing a wide range of functions. Others work in groups, while some, such as serotonin, control or moderate the affect of other neurotransmitters.

Lurking below our rational consciousness is a vast array of mood-altering chemicals, and it is virtually impossible to suppress them. The more we try to suppress our emotions, the more our performance is likely to suffer. Consider someone who experiences a fear of heights, stage-fright, or any other phobia; the more that they focus on fighting against their emotions, the more paralyzed they become.

It is far more effective to manage our emotions and use them in a positive way: to enhance rather than inhibit our performance. To do so, we need to be able to recognize our emotions and, having identified them, channel them or use them to our advantage, rather than try to block them.

Below I will attempt to identify the emotions that you are likely to experience while trading. The reader will need to reflect on his/her own experiences.

Trading Emotions

The most common emotions discussed by traders are greed and fear. In fact, some maintain that the only emotion that they contend with is fear: fear of suffering a loss, and fear of missing out on an opportunity. The actual array of emotions is far more complex than that. How many of the following do you recognise?

Excitement
Early man probably experienced an adrenaline rush while hunting: stalking his prey or a member of an opposing tribe. Nowadays we are more likely to experience excitement when dealt a straight flush in a game of poker; or when our latest trade starts trending upwards on big volume. I tend to get a rush of excitement every time I ring my broker to place a trade or indeed to close a trade.

Elation
Recognise Leytton Hewit’s “C’MON!” when he wins a point or a game? Or the roar of the crowd when your footy team scores a goal? Or when your trade has jumped almost 100 per cent inside 2 weeks.

Fear of Losing Out
The crowd behavior at a closing down sale: “Grab as much as you can”.
Or buyers when stocks are gapping up in a strong bull market: “I don’t care what the price is, just get me in”.

Fear of Failure
The trepidation a weekend golfer feels when standing in a deep sand bunker; or the uncertainty and indecision you face when placing a trade after a string of losses.

Fear of Impending Threat
When you see a police car in your rear-view mirror; or when the dentist says: “This isn’t going to hurt much.” Or when your stock posts three large red candles.

Denial (not a river in Egypt)
When price gaps down through your stop level: “This is not happening to me — there must be some mistake.”

When we confuse our wishes with reality. Denial is forlorn hope; a refusal to accept the situation:

• “This is just a temporary aberration — everything else is still going up.”
• “The fundamentals are still good — I’ll hold for the long run.”
• “I am sure that the stock will bounce at $4.20 — I’ll move my stop down to below there.”
• Anger
  The attack response triggered when someone cuts you off on the highway; or steals your parking space; or when a trade just won’t go your way:
• “I’ve been cheated.”
• “Brokers are a bunch of thieves.”
• “It’s the government’s fault - they should protect us.”
• Frustration
  Inward-directed aggression. Irritability. Negative self-talk: “You idiot — how could you have missed that.”

Inertia
An inability to concentrate or make decisions. You review more than twenty different indicators, many of which you have not used in the past two years, in an attempt to arrive at a decision — while price ticks inexorably downwards.

Panic
The abandonment of hope: “I don’t care what the price is, just get me out.”

Despair
Feelings of loss, sadness, worthlessness or helplessness. Loss of confidence.

Acceptance
Resolution of the whole process. Recognition of past mistakes. Acceptance that you have to incur losses if you want to make profits. The inner calm that comes from having “let go”. A feeling of having gained from the experience. An expectation that you will do better the next time. Confidence restored.

Conclusion
Each of the above emotional states is triggered by a different chemical cocktail released by your endocrine system. Most severely impacting on your ability to make rational decisions while trading. Later posts will discuss strategies for managing your emotions in order to enhance your trading which will benefit your trading of the Planet Wealth Strategy immensely.

Happy trading and remember…

Mums the word!

Marketmum
Stock Market Investor
Planet Wealth Blog © 2007

Bookmark this:

Just to follow on from last week, I thought I’d give a more indepth view of how Trading Psychology can affect your decisions in the market. This becomes relevant in not only the Planet Wealth Strategy, but any strategy you choose to trade.

Your biggest enemy, when trading, is within yourself. Success will only come when you learn to control your emotions.

1. Caution.

Excitement (and fear of missing an opportunity) often persuade us to enter the market before it is safe to do so. After a down-trend a number of rallies may fail before one eventually carries through. Likewise, the emotional high of a profitable trade may blind us to signs that the trend is reversing.

2. Patience.

Wait for the right market conditions before trading. There are times when it is wise to stay out of the market and observe from the sidelines.

3. Conviction.

Have the courage of your convictions: Take steps to protect your profits when you see that a trend is weakening, but sit tight and don’t let fear of losing part of your profit cloud your judgment. There is a good chance that the trend will resume its upward climb.

4. Detachment.

Concentrate on the technical aspects rather than on the money. If your trades are technically correct, the profits will follow.

Stay emotionally detached from the market. Avoid getting caught up in the short-term excitement. Screen-watching is a tell-tale sign: if you continually check prices or stare at charts for hours it is a sign that you are unsure of your strategy and are likely to suffer losses.

5. Focus

Focus on the longer time frames and do not try to catch every short-term fluctuation. The most profitable trades are in catching the large trends.

6. Expect the unexpected.

Investing involves dealing with probabilities – not certainties. No one can predict the market correctly every time. Avoid gamblers’ logic.

7. Average up - not down.

If you increase your position when price goes against you, you are liable to compound your losses. When price starts to move it is likely to continue in that direction. Rather increase your exposure when the market proves you right and moves in your favour.

8. Limit your losses.

Use stop loss orders to protect your funds. When the stop loss is triggered, act immediately - don’t hesitate.

The biggest mistake you can make is to hold on to falling stocks, hoping for a recovery. Falling stocks have a habit of declining way below what you expected them to. Eventually you are forced to sell, decimating your capital.
Human nature being what it is, most traders and investors ignore these rules when they first start out. It can be an expensive lesson.
Control your emotions and avoid being swept along with the crowd. Make consistent decisions based on sound technical analysis.

These guidelines should be internalised and if you are uncertain of which way to turn with a particular trade, re-read these statements and your answer should become clear.

Guidelines taken from Incredible Charts.

As always, Happy Trading and remember…

Mum’s the Word!

Marketmum
Stock Market Investor
Planet Wealth Blog © 2007

Bookmark this: