Trading Strategy: Pyramid Your Profits!

By Jordan Weir

We've all heard the age old adage, cut your losses short, and let your profits run. Yet the vast majority of traders don't use this concept to its fullest. The proper application of this single, key piece of advice can be the difference between showing a profit at the end of the month, and showing a loss. This method is known as pyramiding your profits.

In order to properly pyramid your profits, you must understand a basic tenant of risk management. This tenant alone is enough to bring many an unprofitable trader to profitability, but only once combined with the idea of pyramiding profits, can its true utility be realized. This tenant states that no more then 5% of your portfolio should be at risk during any trade. Thus someone with a $50000 portfolio can risk $2500 on a trade. This doesnt mean they cant invest more then $2500, but it means that when setting a stop loss, your initial position size should be based on the $2500 number.

This can be easily demonstrated with an example. Let us say we have company XYZ trading at $20. There's strong support at $18, so we set a stop loss for 17.50. This means we have a potential $2.50 loss per share. If we are risking $2500, and can lose up to 2.50 per share on this one, 1000 shares should be our maximum position size.

With your standard trade, that would be hit. An order to sell at a certain price, and order to buy at a certain price, and a stop loss. When your pyramiding your profits though, there's an integral extra step. When the stock has gone up in price, and you have some profits, you add MORE to the position. Lets say it goes up to $22.50, and you decide to move your stop loss up to $21.00. You now have 1000 in gains if you get stopped out. To pyramid your profits, you add that 1000 in gains to your risk amount for the trade, for a total of $3500. Since its now at 22.50, and we can risk up to $3500, then we should purchase another 2300 shares. (3500/1.5 = 2334).

If it gets stopped out at 21, then you made gains of $1000 on the shares bought at 20, but you lost $3450 on the shares bought at 22.50, for a total loss of 2450, which is approximately how much you were risking on this trade. If it then continues to go up to $25/share, then you made $5000 on the shares bought at 20, and another $5750 on the shares you bought at 22.50, giving you a total gain of $10750, while only putting 2500 at risk. By adding shares, or pyramiding your profits, you substantially increased the potential reward of the trade, while maintaining a safe level of risk, and by cutting your losses short, and letting your profits run, your ability to profitably trade the markets will be greatly enhanced.

Make no mistake; this strategy is applicable to long term investors as well. Assuming youre invested in an up trending stock, then adding shares to your investment whenever it breaks above the last high will greatly assist in maximizing the profits from the big overall trends that appear in the markets. If you're investing for longer time periods, its advisable to leave some profit in the case of it hitting the stop loss.

This strategy is the natural embodiment of the saying, cut your losses short and let your profits run. Its also in stark contrast to another bit of conventional wisdom, you never go broke taking a profit. While its true that you never go broke taking a profit, the size of the profits in relation to the size of the losses is very important. Pyramiding your profits increases your stake in whats working, while cutting out what isn't, and that's how you make money in the markets.

The key to success in trading is to have big gains, and small losses. By doing so, you can be wrong half the time, and still make money in the market. By pyramiding your profits, you insure big gains and small losses. Using this stock trading strategy, you can truly cut your losses short, and let your profits run. - 23167

About the Author:

Don't even CONSIDER trading another stock before checking out Jordan's website on Stock Trading Stategies. Learn about Stock Option Stategies, Exchange Traded Funds, shorting and more by visiting the Stock and Options Guru!

The Delightful Australian Silver Kookaburra Coin

By Christina Goldman

The Australian Silver Kookaburra should charm both the coin collector and numismatist equivalently. Collectors who regard birds as their theme specialty will be delighted to realize that this silver coin carries the image of the native Australian bird kookaburra engraved in relief.

This bird is a land-based member of kingfisher family which is classified under the genus Dacelo. This large kingfisher is most peculiar for its loud bird call akin to good-natured human laughter. This pleasant disposition of the bird plus the fact that it is found only in Australia are perhaps the main reasons why the Perth Mint in Australia decided to honor the Kookaburra in a silver coin.

The Australian Silver Kookaburra first came out of the Perth Mint at Western Australia in 1990. An introduction which many numismatists must have already taken careful note of as this coin is already nearing its 20th year continuous mintage. The Kookaburra is minted in four sizes with its 32.5 oz. (1-kilo) version consider as one of the largest government-issued silver bullion coins in the world. This coin, which also comes in sizes of 10 oz., 2 oz. and 1 oz., is legal tender, with the 1-kilo size having a face value of 30 Australian dollars.

The Australian Silver Kookaburra has 32.151 troy ounces of silver of 99.99% purity, making it a prized addition to coin collections. Characteristic of Australian bullion coins, the image of Queen Elizabeth graces the head of the Silver Kookaburra. The design of the Kookaburra featured on the reverse side changes every year of minting, a subtle theme variation that should whet the interest of many coin collectors. The 2007 Silver Kookaburra, for instance, has already won the affection of many avid numismatists.

This one features the amiable kookaburra hovering over a twig half-sunken in water, one artistic rendering that should enhance the coins value year after year. - 23167

About the Author:

You'll find great selection and fabulous prices on the unique Australian Silver Kookaburra at: http://AustralasianCoins.com

3 easy ways to increase your credit score

By Doc Schmyz

In the old days the "man behind the desk" decided to give you a loan or not. Your handshake was the contract and your honor was the collateral. Now however the "man" has a name...the name is FICO SCORE.

Although there are several credit models, the most commonly used is FICO, based on a model created by Fair, Isaac Company. Their consumer website is myfico.com, and you can find information about the FICO credit scores there.

Your FICO score is the method used to determine the interest rate as well as how much credit a bank or lender is willing to give you. the cleaner the credit...the lower your rate and larger the sum you qualify for.

Getting and improving your credit score is not hard at all, just takes time. Here is a tip or two that will help you improve and increase your score.

FIRST: Get a copy of your Credit History

There are many reasons you may have no credit history. Maybe you're just starting out, maybe you pay cash for everything and have never needed a loan. In any case, if you have no credit history, your FICO score is likely to be low.

A fast and easy way to improve or start a credit history is to get a loan and pay it off on time. "Installment loans" are looked at as more important than credit cards. You will show a stronger score if your installment loans are paid up to date and on time then say a consumer credit card.

Another option is to take a $1000 and open a 6 month CD at a bank. Now turn around and get an installment loan using the CD as the collateral. You then take that $1000 loan and do it again at another bank. Do this for a total of 3 times.

In the end you have 3 loans. Pay the minimum payments for 6 months...then cash out the CD's and pay off the loans in full. Now you have a credit history.

SECOND: Keep your credit history clean.

So we now have a good history. How do we get the score higher?

Make sure you don't close your old accounts. (Unless of course they charge you a fee of some sort to keep it open.) Part of your credit score is based on the amount of credit available vs. amount used. If you close old accounts you may impact this part of your credit.

Another thing to be aware of is how you manage your money. Here?s the scenario: you have a $2000 credit card. Every month, you charge about $1800 to that card. And, every month you pay it off. But here's what happens - your credit card company reports your credit information monthly to FICO. However if they report it on the day before you pay it off...the credit agency sees you carry a balance every month. If you can try changing the days you pay off your credit card.

THIRD: Repair Your Poor Credit History

At some point there is a very good chance you will have something that causes your credit rating to drop. Don't panic...poor credit can be fixed. Understand however that the process takes time. In some cases you may need to talk to a credit counselor to assure you address the reasons for the drop as well as remove any future habits that may cause it to drop again.

The most heavily weighted part of your score is based on your payment history. The first thing to do to start repairing your credit history is to pay your bills on time. The mortgage is the most important, followed by installment loans, and finally credit cards.

The next largest portion of your FICO score is based on how you use credit. The fastest way to improve this is to pay down your credit cards.

When you?re all done with the rest of things...review your credit report. Get one from all the credit agencies. Look for errors and mistakes. Contact them to see if they can remove them or correct the errors.

A strong, healthy, and clean credit score is a major part of your financial world. Keep it clean and don?t risk it. A good score can factor into things you can't imagine. Don?t damage your score if you can help it. - 23167

About the Author:

Doc Schmyz has invested all over the US and Mexico. He built a free free website shares Real estate investing information for all over the US. Find Real estate investing information by state

What is Forex Trading?

By G. Malone

The Forex trading is a name given to foreign exchange market where people deal in currency trading. This is basically a marketplace where one currency is being trade with respect to other currencies around the world. So when you deal in Forex trading, you are working in an international market where a lot of currency fluctuations take place due to so many factors. In terms of revenues this is market that deals in trillions of dollars every day and millions of people from almost all walks of life participate in it world over.

Many people make this their primary way of earning a living, while for others, it as an only an additional source of income. There are people who have gained huge profits very quickly and at the same time there are those that have lost their fortunes in this market. As with anything, you need to make an effort to take care of several things in first, such as a complete understanding of the Forex market, sufficient money to trade with, a constant gage on the tick of the market, as well as expert knowledge.

Technically speaking, Forex trading is one of the biggest, most liquid and most popular ways of earning legitimate money online that operates round the clock. One estimate has Forex trading generating exchanges in the range of 3 trillion dollars each and every day and still growing. Therefore, it means a great deal of money is involved in it, so if you are able to take right decisions at the right time you can probably earn a huge sum of money. And, the great thing is, anybody can participate in this market almost from anywhere in the world.

Not just individuals, but transactions in Forex market take place between big private investors, small individual investors, multinational corporations, private and public banks, financial institutions, currency speculators, large government and central banks. Another most remarkable feature of Forex trading is that up to a great extent it differs from a stock market as it is divided into various levels of access. At lowest level you will find small investors, while at the highest level you will find inter-bank market which has large investment banking firms and institutions that deal in billions of dollars each day. But that shouldnt discourage small investors who have a few hundred to few thousands of dollars to deal with. In fact, in terms of number of participants, they have a clear majority.

A majority of the information that is available on the internet doesnt necessarily guide you in the right direction, so you need to be very careful about putting your hard earned money in to the Forex trading market. Just like any other business venture, you need to equip yourself with the right knowledge, have a complete understanding, and need to have patience and persistence. Be careful about falling into the trap for those service providers or companies that promise to make you huge profits instantly. Instead of accepting short term gains, always look for ways that can help you invest for the long haul. In choosing a company or service provider, always look for their past track record and customer feedback. Unless you have complete knowledge about the Forex market, its trading components, and its fluctuations, no one can help you earn profits in this market. Find your own trading style coupled with the expert knowledge and tips and start investing slowly and gradually. Develop your own trading strategies and stick with them. Listen to the experts but when it comes to making a decision, ask yourself, because you are investing your money. When you develop your own strategies based upon your own feelings and guidance from experts and technical analysts, you should become an expert investor. The lack of guidance and you will be aimlessly throwing your money away instead of earning money from Forex trading. - 23167

About the Author:

For more information regarding Forex Trading, visit www.allforexshop.com. Click here for article submission.

Smallcap Stocks on Solar Technologys Cutting Edge

By James Brumley

Solar power is well past the prove it stage. The next step in its evolution is bringing its cost down to where its comparable to gas and coal energy prices. To do that, the technology and equipment has to improve in addition to becoming for functional in a real-world environment. Thats good news for smallcap investors, as many of the companies making those advancements are publicly-traded.

Here are some of solar powers most compelling current developments, and a few companies " some of them smallcaps - that could make their investors glad to be owners.

Solar Panels You Just Paint On

Do you hink a solar panel is a large, flat piece of equipment that you have to securely mount? Thats what they are now, but a new development may change the definition of solar panel in the future. In tests, the photovoltaic materials used in a traditional solar cell have also successfully been painted onto a solid structure, and then successfully converted solar power into electricity. Mounting a panel may not be necessary if the paint can be made to work well enough.

Though no publicly-traded stock can be purchased as a way of investing in this paint, dont assume thats a permanent problem. When corporations see that the technology is viable, theyll likely adopt and begin marketing it.

Thin Film Solar Cells

If for some reason painted-on solar panels wont work well enough, and theres not enough flat, sturdy surface area to mount traditional (i.e. heavy) photovoltaic cells, the solution is a flexible thin film solar panel. Theyre flat and thin and not rigid. String-ribbon cells also fall into this category.

First Solar Inc. (NASDAQ: FSLR) is one of the companies leading the thin-film effort. The companys cadmium telluride panels cost less than $1.00 per watt to make, which is approaching comparability with photovoltaic cells.

That said, once again its a smaller company that may be taking a particular technology to the next level. Smallcap stock XsunX, Inc. (OTCBB: XSNX) may be of interest to investors, as their ASI-120 (amorphous silicon) solar module is expected further reduce the per-watt cost of thin-film panels. And, they may work well in more environments.

Another entry into the thin-film arena is Uni-Solar Ovonics triple junction thin film solar cell, which is quickly proving to be very cost effective. The company is wholly-owned by smallcap company Energy Conversion Devices (NASDAQ: ENER), for interested investors.

Better Solar Power Storage

You dont need to be solar power physicist to figure out the sun doesnt shine 24 hours per day. After sunset, the industry needs to figure out a way to keep the electricity flowing. The obvious solution is storing the power created during the day for use at times when there is no sunlight. How? A battery.

The challenge in storing utility-levels of electricity is simply that current batteries cant do the job well enough. Most modern batteries are still made of solid components which degrade over time, take a long time to charge, and they dont last all that long. The solution may be a newly-developed, liquid-based battery.

The good news is, its the finest minds at MIT working on the liquid battery. The bad news is, you cant invest in MIT. Thats ok though. Once MIT proves their liquid battery is better, for-profit companies will become interested.

In the meantime, solid battery-maker Valence Technology Inc. (NASDAQ:VLNC) has a product for every imaginable need automotive, industrial, and yes, even storage solutions for power generated by wind and solar sources. Smallcap stocks like EnerSys (NYSE: ENS) and Advanced Battery Technologies Inc. (NASDAQ: ABAT) may be good bets within the utility battery group as well.

That said, there are at least a couple of dozen battery companies that could actually meet the needs created by the continued growth of solar power. Some are better than others, but thats not a function of size.

Bio-Based Backsheets Cheaper Than Petroleum

Even though one of the key goals of solar power is to rid ourselves of dependence on petroleum, theres a bitter irony in the fact that traditional photovoltaic panels actually require petroleum to be manufactured. How? Not in the power cells themselves, but solar panels use petroleum in their protective covering called a backsheet.

The obvious problem is that the use of petroleum in the manufacturing process makes solar panel prices subject to fluctuation with the price of oil. Theres a small company called BioSolar Inc. (OTCBB: BSRC), however, that has a working solution.. dont use petroleum in the backsheets. BioSolars backsheets use a plant material in place of petroleum, thus making it a bio-based backsheet.

BioSolar had been primarily focused on backsheet technology for the most common crystalline silicon (C-Si) photovoltaic solar cells the markets biggest seller as of right now. However, copper-indium-gallium-selenide (CIGS) and cadmium telluride (CdTe) thin-film panels are quickly becoming competitors of C-Si panels because of their similarly-low costs and impressive power production. So, BioSolar has recently begun work on bio-backsheets for CIGS and CdTe thin panels as well.

Just a Window? What a Waste.

A lack of transparency clearly limits where and how photovoltaic panels can be used, since a window blocked by a solar panel isnt a window at all. However, not utilizing the surface area of windows " particularly for large, glass-covered buildings " is a waste of potential energy. The solution is a see-through solar panel.

Turning glass into an effective solar panel without sacrificing transparency isnt science fiction for New Energy Technologies, Inc. (OTCBB: NENE). This small company has devised a way to coat windows with silicon nanoparticles that actually convert ultraviolet light into electricity. Needless to say, if an entire building could become a self-contained electricity supply, the implications would be enormous.

Next Step For Investors

As enticing as some of these afore-mentioned companies may be, bear in mind its ultimately the technology that will determine their profitability. While these stocks are presently the most interesting, be vigilant about finding the companies that will actually reach the proverbial finish line first. At the same time, remember the best technology is one thing, but profits may be another.

We feel smallcap stocks in particular can quickly surface " often without warning - as worthy investments since their respective companies are nimble. Either way though, the industrys projected growth is undeniable, so one company or another is going to benefit from the dollars being poured into the efforts described above.

The paradigm shifts in solar powers technology are no small matter, but for serious investors who need details of their commercialization potential, keeping tabs can be tough. Thats why we strongly recommend subscribing to our free newsletter. Well inform you of the industrys advances, and the stocks that can let you tap into that progress. - 23167

About the Author:

James Brumley has spent the last two years researching alternative energy stocks and has successfully identified sectors and specific stocks in the alternative energy space that may hold tremendous promise. If you have an interest in learning more about alternative energy stocks, the Small Cap Network's free newsletter published by James Brumley is an excellent resource.