There’s also a lot of hype about how complicated it is and why you need to spend thousands of dollars on options trading education before you get started. Needless to say this last statement usually comes from trading seminar companies trying to sell your their trading course on options.

Lets cover a few of the basics about options trading and set you straight about a few important points. Firstly yes it is true that you can make a lot of money trading options, but of course you can also lose money just as fast.

When trading stocks your leverage is 1:1, if you go full out on margin you get get 1:2 leverage, but thats about it. With options it is not as straight forward to calculate the leverage but generally speaking you can get between 1:5 and 1:10 when you buy an option on a stock, or ETF.

So with 1:10 leverage, when the stock increases by 5% your option can increase by approx 50%, and this can happen in just a few days, this is why swing trading strategies using options on stocks is so popular.

However the downside is that the reverse can happen, if the stock drops by 5% your option can also drop by 50%, at which point you may want to close the trade and save some of your option value, it really depends on what your stop loss and risk management plan is.

What I’ve described above is called directional option trading where you are betting on the getting the direction of the stock movement correct, this is highly speculative. Options can also be used in option strategies which are much more non-directional, such as covered call trades, credit spreads and Iron Condors. In these trades there is much less dependance on getting the stock direction correct, but it still matters.

So should you trades options?, in my opinion you should not do directional option trades until you become very good at trading stocks. This is because you must be very precise with your entry and exit strategy and trading plan, and be very good at technical analysis.

Whereas if you want to do non directional option trades you don’t need to be such an experianced stock trader to be successful, but of course it does not hurt either.

Learning how to trade options is a very good skill to have, but don’t rush into it and blow out your account. Make sure that you get a good options trading education before you start, and also make sure that you have a very solid stock trading education as well, such one from Top Dog Trading Review.

The 50 simple moving average, or 50 SMA, is simply the sum of the last 50 values for each period, divided by 50, this is a moving window, as time moves on so does the average. Notice that I used the term period because this indicator works on any time period in exactly the same way.

It can be used on monthly, weekly, daily, hourly, 30 minutes, 10 minute and on whatever time period you want to monitor and trade. Although the SMA is the most commonly used there is also the exponential moving average or EMA. This is a weighted version of the formula using the mathematical exponent function to give more weight to the more recent values, this has the effect of making it a slightly faster average that many traders prefer.

The reality is that it probably does not matter if you used the SMA or the EMA, what does matter however is that you use one or the other and then be very consistent with it. Do not switch between them, it is more important that you learn to trust your chosen indicator then a slight difference in its value.

The simple moving average is primarily used to determine what the current trend of the stock is, depending on the value used it could be a short term, medium term or long term trend. An important point to note is that moving averages are really only useful when the stock is trending, if the moving average is flat, i.e. horizontal on your chart it can become very choppy, this is a good time to stay out of the market.

The general rule is that if the current price is above the SMA the trend is up, if below the trend is down. This is very important to know because it forms the basics of trend trading and trading with the trend. These rules also apply if you are a swing trader using trading strategies as found in the swing trader guide.

For the short term trend many traders like using a 5-8 SMA or EMA, here is a trading secret, never trade again the direction of the short term tend, this is really just common sense when you think about it.

Moving averages often act as support or resistance, many traders use the 15, 21 or 30 SMA for this purpose.

There are a number of other very important moving averages that you need to know about, these are the 50, 100 and 200 SMA, and this mostly applies to the daily and weekly charts. A lot of big players in the markets, like the the mutual funds, investment banks etc use the 50 and 200 SMA as support and resistance, if they decide to buy or sell based on these you need to follow suite, the 100 to a lesser extent. These are very useful averages to watch if you trade EFT’s like an Oil ETF.

A useful tip is that when a stock breaks through one moving average it will often move all the way to the next, for example, if a stock breaks the 30 SMA it may move to the 50 before finding some support or resistance.

Find more useful trading strategies and tips by reading and studying top trade books

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The GM and C picks were extremely successful and that got him interested in looking for other stocks like them. He found a couple of microcap stocks, CTIC and LJPC, that looked like they may break through with big gains.

That turned out to be correct as both CTIC and LJPC ended up being huge winners.

He thought that he may actually be onto something big with the way he was choosing these stock picks so he decided to try and build a stock screen screen which would find more stocks like them right before they were about to have big gains.

The reason I’m writing this article right now is because his first stock buy with this new screen reached a high 40% above it’s open today and that certainly impressed the heck out of me. My imagination is off and running with the big gains I could make by following his penny stock picks.

Obviously I don’t expect every stock pick he or anyone else makes to have big gains. No way. It’s also key to know that a gain isn’t “official” until the point where you actually sell the stock. Making the decision of when to sell is just as important as deciding when to get in. The cool thing is that he also makes a post on his blog (and on Twitter) when he sells.

He doesn’t share the precise way he screens for these stocks as I guess he’s a little too selfish to share all of his trading secrets but he shares more than  most do.

Of course he doesn’t suggest that people should buy his stock picks. There is really nothing to gain from that. It’s always recommended that you do your own investigating before trading.

While it may be tempting to sign up for The Day Trading Robot or Easy Forex, I honestly think you would have better gains just by following what he’s doing. And of course the really awesome thing is that it’s totally free.

One final note: It’s definitely a good idea to make “imaginary trades” before you start making trades with real money when trying a new stock picking strategy.

Green Funds are funds that invest in companies that are good for the global environment. Typically these companies will either be engaged directly in helping the environment,like innovative recycling, waste management, asbestos removal companies. Or, they have clean, sustainable, Green business models, meaning that their processes are not environmentally harmful

These Green funds have been gaining popularity recently as more and more investors are starting to think about helping the environment. Expectations of global warming and increasing rates of natural disasters are pretty scary, and many believe that if we don’t start taking care of the environment, our planet may not be a very nice place in the near future.

Green Energy mutual funds have interesting possibilities. Today, alternative Energy is a good prospect. The only thing is, it’s not quite the time to go Green with alternatives just yet. Most of these things like wind energy, solar energy, and fuel cells. are still in their developmental stages. That will mean that stuff is expensive and are not very profitable.

If you decide to dabble in a mutual fund investing, you will be faced with a slight challenge, which mutual fund do I choose? A great path to start is by researching different funds’ past records and future goals. Along with this you should also consider the fees the mutual fund charges, it is usually a good idea to go with a fund that offers a low expense ratio and will avoid funds with additional sales charges.