A simple stock trading system that's freeWritten by Trader Jack
I am often asked by relatively inexperienced traders whether there is a simple method that they can use that is consistently profitable. The answer is yes, and better still, it works in both a day trading timeframe and a swing trading timeframe. Heck, it even works if you want to 'buy and hold' your stocks! Basically, this system allows you to build up chunks of equity in your favorite companies at effectively zero cost.Sounds too good to be true, doesn't it? Surely it must be a complicated stock trading system, with high drawdowns and large risk? Nope. So why do I offer it here for free? Because Trader's Collective asked me, simple as that. Right, here we go. Choose your target security or stock, and wait for it to start moving upwards strongly. This could be because whole market is in an upswing, or perhaps your chosen stock is forging ahead on good news. Buy a round lot of stock, say 1,000 shares. Immediately put a limit order on it to sell 90% of stock at a price that will recover ALL your costs (including dealing costs). Say for sake of argument that you spent $10,000 on stock (at $10 per share, obviously), and $25 on execution fees, you would be looking to sell 900 shares at about $11.14 or better. This would recover your initial outlay of $10,025 and leave you holding 100 shares of your favorite company, completely free! Ah, you say. Excellent. But hang on! What happens if it doesn't hit a ten percent rise anytime soon? Or worse, starts to fall? Welcome to world of stock trading, where losses are also possible! The key to successful trading is to control any losses you incur. This means firstly setting a rigorous stop loss that will trigger automatically, and secondly trying to ensure that your entry criteria give a better than average chance stock will move right way. Let's look at that second point first.
| | Equipment Leasing Blunders That Can Cost Your Firm a MintWritten by George A. Parker
Rod McHenry, financial vice president of a document imaging company, thought he had great cause for celebrating. He had signed an unbelievable $370,000 lease proposal covering computer servers, workstations, software and other networking equipment. McHenry believed he had snared an incredible lease rate, capping off weeks of negotiating an acceptable equipment price with equipment vendor. The proposal guaranteed a lease closing and offered a return of 2% ‘commitment fee’ paid by McHenry’s company if leasing company failed to give credit approval within two weeks. Little did McHenry know that signing this proposal would lead his company into ‘Twilight Zone’ of equipment leasing. Ultimately, his firm would fork out more than $15,000 in legal fees seeking lessor performance, only to learn that lessor was already insolvent and mired in several similar lawsuits.Like McHenry’s employer, thousands of U.S. companies lease equipment each year, many of them without careful attention to potential blunders. Rod McHenry became victim to one possible pitfall, but there are several areas deserving careful attention. Falling For Lowest Rate One potential pot-hole facing many would-be lessees is basing their lease decision solely on lowest monthly payment. Even on face of it, making a decision based on monthly payment makes little sense. First, these amounts give only a partial picture of total lease pricing. An accurate discounting of cash flows using a present value analysis, including up-front lease payments, monthly payments, security deposits and fees can often change outcome of lowest lease bid. Making sure that each lease proposal is reduced to a present value calculation guarantees that you will be comparing apples to apples. Even if you make accurate price comparisons, pricing all by itself fails to consider several important factors – ones that might save you a bundle in long run and keep your firm from blundering. To avoid pitfalls in this area, list and evaluate your top priorities for a leasing arrangement. Consider factors such as: choosing right leasing partner, balance sheet considerations, tax considerations, choosing right form of lease, avoiding severe lease terms, and getting enough lease flexibility. Failing to Check Lessors’ References and Financial Condition As Rod McHenry discovered, perhaps area with greatest potential for a misstep is lessor selection. Failing to investigate and make a wise choice of leasing partner can result in transaction delay, misrepresentations, nonperformance, unexpected fees or even fraud. Like many industries, equipment leasing encompasses many players with varying degrees of experience, specialization, integrity and financial strength. In selecting best leasing partner, get sufficient information from bidders to perform an effective reference check. If possible, also obtain financial information from bidding lessors to evaluate their financial condition. Obtain Dunn and Bradstreet reports on each bidder. Ask for and check customer, vendor, bank and trade references. Perform an Internet news and message board search to make sure bidding lessors are not subject of any unresolved problems or scandals. Most reputable lessors belong to one of major equipment leasing trade associations (ELA, EAEL, UAEL, or NAELB). Call appropriate association for a reference. Lastly, ask around. Check with your attorney, accounting firm, banker, friends and associates who are able to make recommendations based on past experiences. Not Fully Understanding Lease Agreement Failing to read and understand major terms and conditions of equipment lease can cost your company a bundle. While most lease agreements include similar terms and conditions, there can be noticeable differences. For example, most agreements cover lessee’s responsibility to pack equipment and ship it to lessor at end of lease, if lessee chooses to return equipment. Some leases require lessee to have this done by last day of lease, perhaps depriving lessee of a week or more of use. Also, some agreements require lessee to pay for equipment de-installation, packing and shipping to any destination within US, which can be costly. You can save money by negotiating many of these points. Read lease agreement thoroughly, get legal advice if necessary, and negotiate points that can save you money. Making Wrong Choice Between Fair Market Value and Bargain Purchase Leases High on list of potential leasing blunders is choosing wrong form of lease for your planned use of equipment. Failure to choose wisely can result in significant additional lease expense. Equipment leases fall into two broad categories: 1) leases designed to pass ownership of equipment to lessee at end of lease (bargain purchase/capital leases) and 2) leases intended to allow leasing company to retain ownership of equipment (FMV or operating leases).
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