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Risk Management Basics For Stock Market Traders

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To be a successful stock market trader, you must follow a risk management plan. A risk management plan helps preserve trading capital while earning consistent returns. It also helps curb your emotions while enforcing self-discipline. The main elements of risk management include determining the risk amount and position size, identifying the stop price, and examining the risk/reward ratio.

Determine the Risk Amount

The risk amount is the maximum amount you are willing to risk on any given trade. It is usually a set percentage of your total account value. A common rule of thumb is to risk 1-3% of your total account value with each trade. This amount should be reduced in periods of high volatility. So, a trader with a capital of $ 50,000 that risks 2% per trade would risk $ 1000 on each trade.

Identify Stop Price

Before entering a trade, you should set a stop loss price in order to help minimize losses and the influence of emotions. This price represents the level at which your position will be closed if the trade moves against you. It will be triggered automatically when the stock price trades at or past that level. Keep in mind that slippage may occur and you may lose more than you had initially calculated. A stop loss order guarantees execution, but the price may move further against you before the trade is actually executed.

Calculate Position Size

Once you have determined the risk amount and stop price, you can then calculate number of shares that you will trade. This number, or position size, can be calculated by dividing the risk amount by the risk-per-share. The risk-per-share is the difference between the stop price and the entry price. So, assume that your maximum risk amount is $ 1000 per trade. If your entry price is $ 30 and your stop loss price is $ 28, then the risk-per-share would be $ 2. In order to calculate the position size, simple divide $ 1000 by $ 2. Your position size would be 500 shares.

Entry price $ 30 Stop price $ 28 = $ 2 Risk-per-share
$ 1,000 / $ 2 = 500 shares

Examine Risk/Reward

Examining the risk/reward ratio is extremely important in determining whether or not a reasonable profit potential exists relative to the risk. It is an extremely important component to your overall money management strategy. The reward-per-share is the difference between the target price and the entry price. The risk-per-share is the difference between the entry price and the stop price. The risk/reward ratio should be established before entering a trade and should never be less than 1:3. In order words, the profit value for every trade setup must be at least three times larger than the risk value. If your entry price is $ 30 and your target price is $ 36, then the reward-per-share would be $ 6. With a stop loss of $ 28, your risk/reward ratio would be 2:6, or 1:3.

Entry price $ 30 Stop price $ 28 = $ 2 Risk-per-share
Target price $ 36 Entry price $ 30 = $ 6 Reward-per-share
2:6 = 1:3 Risk Reward Ratio

More Money Management Tips

For online day trading, only trade stocks that have an average trading volume of more than 1,000,000 shares for day. For swing trading, only trade stocks that have an average trading volume of more than 300,000 shares per day. Also, you should only trade stocks that are priced above $ 5. Technical analysis may fail on stocks below this price since they can be easily manipulated.

Summary

Understanding and following proper stock trading risk management guidelines will help you minimize your losses while earning consistent returns. Strictly following your money management rules will help keep the emotion out of trading and the odds in your favor. Successful traders always stick to their money management plan and do not let their emotions take over.

This article was written by Mary Hedden, owner of http://www.techtradersystem.com. TechTraderSystem.com provides valuable information about technical trading systems and technical analysis of stock charts that can be used to save time and increase stock trading profits. Please click here for more information about risk and money management for stock market traders.

The Forex Money Management Calculator

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The Forex Money Management Calculator is a set of tools that will allow most ordinary people a realistic opportunity to make cash trading stock in a planned and timely manner.

Most stock owners and a lot of market traders do not have the slightest clue of a game plan about how to manage their stock portfolio and they have no real plan how to make profits in the market. The Forex Money Management Calculator is a simple to follow set of instructions that will allow anyone to make stock trades that make profits with confidence.

The two things that keep ordinary people from making money trading stock in any market conditions are time and knowledge. What you need is a disciplined trading plan that takes only a few minutes a day and can prove itself capable of making profits day after day in any market.

The tools you need are the ability to set a realistic target price based on past data and present conditions, a method to consistently and successfully time profit taking and minimize loss, and a strategy to time stock breakouts (the big jumps up in price) that allows you to know when to buy and sell so you make the most profit possible.

Price is everything in managing your portfolio successfully.

The Forex Money Management Calculator is a computer program and instructions that will allow you to make profits in any market by taking the most advantage of price and price breakouts.

The system is based on fundamentally sound market mechanics and provides you with a set of proprietary chart indicators that tell you when to buy and sell and allows you to leverage the spread between Bid and Ask price. The fundamentals include a time filter, a news filter, and a wave filter that directs your buying and selling toward the highest possible profit.

The key is you only have to make one trade a day or place one set of orders a day and then go about your business with confidence that your trades are making money for you.

Back testing this system with the stock or stocks you are thinking about investing in will give you the proof and confidence you need to use this set of tools successfully from day one.

This method takes the emotion and the emotional toll out of trading with up to the minute information that allows a novice trader or a professional to trade confidently and consistently make money in any market by placing just one or a few orders a day.

The system is not the newest gimmick that will make the owner rich, it is backed up by more than two years of documentable success by ordinary investors who saw the system work for them.

Personalized startup guidance, knowledgeable timely and responsive answers to questions, and expert problem solving by professionals is a standard long term part of the system that has been tested and praised by small traders and large traders for over two years.

The Forex Money Management Calculator is a set of tools that will allow most ordinary people a realistic opportunity to make profits trading stock in a planned and timely manner in just minutes a day.

Are you looking to find out more on Forex Money Management Calculator? Visit my website to find out more!

So why are you hesitating? Visit my website to find out where you can find the best Forex Money Management Calculator for your forex calculation needs.

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Latest Sample Project Management Plan News

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California cattlemen to battle regulations in 2014
Public meetings on the statewide Grazing Regulatory Action Project are expected to be held early this year. • The U.S. Bureau of Land Management has offered a draft plan for managing the greater sage grouse, a candidate for listing under the Endangered …
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STRABAG AG : Upgrade of key road delayed again
But now an official from the authority says the plan is still at the design stages. … In particular, the Bretton Woods institution expressed concern over Strabag's management of the contract after a Russian investor it had blacklisted bought into the …
Read more on 4-traders (press release)

Latest Project Management Plan Template News

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Warranty Conference Exhibitors:
While most of the 275 or so people heading to the Warranty Chain Management Conference this week in Tampa want to see and hear the latest from their peers in the industry, there is a significant group of show sponsors and exhibitors who simply want to …
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FDA taking White Flint space, ending NRC HQ controversy
He added the lease demonstrates the Obama administration's Office of Management and Budget's commitment to reducing the federal real estate footprint. The FDA will … It will have no impact on the agency's larger space consolidation program that is …
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War of words over Medicaid purge
The screening program, known as the Illinois Medicaid Redetermination Project, was authorized by the General Assembly as part of the “Save Medicaid Access and Resources Together Act” (SMART Act) of 2012. The amended … It's hard to keep and motivate …
Read more on The Capitol Fax Blog (blog)

Stages of Project Management

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By the way http://ProjectTemplates.biz Offers a Complete Set of Project Management Templates, Tools, Forms, Guides and Everything Which Can Increase the Effi…
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By the way http://ProjectTemplates.biz Offers a Complete Set of Project Management Templates, Tools, Forms, Guides and Everything Which Can Increase the Effi…
Video Rating: 5 / 5

Project Management and Project Management Services

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The success of a Project is made possible through a structured project management step with the help of a professional and skilled project management services. Both are the most basic but important factors to consider in the realization of most projects. We have to consider the primary challenge of project management which is to achieve the goals and objectives considering the preconceived constraints such as budget, time and scope. It’s about taking manageable risks.

The most important step is to understand the project thoroughly. With a set of organized goals, objectives, sufficient time and financial plan, a project can be made feasible! There are so many things to consider because a failed project can lead to loss of revenues and opportunities, failure to achieve business goals or perhaps business failure. Anyone who invests in a certain project would not want failure but would ensure that his investment would be profitable. With these in mind, anyone would make sure he has the right person in the right position but then again it is all about taking manageable risks. In anything we do, we always consider the risks that are inevitable, but, with the best project management services all will be well.

There are few things that I would like to share about taking manageable risks in project management services. One are the commitment. There should be commitment of management to ensure that the stakeholders and the people who will benefit from the project will be able to sustain. This is to provide assurance that if the project becomes more critical to business performance, the management would take the risk and provide preventive actions for improvement.

Second is to have a written plan, a feasibility study. This should include the number of people involved, the time frame of the project, the limitation of the resources, the person responsible and the allocated finances.

Before someone takes the risk of investing a certain business, it is important to know the expected consumer that could afford to avail what your business offers. Third is defining scope, goals and objectives. This should be more specific and predefined to know what processes and business areas are affected. Fourth is to encourage teamwork. A typical projects involved lots of people, including technical staff, end users/costumers, contractors, financial and administrative staff.  Project management, project management services is our great partner.

Project Management Services are our great partner.

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The University of Southern California Standardizes Capital Project Management Information and Communications Tracking with e

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Ft. Lauderdale, FL (PRWEB) March 13, 2012

eBuilder, the number one provider of integrated capital program and project management software to colleges and universities, announced today that The University of Southern California has selected eBuilder Enterprise to standardize their capital project planning, design, and construction processes. USC will leverage eBuilder Enterprises flexibility, easeofuse and deep module integration to enable a phased rollout to their construction management teams. By phasing the rollout, USC will quickly realize the benefits of consistent project communications, process management, and project controls while maintaining team productivity.

USCs Capital Construction Development, Facilities Management and Real Estate Teams are responsible for managing over 400 projects a year ranging from small renovations to major capital projects managed by a team of 30 project managers with a substantial annual capital project budget. The team required a system that would help them enable more methodical cost controls, as well as provide better visibility into project costs for the universitys administrators.

USC is standardizing business processes across their entire capital projects portfolio so they can be codified into eBuilder to reduce risk. As a result, eBuilder Enterprise will allow USCs Capital Construction Development, Facilities Management and Real Estate Teams to establish consistent and measurable business processes that can be refined as USCs requirements evolve. eBuilder will also serve as the collaboration and communications hub to ensure all projectrelated information is stored in a safe, easily accessible, and auditable database.

USC will also use eBuilder Enterprises Planning Module to help the University develop, prioritize and approve new capital plans. This module tracks the evolution of their capital plans, ensuring the team has complete visibility and supporting documentation for each change as it occurs. The eBuilder Enterprise Planning Module centralizes all information related to the capital plan, including design information, topographical studies, feasibility studies, and more. The builtin integration between eBuilders Cost and Planning modules enables USCs Capital Construction Development, Facilities Management and Real Estate Teams to leverage past project cost information, and use this data to develop more accurate estimates.

With nearly half of the top 10 Universities, as ranked by US News & World Report, already using e Builder, the addition of another leading higher education institution builds upon our commitment to deliver best demonstrated practices that produce real results says Jonathan Antevy, CEO of eBuilder, Inc.

About USC

The University of Southern California is one of the worlds leading private research universities. An anchor institution in Los Angeles, a global center for arts, technology and international trade, USC enrolls more international students than any other U.S. university and offers extensive opportunities for internships and study abroad. With a strong tradition of integrating liberal and professional education, USC fosters a vibrant culture of public service and encourages students to cross academic as well as geographic boundaries in their pursuit of knowledge.

About eBuilder

eBuilder is the leading provider of integrated capital program management software and construction management software for top facility owners and the companies that act on their behalf. The companys flagship product, eBuilder Enterprise, improves capital project execution, resulting in increased productivity and quality, reduced cost, and faster project delivery. Since 1995, eBuilders technology leadership and construction industry focus has provided thousands of global companies, government agencies, and healthcare and educational institutions managing billions of dollars in capital programs with solutions to improve the plan, build, and operate lifecycle. The company is privately held and headquartered in Fort Lauderdale, Florida. For more information, visit http://www.e-builder.net/.





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Gain Good Results With Sequential Project Management Phases

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by wallyg

Article by Janelle Elizabeth

Gain Good Results With Sequential Project Management Phases – Business

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In almost all activities that you do, there’s a cycle that you observe. You’ll find regular chronological actions that you conduct so as to arrive at a desirable result. In baseball, for example, you are unable to make a homerun until you hit the ball really good; there’s no faster way to a homerun. Else it is really not considered as a point for your team. In the same way, tasks ought to be executed step-by-step to ensure achievement of the goals set up at the start.

In the accomplishment of a project, it is essential to implement these project management phases:

1. The first phase is project initiation, and it sets up the path for the project. During this stage, the group will recognize the organization need and the purpose of the project by creating a business case. The business case needs to identify the context of the business and define measurable objectives that the project intends to attain.

In this stage you are going to recognize the key sponsor of the project. He would be the one to establish the charter to handle the project, provide sufficient finances and remove hurdles when they occur.

This stage also includes appointing the project team and discovering the main stakeholders who is going to be involved during the entire project. To have a guide in the process of carrying out the project, it really is required that the project scope management be clearly , stating, among others, what is going to and will not be done.

2. Project planning is the vital stage which is all about preparing the project’s resources, funding and schedule. More work is done to determine whether the proposed project will likely be of genuine advantage to the organization. If the project is regarded as essential and it is authorized, more detailed preparation develops. Throughout this period, you can develop the project budget and timetable. The expense plan should involve costs of resources belonging to the project activities. The business scope, project requirements, benefits, governance and integrated project management techniques are agreed upon.

3. Project execution. After determining the coverage of the project and concluding the plan, it’s the perfect time to execute. During this period, you employ the activities in line with your plan. There are a number of aspects to oversee within this phase, such as quality of work, timeframes, possible problems and communications with stakeholders to make sure that your project stays on course.

4. Closing a project. This stage takes place when you finalize all project tasks and keep important documents for future reference. You will give the project deliverables to the customer, close contracts with suppliers and report back to the sponsor the good results of the project.

About the Author

Generally in most things you do, there exists a sequence that you choose to go along with. There are certainly basic chronological steps that you undertake so as to get to a specific output. In the accomplishment of a project, you must adhere to project management phases.

Use and distribution of this article is subject to our Publisher Guidelines
whereby the original author’s information and copyright must be included.

Janelle Elizabeth


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Management Consulting Firm Oliver Wight Americas, Inc. Announces Education Course Scholarship Program for Professors and Students

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New London, NH (PRWEB) October 06, 2011

In an article released by the Associated Press on June 8, Stacy Anderson states, President Barack Obama says the growth of the U.S. economy will depend in part on training new workers for jobs in the manufacturing industry. (Released through Manufacturing.net /News/2011/06.) Oliver Wight Americas desires to help prepare college students for careers in manufacturing by incorporating both professors and students into this education program. The benefit to professors is to help them prepare students for management positions in industry. The benefit to students is to provide them with a vision of key planning and management processes when they become employed after college. It is also common, in many companies, for an Oliver Wight-trained prospective employee to qualify for a higher entry-level pay status.

Oliver Wight Americas will offer two tuition-free seats in each course taking place in the fall of 2011; one for a full-time professor currently teaching a business management curriculum and one for a student currently enrolled in a similar curriculum. The courses available include Business Excellence, Sales and Operations Planning/Integrated Business Planning, Demand Management, Integrated Supply Chain Management, and Master Scheduling. The Oliver Wight Americas website provides detailed descriptions on the business improvement courses along with the dates and locations. Applications for attendance can be filled out on the website. Please visit http://www.oliverwight-americas.com/courses/scholarships/scholarship-student.htm for more information and the application for this program.

About Oliver Wight Americas, Inc.

Oliver Wight Americas has been both a thought leader and hands-on practitioner for over 40 years. As a global business management consulting and education firm, the company specializes in helping organizations work smarter, faster, and better than their competitors. Its principals are seasoned professionals who have real-world manufacturing experience and transfer this knowledge to the people at all levels of an organization, providing tools to help organizations internalize that knowledge and achieve a competitive advantage in the marketplace. The largest world-wide consultancy of its type, Oliver Wight has offices throughout Europe, North and South America, and the Asia/Pacific Region. For more information, please visit http://www.oliverwight-americas.com.

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How Has Supply Chain Management Changed Over the Last 25 Years?

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Lora Cecere explains that supply and demand balancing is not longer sufficient. Companies need to instead focus on value and invest in systems that provide executives with the data and tools they need to make the profitable decisions possible. Visit www.steelwedge.com to learn more about sales and operations planning. Featuring Lora Cecere – Partner, Altimeter Group