Fibonacci Numbers

3 Important Uses of Fibonacci Numbers An example of the power of math can be found in Fibonacci numbers. Fibonacci numbers are a sequence discovered by Italian mathematician Leonardo Fibonacci in the 13th century. The sequence is 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, and 89 on to infinity. The sequence has a series of interesting properties. The sum of any two consecutive numbers equals the next highest number. After the first four numbers, the ratio of any number to its next highest number approaches 0.618. The ratio…

Right Time to Invest

When’s the Right Time to Invest? In the stock market, timing is nothing — but time is everything. It’s not surprising that first-time investors often worry about the timing of their initial stock purchases. Getting started at the wrong point in the market’s ups and downs can leave you staring at big losses right off the bat. But take heart, Fools: Whenever you first invest, time is on your side. Over the long haul, the compounding returns of a well-chosen investment will add up nicely, whatever the market happens to…

Nordic American Offshore

Nordic American Offshore: A 10% Yield Sure To Be Cut I’ve been writing the Safety Net column for more than three years. I’ve never seen a stock that was as much of a lock for a dividend cut as the one I’m covering this week. Nordic American Offshore (NYSE: NAO) is a microcap stock with a market cap of just $110 million. It trades a little over 100,000 shares per day. Nordic American owns and operates platform vessels in the North Sea. Given that the company is heavily tied to the oil industry,…

Motivational Quotes

28 Motivational Quotes from Top Traders Trading is a lot like riding a roller coaster. Although it obviously is fun and exciting, there will be times when you feel scared, nervous or even powerless. When these bad times come, it’s important to not panic or give up. One excellent thing to do during these troubling times is read some motivational quotes from traders who have been in your shoes and know the path to success. Here are 28 motivational quotes that will help keep you focused and on the path…

Compound interest

Change Your Life With One Calculation How compound interest from investing grows your money faster than anything else. If there were an eighth wonder of the world, we’d nominate the equation for compound interest: Your money x (1 + i)^n. (If you’re not a math geek, don’t worry; we’re going to decipher that for you.) Albert Einstein (or maybe it was Yogi Berra) called this deceptively simple formula the “greatest mathematical discovery of all time.” We call it your ticket to financial independence. That’s right, just three straightforward inputs can change…

Investing and gambling

Investing and Gambling are not the same thing It’s the Monday following the second leg of the Triple Crown and a whole bunch of people lost money betting on the Preakness. Like the stock market, the allure of gambling is strong because many people think that having more money will solve most of their problems. And while there are some similarities between investing and gambling we should be clear that they are not nearly as similar as some people might believe. First, some definitions: “Gambling is placing capital at risk…

Financial Gains

Two Ingredients to Financial Gains From a young age, we are conditioned to trade and invest incorrectly. We naturally run from things we are fearful of and are drawn to things that make us feel good.  If you take this action in trading, you are headed for trouble which in the trading world means losses. For example, if your invitation to buy into a market comes only after an uptrend is well underway, all the indicators are pointed up, and the news is good on that market, where do you…

Scalping and Swing Trading

Differences between Scalping and Swing Trading strategies. Many people participate in the stock markets, some as investors; others as traders. Investing is done with a long term view in mind – years or even decades. Trading, meanwhile, is done to pocket gains on a regular basis. There are many sub categories of traders. One of the common ways to distinguish them is the “time period” for which traders hold a stock, which can vary from few seconds to months, even years. Some of the popular trading strategies are day trading, swing trading, scalping…

Increase Your Average Profit

How Simple Maths Can Increase Your Average Profit Per Trade 10-Fold You’ve probably read trading articles that talk about how your “winners need to be greater than your losers”, it’s used so much that it’s become cliché. It is NOT as simple as having a series of trades and just keeping your risk at 1r and your average profit objective of 2r, that is never going to be the case in real world trading. There are several situations where maths is applied to trades I personally take that can dramatically…

Bear Put Spread

What Is a Bear Put Spread? Here’s the basic setup of a bear put spread, along with how to calculate the position’s maximum gain, maximum loss, and breakeven point. There are plenty of ways to profit on a stock‘s movement, beyond investing in the actual stock itself. Options provide a nearly endless array of strategies, due to the countless ways you can combine buying and selling call option(s) and put option(s) at different strike prices and expirations. A call is an options contract that gives the owner the right to…