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Day trading: Do you have what it takes?

Day trading: Do you have what it takes?

Published 8/25/10  (Modified 3/9/11)

By MoneyBlueBook

This is a guest post from Marc Pearlman.

When people ask me if they could be successful at day trading, my first response is, "Do you know what day trading is?"

Most people don't. You might think day trading is about finding the best online brokerage, grabbing a stack of financial reports, arming yourself with financial blogs and news and then diving in.

What many would-be day traders don't realize is that success doesn't come from the uncanny ability to analyze balance sheets and fundamentals like Warren Buffett. And even if you have the ability to interpret charts and price action--the primary skill for day trading--this is secondary to having the strict discipline of adhering to specific rules and guidelines.

Without these rules in place, day trading is like a child playing with a chainsaw.

I'm not judging the merits of day trading. I know both very successful day traders and those who blew themselves up financially with day trading. (For what it's worth, I know many more of the latter variety.) But if you're going to succeed at this kind of investing, you'd better understand what it takes.

What it takes to succeed

Here are observations from my experience as both a professional trader and money manager about what it takes to succeed at day trading:

  • Hard work. Brains don't hurt, but day trading is a skill, and that skill needs to be developed by treating this as a business. A lot of people day trade as a side avocation or hobby, maybe because it seems
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Investing tips for today: Q&A with money expert Saly Glassman

Published 8/10/10  (Modified 3/9/11)

By Barbara Marquand

In the wake of the financial meltdown, top money expert Saly Glassman says investors need to take responsibility of their finances and get their investments back on track. Glassman, ranked the nation's No. 1 woman financial advisor by Barron's, is author of "It's About More Than the Money: Investment Wisdom for Building a Better Life" (FT Press: 2010).

We recently chatted with her about today's hot personal money management issues, from coping with losses to investing independently with discount brokers.

MoneyBlueBook.com: What's your advice for investors coping with losses?

Saly Glassman: The best way to deal with a loss is to step back and make an unemotional evaluation of what happened. By looking with more objectivity at the situation, you can analyze what role you played in contributing to that loss. Were you overextended with your borrowing? Did you have unrealistic expectations with that return? Did you not save enough? Did you not do enough research on the kind of investments you were buying and the person who was advising you? Ask yourself, "What role did I play in the loss that I incurred?"

If you say, "It's everybody else's fault," where does that take you? How can you be part of the solution if you had nothing to do with the problem?

MBB: What are the biggest mistakes investors have made in the last two years?

Glassman: Common mistakes

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Overcoming Spending Anxiety: When Financial Planning for Retirement Isn't Enough

Published 7/14/10  (Modified 3/9/11)

By MoneyBlueBook

This is a guest post from Marc Pearlman.

Back in the early to mid-1990s I made my living by sitting in front of computer monitor with green and red glowing pixels that flashed stock and commodity prices. I was an off-the-floor stock and commodity trader, and in my world, green and red meant everything. Green meant I was making money, and red meant I would be drawing out of my savings to pay for monthly expenses.

Fortunately for me, I was given some sage advice from a wealthy mentor of mine who was about 25 years my senior and knew of an obstacle that I was likely to encounter. I still remember his wise words: "Kid, make sure you put money into an account you can draw from when times are lean--and expect some lean times. It's part of the game."

Even though I heeded his advice, there was one thing I didn't account for: the feeling I'd have when trekking to the bank to withdraw those savings. While I had been diligently depositing money in my high yield savings account specifically to be drawn on when needed, the mental anguish of seeing my balance decrease--sometimes month after month--was one of the biggest challenges I had to overcome as a trader.

From Retirement Saving to Retirement Spending: Getting Past the Anxiety

Fast-forward 16 years: now I manage other people's money for a living. I'm on the phone with a client in his mid-60s who recently retired. He asks me if taking $10,000 out of

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New Credit Card Statement Format

Published 7/13/10  (Modified 3/9/11)

By MoneyBlueBook

Usually when I open my credit card statements, my eye goes right to the line that tells me how much I made during the past month in cash back and credit card rewards points. Recently, though, something else caught my eye when I opened my monthly statement: the brand-spanking-new statement format mandated by the Federal Reserve.

As of July 1, credit card issuers were required to conform with new rules approved by the Federal Reserve Board to protect consumers from what many have seen as unfair (or at least unclear) practices by the card issuers.

The new statement does a lot of things right--it's now abundantly clear, for example, just how long it'll take you to pay off even a small balance if you just send in the minimum payment required (and how much interest you'll rack up in the process). Closing one of the classic traps of card usage that have ensnared many, the new statements must tell cardholders up-front just how much their credit card rates will jump and how much the late fee will be if you're late with your payment. And interest fees and fee charges of all types are now labeled clearly--you'll be able to see at a glance whether that zero percent balance transfer transaction was correctly implemented.

FiveCentNickel.com has a nifty infographic with mouseover highlights of the new changes:

Credit Card Statement Changes from Five Cent Nickel

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Money Blue Book Weekend Roundup - 6

Published 6/28/08  (Modified 3/9/11)

By MoneyBlueBook

Since it's a lazy weekend afternoon for me, here are some finance and frugality reading material I thought you all might enjoy. There are so many exceptional new and old personal finance bloggers on the web today. I would like to share some of their blogging work with my readers here. During the last few weeks I also participated in numerous blog carnivals that I am finally getting around to linking back to. Yes I know, I can be a big procrastinator sometimes (I suck). Here they are:

Personal Finance Blogger Friends:

Carnival of Personal Finance:

Carnival Of Debt Reduction:

Carnival of Money Hacks:

Carnival Of Money Stories:

Carnival of Twenty Something Finances:

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Money Blue Book Weekend Roundup - 5

Published 5/10/08  (Modified 3/9/11)

By MoneyBlueBook

Here are select blog carnivals and blog festivals I participated in over the last few weeks. Apologies for the delay in getting these out (extra curricular duties have been occupying most of my free time). Other than my own article submissions, there are definitively a lot of good finance and frugality articles in the mix worth reading as well. I've listed the website links where the carnivals were hosted and the articles I've mine that were submitted. At least one was selected as an Editor's Pick. Take a look!

Carnival of Personal Finance

Carnival Of Debt Reduction

Carnival Of Money Stories

Festival of Frugality

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