Before you choose one of the Top Investment Newsletters for 2018-2019, you need to understand concretely what your investment and trading objectives are first. Here we look at the differences between the major strategies offered by the various types of financial newsletters available today.
Primary Differences Between Day Trading and Swing Trading
Most investment newsletters these days fall into one of two primary categories— Day Trading or Swing Trading. Yet these strategies are worlds apart. We will look at the biggest differences between them before considering the Top Investment Newsletters over all. These differences center mainly around startup trading costs, time commitment involved, risk involved, and stress levels associated with the strategies.
Day trading successfully requires expensive trading advantages. This is because today’s day traders are effectively competing against high frequency traders, hedge funds, and other disciplined market professionals with vast resources. Their whole business models depend on attaining and maintaining significant trading advantages. This means that if you intend to compete with such deep-pocket institutions, then you must recognize the need to acquire cutting-edged day trading software, charting and graphing technology, and a super fast execution trading platform.
Swing trading on the other hand allows for traders with little in the way of startup money to compete. It only really needs a decent laptop (or desktop computer) and some fairly traditional trading tools in order to effectively get started. One of the great advantages available to swing traders is that there are a number of free sites that provide for high quality research too.
Time Commitment Involved
Day traders must be willing to invest enormous time commitments to do it well, whereas swing trading does not require so much time. Part of the reason is that day trading commonly involves trading in and out of positions in rapid succession (as in one minute, three minute, or fifteen minute intervals). This makes the traders continuously monitor their positions for profit and loss points. It requires constant focus and concentration and often causes significant personal stresses. Many day traders are doing this for full time work, whether they work alone or as a member of a corporate institutional trading and investing team.
With swing trading, the time frames involved are substantially longer, often lasting for a few days or even weeks. It still requires monitoring positions for profit and loss, but there is no constant changing out of positions. Many swing traders do this on a part- time basis and keep regular full-time jobs in an unrelated field. Swing trading is a fantastic option for those investors and traders who are just learning how to trade and who simply can not commit their whole lives to doing so.
It is all too possible to fall into significant debt rapidly while day trading. This is because day trading typically involves trading with borrowed money called margin in the business. The upside is that this provides you with significant additional trading funds and therefore the possibility of making greater profits. The downside is that there is also much more money to lose on any given trade. A single loss while trading on margin can be very expensive indeed. This is all the more true if you are not an experienced day trader and stocks start moving faster than normal. Unfortunately, the majority of new day traders plunge head first into it without sufficient knowledge, becoming more gamblers than traders in a hurry. Risk and trade management are essential disciplines and critical skills for day traders.
Fortunately for swing traders, they do not have to rely on margin heavily. It is entirely optional with this form of trading. This means that the maximum losses on any given trade are the actual capital that you place on the trade itself. You will not run into negative equity while swing trading. It does not remove all of the risks in swing trading by any means, but it does decrease the chances of losing massive amounts of money if you learn and practice good risk management techniques.
Associated Stress Levels
It should not come as too much of a surprise at this point that day trading is an inherently stressful practice by nature. Some people thrive on this, but many others may wish to avoid it at all costs. The minute to minute monitoring of positions with day trading can break a person who is not up to it. It requires huge amounts of decisiveness, discipline, detachment from emotions, and a more in depth understanding of what moves the markets. Remember that the competitors in this type of trading are hardened financial and experienced trading professionals with corporations who do this type of trading for a living.
The swing trading strategies are such that any investors can put in some time studying to learn enough about finance and the markets to become a successful trader. This does not make swing trading easier exactly. It is still trading. Yet for any individual who wants to trade but simply can not spend all of their waking hours doing it, swing trading remains the lower stress, less risky, and often better choice of trading strategies.
About Options Trading Basics and Newsletters
Options newsletters are focusing on something completely different from day traders and swing traders. Their strategies hinge around using highly leveraged financial instruments called options in lieu of stocks. An options contract is simply an agreement made by two parties to buy or sell the right (but not the obligation) to an underlying stock. Premiums for this right change hands between the buyers and the sellers (and not the stock shares themselves).
An option buyer will pay the premium to the option seller speculating on the stock price rising before the contract expires, while an options seller receives the premium hoping that the stock price will not rise within the time frame of the contract. Options do give traders a range of strategies that offer potentially unlimited (or sometimes limited) means for profit and risk. Professional traders use them for both speculation and for active position hedging.
Call Options Versus Put Options
Options are fairly straight forward as there are only the two kinds of them, Calls and Put options. Everything else in options trading is a combination of( or a variation on) those two strategies. When you buy a call or a put option, you are obtaining the right to profit from a rise or fall in the underlying shares when they pass a specified strike price. People who buy call options are bullish on a given stock or market, while those who buy put options are bearish on the underlying stock issue or market. For call options holders to profit, they seek for the price of the underlying issue to rise above the strike price before the option contract expiration date arrives. The opposite is true for put option holders.
Premiums are what the Option trading newsletters are all about. Whether they advise buying a call or a put option, their goal is to increase the value of the premium that you receive when you close out the option contract. Premiums increase from stock market price and volatility movement.
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With all of the competition and challenges to trading the stock and option markets these days, all traders need some practical and helpful tools to give them a trading edge. Volatility has always been the key to swing trading, day trading, and option trading. It still does not change the fact that if you are on wrong end of such volatility, you can suffer significant losses that lead you to quit trading. It helps to explain why stock and options picking newsletters are flourishing today as never before.
Yet as with most things in life, not all financial investment newsletters are created equal. How do you know which one is most deserving of your precious time and hard-earned investment dollars today? In truth, there are probably investment newsletters available for every day of the year. It is impractical to subscribe to five or six newsletters at once in order to try them all out. Even test driving one newsletter at a time is a considerable use of both time and energy. All of these trading and investing newsletters also have their own individual cancellation rules, making it confusing to keep up with deadlines to close your trial subscription out.
We have solved these problems for you in this article. Through investigating literally dozens and dozens of these newsletters and writing reviews on the best ones, we have taken the guesswork out of the equation for you to compile a list of the five best, most highly recommended stock and option trading newsletters on the market these days. To do this, we considered each of the newsletters in this table above according to their capabilities in delivering the following:
- Swing Trading Newsletters – Traders who wish to use a strategy for buying and holding stocks for one to up to five days will find the swing trading strategy fits their personality and goals better. These newsletters are more ideal for their style of trading. Some significant technical analysis is involved with swing trading, which is why such a newsletter will need to follow those stocks with a significant price movement potential over a few days to a week. Gurus at swing trading newsletters are less concerned with fundamental analysis of their stocks or their own intrinsic value. Rather they focus on historical patterns and price trends of the issues that they analyze and chart.
- Day Trading Newsletters – Simply put, a great number of traders fear having to buy and hold a stock after the market has closed to possibly learn at the open the next day that the overall market has moved significantly against their position. It explains why so many solo traders choose to go with a day trading newsletter versus a swing trading one. These newsletters have built up services with a social online member community in many cases to try to help take the loneliness out of the profession. Not all of the newsletters reviewed here are day trading ones, others are options trading or swing trading picks newsletters. A few focus on more than one strategy at a time.
- Option Trading Newsletters – There are many traders who prefer the high stakes leverage and potential to make huge returns using option picks. These types of newsletters deliver this excitement in their calls. Solid options newsletters generate picks that can double or triple the initial amount invested in less than a week using their strategies. Not as many of these kinds of newsletters populate the financial trading space, and most of the ones that do so also cover day trading alongside their options in order to have a larger appeal.
- Real Time Alerts Service – This is a higher tech function of some stock picking newsletters which gives you the flexibility to not have to be glued to your email inbox all market trading day long. For those newsletters who believe that the timing is critical in these particular recommendations, they will want you to jump right in with a real time alert. It often makes an enormous difference between making or losing money on a trade. SMS text messaging usually powers these real time alerts. There are often audio alerts associated with them that can be activated on your laptop or desktop as well to make sure that you do not miss when they come out as you could do with an email.
- Email Alerts Service – A majority of the stock and options selecting newsletters these days provide a valuable additional service of sending out emails in the forms of buy or sell alerts if their underlying stock hits the target to buy or sell. This helps people new to trading especially as they have precise trading entry and exit points and also get a timely reminder that it is time to enter or exit a trade that the newsletter is following closely.
- Chat Room Option – As strange as it sounds at first, a number of the more full-service newsletters have addressed the issue of loneliness and confidence building by providing member-based chat room options to their services. These newsletters tend to offer a range of other services that make them more like full scale trading services as well. Moderators professionally manage these chat rooms and orchestrate the trades during market hours in such scenarios. It is highly likely that the guru will moderate part of the time and have other assisting staff who serve as moderators when he or she is busy studying the charts and investigating other future potential winning trades for the members.
- Supplemental Educational Materials Provided – Newsletters are a cornerstone of a solid trading strategy, but some of them take for granted that you have the necessary financial background to understand basic terms and trading concepts that go with this kind of a trading recommendation. To this effect, some of them offer a library of additional educational materials to their new and inexperienced members. Subscribers have the opportunity to learn while growing into a superior trader this way. The idea is that by educating the client, the newsletter will win his or her longer term loyalty.
- Service Pricing – Prices for these newsletters are far from consistent, as are the re-billing points. Some of them provide lifetime subscription pricing offers. Most use a monthly or quarterly pricing and renewal plan. A few provide significant discounts for taking a non-refundable annual subscription billing period. The most important component of a newsletter though is the quality and success rate of the author’s recommendations, but price is a major factor in deciding on which newsletter to take on.
- Money Back Guarantee – Once upon a time with trading newsletters, the standard in the industry was to offer a full and unconditional money back guarantee or cancellation period. This has changed dramatically in the last few years. A very few are agreeable to refunding already paid subscription costs to members now. This helps to explain why monthly and quarterly billing periods are so popular for new subscribers, who can not test out the newsletter any other way any longer.
Famous Last Words About Stock Picking Newsletters
No stock trading newsletter is the same. Think about our top five newsletters reviewed in this table. Capitalist Exploits focuses on sophisticated investors and even professional money managers. Jason Bond Picks mostly successfully attempts to be all things to all investors by offering picks on swing trading, day trading, and even options trading all under one flagship newsletter service. Biotech Breakouts concentrates its efforts on emerging biotech companies. Its typical holding periods are often for weeks as opposed to days. Petra Picks is only concerned with trading and recommending stocks in her newsletter. Finally, Investors Underground concentrates all its efforts on day trading stocks but provides huge free quantities of supplemental educational materials for subscribers to help them in their quest to better understand what and why they are trading. They offer some of these day trading for beginners video lessons freely to those who are not yet even subscribers.