Microsoft Stock Trading Tips

The date is 1st January 1975. MITS (Micro Instrumentation and Telemetry Systems) of Albuquerque has announced the first personal computer, MITS Altair 8800. Computer enthusiasts Bill Gates and Paul Allen are greatly inspired by MITS Altair 8800. Bill Gates and Paul Allen visualizes that the key to the future of personal computing lay in the unlimited potential of software. Gates and Allen recognizes that the compact design of BASIC Language (Beginner's All-Purpose Symbolic Instruction Code) makes it ideal for the limitations of this first personal computer, which has extremely restricted memory and processing power - and from that idea, Microsoft is born to Gates and Allen in 1975.

Most Successful Company in the World

Today, Microsoft Corporation has 91,000 full time employees and an average intraday Market Cap of $195 billion thus making it one the most successful company in the world. Microsoft is classified in technology sector and is a member of the following indexes: Dow Jones Composite, Dow Industrials, S&P 100, S&P 500, S&P 1500 Super Comp., Nasdaq 100 and Nasdaq composite ($compq).

One should consider trading Microsoft stocks because Microsoft is a good company run by intelligent Bill Gate et all, Microsoft stocks has always paid dividends, Microsoft stock is historically less noisy, Microsoft shares are not very prone to rumors and or manipulations, Microsoft Options are spread at workable intervals for spread strategies, Microsoft options have reasonably good volumes and above all, Microsoft stock trades are easily predictable by using the broad market indices of Nasdaq, SP500, Dow, Russell 3000 and NYSE.

Microsoft Corporation makes software products for computing devices through out the world. Microsoft sells Windows product family that comprises Windows Vista; Windows XP Professional and Home; Media Center Edition; Tablet PC Edition; and other Windows operating systems. Microsoft's Entertainment and Devices Division offers the Xbox video game system, including consoles and accessories, third-party games, games published under the Microsoft brand, and Xbox Live operations.

Buying Microsoft Stocks is Easy

Anyone can own Microsoft by buying Microsoft (symbol: MSFT) shares in the stock market. Buying the Microsoft stock is an easy thing but making money out of it is a different thing. You can buy Microsoft stock today and hold it for as long as it may take until it makes you a profit. It can take a year or even longer than a life time; it all depend on the price you bought it. When the Microsoft stock is below the price you bought it, just comfort yourself by imagining the number of Microsoft shares you own rather than the value of Microsoft shares you own. That way, it will work for you.

Life is Short in Stock Market

There are those who believe life is short in Stock Market. A Microsoft stock is nothing if it's not making money to you. Throw such stocks to the dogs and buy other companies that will make you good money.

Microsoft Stock Options are Spread at Workable Intervals for Spread Strategies

But one should consider trading Microsoft stocks because Microsoft is a good company run by intelligent Bill Gate et all, Microsoft stocks has always paid dividends, Microsoft stock is historically less noisy, Microsoft shares are not very prone to rumors and or manipulations, Microsoft Options are spread at workable intervals for spread strategies, Microsoft options have reasonably good volumes and above all, Microsoft stock trades are easily predictable by using the broad market indices of Nasdaq, SP500, Dow, Russell 3000 and NYSE.

Following Microsoft Stocks' Trading Directions with Precision

By intermarrying proven stocks trading tips and in consideration of only proven mathematical logics, the table below will provide you with logical trading tips and conditions that will beat everyone else's trades hands down on the Microsoft Stock. The table shows trades on Microsoft Stock from April 05, 2007 to the current date.

Gains Are Small Percentages Not Worth the Effort

If you look at the net profit realized from Microsoft Stock trades in the table shown (click on the table to view larger size of the table in a new window), to many people, these gains are small percentages perhaps not worth the effort. There are even some negatives. Then why should one risk trading these Microsoft Stock trades? The real gains are in between the tops of crests and bottoms of troughs. All you need to know is to be able to identify where the tops of crests and bottoms of troughs are. A 5% gain in Microsoft Stock may translate to 100% gain in its options. The opposite is also true. You may look at trading these small gains to generate better gains from options. Even where the gains are negative, you will still make neat profits in as long as you identify the tops of crests and bottoms of troughs.

Microsoft Calendar Spreads

You should be able to do this by buying Microsoft stocks and selling Microsoft call options. Better still is to trade using Microsoft calendar spreads of call options or put options. The good thing with calendar spreads is that you make money regardless of price direction. The only way to lose is if the prices of Microsoft stock moves too far in either direction in which case the stop loss will have stopped you before it happen. You can structure your calendar spread trades so you have a very wide profit zone, with a high probability the price of Microsoft stock will stay in the profit zone. Bear in mind that when you use calendar spread, you maybe funding your investment with 60% of other people's money and only 40% of your own money is at risk which is one great head start.

1. Look at the current trade entry which is a Short on Microsoft stock which was initiated on June 11, 2008 at a price of $27.12. You will notice that the only driving forces are Microsoft stock price and price of Nasdaq Composite index.

2. Looking further you will notice that what triggered that short trade was the conditions that (a) If Microsoft stock less than $27.95 AND (b) If $COMQ less than $2430.36, sell to open (short) Microsoft stock. You are able to achieve that by using an automatic multiple conditional order that you set and resides in your broker's trading system. And just incase the Microsoft stock could as well deviate significantly from the broader market of Nasdaq composite, there is the second trigger far below: If MSFT is less than $26.87, exit long Microsoft stock and or short Microsoft stock regardless of the broader market.

3. Immediately that trade was initiated, a automatic conditional stop loss order was set to prevent you from losing substantial amount of money had the Microsoft stock gone to the upside. In this case the automatic stop was buy to close (long) Microsoft stock on conditions (a) If Microsoft stock is greater than $30.53 AND (b) If $COMQ is greater than $2549.94. Luckily in this case the choice of the Microsoft stock trading direction was correct and Microsoft stock sunk far deep. You will also notice the alternate stop loss far above of exit the Microsoft short stock trades and or change to Microsoft long stock trading if MSFT is greater than $32.10.

4. What do you do next? You try to lock your gains by adjusting your automatic stop loss order with your broker. As you can see that automatic stop loss order has been adjusted until it is currently standing at (a) If Microsoft stock is greater than $20.94 AND (b) If $COMQ is greater than $1535.57, buy to close (long) Microsoft stock.

5. With time and if Microsoft stock sunk far deep, that automatic stop loss order will be adjusted downward accordingly (watch this page for updates).

6. Between June 11, 2008 and December 8th 2008, there have been tops of crests and bottoms of troughs which have been very profitable when traded to the downside. All you needed was only to be able to identify where the tops of crests and bottoms of troughs were

7..December 8th 2008: MSFT changed to upside trend.

Automatic Stop Loss Order

As Microsoft stock currently stand, it will remains in an uptrend (a) If Microsoft stock is greater than $18.47 AND (b) If $COMQ is greater than $1295.48. With time and as Microsoft stock moves, that automatic stop loss order will be adjusted accordingly (watch this page for updates) to protects your profits. Ask your stock broker for Automatic Stop Loss Orders. Should microsoft go wild against the general trend of $COMPQ, then there is another stoploss exit at $17.50.

QQQQ Power Shares Trading Tips

Losing a Stock Market Trade Can Be Painful

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Do not worry - the stock market trading is an industry plagued with skepticism.

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