24option - Number One for a Reason
Looking to start your career as a binary options trader but don't know where to start? Choosing the platform that's right for you is essential to your success. Working on a platform that fits your needs as a trader is one keys to trading success. 24option is one of those keys to unlocking your success.
24option is the world's leading binary options platform and has become the industry leading by implementing a platform that is both intuitive and very lucrative. Based in London, 24option has positioned itself in the heart of the financial markets and uses its location as way to leverage the latest financial products and deliver them to its traders.
24option's platform utilizes the latest technology to deliver lucrative yet simple financial products. Traders can up to 89% on a folder of the most profitable assets from around the world. 24option also offers a variety of High Yield assets that traders can earn up to 310% on certain assets, making 24option even more profitable. Yet 24option did not become the leading binary options platform with just lucrative options, but also by building an excellent team of analyst to assist traders and offering their traders exclusive tools to help improve their trading success.
24option has built an extensive education complete with hours of free videos, a free eBook, trader manual, daily market analyses and more. When you trade with 24option you receive unique benefits found nowhere else. Their video center has hours of free videos designed to educate traders on everything from binary options basics to proven trading strategies.
24option's mission is to introduce you to binary options trading. Depending on your level, a dedicated coach is at your disposal to train you how to trade. 24option interface is extremely robust and responsive. After selecting an asset, you can easily choose a strategy, simply click 'Buy' once you're ready. Unlike other brokers, 24option has a flexible comprehensive platform where you can choose the amount of your investment and the expiry time of the contract.
The platform at 24option has some built in features that give your trades that extra edge. Click on an asset and you'll see real-time data plus relevant news related to the asset so you'll know everything that's occurring so you can make the most informed investment. 24option also has an exclusive Early Closure option to that you can redeem your option immediately without waiting for the expiry time.
24option has become the world's leading binary option platform by giving its traders a lucrative and intuitive platform, excellent trader support, and an education center second to none in the industry.
Friday, March 30, 2012
Thursday, March 29, 2012
AUD/USD
Finally the set up on daily TF executed for a decent day trade. Any idea as to how long we had to wait for this trade to trigger? Refer to the previous chart!
Wednesday, March 28, 2012
Online Trading Strategies - When to Exit a Trade
Many traders have an entry-weighted strategy. They know the fundamentals. They've calculated the amount they will risk on a trade based on their position size and the placement of their stop loss. They've set signals for entry.
However, then they expect the trade to take care of itself, not realising that how they manage a trade after it has been opened is one of the most important factors in securing profits. Although a hard stop will allow you to get out of a losing trade without too much of a loss, what should you consider when exiting a winning trade?
Having a profit target sounds like a logical solution, but then how much of a profit should you target, and how do you know whether you've closed a position too early?
One method is by setting multiple targets. If you set your first target at the initial risk taken you have not only made back what you originally risked on the trade once this target is hit, but you are free to let your profits run on the remainder of the position.
The simplest way to let your profits run is to set a trailing stop. A trailing stop functions like a conventional stop loss in that it will close your position automatically should the market turn (closing it at that level, or the closest level through which the market trades). However, unlike a conventional stop loss, which remains static, a trailing stop follows the market as it moves in your favour. This means that if you were long on some Share CFDs valued at $20 each and you set a trailing stop 10 cents behind your starting price, if the share price rose to $23, your stop would rise to $22.90. If the share price then turned and triggered the stop, you would have made a profit of $2.90 per share (excluding commissions, overnight interest, and any other charges).
So you have curbed your risk with your first target, and let your profits run with a trailing stop. So how long should the process take?
A simple way to establish the length of the trade is to refer to the charts you are using - if you are waiting for an economic announcement and are looking at weekly charts, your trade may take weeks or months. If you are looking at a breakout of support that has been developing for weeks, your trade may last for a few days. If you're examining moving average crossovers on 5 minute charts, then your trade is unlikely to last more than a few hours.
When your time is up, it's time to exit the trade.
No second-guessing - traders that question their systems are ones that are more likely to lose their hard-won gains. And with developments in mobile trading, you can easily monitor your open positions from anywhere and exit at the right time.
Please keep in mind that CFDs and the foreign exchange are leveraged products, so it's possible to have losses that are greater than your initial investment. As CFD trading might not be suitable for all people, please educate yourself so you understand the risks.
However, then they expect the trade to take care of itself, not realising that how they manage a trade after it has been opened is one of the most important factors in securing profits. Although a hard stop will allow you to get out of a losing trade without too much of a loss, what should you consider when exiting a winning trade?
Having a profit target sounds like a logical solution, but then how much of a profit should you target, and how do you know whether you've closed a position too early?
One method is by setting multiple targets. If you set your first target at the initial risk taken you have not only made back what you originally risked on the trade once this target is hit, but you are free to let your profits run on the remainder of the position.
The simplest way to let your profits run is to set a trailing stop. A trailing stop functions like a conventional stop loss in that it will close your position automatically should the market turn (closing it at that level, or the closest level through which the market trades). However, unlike a conventional stop loss, which remains static, a trailing stop follows the market as it moves in your favour. This means that if you were long on some Share CFDs valued at $20 each and you set a trailing stop 10 cents behind your starting price, if the share price rose to $23, your stop would rise to $22.90. If the share price then turned and triggered the stop, you would have made a profit of $2.90 per share (excluding commissions, overnight interest, and any other charges).
So you have curbed your risk with your first target, and let your profits run with a trailing stop. So how long should the process take?
A simple way to establish the length of the trade is to refer to the charts you are using - if you are waiting for an economic announcement and are looking at weekly charts, your trade may take weeks or months. If you are looking at a breakout of support that has been developing for weeks, your trade may last for a few days. If you're examining moving average crossovers on 5 minute charts, then your trade is unlikely to last more than a few hours.
When your time is up, it's time to exit the trade.
No second-guessing - traders that question their systems are ones that are more likely to lose their hard-won gains. And with developments in mobile trading, you can easily monitor your open positions from anywhere and exit at the right time.
Please keep in mind that CFDs and the foreign exchange are leveraged products, so it's possible to have losses that are greater than your initial investment. As CFD trading might not be suitable for all people, please educate yourself so you understand the risks.
Tuesday, March 27, 2012
Monday, March 26, 2012
Sunday, March 25, 2012
Stock Options Trading Strategies - Your Virtual Assistant in Your Investments
Since you have landed on this page, it is assumed that you are into finding some reliable and useful stock options trading strategies to make use of, maximize and enjoy. Whether you are a seasoned trader and investor or a complete beginner or a certified first-timer, such strategies on options trading can surely provide you with such financial boost that you have always wished for. Such techniques on how you could handle your investments and resources as well as how you could deal with some inevitable and unexpected circumstances could now be readily available over the web. And in just a matter of a few clicks, you could be able to get what you want as well as what you need.
Giving you an edge among the others, such knowledge, expertise, skills, and experiences that you possess in order to succeed and win this venture are believed to be enough to work things out and enjoy such a stress-free early retirement - spending more years with your families and loved ones. Since everybody is looking forward to a worry-free life after decades of employment, everyone is also finding out some alternatives to help them sustain their lifestyle and provide their needs even after years of working. One great option is trying to learn how do investments and options trading work; thus, one has to find various means to gather helpful resources and inputs as to how to do these ventures right.
Needless to say, if one wants to make these endeavors work, he or she has to grab possibilities to widen horizons and avenues to obtain success and stability among his or her investments and options. One great thing to jumpstart is to do online visits and researches. Finding reliable pages and links to useful and practical stock options trading strategies is a great way to go. In a few searches, you would be directed to get some good access on some online groups, communities and forums in which first-hand sources tend to share inputs, thoughts and experiences on options trading and stocks investment.
Truly, this virtual assistance and support can be exquisitely taken into consideration - such an alternative that one could depend on. This is possibly one of the most remarkable stock options trading strategies that have ever been developed over time. Easy, convenient and accessible at an affordable rate, such make use of powerful principles of leverage, and can allow you to have such very large amount of money in a very short time. Great investments begin with small, little steps. Taking things one step at a time may be a safe idea. Impulsiveness and aggressiveness may lead you to wrong decisions and may heighten possible negative outcomes and impacts on your ventures.
Indeed, stock options trading may involve risks unsuitable for most investors because you can lose all of your money and be liable for additional unlimited losses depending on the strategies you employ. So before ever risking your hard-earned money, you must be certain as to what particular stock options trading strategies you would wish to embrace and adopt.
So, what are you waiting for? Grab such effective and useful stock options trading strategies today and see great results on your finances. Virtual assistance can surely be a great help. Give it a try now. Good luck!
Giving you an edge among the others, such knowledge, expertise, skills, and experiences that you possess in order to succeed and win this venture are believed to be enough to work things out and enjoy such a stress-free early retirement - spending more years with your families and loved ones. Since everybody is looking forward to a worry-free life after decades of employment, everyone is also finding out some alternatives to help them sustain their lifestyle and provide their needs even after years of working. One great option is trying to learn how do investments and options trading work; thus, one has to find various means to gather helpful resources and inputs as to how to do these ventures right.
Needless to say, if one wants to make these endeavors work, he or she has to grab possibilities to widen horizons and avenues to obtain success and stability among his or her investments and options. One great thing to jumpstart is to do online visits and researches. Finding reliable pages and links to useful and practical stock options trading strategies is a great way to go. In a few searches, you would be directed to get some good access on some online groups, communities and forums in which first-hand sources tend to share inputs, thoughts and experiences on options trading and stocks investment.
Truly, this virtual assistance and support can be exquisitely taken into consideration - such an alternative that one could depend on. This is possibly one of the most remarkable stock options trading strategies that have ever been developed over time. Easy, convenient and accessible at an affordable rate, such make use of powerful principles of leverage, and can allow you to have such very large amount of money in a very short time. Great investments begin with small, little steps. Taking things one step at a time may be a safe idea. Impulsiveness and aggressiveness may lead you to wrong decisions and may heighten possible negative outcomes and impacts on your ventures.
Indeed, stock options trading may involve risks unsuitable for most investors because you can lose all of your money and be liable for additional unlimited losses depending on the strategies you employ. So before ever risking your hard-earned money, you must be certain as to what particular stock options trading strategies you would wish to embrace and adopt.
So, what are you waiting for? Grab such effective and useful stock options trading strategies today and see great results on your finances. Virtual assistance can surely be a great help. Give it a try now. Good luck!
How To Choose The Best Forex Trading Strategy – Tips for Success!
When you make your first journey into the world of forex trading, you should be looking for a simple forex trading strategy that’s easy to understand. Once you feel comfortable and confident with beginner forex trading strategies, you can advance to more advanced systems.
Easy To Understand
First and foremost the forex trading system you choose should be one that you understand without a degree in finance. If you spend more time trying to understand the basics of your trading strategy than you do learning and implementing it, that is a strategy too complicated for your skill level.
This doesn’t mean that you’ll always have to stick to simple forex trading strategies, but until you learn more about the foreign exchange market its best. In fact many successful forex traders swear that the best forex trading strategy is one that is simple.
Easy To Understand
First and foremost the forex trading system you choose should be one that you understand without a degree in finance. If you spend more time trying to understand the basics of your trading strategy than you do learning and implementing it, that is a strategy too complicated for your skill level.
This doesn’t mean that you’ll always have to stick to simple forex trading strategies, but until you learn more about the foreign exchange market its best. In fact many successful forex traders swear that the best forex trading strategy is one that is simple.
Saturday, March 24, 2012
Learn Options Trading Today and Get Started With Confidence
Do you see yourself online most of the time? Are you fond of learning something new to help you provide some alternatives to increase the number of your income resources? Are you taking trade and investment into consideration to give you great and reliable options? If you've gotten yes for three times, you are indeed in a good page. Read on and see how you could learn options trading the easiest and most convenient ways.
Many people nowadays are into employment while some invest into businesses, investments, option trading, stocks and the like. They may have various means as to how they could save more for the future - providing the needs of their families, relatives and loved ones. But one thing is for sure, they want to have more savings, early and worry-free retirement, and such fun years after decades of being an employee. They all have one goal or objective to be achieved and that is to widen horizons of opportunities and avenues of increasing one's sources of future funds.
One great way to learn options trading is to do some reliable and rigid online research. Such involves exerting effort and allotting ample time and resources - making such endeavour work at your best. Getting through some reliable and credible online sites, forums and web communities and groups may also be helpful. In here, you are given good chances to extend your linkages and network as to how you could learn options trading the reliable and effective way. Meeting minds with some first-hand sources, you could be able to get the best inputs and tips you could get and could ever deserve. Good idea, join those online groups today and subscribe such newsletter, daily updates and the like.
Learn Options Trading - Its Basics and Terms
Primarily, a stock option is not a physical thing like holding shares in a company; otherwise, it is a contract or an agreement between two parties. If in any case, an option is an agreement, or contract, where one party agrees to deliver something to another party within a specific time period and for a specific price. One great distinction is how such investment procedure, style and technique take place in the journey of one investment vehicle. Options trading becomes prominent and a sure-hit because of its versatility.
Though every investment and trade venture has its own risks and losses, one can surely maximize his or her chances of grabbing the available gains and profits such options trading could ever hand you with. Such options may not seem good and effective to everyone; thus, you may be assured that once you learn options trading, you could do it the right way. No worries, no fuss. After all, when you equip yourself with the right tools, skills and attitudes on whatever ventures you are interested in pursuing, you are guaranteed that you are close to meeting and obtaining your goals. And that is to achieve financial freedom and security in time.
So what are you waiting for? Learn options trading today and see how you could find it so easy to start with your investment ventures. Jumpstart your endeavors today and obtain your financial goals at the soonest time possible. Good luck!
Many people nowadays are into employment while some invest into businesses, investments, option trading, stocks and the like. They may have various means as to how they could save more for the future - providing the needs of their families, relatives and loved ones. But one thing is for sure, they want to have more savings, early and worry-free retirement, and such fun years after decades of being an employee. They all have one goal or objective to be achieved and that is to widen horizons of opportunities and avenues of increasing one's sources of future funds.
One great way to learn options trading is to do some reliable and rigid online research. Such involves exerting effort and allotting ample time and resources - making such endeavour work at your best. Getting through some reliable and credible online sites, forums and web communities and groups may also be helpful. In here, you are given good chances to extend your linkages and network as to how you could learn options trading the reliable and effective way. Meeting minds with some first-hand sources, you could be able to get the best inputs and tips you could get and could ever deserve. Good idea, join those online groups today and subscribe such newsletter, daily updates and the like.
Learn Options Trading - Its Basics and Terms
Primarily, a stock option is not a physical thing like holding shares in a company; otherwise, it is a contract or an agreement between two parties. If in any case, an option is an agreement, or contract, where one party agrees to deliver something to another party within a specific time period and for a specific price. One great distinction is how such investment procedure, style and technique take place in the journey of one investment vehicle. Options trading becomes prominent and a sure-hit because of its versatility.
Though every investment and trade venture has its own risks and losses, one can surely maximize his or her chances of grabbing the available gains and profits such options trading could ever hand you with. Such options may not seem good and effective to everyone; thus, you may be assured that once you learn options trading, you could do it the right way. No worries, no fuss. After all, when you equip yourself with the right tools, skills and attitudes on whatever ventures you are interested in pursuing, you are guaranteed that you are close to meeting and obtaining your goals. And that is to achieve financial freedom and security in time.
So what are you waiting for? Learn options trading today and see how you could find it so easy to start with your investment ventures. Jumpstart your endeavors today and obtain your financial goals at the soonest time possible. Good luck!
Friday, March 23, 2012
Thursday, March 22, 2012
Wednesday, March 21, 2012
Do You Confuse Trading With Investing?
Trading and investing are often mistaken for the same thing when they are actually very different disciplines for making money.
The first thing to know about investing is that it is usually for a longer term with the intention of taking profit via dividends or selling the stock later when it has appreciated considerably in value. That is a well-known and common practice.
Trading is purchasing stocks (or Euros or Options or...?) with the idea of selling it for a capital gain; usually in a much shorter time frame than an investor would do. It is possible to trade down to the minute or second but most trades are for several minutes to less than a day; Hence the term "Day Trader". It is not uncommon for a day trader to make several small trades throughout the day, often in opposite directions of previous trades. They are commonly called "Scalpers".
Both of these approaches are legitimate ways to make money and each has its detractors and proponents. As with most things financial it is important to have a system and a plan. Without a system, investing and trading is simply gambling. There is no shortage of systems out there and my advice is to find one that you understand. Trying to use a "black box" type robot or automatic system is a very easy way to lose a lot of money quickly. Remember that the goal is to make money. If you can't understand the system you are using then you are setting yourself up for failure.
The next important factor is to ensure you have a plan. Again, a simple plan that you know and understand is the best approach. Even as a trader the long term goal is to minimize your losses. If you trade at a 80-95% success rate, you are still wrong 5-20% of the time. This is where the plan comes into play, the worst thing one can do is hang onto a bad trade and "hope" it will turn around. Hope is not a plan. Selling when you are 10% down is. With a good plan in place, when things go against you, it is easy to get out of a bad trade because you are following your plan. You take emotion out of it, you will minimize your loses, and live to trade another day with your account and confidence firmly in place.
In conclusion, decide what you are comfortable doing be it trading or investing, and then come up with a system and a plan to make it happen.
The first thing to know about investing is that it is usually for a longer term with the intention of taking profit via dividends or selling the stock later when it has appreciated considerably in value. That is a well-known and common practice.
Trading is purchasing stocks (or Euros or Options or...?) with the idea of selling it for a capital gain; usually in a much shorter time frame than an investor would do. It is possible to trade down to the minute or second but most trades are for several minutes to less than a day; Hence the term "Day Trader". It is not uncommon for a day trader to make several small trades throughout the day, often in opposite directions of previous trades. They are commonly called "Scalpers".
Both of these approaches are legitimate ways to make money and each has its detractors and proponents. As with most things financial it is important to have a system and a plan. Without a system, investing and trading is simply gambling. There is no shortage of systems out there and my advice is to find one that you understand. Trying to use a "black box" type robot or automatic system is a very easy way to lose a lot of money quickly. Remember that the goal is to make money. If you can't understand the system you are using then you are setting yourself up for failure.
The next important factor is to ensure you have a plan. Again, a simple plan that you know and understand is the best approach. Even as a trader the long term goal is to minimize your losses. If you trade at a 80-95% success rate, you are still wrong 5-20% of the time. This is where the plan comes into play, the worst thing one can do is hang onto a bad trade and "hope" it will turn around. Hope is not a plan. Selling when you are 10% down is. With a good plan in place, when things go against you, it is easy to get out of a bad trade because you are following your plan. You take emotion out of it, you will minimize your loses, and live to trade another day with your account and confidence firmly in place.
In conclusion, decide what you are comfortable doing be it trading or investing, and then come up with a system and a plan to make it happen.
Compare Spread Betting Companies
When you are researching brokers and deciding which company to open an account with, we all know that tight spreads are important, but why are tight spreads so important and should they be the only thing that you consider when making this decision?
The main cost to financial spread bettors is the spread, the difference between the offer and the bid, which is why the closer the spread the better the investment. Therefore it goes without saying, the wider the spread the more costly the investment to you, the investor. Finding a company that offers you the tightest spreads allows you to recover your investment quicker, unfortunately the way the spread works you always start by making a loss and need to wait for prices to move outside the spread in order to move into gain. So if you compare companies, the spreads that they offer should be the first thing that you consider.
Margin requirements are another important factor to consider when doing a spread betting comparison. Margin is the amount of money you need in your trading account in order to make a trade. A low margin requirement means that you are only required to deposit a small portion of the value before you can open a trade. As discussed, margin requirement and tight spreads are clearly not the only thing that you should be looking at when you compare companies. Remember that spread betting allows the trader to take a geared position so you can always lose more than your initial deposit. It is therefore important to consider how to minimise your risk by taking advantage of the various tools many brokers make available to you. This is an important consideration when researching spread betting companies as many companies offer a vast array of education and learning tools to help their traders minimise risk - which you should be looking to take advantage of. See below a selection of tools which you should consider when you are deciding which spread betting company to open an account with.
Services and tools that spread trading companies offer to minimise risk include; new account offers, 24 hour trading hours, automatic stop losses, guaranteed stop losses and trailing stops are other points that you should compare when looking at spread betting companies. Many spread betting companies also offer a wide selection of learning tools which you must take advantage of. Nobody expects you to jump into spread betting without any helps so always open a FREE demonstration account. Demo accounts allow you to trade with virtual money and receive access to a range of markets. Demo accounts allow you to familiarise yourself with the different trading platforms on offer without risking your own funds. Becoming familiar with trading platforms is vital when you start to trade with a new spread betting company as you will minimise the risk of making elementary mistakes which can be easily avoided. Finally, it is always advisable to stay "in the know" and attend some FREE seminars that the superior spread betting companies have on offer, if you can't physically get to them then try to log-on to an online seminar that let you to keep your trading knowledge up to date in the comfort of your own home or office.
Betting-Bible is a spread betting comparison website that compares all the top spread betting and CFD companies such as IG Index, Capital Spread and InterTrader for the aspects you should be interested in such as who has the tightest margins and who has the best account opening offers
The main cost to financial spread bettors is the spread, the difference between the offer and the bid, which is why the closer the spread the better the investment. Therefore it goes without saying, the wider the spread the more costly the investment to you, the investor. Finding a company that offers you the tightest spreads allows you to recover your investment quicker, unfortunately the way the spread works you always start by making a loss and need to wait for prices to move outside the spread in order to move into gain. So if you compare companies, the spreads that they offer should be the first thing that you consider.
Margin requirements are another important factor to consider when doing a spread betting comparison. Margin is the amount of money you need in your trading account in order to make a trade. A low margin requirement means that you are only required to deposit a small portion of the value before you can open a trade. As discussed, margin requirement and tight spreads are clearly not the only thing that you should be looking at when you compare companies. Remember that spread betting allows the trader to take a geared position so you can always lose more than your initial deposit. It is therefore important to consider how to minimise your risk by taking advantage of the various tools many brokers make available to you. This is an important consideration when researching spread betting companies as many companies offer a vast array of education and learning tools to help their traders minimise risk - which you should be looking to take advantage of. See below a selection of tools which you should consider when you are deciding which spread betting company to open an account with.
Services and tools that spread trading companies offer to minimise risk include; new account offers, 24 hour trading hours, automatic stop losses, guaranteed stop losses and trailing stops are other points that you should compare when looking at spread betting companies. Many spread betting companies also offer a wide selection of learning tools which you must take advantage of. Nobody expects you to jump into spread betting without any helps so always open a FREE demonstration account. Demo accounts allow you to trade with virtual money and receive access to a range of markets. Demo accounts allow you to familiarise yourself with the different trading platforms on offer without risking your own funds. Becoming familiar with trading platforms is vital when you start to trade with a new spread betting company as you will minimise the risk of making elementary mistakes which can be easily avoided. Finally, it is always advisable to stay "in the know" and attend some FREE seminars that the superior spread betting companies have on offer, if you can't physically get to them then try to log-on to an online seminar that let you to keep your trading knowledge up to date in the comfort of your own home or office.
Betting-Bible is a spread betting comparison website that compares all the top spread betting and CFD companies such as IG Index, Capital Spread and InterTrader for the aspects you should be interested in such as who has the tightest margins and who has the best account opening offers
Tuesday, March 20, 2012
What You Need to Know As a Beginning Day Trader
The first step of the journey is to understand the term "day trade". The SEC defines a day trade as "the purchasing and selling or the selling and purchasing of the same security on the same day". The term "intraday" is also used to describe such trading behavior.
Another term, which beginning traders must be aware of, is the so called "pattern day trading". The SEC defines this term as "executing four or more day trades within five business days". Understanding this term is important because once you become a pattern day trader you will have to comply with a special rule. This rule requires that you trade an account in which a balance of at least $25,000 is maintained at all times.
Having grasped the basic terms, the newcomer in the field can make a more prudent choice between the path of the swift intraday trade and the path of the long term investment. Many people argue over which path is best, but the truth is they both have their advantages and disadvantages.
Day trading, for example, can offer opportunities for a quick and modest profit. Unfortunately, the risk level of trading this way is very high and loses can equally be swift and devastating. In addition, trading is an intensive, devouring process which is usually more time consuming than long term investing.
In general, traders do not care whether a company has a potential to grow ten times in the future. Profits and future sales projections numbers may be overlooked by a trader. What they care about is whether the company can provide enough speculative opportunities during a given day regardless of its financial health.
While long term investors rely primarily on fundamental analysis, traders use predominantly technical analysis. In particular, successful day trading depends on the ability to correctly discern buy or sell signals emitted by daily price charts. Day traders believe that all the information available about a company is reflected in its current price and price history.
In order to effectively discover such signals, most day traders usually focus on:
(*) Volume
(*) Trends
(*) Formations - triangles, channels, flags, breakouts etc.
(*) Indicators - Stochastics, MACD, MA and RSI.
Most day traders usually put fundamental analysis out of main focus, however, fundamentals such as important company updates and news should not be ignored in the day trading process.
In short, one must get armed with knowledge, experience and perspicacity before entering the deep seas of day trading. With this arsenal at hand, traders have more chances to survive the volatile waves of the market and keep themselves financially alive until they reach the coveted treasure islands described in the tall tales of "expert" day traders.
Another term, which beginning traders must be aware of, is the so called "pattern day trading". The SEC defines this term as "executing four or more day trades within five business days". Understanding this term is important because once you become a pattern day trader you will have to comply with a special rule. This rule requires that you trade an account in which a balance of at least $25,000 is maintained at all times.
Having grasped the basic terms, the newcomer in the field can make a more prudent choice between the path of the swift intraday trade and the path of the long term investment. Many people argue over which path is best, but the truth is they both have their advantages and disadvantages.
Day trading, for example, can offer opportunities for a quick and modest profit. Unfortunately, the risk level of trading this way is very high and loses can equally be swift and devastating. In addition, trading is an intensive, devouring process which is usually more time consuming than long term investing.
In general, traders do not care whether a company has a potential to grow ten times in the future. Profits and future sales projections numbers may be overlooked by a trader. What they care about is whether the company can provide enough speculative opportunities during a given day regardless of its financial health.
While long term investors rely primarily on fundamental analysis, traders use predominantly technical analysis. In particular, successful day trading depends on the ability to correctly discern buy or sell signals emitted by daily price charts. Day traders believe that all the information available about a company is reflected in its current price and price history.
In order to effectively discover such signals, most day traders usually focus on:
(*) Volume
(*) Trends
(*) Formations - triangles, channels, flags, breakouts etc.
(*) Indicators - Stochastics, MACD, MA and RSI.
Most day traders usually put fundamental analysis out of main focus, however, fundamentals such as important company updates and news should not be ignored in the day trading process.
In short, one must get armed with knowledge, experience and perspicacity before entering the deep seas of day trading. With this arsenal at hand, traders have more chances to survive the volatile waves of the market and keep themselves financially alive until they reach the coveted treasure islands described in the tall tales of "expert" day traders.
Monday, March 19, 2012
Sunday, March 18, 2012
How to Create Day Trading Strategy and Investing Strategy Ideas
I always encourage traders to develop their own trading strategy, whether it be a day trading strategy, swing trading strategy or investing strategy. There are two main reasons why I believe it is important for traders to develop their own trading strategy.
First of all, developing a trading strategy requires the trader to strive for a greater knowledge of the market and its price movements.
Secondly, when a trader develops their own trading strategy they are tuned into how the strategy actually works, what will cause it not to work and they will be in a much better place to make adjustments when needed.
How to Create a Trading Strategy
This is the time consuming part, but can also be fun. For me the real fun is testing out what I come up with, but before we can test anything we need an idea. How I generate trading strategy ideas is by watching charts, both past and in real-time. No matter what time frame I am watching, I look for moves where there was/is good money to be made. Once I have found a move that looks profitable I start to ask myself questions about it:
What precipitated the move?
(*) Was it a chart pattern, a candlestick pattern, indicator level, trend line break, a news event or certain time of day? These are samples of the questions you want to attempt to answer.
(*) Did the move start before a certain session (NY, London, Tokyo, etc), near the close, mid-day? Is there any relation to an opening or closing market?
(*) Where could I enter?
(*) How could I have gotten into the trade?
(*) Looking at my answers from above, how could I take advantage of this opportunity in real-time?
(*) Does the pattern I am watching give an entry signal such as a break out of resistance/support/pattern, a certain amount of movement before it takes off, a certain time of day, a short term reversal pattern?
(*) Are there any indicators that aid in this?
(*) Does the stock/forex pair generally stay within an average range for the day?
(*) Look for anything that would allow you to enter into the big move as it is happening.
Where could I exit?
This is very important - more important than the entry!
(*) What signals are present once the move has topped or bottomed and started to reverse?
(*) If my entry criteria disappears, can I use that as an exit?
(*) How can you stay in the move to capture the bulk of it, but also not give up too much profit when it reverses?
(*) Are there any indicators that aid in this?
(*) Would a trailing stop have allowed me to capture a large profit? If so, what should my trailing stop be?
(*) Would a fixed number profit target work (ie. if stop is $100, then profit target is $350)
(*) Does the currency pair generally stay within a certain percentage move for the day? (all pairs and stocks have average movements per day)
Money management - is the trade worth taking?
(*) From the entry point you identify, what is your risk in dollars based on your position size?
(*) What is your potential profit?
(*) Based on the above two answers, was the trade worth taking? If the risk is too large, or you are getting into moves too late you will need to adjust. If you are giving up too much profit when prices reverse, you will also need to adjust.
Other things to consider
(*) Does this signal you identify for entry occur at other times, and not just before large moves? I.e are you going to get a lot of false signals?
(*) Can you cut down on false signals by only trading a certain time of day, adding indicators, or pattern filters?
In short, you want to analyze your charts and look for opportunities. Then examine those opportunities and construct how you turn those opportunities into real money...without exposing yourself to excessive risk.
Once you have gone through several opportunities in this fashion you will be well on your way to creating profitable trading strategy ideas. When you come with a trading strategy ideas that seems valid, see if the trading strategy would have worked on past movements. Then see if it works on upcoming movements. If it worked in the past is working in real-time then try using it with real money...you have created a trading strategy.
First of all, developing a trading strategy requires the trader to strive for a greater knowledge of the market and its price movements.
Secondly, when a trader develops their own trading strategy they are tuned into how the strategy actually works, what will cause it not to work and they will be in a much better place to make adjustments when needed.
How to Create a Trading Strategy
This is the time consuming part, but can also be fun. For me the real fun is testing out what I come up with, but before we can test anything we need an idea. How I generate trading strategy ideas is by watching charts, both past and in real-time. No matter what time frame I am watching, I look for moves where there was/is good money to be made. Once I have found a move that looks profitable I start to ask myself questions about it:
What precipitated the move?
(*) Was it a chart pattern, a candlestick pattern, indicator level, trend line break, a news event or certain time of day? These are samples of the questions you want to attempt to answer.
(*) Did the move start before a certain session (NY, London, Tokyo, etc), near the close, mid-day? Is there any relation to an opening or closing market?
(*) Where could I enter?
(*) How could I have gotten into the trade?
(*) Looking at my answers from above, how could I take advantage of this opportunity in real-time?
(*) Does the pattern I am watching give an entry signal such as a break out of resistance/support/pattern, a certain amount of movement before it takes off, a certain time of day, a short term reversal pattern?
(*) Are there any indicators that aid in this?
(*) Does the stock/forex pair generally stay within an average range for the day?
(*) Look for anything that would allow you to enter into the big move as it is happening.
Where could I exit?
This is very important - more important than the entry!
(*) What signals are present once the move has topped or bottomed and started to reverse?
(*) If my entry criteria disappears, can I use that as an exit?
(*) How can you stay in the move to capture the bulk of it, but also not give up too much profit when it reverses?
(*) Are there any indicators that aid in this?
(*) Would a trailing stop have allowed me to capture a large profit? If so, what should my trailing stop be?
(*) Would a fixed number profit target work (ie. if stop is $100, then profit target is $350)
(*) Does the currency pair generally stay within a certain percentage move for the day? (all pairs and stocks have average movements per day)
Money management - is the trade worth taking?
(*) From the entry point you identify, what is your risk in dollars based on your position size?
(*) What is your potential profit?
(*) Based on the above two answers, was the trade worth taking? If the risk is too large, or you are getting into moves too late you will need to adjust. If you are giving up too much profit when prices reverse, you will also need to adjust.
Other things to consider
(*) Does this signal you identify for entry occur at other times, and not just before large moves? I.e are you going to get a lot of false signals?
(*) Can you cut down on false signals by only trading a certain time of day, adding indicators, or pattern filters?
In short, you want to analyze your charts and look for opportunities. Then examine those opportunities and construct how you turn those opportunities into real money...without exposing yourself to excessive risk.
Once you have gone through several opportunities in this fashion you will be well on your way to creating profitable trading strategy ideas. When you come with a trading strategy ideas that seems valid, see if the trading strategy would have worked on past movements. Then see if it works on upcoming movements. If it worked in the past is working in real-time then try using it with real money...you have created a trading strategy.
Effective Options Trading Strategies - The Easiest Way to Investment and Trading Success
Since you are finding good and effective options trading strategies, you are led and guided to this page and now reading this post. Truly, such techniques are believed to be reliable and dependable because when one investor or trader is equipped with corresponding skills, experiences, knowledge and expertise necessary for trading, investment and other ventures of that sort, he or she may maximize his or her own ways of achieving success and stability in terms of finances. So get hooked with this post and be informed with the latest trends and tricks on how to meet financial security in no time and at your own pace and convenience.
Primarily, some options trading strategies may seem to be complex, complicated and advanced. However, once you get to adopt the game and learn how to execute the game plan, you are able to maximize your means and other available options trading strategies. One great way is to know how your new ventures may work for you and your finances. Learning from first-hand sources, it is highly recommended that as a novice or a beginner in the trading options and investments, you find several ways as to how you can equip yourself with the right things to do - setting your mind and your body for another endeavor that could lead you to a more stable and secure finances in the future.
The best way to get those options trading strategies at hand is to do rigid research. Since we now live in a society where technology and innovation have been useful and convenient tools in providing us reliable and valid resources - such inputs and references that we could really depend on and make use of, we could now just go online in a very few clicks, we are able to get what we want as well as what we need. There have been many great ways as to how we could find innovative and timely options trading strategies - those that could adhere to the needs of time as well as the demands of your ventures.
Truly, more and more people are getting interested in investments, trades, trading and the like, be it short-term or long-term plans and investments. With the individual's determination, enthusiasm, skills and expertise, he or she could really add good advantages and edges to win this game. More than those available reliable and effective options trading strategies and above anything else, you must ready yourself in all aspects and areas before pushing through any of these ventures. You must bear in mind that you have to prepare yourself financially, emotionally, mentally, intellectually and even spiritually.
Indeed, nothing beats a prepared, equipped, highly skilled, determined and motivated person in this business. You have to initially prepare oneself before posting your expectations and aiming to target your objectives. With that, find the most practical, useful and effective options trading strategies today and see how this can help you achieve your goals in life - attaining and obtaining financial freedom, security and stability in your own time, pace and convenience. Good luck!
Primarily, some options trading strategies may seem to be complex, complicated and advanced. However, once you get to adopt the game and learn how to execute the game plan, you are able to maximize your means and other available options trading strategies. One great way is to know how your new ventures may work for you and your finances. Learning from first-hand sources, it is highly recommended that as a novice or a beginner in the trading options and investments, you find several ways as to how you can equip yourself with the right things to do - setting your mind and your body for another endeavor that could lead you to a more stable and secure finances in the future.
The best way to get those options trading strategies at hand is to do rigid research. Since we now live in a society where technology and innovation have been useful and convenient tools in providing us reliable and valid resources - such inputs and references that we could really depend on and make use of, we could now just go online in a very few clicks, we are able to get what we want as well as what we need. There have been many great ways as to how we could find innovative and timely options trading strategies - those that could adhere to the needs of time as well as the demands of your ventures.
Truly, more and more people are getting interested in investments, trades, trading and the like, be it short-term or long-term plans and investments. With the individual's determination, enthusiasm, skills and expertise, he or she could really add good advantages and edges to win this game. More than those available reliable and effective options trading strategies and above anything else, you must ready yourself in all aspects and areas before pushing through any of these ventures. You must bear in mind that you have to prepare yourself financially, emotionally, mentally, intellectually and even spiritually.
Indeed, nothing beats a prepared, equipped, highly skilled, determined and motivated person in this business. You have to initially prepare oneself before posting your expectations and aiming to target your objectives. With that, find the most practical, useful and effective options trading strategies today and see how this can help you achieve your goals in life - attaining and obtaining financial freedom, security and stability in your own time, pace and convenience. Good luck!
Saturday, March 17, 2012
Practical Options Trading Strategies - Helping You Enjoy Your Life After Work
If you are up into investing and in trading, you better read on as this post aims to provide you some unbiased and realistic options trading strategies to get you started.
More and more people nowadays are looking forward to many alternative investments and other ventures to help them out in their finances. Whenever someone thinks of a better way to save money for tomorrow or for the future, investment and trade may come across their minds. Taking it as an option, it could actually provide them some opportunities of widening their horizons and avenues to prepare themselves when they retire from employment.
One great way is to get into investment or into trading options as these ventures may seem to work at their best especially if investors and traders get to have reliable and consistent access on some options trading strategies as well as other investment techniques - learning the best way to know how to handle them and to manage these funds and resources. Needless to say, if you get to learn how to do it best, you would surely have much higher possibilities in coming up with a more stable and secure investment and trading ventures.
Primarily, you could find these practical guides and tips on options trading strategies from the internet. Experts and experienced investors and traders intend to share some helpful and useful inputs over the web to encourage other people to open their doors to investment or even trading options as well as to motivate others who are into these ventures to pursue and push through with such as this may seem to give them a brighter and a more constant finances in the future.
Other experts create, facilitate and manage some online groups, communities and forums when people around the globe could possibly post and share their experiences, ideas and thoughts on investments and trades that you, newbies and beginners, could make use of as your newly found treasures in terms of those available options trading strategies over the web. These first-hand sources could be able to lend you a helping hand to assist you in your journey towards a better and a more reliable income or finances after work or employment.
Truly, many people worry about their retirement as to how they can survive their expenses as well as their families' especially when they get to stop working. All people dream of having a stress-free life after work or employment for several years. Living a worry-free retirement seems to be a dream for some but for those who are willing to take the risks and aspire to grab and maximize that investment and trading could offer them.
On the other light, investment and trading may actually involve risks, losses and gains; they may have ups and downs. But if you equip yourself with the right skills and attitudes, you would surely accelerate your way to its gains and ups. Indeed, it all depends to you as to how you prepare yourself - speeding your way to a worry-free retirement at your own pace and convenience.
So, why wait for so long if you could retire early and spend most of your time with your families, loved one and friends? Grab those practical options trading strategies today and see how you speed up your drive towards a healthier and wealthier lifestyle after employment. Good luck!
More and more people nowadays are looking forward to many alternative investments and other ventures to help them out in their finances. Whenever someone thinks of a better way to save money for tomorrow or for the future, investment and trade may come across their minds. Taking it as an option, it could actually provide them some opportunities of widening their horizons and avenues to prepare themselves when they retire from employment.
One great way is to get into investment or into trading options as these ventures may seem to work at their best especially if investors and traders get to have reliable and consistent access on some options trading strategies as well as other investment techniques - learning the best way to know how to handle them and to manage these funds and resources. Needless to say, if you get to learn how to do it best, you would surely have much higher possibilities in coming up with a more stable and secure investment and trading ventures.
Primarily, you could find these practical guides and tips on options trading strategies from the internet. Experts and experienced investors and traders intend to share some helpful and useful inputs over the web to encourage other people to open their doors to investment or even trading options as well as to motivate others who are into these ventures to pursue and push through with such as this may seem to give them a brighter and a more constant finances in the future.
Other experts create, facilitate and manage some online groups, communities and forums when people around the globe could possibly post and share their experiences, ideas and thoughts on investments and trades that you, newbies and beginners, could make use of as your newly found treasures in terms of those available options trading strategies over the web. These first-hand sources could be able to lend you a helping hand to assist you in your journey towards a better and a more reliable income or finances after work or employment.
Truly, many people worry about their retirement as to how they can survive their expenses as well as their families' especially when they get to stop working. All people dream of having a stress-free life after work or employment for several years. Living a worry-free retirement seems to be a dream for some but for those who are willing to take the risks and aspire to grab and maximize that investment and trading could offer them.
On the other light, investment and trading may actually involve risks, losses and gains; they may have ups and downs. But if you equip yourself with the right skills and attitudes, you would surely accelerate your way to its gains and ups. Indeed, it all depends to you as to how you prepare yourself - speeding your way to a worry-free retirement at your own pace and convenience.
So, why wait for so long if you could retire early and spend most of your time with your families, loved one and friends? Grab those practical options trading strategies today and see how you speed up your drive towards a healthier and wealthier lifestyle after employment. Good luck!
Friday, March 16, 2012
Trading EMini Futures With YouTube
Thinking about day trading for a living, but have had little or no success convincing yourself? Are you on your second/third trading account after blowing up your first? Banging your head against the wall with no hope in sight? You're not alone.
You might be lacking accountability. Are you and your mouse the only ones privy to the stupid trades you are taking by clicking on your order placement DOM? Are you the only one aware of the fact that playing a very expensive video game is an addiction and not an income? Are you clicking on trades a mile a minute justifying it by saying "ah, it's only simulated trading"? Are you taking unprofitable trades with your cash account because you taught yourself bad habits from the previous? Are you lacking consistency and rather than being responsible, you blame it on the market. Have you ever clicked like a "Mad Man" just to release your anger? If the answer is "No, Not Me", I say "BALONEY"!....Ok, well, maybe you don't do it ALL the time. But be honest.....have you ever?
Herein lies the answer of, ACCOUNTABILITY. If you feel you can do whatever the heck you want, to a certain degree, you will. If there aren't consequences other than financial, the mind can adapt and accept this as tolerable behavior. Once the sub-conscience categorizes this as acceptable behavior, one of the worst possible bad habits of day trading will have reared it's ugly head.
On the other hand, what if someone was looking over your shoulder and keeping your demons in check? What if all your actions, reactions and decisions were in plain view and had consequences in the form of answering to your peers? Wouldn't that deter your frivolous and habitually negative self destructive behavior?
YouTube to the rescue. Free video posting at it's finest. Opening up a YouTube account is as easy as opening up a new email account. Recording your screen and trades is as simple as finding a screen recording software that meets your requirements and budget. A charting platform that actually puts markers on your charts showing entry and exit decisions will leave nothing to the imagination and will play a large part in keeping you on your toes.
Once you get rolling, you will be recording your live screen trades. Talking your way through your trades. Putting your thoughts and actions out into the universe for the whole world to see and hear. You will be on your best behavior. You will finally have someone to answer to besides yourself. In your minds eye your peers will be watching and comparing themselves to you, and you to them. Before you know it, you are on the road to consistency, training your brain to act with accountability and responsibility. You'll be convincing and programming your sub-conscience mind with proper entry, exit, trade and money management techniques. In a nutshell, in time, you will advance to the next level by forcing yourself to act like a professional trader and thereby proving to yourself that you really do have what it takes.
You might be lacking accountability. Are you and your mouse the only ones privy to the stupid trades you are taking by clicking on your order placement DOM? Are you the only one aware of the fact that playing a very expensive video game is an addiction and not an income? Are you clicking on trades a mile a minute justifying it by saying "ah, it's only simulated trading"? Are you taking unprofitable trades with your cash account because you taught yourself bad habits from the previous? Are you lacking consistency and rather than being responsible, you blame it on the market. Have you ever clicked like a "Mad Man" just to release your anger? If the answer is "No, Not Me", I say "BALONEY"!....Ok, well, maybe you don't do it ALL the time. But be honest.....have you ever?
Herein lies the answer of, ACCOUNTABILITY. If you feel you can do whatever the heck you want, to a certain degree, you will. If there aren't consequences other than financial, the mind can adapt and accept this as tolerable behavior. Once the sub-conscience categorizes this as acceptable behavior, one of the worst possible bad habits of day trading will have reared it's ugly head.
On the other hand, what if someone was looking over your shoulder and keeping your demons in check? What if all your actions, reactions and decisions were in plain view and had consequences in the form of answering to your peers? Wouldn't that deter your frivolous and habitually negative self destructive behavior?
YouTube to the rescue. Free video posting at it's finest. Opening up a YouTube account is as easy as opening up a new email account. Recording your screen and trades is as simple as finding a screen recording software that meets your requirements and budget. A charting platform that actually puts markers on your charts showing entry and exit decisions will leave nothing to the imagination and will play a large part in keeping you on your toes.
Once you get rolling, you will be recording your live screen trades. Talking your way through your trades. Putting your thoughts and actions out into the universe for the whole world to see and hear. You will be on your best behavior. You will finally have someone to answer to besides yourself. In your minds eye your peers will be watching and comparing themselves to you, and you to them. Before you know it, you are on the road to consistency, training your brain to act with accountability and responsibility. You'll be convincing and programming your sub-conscience mind with proper entry, exit, trade and money management techniques. In a nutshell, in time, you will advance to the next level by forcing yourself to act like a professional trader and thereby proving to yourself that you really do have what it takes.
Understanding Trend Lines in E-Mini Trading: Types and Angles
I make it point to sketch in a trendline on the e-mini charts I trade. I don't use the automated trendline programs that have become very popular of late. No, I prefer to draw my trend lines manually using the tops of each bar range, as oppose to drawing trend lines based upon the close of each bar.
I feel I get a better understanding of the e-mini chart price movement when I employ a manual method for drawing lines; or maybe I have been drawing them in this fashion for so long that it is force of habit. Either way: I draw my lines by hand.
Trend lines can be classified in two distinct categories:
1. External Trend lines: External lines are, by far, the most common line most traders employ. The technique for drawing this flavor of e-mini trendline is similar to playing "connect the dots." When drawing an up sloping trend line, a trader will connect the valleys of a rising trend. Of course, when the price action violates, or passes through the line, the potential for a trade arises. Down sloping trend lines are draw in exactly the opposite fashion of up sloping line. A down sloping line connects the price peaks. The reason these lines are drawn, either up or down, is to get an idea of when a potential price change may occur.
2. Internal trend lines are a bit more esoteric and are generally not used by the average retail trader. Internal trend lines are drawn so that they rest on the flat peaks or valleys and they are known to pierce through existing price action. Analyst generally argue that internal e-mini trend lines represent the buying and selling behavior of the masses, while external lines represent the behavior of active e-mini traders who tend to trade at the extremes.
As I mentioned, most trend lines you will see will be of the external variety, with the internal lines used most by technical analysts.
These days, once a trendline is drawn, most traders are concerned with the direction of the line. Is it moving up or down? They are generally concerned with determining the direction of the trend.
Have you ever given any consideration of the angle of the line? You should; because the angle of a line can give you valuable information about what you can expect when you encounter a trendline violation.
For example, the steeper the trendline in a breakout, the poorer the performance in terms of potential gain. This research by Thomas Bulkowski shows empirically that a breakout angle of 30 to 45 degrees travelled the furthest to the upside or the downside, depending on whether the departure is a breakout or breakdown. On the other hand, break outs with a slope angle of 60 degrees or more tended to travel the least amount of distance. The conclusion? Departures from a trendline that were between 30 and 45 degree tended put the most money in a traders pocket, and sharp departures of 60 degrees or more tended put the least money in the traders pocket. Angle is important, yet it is seldom part of the trade consideration process of most e-mini traders. Why? They simply don't know the facts.
In summary, we have identified two distinct types of trend lines and defined each in a coherent manner. Further, we have discussed the angle of departure (relative to a horizontal line) of a breakout or breakdown and identified specific characteristics of each angle. We favor angle of departure in the 30 to 45 degree range, and understand that departure angles of 60 degrees or more tend to produce substandard results.
I feel I get a better understanding of the e-mini chart price movement when I employ a manual method for drawing lines; or maybe I have been drawing them in this fashion for so long that it is force of habit. Either way: I draw my lines by hand.
Trend lines can be classified in two distinct categories:
1. External Trend lines: External lines are, by far, the most common line most traders employ. The technique for drawing this flavor of e-mini trendline is similar to playing "connect the dots." When drawing an up sloping trend line, a trader will connect the valleys of a rising trend. Of course, when the price action violates, or passes through the line, the potential for a trade arises. Down sloping trend lines are draw in exactly the opposite fashion of up sloping line. A down sloping line connects the price peaks. The reason these lines are drawn, either up or down, is to get an idea of when a potential price change may occur.
2. Internal trend lines are a bit more esoteric and are generally not used by the average retail trader. Internal trend lines are drawn so that they rest on the flat peaks or valleys and they are known to pierce through existing price action. Analyst generally argue that internal e-mini trend lines represent the buying and selling behavior of the masses, while external lines represent the behavior of active e-mini traders who tend to trade at the extremes.
As I mentioned, most trend lines you will see will be of the external variety, with the internal lines used most by technical analysts.
These days, once a trendline is drawn, most traders are concerned with the direction of the line. Is it moving up or down? They are generally concerned with determining the direction of the trend.
Have you ever given any consideration of the angle of the line? You should; because the angle of a line can give you valuable information about what you can expect when you encounter a trendline violation.
For example, the steeper the trendline in a breakout, the poorer the performance in terms of potential gain. This research by Thomas Bulkowski shows empirically that a breakout angle of 30 to 45 degrees travelled the furthest to the upside or the downside, depending on whether the departure is a breakout or breakdown. On the other hand, break outs with a slope angle of 60 degrees or more tended to travel the least amount of distance. The conclusion? Departures from a trendline that were between 30 and 45 degree tended put the most money in a traders pocket, and sharp departures of 60 degrees or more tended put the least money in the traders pocket. Angle is important, yet it is seldom part of the trade consideration process of most e-mini traders. Why? They simply don't know the facts.
In summary, we have identified two distinct types of trend lines and defined each in a coherent manner. Further, we have discussed the angle of departure (relative to a horizontal line) of a breakout or breakdown and identified specific characteristics of each angle. We favor angle of departure in the 30 to 45 degree range, and understand that departure angles of 60 degrees or more tend to produce substandard results.
Thursday, March 15, 2012
GBP/USD
A pending long at 1.5635 bid price for more than 12 hours finally executed for a decent day trade.
Wednesday, March 14, 2012
Trading Today and Throughout History
Trading today has become popular. I am sure that each one of us has heard something about trading. But most people know only the definition, but know we can know what trading is about. Let us explore the details. First of all, what is trading? What does it mean and how does it work? Transfer of ownership of goods and services from one person to another. To make it easier it is sometimes called commerce or financial barter.
A network that allows this trade to operate is called a market. The original form of trade historically was barter, the direct exchange of goods and services. Later one side of the barter was the metals, precious metals like coins, a bill or paper money. Nowadays, modern traders instead, generally negotiate through a medium of exchange that is monitory.
It is believed to have taken place throughout much of recorded human history. It is believed that it existed even in Stone Age! It was very popular in ancient Egypt. Later, the fall of the Roman Empire, and the succeeding Dark Ages brought instability to Western Europe and a near collapse of the network in the western world.
One more important thing about it is that buying can be separated from selling, and one of the most important index options. Let us say that this system of appeared because money appeared. The invention of money, and later credit, paper money and non-physical money greatly simplified. Between two parties it is called bilateral trade, while between more than two t is called multilateral trade. With binary options strategy, one simply has to anticipate the direction of the price of the underlying asset, which can be an index, a commodity, a stock or a currency pair.
It is very simple, when you look closer. If they think that the price of the asset in the given period would rise, they buy a binary Call option and if they think that the price of the asset would fall, they buy a binary Put option. The returns with binary options are quite high, as the trading platforms offer an average of seventy percent returns for an in-the-money option. What are its benefits? What traders enjoy most with binary options trading is the availability of a whole lot of periods for trading. These may range from five minutes to the end of the week. This is a day trade option.
One more benefit is that the concept of binary options is quite simple as compared to other financial investments available for trading. Let us find out how the international option works. It is the exchange of goods and services across national borders. In most countries, this has been present throughout much of history, it is of economic, social, and political importance has increased in recent centuries, mainly because of Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing.
You must have heard something about Trade sanctions. They are against a specific country are sometimes imposed, in order to punish that country for some action. An embargo, a severe form of externally imposed isolation, is a blockade of all trade by one country on another. Many African countries know very well what is embargo.
A network that allows this trade to operate is called a market. The original form of trade historically was barter, the direct exchange of goods and services. Later one side of the barter was the metals, precious metals like coins, a bill or paper money. Nowadays, modern traders instead, generally negotiate through a medium of exchange that is monitory.
It is believed to have taken place throughout much of recorded human history. It is believed that it existed even in Stone Age! It was very popular in ancient Egypt. Later, the fall of the Roman Empire, and the succeeding Dark Ages brought instability to Western Europe and a near collapse of the network in the western world.
One more important thing about it is that buying can be separated from selling, and one of the most important index options. Let us say that this system of appeared because money appeared. The invention of money, and later credit, paper money and non-physical money greatly simplified. Between two parties it is called bilateral trade, while between more than two t is called multilateral trade. With binary options strategy, one simply has to anticipate the direction of the price of the underlying asset, which can be an index, a commodity, a stock or a currency pair.
It is very simple, when you look closer. If they think that the price of the asset in the given period would rise, they buy a binary Call option and if they think that the price of the asset would fall, they buy a binary Put option. The returns with binary options are quite high, as the trading platforms offer an average of seventy percent returns for an in-the-money option. What are its benefits? What traders enjoy most with binary options trading is the availability of a whole lot of periods for trading. These may range from five minutes to the end of the week. This is a day trade option.
One more benefit is that the concept of binary options is quite simple as compared to other financial investments available for trading. Let us find out how the international option works. It is the exchange of goods and services across national borders. In most countries, this has been present throughout much of history, it is of economic, social, and political importance has increased in recent centuries, mainly because of Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing.
You must have heard something about Trade sanctions. They are against a specific country are sometimes imposed, in order to punish that country for some action. An embargo, a severe form of externally imposed isolation, is a blockade of all trade by one country on another. Many African countries know very well what is embargo.
Tuesday, March 13, 2012
Trader - Beware the Cauldron of Churning Emotions
Trading may look simple but it is not easy to do. Recall a point from Shakespeare's Merchant of Venice: If to do were as easy as to know what were good to do, chapels had been churches and poor men's cottages prince's palaces. This is apropos of trading.
The markets often disappoint and inflict adversity. Those who engage in trading at one time or another experience losing in a trade, suffering frustrated expectations, traumatized self-confidence and the painful loss of money.
In the face of a potential or imminent trading loss (as when there is a sudden and unanticipated reversal of market direction), most traders begin to suffer emotional turmoil. Like every human being who perceives the oncoming or imminent danger of loss and pain, emotions set in and bodily changes occur. There is an increase of sugar in the blood. There is greater supply of blood in the arms and the legs. The pulse beats faster. There is tension in the blood vessels and muscles. The heart and breathing rhythm change. Even the condition of the skin and other tissues change. In short, bodily commotion is experienced and felt. Depending on the person's bodily makeup, the emotions may be more or less violent. As all these changes occur, the body is transformed into a cauldron of churning emotions of anxiety, fright and fear.
Those who studied and analyzed emotions, from Aristotle to the present, ascribe them to the instinct to survive, the instinct prompting a decision to take flight or fight. They comment that emotions are common to men and animals, that emotions are more closely related to instincts than to reason or intelligence. Emotions involve a feeling of an impulse to act or do something. While emotions dominate a man's mind or action, he does not listen to reason. And he is in danger of doing the very opposite of what reason will tell him is right. Emotional moments do not permit study and reflection. Because they tend to overwhelm. This has long been recognized in legal jurisprudence. This is why the person who acts under the influence of passion and obfuscation, under penal laws, may be found exempt from being penalized. An example is the defense of temporary insanity.
Unfortunately, no such exemption exists for a trader's unwise actions in the face of an imminent trading loss. Like they say in the Hispanic world of the game of Jai-Alai, "El fallo del juez es inapelable." (The verdict of the judge is not appealable). The trader must live with his loss and the pain and suffering it brings.
What does a trader have to do so his trading will not be adversely affected by emotions. The answer is to develop discipline. The discipline the trader needs is two-pronged. One prong is subjective; the other objective. The subjective prong requires him to look into his inner self, identify his emotional predispositions, and train himself to keep them under control. The control needed is not momentary control but habitual control developed by training. This includes forming habits of emotional response which restrain his emotions from taking over his actions. He must learn to direct his emotional energy to conform to right and reason. This is rigorous but doable and requires the investment of time.
The other prong is objective and simple in its execution. Create a good trading plan and stick with it. The discipline required is the development of the mindset to stick with the trading plan and trust it. This discipline extends to strictly refrain from second-guessing the trading plan during emotional moments.
The markets often disappoint and inflict adversity. Those who engage in trading at one time or another experience losing in a trade, suffering frustrated expectations, traumatized self-confidence and the painful loss of money.
In the face of a potential or imminent trading loss (as when there is a sudden and unanticipated reversal of market direction), most traders begin to suffer emotional turmoil. Like every human being who perceives the oncoming or imminent danger of loss and pain, emotions set in and bodily changes occur. There is an increase of sugar in the blood. There is greater supply of blood in the arms and the legs. The pulse beats faster. There is tension in the blood vessels and muscles. The heart and breathing rhythm change. Even the condition of the skin and other tissues change. In short, bodily commotion is experienced and felt. Depending on the person's bodily makeup, the emotions may be more or less violent. As all these changes occur, the body is transformed into a cauldron of churning emotions of anxiety, fright and fear.
Those who studied and analyzed emotions, from Aristotle to the present, ascribe them to the instinct to survive, the instinct prompting a decision to take flight or fight. They comment that emotions are common to men and animals, that emotions are more closely related to instincts than to reason or intelligence. Emotions involve a feeling of an impulse to act or do something. While emotions dominate a man's mind or action, he does not listen to reason. And he is in danger of doing the very opposite of what reason will tell him is right. Emotional moments do not permit study and reflection. Because they tend to overwhelm. This has long been recognized in legal jurisprudence. This is why the person who acts under the influence of passion and obfuscation, under penal laws, may be found exempt from being penalized. An example is the defense of temporary insanity.
Unfortunately, no such exemption exists for a trader's unwise actions in the face of an imminent trading loss. Like they say in the Hispanic world of the game of Jai-Alai, "El fallo del juez es inapelable." (The verdict of the judge is not appealable). The trader must live with his loss and the pain and suffering it brings.
What does a trader have to do so his trading will not be adversely affected by emotions. The answer is to develop discipline. The discipline the trader needs is two-pronged. One prong is subjective; the other objective. The subjective prong requires him to look into his inner self, identify his emotional predispositions, and train himself to keep them under control. The control needed is not momentary control but habitual control developed by training. This includes forming habits of emotional response which restrain his emotions from taking over his actions. He must learn to direct his emotional energy to conform to right and reason. This is rigorous but doable and requires the investment of time.
The other prong is objective and simple in its execution. Create a good trading plan and stick with it. The discipline required is the development of the mindset to stick with the trading plan and trust it. This discipline extends to strictly refrain from second-guessing the trading plan during emotional moments.
Monday, March 12, 2012
Stock Trading School - Gold - An Integral Part of Investment Portfolio
Gold has been an important part of economies all over the world since time immemorial. In fact, it was used as a form of currency for centuries. Today, however, it is one of those precious metal commodities used by investors to shield themselves from debt crises or any other currency crises. Let's take a closer look at the real importance of gold in any investment portfolio.
As mentioned above, gold was considered as a standard currency in the early economies. However, sometime during the late 20th century, gold began to be replaced by government backed currencies, and was changed into a commodity. This replacement was triggered by the Nixon shock of 1971, when the United States stopped backing the dollar with gold. By the start of the 21st century, economies around the world converted their currency into government backed currencies.
Now, these government backed currencies have a major fallacy, which was clearly seen during the recession of 2007. Currencies and other virtual stocks are not only dependent on the supply and demand and speculation of stock markets, but also on various political and economic policies and conditions. Moreover, there have been various instances of investment bubbles, where prices can rise and fall rapidly, and very unpredictably at that.
However, gold as a precious metal is protected against political or economic conditions. It is a commodity with real value that stays intact, especially when it comes to physical gold. As an investor, if you have some gold in your investment portfolio, you can be rest assured that you are protected to an extent from rocky stock markets or government debt crises.
When you talk about gold, you can invest either in physical gold or in paper gold through exchange-traded funds or ETFs. You can also buy gold through gold stocks or through mutual funds that trade with gold. However, buying gold stocks or mutual funds are just about the same as buying stocks, and stocks are always vulnerable to rises and falls in the market.
When it comes to buying gold in its physical form or gold bullion, there are some challenges in that arena as well. Gold bullion can be bought from various dealers or banks, but this calls for various storage arrangements as well. The storage and security of your gold bullion can be taken care of by other specialized companies.
The importance of gold as an investment option in today's market conditions is strengthened even more as governments are beginning to back up their gold bullion reserve. Asian countries such as China and India have expressed their interest to buy and store more gold. Moreover, government backed currencies such as the US dollar is losing its power steadily. The prices of gold, however, are set to go up as supplies have already become negligible and the demand is increasing by the day.
Thus, it can be clearly seen that gold is a great way to safeguard your investments from any unforeseen downfall of stocks or national currencies.
As mentioned above, gold was considered as a standard currency in the early economies. However, sometime during the late 20th century, gold began to be replaced by government backed currencies, and was changed into a commodity. This replacement was triggered by the Nixon shock of 1971, when the United States stopped backing the dollar with gold. By the start of the 21st century, economies around the world converted their currency into government backed currencies.
Now, these government backed currencies have a major fallacy, which was clearly seen during the recession of 2007. Currencies and other virtual stocks are not only dependent on the supply and demand and speculation of stock markets, but also on various political and economic policies and conditions. Moreover, there have been various instances of investment bubbles, where prices can rise and fall rapidly, and very unpredictably at that.
However, gold as a precious metal is protected against political or economic conditions. It is a commodity with real value that stays intact, especially when it comes to physical gold. As an investor, if you have some gold in your investment portfolio, you can be rest assured that you are protected to an extent from rocky stock markets or government debt crises.
When you talk about gold, you can invest either in physical gold or in paper gold through exchange-traded funds or ETFs. You can also buy gold through gold stocks or through mutual funds that trade with gold. However, buying gold stocks or mutual funds are just about the same as buying stocks, and stocks are always vulnerable to rises and falls in the market.
When it comes to buying gold in its physical form or gold bullion, there are some challenges in that arena as well. Gold bullion can be bought from various dealers or banks, but this calls for various storage arrangements as well. The storage and security of your gold bullion can be taken care of by other specialized companies.
The importance of gold as an investment option in today's market conditions is strengthened even more as governments are beginning to back up their gold bullion reserve. Asian countries such as China and India have expressed their interest to buy and store more gold. Moreover, government backed currencies such as the US dollar is losing its power steadily. The prices of gold, however, are set to go up as supplies have already become negligible and the demand is increasing by the day.
Thus, it can be clearly seen that gold is a great way to safeguard your investments from any unforeseen downfall of stocks or national currencies.
Market participants
Unlike a stock market, the foreign exchange market is divided into levels of access. At the top is the interbank market, which is made up of the largest commercial banks and securities dealers. Within the interbank market, spreads, which are the difference between the bid and ask prices, are razor sharp and not known to players outside the inner circle. The difference between the bid and ask prices widens (for example from 0-1 pip to 1-2 pips for a currencies such as the EUR) as you go down the levels of access. This is due to volume. If a trader can guarantee large numbers of transactions for large amounts, they can demand a smaller difference between the bid and ask price, which is referred to as a better spread. The levels of access that make up the foreign exchange market are determined by the size of the "line" (the amount of money with which they are trading). The top-tier interbank market accounts for 53% of all transactions. From there, smaller banks, followed by large multi-national corporations (which need to hedge risk and pay employees in different countries), large hedge funds, and even some of the retail market makers. According to Galati and Melvin, “Pension funds, insurance companies, mutual funds, and other institutional investors have played an increasingly important role in financial markets in general, and in FX markets in particular, since the early 2000s.” (2004) In addition, he notes, “Hedge funds have grown markedly over the 2001–2004 period in terms of both number and overall size”. Central banks also participate in the foreign exchange market to align currencies to their economic needs.
Foreign exchange
Foreign exchange fixing is the daily monetary exchange rate fixed by the national bank of each country. The idea is that central banks use the fixing time and exchange rate to evaluate behavior of their currency. Fixing exchange rates reflects the real value of equilibrium in the market. Banks, dealers and traders use fixing rates as a trend indicator.
The mere expectation or rumor of a central bank foreign exchange intervention might be enough to stabilize a currency, but aggressive intervention might be used several times each year in countries with a dirty float currency regime. Central banks do not always achieve their objectives. The combined resources of the market can easily overwhelm any central bank. Several scenarios of this nature were seen in the 1992–93 European Exchange Rate Mechanism collapse, and in more recent times in Southeast Asia.
Central banks
National central banks play an important role in the foreign exchange markets. They try to control the money supply, inflation, and/orinterest rates and often have official or unofficial target rates for their currencies. They can use their often substantial foreign exchange reserves to stabilize the market. Nevertheless, the effectiveness of central bank "stabilizing speculation" is doubtful because central banks do not go bankrupt if they make large losses, like other traders would, and there is no convincing evidence that they do make a profit trading.
Investment management firms
Investment management firms (who typically manage large accounts on behalf of customers such as pension funds and endowments) use the foreign exchange market to facilitate transactions in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.
Some investment management firms also have more speculative specialist currency overlay operations, which manage clients' currency exposures with the aim of generating profits as well as limiting risk. While the number of this type of specialist firms is quite small, many have a large value of assets under management), and hence can generate large trades.
About 70% to 90% of the foreign exchange transactions are speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency. Hedge funds have gained a reputation for aggressive currency speculation since 1996. They control billions of dollars of equity and may borrow billions more, and thus may overwhelm intervention by central banks to support almost any currency, if the economic fundamentals are in the hedge funds' favor.
Commercial companies
An important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators, and their trades often have little short term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when very large positions are covered due to exposures that are not widely known by other market participants.
Money transferremittance companies
Money transfer companies/remittance companies perform high-volume low-value transfers generally by economic migrants back to their home country. In 2007, theAite Group estimated that there were $369 billion of remittances (an increase of 8% on the previous year). The four largest markets (India, China, Mexico and thePhilippines) receive $95 billion. The largest and best known provider is Western Union with 345,000 agents globally followed by UAE Exchange
Bureaux de change or currency transfer companies provide low value foreign exchange services for travelers. These are typically located at airports and stations or at tourist locations and allow physical notes to be exchanged from one currency to another. They access the foreign exchange markets via banks or non bank foreign exchange companies.
Non-bank foreign exchange
Non-bank foreign exchange companies offer currency exchange and international payments to private individuals and companies. These are also known as foreign exchange brokers but are distinct in that they do not offer speculative trading but rather currency exchange with payments (i.e., there is usually a physical delivery of currency to a bank account).
It is estimated that in the UK, 14% of currency transfers/payments are made via Foreign Exchange Companies. These companies' selling point is usually that they will offer better exchange rates or cheaper payments than the customer's bank. These companies differ from Money Transfer/Remittance Companies in that they generally offer higher-value services.