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Posts Tagged ‘Day Trading’

Technical analysis of the stock market, or any other market such as Forex, Bonds, Futures, is how most traders and investors make their trading decisions. This is as opposed to fundamental analysis which most people more agree is pretty much done as a way of making trading decisions, unless of course you are Warren Buffet!.

You only have to think back to major stock market scams like Enron to know that it is almost impossible for the average, and even very sophisticated fund manager or hedge fund trader to really know what the real financial state of a company is.

Just by reading the balance sheet and other quarterly reports they release gives you a very limited insight into the real health of the company. Whereas the technical charts of the company tend to give the real picture of what the market thinks of the value of the company. In the case of Enron even simple technical analysis told you to SELL when the stock was in the $80-90 range, this is why technical analysis of stocks is so popular.

So what are the secrets to technical analysis?, I’m about to tell you, here are my golden rules:

* Only use 3-5 simple technical analysis indicators

* Make sure that you understand how the indicators that you have selected work, what the parameter settings are and in what market conditions they are effective

* After selecting your indicators and parameter settings don’t mess with them.

The real secret to technical analysis is to get VERY familiar with your choosen indicators, and really this can only be done by watching and studying the market, so that you get to the point that you TRUST them.

The fact is that in any market, for each bar period, there are only 5 pieces of information, the open, close, high, low and volume, yet there are now hundreds of indicators. Most of these indicators are displaying much the same information and so are redundant.

For the record my set of indicators are:

* 4 Simple Moving Averages

* Bollinger Bands

* MACD

* Stochastics

But the way I use them is quite special, to learn more about how to become an expert at technical analysis visit:

Top Dog Trading Review

A767342187

Contracts in the futures trading market are between a buyer and seller. The contract states that the seller must provide the buyer a very specific quantity of a certain item, such as grain, oil etc, for a price agreed today, but at a date in the future.

It is important not to get confused about what the word “future” refers to. Futures traders are not day trading futures prices, we are trading today’s prices, but the settlement is taking place in the future. So we buy if we think prices will increase and we sell if we think prices will drop.

If I buy (or sell) a futures contract today, I don’t have to hold it until the contract expires, I can simply decide to sell it (or buy it) in the market at the prevailing price. Futures contracts are bought and sold in the controlled environment of a futures exchange, such as the Chicago Board of Trade (CBOT) in the U.S. and the London International Futures and Options Exchange (LIFFE) in the U.K.

Futures were originally developed to help offset the risks and uncertainties experienced by farmers and merchants due to the varying supply and demand for produce. Take for example a coffee bean plantation farmer. The price that he will receive for his beans will vary according to the vagaries of supply and demand. In a year when supplies are limited and demand is high, prices will be high. In a year when demand falls and the supply is plentiful, the price will fall.

The use of futures trading in the farming industry has many benefits such as allowing the farmer to be able to plan ahead as he already knows what kind of profit he can expect from his crop of say coffee beans. The price paid may not be the best and the merchant may make a killing but the risk is reduced.

By using a type of futures contract long before harvest time both the farmer and the merchant can reduce their risks by setting the price.

Today the futures market has changed quite a bit from the historical origins. There are now futures contracts on financial instruments such as stocks and bonds. broadly speaking futures contracts are either commodity type products or financial type products. It is usually not that important because they are rarely held until expiration.

The CBOT was started in 1848 for the benefit of the farmers and merchants. The exchange was to regulate both the quality and quantity of the actual crop that was being traded. Today the CBOT offers many contracts on items like wheat, oil, silver, corn, bonds and soybeans.

The Chicago Mercantile Exchange (CME) was created about 1919 and has managed a futures market in such things as pork bellies, live cattle and the SP500 index.

In London the biggest financial futures exchange is the London International Futures and Options Exchange (LIFFE). Here financial instruments such as the FTSE100, the GILT and Short Sterling are traded, the exchange is relativily new and opened around 1982.

EUREX started it’s life as the DTB, the German futures exchange. The DTB has always been an electronic exchange and started back in 1990, when electronic exchanges were still considered to be inferior to the open outcry system.

The German Bund was a very heavily traded financial contract and one of the biggest markets on the LIFFE.

Many markets in futures have very high volumes and hence very good liquidity, these are attractive markets for traders. The high leverage means that profits can be made very fast when the market moves, however money can also be lost very fast. If you want to learn to trade futures, or are even thinking of trading futures make sure that you learn as much as you can before using real money.

A765487534

Technical analysis of the stock market, or any other market such as Forex, futures, is how most traders and investors make their trading decisions. This is as opposed to fundamental analysis which most people more agree is pretty much done as a way of making trading decisions, unless of course you are Warren Buffet!.

You only have to think back to major stock market scams like Enron to know that it is almost impossible for the average, and even very sophisticated fund manager or hedge fund trader to really know what the real financial state of a company is.

Just by reading the balance sheet and other quarterly reports they release gives you a very limited insight into the real health of the company. Whereas the technical charts of the company tend to give the real picture of what the market thinks of the value of the company. In the case of Enron even simple technical analysis told you to SELL when the stock was in the $80-90 range, this is why technical analysis of stocks is so popular.

So what is the secret to technical analysis?, I’m about to tell you, here are my golden rules:

* Only use 3-5 simple technical analysis indicators

* Make sure that you understand how the indicators that you have selected work, what the parameter settings are and in what market conditions they are effective

* After selecting your indicators and parameter settings don’t mess with them.

The real secret to technical analysis is to get VERY familiar with your choosen indicators, and really this can only be done by watching and studying the market, so that you get to the point that you TRUST them.

The fact is that in any market, for each bar period, there are only 5 pieces of information, the open, close, high, low and volume, yet there are now hundreds of indicators. Most of these indicators are displaying the same information and so are redundant.

For the record my set of indicators are:

* 4 Simple Moving Averages

* Bollinger Bands

* MACD

* Stochastics

But the way I use them is quite special, to learn more about how to become an expert at technical analysis visit:

Top Dog Trading Review

A907156389

Technical analysis of the stock market, or any other market such as Forex, futures, is how most traders and investors make their trading decisions. This is as opposed to fundamental analysis which most people more agree is pretty much done as a way of making trading decisions, unless of course you are Warren Buffet!.

You only have to think back to major stock market scams like Enron to know that it is almost impossible for the average, and even very sophisticated fund manager or hedge fund trader to really know what the real financial state of a company is.

Just by reading the balance sheet and other quaterly reports they release gives you a very poor insight into the real health of the company. Whereas the technical analysis charts of the company tend to give the real picture of what the market thinks of the value of the company. In the case of Enron even simple technical analysis told you to SELL when the stock was in the $80-90 range, this is why technical analysis of stocks is so popular.

So what are the secrets to technical analysis?, I’m about to tell you, here are my golden rules:

* Only use 3-5 simple technical analysis indicators

* Make sure that you understand how the indicators that you have selected work, what the parameter settings are and in what market conditions they are effective

* After selecting your indicators and parameter settings don’t mess with them.

The real secret to technical analysis is to get VERY familiar with your choosen indicators, and really this can only be done by watching and studying the market, so that you get to the point that you TRUST them.

The fact is that in any market, for each bar, there are only 5 pieces of information, the open, close, high, low and volume, yet there are now hundreds of indicators. Most of these indicators are displaying the same information and so are redundant.

For the record my set of indicators are:

* 4 Simple Moving Averages

* Bollinger Bands

* MACD

* Stochastics

But the way I use them is quite special, to learn more about how to become an expert at technical analysis visit:

Top Dog Trading Review

A875645387

Hoping and praying that the stocks that you just bought will go up is not the best strategy to use, however it is the one very often used by the average Joe stock trader who is stock trading internet. The only good point they have is that in bull markets most stocks will go up.

Statistics show that in a bull market about 75% of the stocks will follow the general trend and go up, and in a bear market 75% will also go down. Trading with the trend is the best way to trade as 9 out of 12 stocks will follow the trend and give you the best chance of making gains on your stock purchases.

But what if you own some good stocks and don’t want to sell when the market is clearly going down, or about to go down?. There are a couple of tactics that you can consider, both of which involve the use of options, CALL options and PUT options. There is the widely known strategy called Covered Calls, and the much lesser known one called the Married Put.

If you are going to trade options it is important that before you start trading you get the best option trading education that you can. You should also practice stock trading until you are comfortable with the process. This is a very important point that must be taken seriously, if you don’t understand the terminology and theory then you should not be trading options. If Put option, Call option, Married Put and Covered Call are new to you then don’t trade until you have studied sufficiently.

Selling call options against your stock in 100 share increments is the basis of the covered call strategy and it can provide about a 2-7% buffer against the loss in stock price. However a bigger drop in stock price will not be compensated for using the covered call strategy, in general.

Stocks in a bear market, and even in a bull market, can drop quickly on news or earnings releases, as much as 15 to 40% within a month. Using covered calls to protect your stocks will only provide limited protection of less than 7% at best and so will not save your account if the stock takes a 40% tumble.

The better solution to providing downside stock protection is the option strategy called the Married Put. As the name suggests the PUT that you buy is used to provide protection when the stock goes down because Put options will increase in value when the stock decreases in value. The term married is used because the option that is selected has to be very compatible with the stock, in other words a good match, if the strategy is to work.

The selection of the best Put option is not straight forward and involves several criteria which are listed below:

1. The strike price of the option

2. The current stock price

3. Choice of options, in or out of the money

4. Put expiration time

Even though the married Put protection only has a limited life span if offers much more protection than the covered call. It can provide as much as 95% loss recovery in the event of a significant drop in the stock price.

The downside of the good protection is that you have buy the Put which is a cash debit whereas the covered call is a credit. But there are ways of offsetting this expense and there is much more to this strategy when executed correctly. The Married Put can be made to pay for itself and used to generate good gains if the market, or stock to be specific, moves a lot.

The general idea of the Collar Trade is to combine the covered call and married Put strategy into one, this is what is called the Collar Trade. In effect you put a collar around the stock, sell a call and buy a PUT. If you do this correctly most of the cost of the Put can be offset by the credit from the covered call so you can protect your stock at almost no cost. Yes this is a great strategy which the general public is unfortunately very ignorant of, and most brokers don’t understand.

The strategy that I have outlined above is unknown to the average stock market trader but is one of the best trading systems you could have.

If you are about to start, or are already in the process of learning how to trade, or day trade, you may have already been searching the internet using Google or Yahoo for day trading training education, tools, software or seminars, and have found that there is a lot on offer.

For example “trading course” brings up 758,000 pages in Google and “trading seminar” another 109,000 pages, the question is what should you be looking for when buying trading education. In this article I’ll point out some of the things to check before spending your hard earned money on your trading education.

1. If buying a live trading seminar check carefully where the location will be, have you fully priced the expensive of travel, hotels, meals and car rental?, it may be much more than you expect.

2. What is the return policy, this can vary widely between trading education companies, for some you only have a 3 day cooling off period while for others you may have up to 12 noon or the end of the 1st day to ask for your money back if you decide this was not.

3. For a live seminar are you also given a set of DVD’s of the same or similar content?, so often live seminars fail to explain all the very important details involved in day trading. Having a set of DVD’s enables you to watch the content over and over again at home until you get it. Beware that some companies will bill you extra for the DVD’s even though you have already paid for a live trading seminar.

4. Check the internet for feedback on the company and trading seminar. Use search terms like “company name review”, “company name refunds” or “company name scam”. Often reviews are posted in trading forums, these can be found by searching for terms like “trading forum”.

5. A head of time try and find out exactly who will be presenting the seminar. The last thing that you want is a professional “teacher” giving a seminar on trading, what you want is a “trader” who makes his living by trading and only does a few seminars a month out of interest and for personal reasons, not because they need the money.

6. If you are buying an online day trading or investing course where the content is 100% viewed online you should get at least a 30 day 100% money back guarantee, if not stay away.

7. If you are buying a course or trading seminar in which DVD’s and manuals are being shipped to your house, again you should expect a 30 day 100% money back return policy, less shipping and handling, again if not stay away.

8. It’s very likely that you will have questions after watching either the live or online course or watching the DVD’s, make sure that you will be able to ask questions and have them answered, either one on one or in a forum setting.

9. Last, but certainly not least, before buying do a lot of window shopping. The price for trading seminars, either stocks, options, Forex or futures varies widely from $47 for an ebook to over $25K for a comprehensive set of training. You may be able to find the same education much cheaper at a different company.

Also be aware that day trading education and seminar companies are always running specials and offering discounts, before you buy search the internet carefully for any deals and also call the company directly and ask for a low price guarantee. In other words make sure that you are paying the lowest price that they are offering the product for.

A756452359

Contracts in the futures market are between a buyer and seller. The contract states that the seller must provide the buyer a very specific quantity of a certain item, such as cotton, oil etc, for a price agreed today, but at a date in the future.

It is important not to get confused about what the word “future” refers to. Futures traders are not day trading futures prices, we are trading today’s prices, but the settlement is taking place in the future. So we buy if we think prices will increase and sell if we think prices will drop.

If I buy (or sell) a futures contract today, I don’t have to hold it until the contract expires, I can simply decide to sell it (or buy it) in the market at the prevailing price. Futures contracts are bought and sold in the controlled environment of a futures exchange, such as the Chicago Board of Trade (CBOT) in the U.S. and the London International Futures and Options Exchange (LIFFE) in the U.K.

Futures were originally developed to help offset the risks and uncertainties experienced by farmers and merchants due to the varying supply and demand for produce. Take for example a coffee bean plantation farmer. The price that he will receive for his beans will vary according to the vagaries of supply and demand. In a season when supplies are limited and demand is high, prices will be high. In a year when demand falls and the supply is plentiful, the price will fall.

The use of futures trading in the farming industry has many benefits such as allowing the farmer to be able to plan ahead as he already knows what kind of profit he can expect from his crop of say coffee beans. The price paid may not be the best and the merchant may make a killing but the risk is reduced.

By using a type of futures contract long before harvest time both the farmer and the merchant can reduce their risks by setting the price.

Today the futures market has changed a lot from the historical origins. There are now many futures contracts on financial instruments such as stocks and bonds. broadly speaking futures contracts are split between commodity type products and financial type products. It is usually not that important because they are rarely held until expiration.

The CBOT was started in 1848 for the benefit of the farmers and merchants. The exchange was to regulate the quality and quantity of the actual crop that was being traded. Today the CBOT offers many contracts on items like wheat, oil, silver, corn, bonds and soybeans.

The Chicago Mercantile Exchange (CME) was created about 1919 and has managed a futures market in such things as pork bellies, live cattle and the SP500 index.

In London the biggest financial futures exchange is the London International Futures and Options Exchange (LIFFE). Here financial instruments such as the FTSE100, the GILT and Short Sterling are traded, the exchange is relativily new and opened around 1982.

EUREX started life as the DTB, the German futures exchange. The DTB has always been an electronic exchange and started back in 1990, when electronic exchanges were still considered to be inferior to the open outcry system.

The German Bund was a heavily traded financial contract and one of the biggest markets on the LIFFE.

Many futures markets have very high volumes and hence very good liquidity, these are attractive markets for traders. The high leverage in futures means that profits can be made very fast when the market moves, however money can also be lost very fast. If you want to learn to trade futures, or are even thinking of trading futures make sure that you learn as much as you can before using real money.

A765487534

Contracts in the futures market are between a buyer and seller. The contract states that the seller must provide the buyer a very specific quantity of a certain item, such as cotton, oil etc, for a price agreed today, but at a date in the future.

It is important not to get confused about what the word future refers to. Futures traders are not day trading futures prices, we are trading today’s prices, but the settlement is taking place in the future. So we buy if we think prices will increase and sell if we think prices will drop.

If I buy (or sell) a futures contract today, I don’t have to hold it until the contract expires, I can simply choose to sell it (or buy it) in the market at the prevailing price. Futures contracts are bought and sold in the regulated environment of a futures exchange, such as the Chicago Board of Trade (CBOT) in the U.S. and the London International Futures and Options Exchange (LIFFE) in the U.K.

Futures were originally developed to help offset the risks and uncertainties experienced by farmers and merchants due to the varying supply and demand for produce. Take for example a coffee plantation farmer. The price that he will receive for his beans will vary according to the vagaries of supply and demand. In a year when supplies are limited and demand is high, prices will be high. In a year when demand falls and the supply is plentiful, the price will fall.

The use of futures trading in the farming industry has many benefits such as allowing the farmer to be able to plan ahead as he already knows what kind of profit he can expect from his crop of say coffee beans. The price may not be the best and the merchant may make a killing but the risk is reduced.

By using a form of futures contract long before harvest time both the farmer and the merchant can reduce their risks by setting the price.

Today the futures market has changed a lot from the historical origins. There are now futures contracts on financial instruments such as stocks and bonds. broadly speaking futures contracts are split between commodity type products and financial type products. It is usually not very important because they are rarely held until expiration.

The CBOT was started in 1848 for the benefit of the farmers and merchants. The exchange was to regulate the quality and quantity of the actual crop that was being traded. Today the CBOT offers many contracts on items like wheat, silver, corn, bonds and soybeans.

The Chicago Mercantile Exchange (CME) was created in 1919 and has managed a futures market in such things as pork bellies, live cattle and the SP500 index.

In London the biggest financial futures exchange is the London International Futures and Options Exchange (LIFFE). Here financial instruments such as the FTSE100, the GILT and Short Sterling are traded, the exchange is relativily new and opened around 1982.

EUREX started life as the DTB, the German futures exchange. The DTB has always been an electronic exchange and started back in 1990, when electronic exchanges were still considered to be inferior to the open outcry system.

The German Bund was a heavily traded financial contract and one of the biggest markets on the LIFFE.

Many futures markets have very high volumes and hence very good liquidity, these are attractive markets for traders. The high leverage in futures means that profits can be made very fast when the market moves, however money can also be lost very fast. If you want to learn to trade futures, or are even thinking of trading futures make sure that you learn as much as you can before using real money.

A765487534

Technical analysis of the stock market, or any other market such as Forex, futures, is how most traders and investors make their trading decisions. This is as opposed to fundamental analysis which most people more agree is pretty much done as a way of making trading decisions, unless of course you are Warren Buffet!.

You only have to think back to recent stock market scams like Enron to know that it is almost impossible for the average, and even very sophisticated fund manager or hedge fund trader to really know what the real financial state of a company is.

Just by reading the balance sheet and other quarterly reports they release gives you a very limited insight into the real health of the company. Whereas the technical charts of the company tend to give the real picture of what the market thinks of the value of the company. In the case of Enron even simple technical analysis told you to SELL when the stock was in the $80-90 range, this is why technical analysis of stocks is so popular.

So what is the secret to technical analysis?, I’m about to tell you, here are my golden rules:

* Only use 3-5 simple technical analysis indicators

* Make sure that you understand how the indicators that you have selected work, what the parameter settings are and in what market conditions they are effective

* After selecting your indicators and parameter settings don’t mess with them.

The real secret to technical analysis is to get VERY familiar with your choosen indicators, and really this can only be done by watching and studying the market, so that you get to the point that you TRUST them.

The fact is that in any market, for each bar period, there are only 5 pieces of information, the open, close, high, low and volume, yet there are now hundreds of indicators. Most of these indicators are displaying the same information and so are redundant.

For the record my set of indicators are:

* 4 Simple Moving Averages

* Bollinger Bands

* MACD

* Stochastics

But the way I use them is quite special, to learn more about how to become an expert at technical analysis visit:

Top Dog Trading Review

A786543298

If you are about to start, or are already in the process of learning how to trade, or day trade, you may have already been searching the internet using Google or Yahoo for day trading training education, tools, software or seminars, and have found that there is a lot on offer.

For example “trading course” brings up 758,000 pages in Google and “trading seminar” another 109,000 pages, the question is what should you be looking for when selecting a trading course or seminar. In this article I’ll point out some of the things to check before spending your hard earned money on your trading education.

1. Becareful of the hidden costs involved in a trading seminar that is away from home, account for the expense of hotels, meals travel and car rental?, it may be much more than you expect.

2. What is the return policy, this can vary widely between trading education companies, for some you only have a 3 day cooling off period while for others you may have up to 12 noon or the end of the 1st day to ask for refund if you decide this was not right for you.

3. For a live seminar are you also given a set of DVD’s of the same or similar content?, so often live seminars fail to cover all the very important details involved in day trading. Having a set of DVD’s enables you to review the content over and over again at home until you get it. Beware that some companies will bill you extra for the DVD’s even though you have already paid for a live trading seminar.

4. Check the internet for positive and negative feedback on the company and trading seminar. Use search terms like “company name review or “company name scam”. Often reviews are posted in trading forums, these can be found by searching for terms like “trading forum”.

5. In advance try and find out exactly who will be presenting the seminar. The last thing that you want is a professional “teacher” giving a seminar on trading, what you want is a “trader” who makes his living by trading and only does a few seminars a month out of interest and for personal reasons, not because they need the money.

6. If you are buying an online day trading or investing course where the content is 100% viewed online you should get at least a 30 day 100% money back guarantee, if not stay away.

7. If you are buying a course or trading seminar in which DVD’s and manuals are being shipped to your house, again you should expect a 30 day 100% money back return policy, less shipping and handling, again if not stay away.

8. It’s very likely that you will have questions after taking either the live or online course or watching the DVD’s, make sure that you will be able to ask questions and have them answered, either one on one or in a forum setting.

9. Last, but not least, before buying do a lot of window shopping. The price for trading seminars, either stocks, options, Forex or futures varies widely from $47 for an ebook to over $25K for a comprehensive set of training. You may be able to find the same education much cheaper at a different company.

Also be aware that day trading education and seminar companies are always running specials and offering discounts, before you buy search the internet carefully for any deals and also call the company directly and ask for a low price guarantee. Make sure you are paying the lowest price possible for the course or seminar before you commit to it.

A756452359