Time of Day to Trade

November 21, 2011 Invest
Comments Off

When it comes to binary options, having a set schedule for trading can be a great way to structure your day and make the most out of your trading. Stock markets are only open for so many hours per day, and if you want to trade stocks through binary options. It is important that you know which stocks are active at which time. This is especially true in the U.S. market where the major stocks are only open from 9:30 to 4:30 during the day.

Funadmental DataTrading binary options requires a good deal of finesse on your behalf, so knowing when markets are at their most active will be a big help. For example, the end of the trading day usually sees a bit more action as major stocks are traded more heavily as people prepare to close out positions for the evening. This increases volatility sometimes, and if you anticipate in which direction that volatility will move, you can make a lot of money.

Another thing to be aware of is trading the news. When a company announces something major, or has a new product released, there tends to be more action within their stock. If you are prepared to address these situations, again, you can make a lot of money simply by predicting consumer and trader sentiment. Knowing the fundamental data behind the stocks you wish to trade as binary options will be a huge help here. Because many traders just look at trends and ranges within their binary option trading, having outside knowledge can give you an advantage over other traders.

Greek Debt Issue

October 10, 2011 Invest
Comments Off

The debt crisis in Greece is creating problems for markets around the world, including stock markets in the U.S. As the Dow Jones Industrial Average plummets in price, investors and traders around the world are holding their breaths to see what will happen in Greece. The next installment of bailout money for the Greek economy will be delayed until October, and many traders do not believe that this will be enough time for Greece to address all of its debt issues. If the Greek market fails, much of Europe will go into disarray as a result—this includes the Euro.

If you are looking to trade currencies for a long period of time, you will want to stay away from the Euro simply because the odds that it will remain stable are slim. Whatever happens in Greece, the Euro will be subject to quite a bit of volatility. It is hard to tell at this point in just what direction the Euro will swing first, but this remains a poor choice for investors.

Short term traders, on the other hand, will have plenty of opportunities to make money using Tom’s EA. Volatility is a good thing for day traders as they have the resources to make money regardless of which direction the market is going to swing. By anticipating up and down swings in the Euro, the day trader is the real winner in a volatile market like the Euro’s is bound to create. Currencies are tough to predict, however, so you will want to make especially sure that you have the proper trading safeguards in place when trading the Euro.

The IPO Market

September 27, 2011 Invest
Comments Off

While the stock market outlook is volatile as well as Forex trading, it usually is not a good time for new companies to turn public. Initial price offerings set out by these fledgling companies stand a very poor chance of outperforming the rest of the market. This means that these developing companies will probably not get enough capital invested within their stock to make going public a worthwhile task.

As further evidence of this, one study indicates that around 70 percent of the companies that went public this year are trading below their IPO price. For these companies, it is important that they keep their fundamentals sound—with poor performances following the IPO, there is a very real danger of bankruptcy. To make matters worse, investors tend to stay away from new companies that haven’t yet proven their worth.

Of course, whether or not you should trade a new company’s stock is entirely a case by case situation. You need to look for companies with a good outlook. If they are trading below their original IPO, you need to ensure that you are on the right side of their movement. Most new companies will not be worth enough to sell short, but you can catch a wave of increasing prices. Dunkin Donuts is a good example. This is a company that has been around for quite a while and only has gone public very recently. They also are almost 50 percent above their IPO. Use Dunkin Donuts as an example of what to look for when you wish to trade companies that have only recently gone public.

Take Two and Call Me in the Morning

July 21, 2011 Invest
Comments Off

Strike up a conversation with anyone, anywhere and sooner or later you will get around to the fact that they, or someone they know, is taking some form of prescription drugs. While it is not the greatest thing to admit, America is indeed on board the pharmaceutical train and the train doesn’t seem to be stopping at any station anytime soon.
For awhile, investing in these drug stocks was the thing to do. They were performing well. People were believing in the product. After all, Viagra is the second coming, right? But this mad-rush for investing and buying up shares slowed due to lack of new drug discoveries, over-saturation and what looked like a bleak future. People began to lose money on their investments and suddenly taking anti-depressants, rather than investing in them, looked like a much better alternative.

However, in recent months there are a few drug stocks that look a bit promising for those who are willing to take a risk again. After all, we are a society driven by pharmaceutical ads on TV, Pfizer pens and coffee mugs and doctors who receive kick backs for suggesting new drugs. The “trend” doesn’t seem to be fading anytime soon and it looks like the folks at Pfizer, Allergan and Novartis (a Swiss pharmaceutical company) know this as well.

While Pfizer (PFE) really doesn’t have anything “new” to sell, so to speak, it has performed well over recent months. Nowhere near its peak position during the Viagra days, it is still garnering a backing from investors. Truthfully, Pfizer has been around for quite some time and doesn’t appear to be going anywhere. Just don’t expect this to give you a huge return on investment.

It is, Allergan (AGN), however, that may stand the test of time in the next few months due to what it offers the market. After all, if there is one thing America seems to feed off of more than money and pharmaceutical ads, it is the business of beauty and eternal youth. Allergan sells just that. The company is responsible for Botox and breast implants – two things Hollywood couldn’t live without, so if you plan to invest this could be your best bet. Hopefully it keeps your money looking just as fit and firm as its product users.
Lastly, Novartis (NVS), which deals with generics and eye care products, among other things, is doing very well. In the past month, it has reached a company-wide high and with its leading hypertension and cancer drugs, the future of this stock looks very bright.

Brought to you by The Disciplined Trader and friends.

Where to invest in 2012

June 1, 2011 Invest
Comments Off

With a crazy market, a dollar that slips and falls faster than contestants on Dancing with the Stars and an extremely volatile commodities market, it is rather unclear these days where to invest your money in the up-coming years. Where do you put that hard earned money for safe-keeping and/or profit?

The answer, according to most in the know, is to invest it in ETFs, or Exchange Traded Funds. These investment funds are traded on stock exchanges, much like stocks are and allow you to buy and sell at anytime, as long as the market is open. Essentially, ETFs are mutual funds that trade like a stock.

The bonus of an ETF and straddle trader pro 2.0 over other investments at this time is that they track an index, such as Standard & Poor’s 500 or Nasdaq 100, and keep assets/investments like bonds, stocks, trades, commodities as close to their net value as possible throughout an entire trading day. Therefore, for those who cannot handle the flux of the market, investing in an ETF is a low risk option.

Another bonus: Unlike other stocks and investments, ETFs do not have a minimum. Therefore, you can buy or sell as little as one share and feel no penalties. They may also be traded during the day, unlike other investments.

With the economic outlook of 2011 and 2012 looking a bit grim, investing in an ETF could be a wise choice for those with a little bit of trepidation. Their low costs, tax efficiency, and low risk make them a very hot commodity (pun intended).

Role of Margin in Forex Trading

May 16, 2011 Invest
Comments Off

People who enter into Forex trading for the first time are initially confused by what they are actually trading. Unlike the stock market, where you are buying shares in a real life company that makes real life products or services, the currency market is an abstract animal. When you trade Forex, you are not buying or selling a company or a product but one currency with another currency.

The trading units in the currency market are known as “lots”, just as the units in the stock market are called “shares”, and the ones in the futures markets are “contracts”.

Since the movements in the currency markets are miniscule, a lot in standard Forex accounts comprises of 10,000 units of the base currency. This ensures that even tiny changes in rates make a meaningful profit or loss for the traders. However, no retail trader has the capacity to lay out 10,000 of any currency to get a piece of the action. This is where the concept of margin kicks in.

It is vital to understand how margin and leverage affect your trading. In order to trade Forex, a trader needs to only put up a fraction of the amount needed. In North America, it can be as low as one-fiftieth or 2% of the amount required. Currency trading has extremely low minimum margin requirements compared to other markets. If used judiciously, it can be an immense benefit to the Forex trader.

US Woes in the Markets

April 26, 2011 Invest
Comments Off

As the U.S. government comes together over President Obama’s plan to reduce the deficit, the U.S. dollar has performed pitifully. For instance, both the Euro and the Japanese yen have increased drastically in value as the dollar sinks. The Euro recently went as high as 1.4547, while the yen went up to a high of 120.40. In response to the dollar’s loss of value, the U.S. stock markets have performed well. The Dow Jones had a total gain of over 1 percent on Wednesday, April 20th alone.

What does this mean for forex traders and the Oracle Trader? It could mean that as the U.S. dollar drops in value, purchasing public company stock in U.S. businesses becomes a discounted purchase for foreign investors and traders. It also means that for those that had the foresight to short the U.S. dollar a large bundle of money was made.

Will this trend continue on, or is this a limited time deal? This is harder to analyze. The U.S.’s deficit has grown remarkably, and while President Obama has set forth a method of lowering this deficit, whether or not it will be effective is a different question. Set to reduce the deficit by $38 billion, many people do not have faith in the measures taken by Washington. If this sentiment becomes the majority, the dollar has a good opportunity of losing even more value. If these worries become passé, then the dollar will rebound. Market sentiment is always easier to judge in retrospect, however. But by getting a good look at how this plan out of Washington will work over the first few months of the fiscal year, we can position our Zecco trades to profit off of the deficit reduction measures.

Random Walk Theory

April 12, 2011 Invest
Comments Off

The random walk theory states that one day’s price is completely independent of the previous day’s price. Relating this theory to the Forex market would translate by saying that a currency pair, such as GBP/USD, is not affected at all by past performances or price charts, but rather is determined by an efficient application of supply and demand.

There are a number of problems that are created by the random walk theory. For one, multiple studies have shown that simply paying attention to support and resistance lines can improve a trader’s fare when trading stocks. Whether it is a self-fulfilling prophecy or not does not matter. A large enough amount of traders pay attention to technical indicators so that these technical indicators can be successfully applied to currency trading.

Because the majority of currency traders look at technical indicators such as support and resistance levels, the prices of currencies will often reflect the action that they expect from them. Think of it this way: when enough people believe that something is going to happen and then they act like that something is going to happen, in the currency market this is usually enough to make that something actually occur.

This is what makes technical analysis so powerful. Even if the signals generated were originally not effective through the TradeForgeFX Review, they are now because enough people believe that they are effective. In this regard, technical analysis is more than just a look at price and history’s effect on price. It is a look at the collective psychology of all traders involved.

The Profit Loss Scenario

April 1, 2011 Invest
Comments Off

Every business enterprise endeavor wants to make a profit and as much as possible, minimize losses. The traditional profit-loss ratio has been adopted by many businesses, but while it may have worked before, is it realistic when applied to this modern age? A profit-loss ratio of at least 2:1 is an acceptable scenario, but then, experts deem this as unrealistic because certain factors were never considered. This isn’t a simple exchange of goods because we have to take into account trading in the world market.

Some advocate the average profitability per trade which can be best explained through a simple illustration. For example we have 5 trades in action, but we only got a profit from 3 of them, or at least 60%. This may seem good because it appears that we made a little profit out of it. But then, how much do we make for each trade? Let’s say it’s at US$100, while the average loss is US$50. The average profitability per trade is now arrived at by multiplying the average win by the probability of win which is US$60.00 (US$100 x .6). Then, we compute the probability of loss by the average loss which is US$20 (US$50 x .40). We then take subtract the two amounts and it would show that we have a positive profitability trade of US$40.00 which is actually good since what we want is a positive result. This means that we are really making money!

Preparing to Trade Currencies

March 30, 2011 Invest
Comments Off

Like most other worthwhile endeavors, investing within the Forex market requires a great deal of work. To be on top of a moving market, you will be required to put in a lot of time studying price trends and analyzing financial data. While it’s true that there are some Forex robots out there that do everything for you, this eliminates the fun of currency investing for many people. Your style of trading will rely heavily on your personality, the use of the Elemental Trader and your motives.

If you want to simply make money with minimal effort, consider a Forex robot. Although not foolproof, the basic idea of a robot is that it identifies potentially profitable trades and then conducts them through your platform automatically for you. These robots have mixed results, however, so you will want to make sure that you pick the appropriate one. Robots can also be quite expensive, but if you select a good robot, it will pay for itself.

Doing the research yourself is an aspect of trading currencies that many people find a great joy in. While this does require a good deal of work and time, you will quickly gain confidence in your abilities to decipher everything related to currency investing. The more time you put in, the more successful you will be. Beware though, if you are simply trading without putting in the appropriate study time beforehand, you are simply gambling your money and will ultimately not be profitable. Trading on your own can be a rush, but you don’t want to gamble away the money you have worked so hard to earn.