By: Christopher Smith

Everyone is looking for a good trading strategy. How about if you had 6 to choose from? With a little bit of experience and discipline, you'll find these to be quite useful.

1. Post-opening buying. If stocks rise 5% or more during early trading on any given day and it doesn’t make the news it will generally fall off after about 30 minutes or so of trading and the price will level. There are occasions when market makers are attempting to artificially inflate stock prices in order to sell off excess inventory. If the stock doesn’t fall off after about 30 minutes it is quite likely that they will continue to rise throughout the day. The tactic for this type of trading is to buy at 1/16 above the high of the day and sell at 1/16 below the low of the day.

2. Post-opening selling. This strategy is the direct opposite of the strategy mentioned above. When a stock opens low with no news it could be that there are nervous investors placing sell orders from the day before. It could also be the result of artificially lowered prices in order to draw in panic sellers so that market makers can purchase shares as the price declines and sell as they rise. The value of these stocks are generally recovered after about thirty minutes of trading and profit makers can make money by selling the stocks they’ve just purchased on the decline at the average price. If the stock continues to fall after 30 minutes or show no sign of recovery chances are that it will continue to decline throughout the day. The tactic for this investment type is to sell short at 1/16 of the days low and set a stop at 1/16 above the high for the day.

3. Playing the spread. This method is a little easier to understand than some of the others. Buy at 1/16 up and sell at 1/16 down. This method works best with stocks that don’t typically see more of a spread than 3/8 of a point. When you manage these trades successfully you will see the growth of a quarter point per trade. The problem with this type of trading is that you cannot always sell as soon as you place the sell order so it may not work, as market makers are more than aware of this tactic. It often takes several tries within a day in order for this to succeed.

4. Grinding. This is another tactic that is considered relatively easy. This is the act of buying an in demand stock as it is on the rise and selling quickly at 1/8 or ¼ of a point for a quick profit.

5. Fading the market. This is a contrarian strategy in which buyers capitalize by buying weaknesses and selling strengths meaning you buy stocks with small declines hoping they will see gains when the market reverses. With this type of investing you should hold on selling until the stock trades above its opening. The logic behind this tactic is that current owners will sell in order to prevent further loss, which will drive the prices down for the short term.

6. Shop the final hour. The last hour of trading on any given day will typically see stocks easing back from their highest prices of the day. The reason for this is that day traders and market makers are exiting their positions in order to ‘guarantee’ their profits. This results in lower prices on many stocks during the very last hour of trading and opportunities for short trading possibilities abound as the result of this common practice.

Keep your stops close. Its important to save your capital and live to trade another day.

About the Author:

Learn more trading strategies at http://www.investorandtrader.com

Article Tags: day, sell, stocks

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By: kelly Price

Using technical analysis and forex charts is an excellent way to make money in forex trading. The problem is there are a number of myths that traders fall victim to and lose. The mistakes are easy to avoid and enclosed.

1. Trying To be to Complicated

Many traders see all the indicators that are available to them and think they have to use them, after all 10 indicators are better than 2 - Wrong.

The best forex trading systems are simple and this means they are more robust in the hard world of real trading with fewer elements to break, than a complicated trading system. Less really is more in forex technical analysis! All the best forex trading strategies used by successful traders are relatively simple and yours should be too.

2. Predicting Prices

If you try and predict forex prices your predictions will be as accurate as your horoscope and you will lose. Predicting is another word for hoping or guessing and that won't get you far in life or forex trading. What you need to do is to simply act on the reality of price change.

Sure you miss the exact change but you can't predict that anyway. Your aim is to make money not strive for perfection!

3. Scientific Methods

Leads on from the above and currency prices unfortunately don't move to a scientific theory. This is of course obvious because if they did, we would all know the price in advance and there would be no market.

A forex market moves because we don't and never will know what happens next. So forget prediction and forget science, they won't help you your trading the odds but if you trade them successfully you will make a lot of money.

4. Invalid Data

The biggest mistake novice traders make is to believe the myth of forex day trading and scalping.

Forex day traders never make money and never will - why?

Because the data is invalid and all volatility in short term time frames is random.

As volatility is random, you can't get the odds in your favour and you will lose. You need to trade longer term time frames where you can get the odds in your favour and this means long term trend following or swing trading.

The above are the 4 biggest mistakes traders make with forex charts and there easy to avoid.

If you want to learn currency trading the right way, then you need to understand forex charts can help you achieve currency trading success only if you use them in the correct manner. Simple odds based, currency trading system which trades the reality of price change is a simple yet powerful way of making big long term gains.

NEW! 2 X FREE ESSENTIAL TRADER PDFS For free 2 x trading Pdf's with 90 of pages of essential info and more Forex education visit our website at: www.learncurrencytradingonline.com

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By: kelly Price

Forex day trading is simply one of the best ways to lose your money and the logic it is based on is absurd and common sense should tell anyone why it doesn't work. Yet year after year day traders trade and lose using day trading methods. Lets look at why.

Before we look at why day trading doesn't work lets first look at all the systems that supposedly make money on the net. They don't make money in real trading though it's all simulated made up track records using past data.

If you see a day trading system which claims that it makes money simply look for the following in the small print at the bottom:

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

The above disclaimer simply means nothing in terms of future profitability. Why?

Because if you want to make up a track record using past history - anyone can do that.

If we all knew prices in advance we would all buy the bottom and sell the top and never lose any money - in fact we would all be multi millionaires. Shame it's not that easy though!

We have to trade without knowing what will happen and that really is a lot harder

Day trading is a good story and marketing companies know this so why not write some hyped up copy to appeal to greedy traders, make up a great track record and then sell it to the unsuspecting trader?

That's what happens and time and time again the novice trader falls for it - He thinks he is going to make his fortune by handing over a few hundred bucks and then he gets his lesson in reality his equity is lost.

So let's look at why day trading is a loser's game

The reason day trading doesn't work is that the logic it is based upon is absurd - think about this:

We have millions of traders, all with different motivations and forex trading systems and day trading is supposed to allow you to gauge what this vast diverse mass of emotional beings will do so you can enter trades on a tick chart?

Its common sense this cant be done and that's why over the longer term day traders lose.

All volatility in daily time frames is random, support and resistance levels cannot be used and you cannot get a trading edge so you will lose.

If you can't get the odds in your favor you will lose period

Avoid forex day trading unless you want to lose your money and lose it quickly.

Leave it alone and trade the longer term trends where you can get a trading edge and you can get the odds in your favor - Period.

NEW! 2 X FREE ESSENTIAL TRADER PDFS For free 2 x trading Pdf's with 90 of pages of essential info and more Forex education visit our website at: www.learncurrencytradingonline.com

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By: Jon Provencher

Learning about the common mistakes inexperienced foreign currency (Forex) traders make will help you to develop your skills and chances of being successful. Here are some common mistakes and assumptions inexperienced traders make:

- Misplacing Stops
Stops are essential to avoid bad losses, however poorly placed stops can be equally as bad. Before placing a trade the trader should consider the risk to reward ratio for the trade. The stop needs to be set with the traders cash management in mind and should not be too close or too far away from the price. Traders should also consider moving their stop as the trade goes in their favor to lock in profits and lower potential losses.

- Abusing Leverage
With Forex brokers providing up to 400:1 leverage, it's easy for inexperienced traders to get carried away with the dream of making fast profits. When traders use a high amount of leverage the profits can be amazing, but when the trade doesn't work out the result can be catastrophic. Traders should always compute the dollar value of the risk they are taking for each trade and ensure that this is suitable for their investment balance. Accomplished traders rarely risk more than 2-3% of their investment balance on any one trade.

- Placing Technical's On A Pedestal
Technical indicators are good tools that help traders to make decisions. However making decisions for trades based solely on what the technical indicators are telling us can result in large losses. By considering fundamental data together with technical data you will have a much better chance at being successful.

- Day Trading
There are successful day traders out there. However, for inexperienced traders, trading with the longer term trend will be easier and have a better chance of making profits. Longer duration trades allow the position more time to move in your favor, especially if the market is volatile.

- Blindly Following A System
There are many Forex systems out there that promise miraculous results. But if you begin trading one of these systems with no proof that it actually works you could find your investment balance quickly reduced to 0. If you want to use a Forex trading method, a sensible approach is to back-test and forward test it using software or on paper prior to putting any real money at risk.

- Underestimating Emotions
Emotions can have a enormous impact on your Forex trading. Keeping a trade diary will help you to appreciate how your emotions are impacting on your trading, you can then learn to use them to your advantage.

- I Back-tested It So It Must Work
An error traders make is to assume a back-tested method will continue to work. Forex markets are constantly changing and are effected by global and political events. Before you start to use a back-tested method you should consider if it reasonable to assume that the market conditions the method has been tested on are probable to be similar to market conditions in the future.

We hope that this article has helped you to improve your Forex trading. For more articles on Forex training, please visit our site.

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Source: http://financialwww.com/

There are a wide variety of forex trading systems available online. Every investing niche has a group of people who claims to be experts. Foreign exchange trading is no different. While some may find it helpful at first to pay for forex trading strategies, they are generally redundant; and after getting started, many traders go on to develop their own successful strategies.

Most of the companies that are selling forex trading systems offer a free online simulator. It is a very good idea to spend some time investing with play money so you can carefully track the performance of a particular strategy. If you feel, after some time, that you just aren't comfortable with the forex trading strategy that they are producing, don't think twice about walking away. The tools are there for a reason, and it may just be to keep you from making a costly mistake.

Once you have done some research and have found several forex trading systems with which you are comfortable, you should do some additional research to check on the validity of those few. Consumer advisory sites keep running listings of companies that have been found to the fraudulent, or that have made false claims about earnings potential. The chances are pretty good that theses companies haven't actually made a dime trading forex. Instead, they make their money selling promises to unsuspecting investors.

There are several ways that these companies dupe new traders into believing that their forex trading systems are legit. The first is that they offer hypothetical results. You, as an investor, shouldn't be nearly as concerned with what their system could have accomplished, as you should be with what it actually accomplished. Anyone can use a little common sense and hindsight to create a hypothetical trail of forex trades that will look good on paper. Make sure you see actual return on investment numbers before you commit any money to a forex trading system.

Another way that these fraudulent companies get foreign exchange traders to buy into their forex trading systems is by guaranteeing profits. If a company promises high returns with minimal or no risk, then they are trying to sell you something. Any type of investing comes with inherent risk. When trading forex, that risk can be fairly substantial, especially when you start dabbling in the 60 some odd currencies that are not considered majors. The world economy is volatile by nature. Therefore, the markets that are controlled by it are volatile as well.

As with anything else available to consumers, there are different levels of quality available in forex trading systems. The best information that you can get will always be from other customers who have used the product. Service providers will always have great things to say about themselves, but a true test of their worth is to find another consumer who believes in the one you are considering.

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Author: Kelly Price

Most novice traders are attracted to day trading as they feel it can offer them a living by making small regular profits that can build up into a substantial income over time. Let's look at day trading in greater detail.

The reality of day trading profits is a myth, no day traders make money longer term and if you see a day trading track record of profits, you will however see the disclaimer below.

You need to read it very carefully - here it is:

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

So what use is a track record with this written on it - it's not worth the paper it's written on. It simply means a vendor can make up a track record (showing any profit they like) in hindsight knowing the closing prices and they do.

They know day trading is a good story but that's all it is a story, I love James Bond but don't take it seriously!

No day trading is doomed to failure simply because the logic it is based on is just plain stupid - think about it:

You have millions upon millions of traders transacting trillions of dollars each day and every trader has different skill levels, motivations etc and you simply cannot tell what this vast diverse group will to do in a few hours and it's totally futile to try.

Volatility is random in short daily time spans, you therefore cannot get the odds in your favor and you will never win.
Of course day trading also breaks the cardinal rule of trading which is - run your profits to cover your inevitable losses. Day traders certainly keep losses small but sometimes they hit a profit (day traders get lucky to) but do they run it?

Of course not, they close it out at the end of the day!

So we have lots of small losses, a few small profits and over time, equity gets destroyed - that's the reality of day trading.

If you still don't believe me, try and find a day trading system with a real (not simulated in hindsight) track record, supported by brokerage statements over the longer term.

By the way if you do let me know - I have been searching for one for 25 years and not found one yet.

If you want to enjoy forex trading success - learn to follow the longer term trends, where you can get the odds in your favor and make some great profits and leave day trading to the naïve, or lazy traders.

Concentrate on working with a logical, robust and long term method which will give you forex trading success.

Article Tags: FOREX, Day Trading, Forex Day Trading, Trading System, Currency Day Trading, Forex Scalping System

Article Source: http://www.articlesbase.com/

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Source: http://financialwww.com/

Learning to read forex quotes can be a challenge. They present different information than the standard common stock quotes with which most folks are familiar. Should you determine, after spending plenty of time building a forex trading strategy, that you are ready to enter the forex trading market, then you need to make sure that you know how to properly read the foreign exchange trading quotes.

The first part of the quote lets the forex trader know which currency is involved. The nation listed first is referred to as the base currency. This means the trader currently holds that currency and he is using it to buy the quote currency, sometimes called the trade currency. For example, a quote that reads USD/JPY means that the forex trader currently holds United States Dollars and wants to trade them for Japanese Yen. Forex quotes always begin this way, with the two currencies involved forming what's called the cross.

The second part of forex quotes that you need to look at is the pricing portion of the quote. To continue the example from above, if the quote read USD/JPY=117.57, then the trader knows that for every 1 US dollar he trades, he will get 117.57 Japanese Yen in return. While that may seem really simple, there are a few more details of these quotes that the forex trader needs to take note of before making the foreign exchange trade.

Following the initial line of the quote, which contains the two currencies that form the cross and the exchange rate, is another line of information. This is probably more familiar to common stock traders. Bid prices and ask prices, which make up an integral part of forex quotes, function in trading forex much the same way. The bid price is the price at which you can sell the currency. In other words, that is the price that people are willing to pay for it. The buy price is what you will have to pay if you want to buy the currency. There is usually a difference between these two numbers, but it is seldom substantial.

While it is possible to trade forex in any number of currencies, the largest numbers of forex quotes that are traded every day involve what are known as the majors. The US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar make up more than 85% of all forex trades. These currencies make up the most stable markets in the world and carry the most volume. These facts make them the safest foreign exchange currencies to trade. It is not likely that you will end up holding huge amounts of worthless money.

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Author: Warren Wong

As we go into 2008, let us recap some of the common mistakes we all make and strive to avoid making them in 2008.

1. Trading too often. This largely depends on the size of your asset base. If you only have $10,000 to invest, making about 50 trades a year at $10 a trade is $500, or 5% of your asset base! That is just about one trade a week, but it takes up 5% of your money. So even if you make 12% returns (beating the historical returns of the market), you will only make 7%, well below the historical returns of the market. If you have a large asset base, you can afford to trade more often. But for most people, try to keep commissions low.

2. Selling scared. Sometimes, it is time to face the music and sell a stock that has been a loser. However, you should not sell just because you are scared. You should sell if you think it makes rational, logical sense to close a position. Many times, people sell stocks because the market had a bad day and they're afraid it will go lower or the stock itself had a bad day. This later turns out to be a bad decision when the stock shoots back up.

3. Not keeping any cash on the side. I have to credit Jim Cramer with this tip. This was one of the biggest newbie mistakes he talked about on his Mad Money show. When you are fully invested and have no cash, you can not take advantage of the market when it has a bad day. You are also more prone to panic selling and making other fear-related decisions. He recommends keeping at least 10% of your portfolio in cash, which I think is a pretty good tip.

4. Buying fad stocks. Sometimes, popular cool stocks do well. Examples from 2007 would be Chipotle and Apple, both of which more than doubled (in full disclosure, I own shares of Chipotle currently). These companies are solid companies with excellent growth, so the gains are justified. Often times though, people buy shares in a stock just because other people are buying shares. The obvious example is the tech bubble, when people were paying exorbitant prices for companies that were not even close to turning a profit. The psychology behind people's willingness to buy these stocks was largely because other people were buying them, so they figured people would continue to buy them. That is not a good reason to invest in a company (in fact, it is a horrible one for long-term investing). When investing for the long-term, always make sure the fundamentals are good.

5. Investing in too many stocks. This is another tip I am borrowing from Jim Cramer. Too many of us buy too many stocks and can not follow-up with the companies. We often barely know what we are investing in and have no game plan in regards to the stock. I know I make this mistake often. If we want to diversify, it is easy enough to just buy an index fund or ETF. If we end up investing in 50-100 individual stocks, we effectively become our own mutual fund, but without the resources to adequately monitor the companies we are invested in.

Article Tags: Stock Trading, Stock Market, Stock Investing

Article Source: http://www.articlesbase.com

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Source: http://financialwww.com/

Forex brokers offer a wide range of services from the trading platform you'll use, the spreads (commissions) they charge, customer support, fast trade execution etc. Some brokers give good trading advice to help their clients perform better as traders, while other brokers play against their clients. Needless to say, you want to stay away from these brokers. They are also commonly known as bucket shop brokers.

A forex broker will explain various forex trading strategies to his or her client and will assist in their process of putting these strategies to work. The advice you receive from your broker will basically include technical analysis approaches and research methods followed by experienced traders and brokers that boost the client trader's performance as a forex trader.

In the earlier days of forex trading, the banks and large financial institutions had sole access to the forex market, but now with the advent of the internet technology, things have changed. As more novice traders have taken up forex trading as a home based business, the forex brokers are also realizing the importance of this trend and moving away from the conventional banks. An increasing number of forex brokers are operating through internet based businesses and offering customers a complete suite of services totally based online. Today's forex brokers recognize that their customers are no longer the rich individuals or large institutions and have tailored their forex trading strategies to conform with the needs of their new, home based, middle class client. They know that the stakes for this type of client are lower and that they wish to maximize their profit but have a different appetite for risk. Also, in terms of certification, it is useful to work with an NFA (National Futures Association) member broking house.

Forex brokers that offer sound advice and have well recognized and verified credentials are, of course, the ones that you should be looking for. Additionally, don't rely blindly on the advice of a forex broker. If it doesn't sound right, may be it isn't. Learn to trust your own judgment and ask your forex broker lots of questions. Reliable brokers will not be bothered with this.

Let your needs guide you and your trading level help you choose the right broker for you. It will typically depend on whether you are a novice or an experienced forex trader. There are specific forex trading brokerages online that are targeted towards the beginner in forex trading. These will generally offer detailed research material and plenty of advice for the newbie trader. Additionally, these types of firms will provide access to forex trading software that will simulate the real trading environment and help to make the forex trader accustomed to using the tools of the trade.

For experienced forex traders, these types of detailed instructions may not actually be required, since these individuals will know their way around the forex market. For them, there are different forex brokerage firms that will offer advice with a greater emphasis on the logic behind the forex trading strategy and will go into greater depth on this matter. To find the best fit for your needm ask friends or traders you know, read about various forex brokers and ask about the forex broker's packages that offer trials or demo trading.

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Source: http://financialwww.com/

It is not necessary to justify the importance of having a good strategy if you want to become a successful FOREX trader. At the same time it must be said that there is no common strategy that does not work for everyone. An individual approach is what is best for every investor. In order to build a strategy, an investor needs to make an analysis. Analyses are of two kinds in the stock market fundamental and technical. Either one of them could be used. However, enterprising investors would use a combination of both the analyses to get a better standpoint of the market trends and plot the entry and exit points.

In technical analysis, the market trends are the deciding factors. The fluctuations in the prices are based on the trends. Investment gurus have developed their own studies of patterns of the market fluctuations over several years. This is how they can arrive at a good trading strategy.

For those who find understanding the market movements difficult, there are many tools available. However, an initial study of these tools is in order. Only then can one begin applying them to the market. Even if a single one of these tools is understood to a workable level, then it can be used; and the others could be studied further. Every tool helps to reinforce the other tools.

In making FOREX trading strategies, there are both support and resistance levels that are used. The support is actually the price level that is at the bottom. When this price reaches this level, then only any upswing can occur. While resistance levels are the upper limit prices. These are the prices beyond which the trading rarely takes place. Hence, support and resistance prices are the limits that are set for trading within a specified period of time.

In case the prices break the support or the resistance levels, then the prices would continue to move in that direction. So if the price reaches the previous support level, then it would be seen as bearish; i.e. the price should continue to fall.

In order to estimate the support and resistance levels, the price charts should be analyzed. Support and resistance levels are decided on the market trends over a period of time. Hence the longer timeframe of the charts analyzed; the better it is to determine the price and support levels. Once the support and resistance levels are determined, the traders could use this to find out when to exit or to enter a transaction.

Investors use moving averages as another tool to make their trading strategies. The simple moving average (SMA) is an indicator of the average price in a given period of time over a specific period of time. These can be plotted on a graph and used by the investors to determine whether the prices have a tendency to rise or to fall. If the prices cross above the SMA, then they keep on rising.

Trading strategies can be used individually as well as in combination. It is better if the investor has several trading tools at his/her disposal, so that an effective use of those can be made. Using many tools in conjunction would help the investor to make better decisions than if only a single tool was to be used.

Each analysis helps to supplement the other. Technical analysis can make fundamental analysis more complete, and vice-versa. A trading strategy would be built up taking several analysis factors into consideration.

The trading strategy would tell when a trader should enter the trade, how many profits to expect and when to exit the trade. This could be very helpful guidelines to the amateur trader, as well as make the decision-making process easier for the professional trader.

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Source: http://financialwww.com/

Forex stands for foreign exchange. Forex currency trading is the trading of currencies. Forex traders try to profit by buying one nations currency and at the same time selling other ones for small increase or decrease in exchange rates. Forex currency trading market is a worldwide market with 24 hour trading capability. It is currently the largest financial market in the world with 2.7 trillion US dollar worth trades a day; more than 30 times over NYSE and NASDAQ together, and more than 10 of all equity markets together. The key players of forex currency market include banks, corporations and individual forex traders.

The establishment of modern forex currency trading market was done in early 1970s with the popularization of free floating currencies. In 1972, the gold standardization of the currencies were lifted which made the currencies free floating changing the exchange rate with change in value of other currencies. The market became popular in 1980s as the trade, currency movement and migration across borders increased. The most important revolution, on an individual trader point of view, occurred in 90s when online trading through internet started. The globalization made forex currency market more favorable for trading, as the control of states over their currencies decreased considerably.

Unlike stock trading or futures trading, forex currency trading does not require and has a specified market. All trades are executed Over The Counter (OTC) through high-speed interconnected electronic networks. The banks have their own dealing rooms and most individual traders trades from their home on specific encrypted currency trading software platforms. These trading platforms are usually of two sides as online or broker-side trading platforms and direct access or trader-side trading platforms.

Forex currency trades are done in pairs, the currency pairs, such as EUR/USD, GBP/USD, USD/JPY, and USD/CHF. Each three letter code you see before and after the slash (/) denote one currency; EUR for Euro, USD for United States Dollar, and GBP for Great British Pound. The profit or loss depends on the rise or fall in exchange rate of the second currency in a pair to the first one. The five major currencies which constitute around 70% of total trades include US Dollar, Euro, Japanese Yen, British Pound and Swiss Franc. The major country for forex currency trading is the London, with around 32% market share, followed by USA with around 18% market share.

Forex currency traders follow a number of strategies to profit from market. They do detailed studies over nations economic history, policies, GDP growth, etc to find out right currencies with profit marking chance. Around 90 percent of currency trades are carried out by banks and 73% of total market volume is consumed by 10 international banks with Deutsche Bank leading the front. Retail traders with currency brokers constitute only 2% of the market.

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Source: http://financialwww.com/

A great way to identify and measure the trend of a stock is by using moving averages. A moving average is simply an average of closing prices over a specified time span. Charting software really makes your job easier as all you need to do is specify which time frame you want and the software does the rest. It will lay a smoothed line across the chart for you. You can now see whether or not a trend exists and in which direction it is heading. If the moving average is moving higher and the price of the stock is above it, then the stock is in an uptrend. If the moving average is heading lower and the price of the stock is below it, the stock is in a downtrend. As you can see, this is fairly elementary. Making money is not that difficult when you keep it simple. If you want to look at trends over a short, intermediate, and long-term basis it will be necessary to use different moving averages. For the short term trend use something between the 10 and 20-day moving average.

If you want to focus predominantly on the intermediate and long term trends, you would want to use between a 18- or 21-day moving average for the intermediate trend. For the longer term trend you can use between a 40- or 50-day moving average. What you will have on your stock charts are two smoothed moving averages: one representing the intermediate trend and the other representing the longer term trend. We often use the 10-day and the 20-day moving averages. You can use just one or the other but using both will help you refine your buying and selling even more. One rule of thumb in determining whether an uptrend exists is the following: when the 10-day moving average is above the 50-day moving average, and both lines are rising, then an uptrend is in place. A powerful uptrend is in place. A trend in motion tends to stay in motion. Conversely, if the 10- is below the 50-day moving average and both lines are falling, then a downtrend is in place. Buying calls in hopes of a trend reversal would be foolish. All phases of trend point lower. Picking market bottoms is dangerous! Remember, when both phases of trend are in sync it gives us the highest probability that the current trend will stay in place. Don't fight or buck the trend.

The trend is your friend! If you stick with this simple rule of thumb it will keep you out of trouble and also help you identify those stocks exhibiting the strongest trends. Buying stock and/or calls in downtrends or selling stock short/buying puts in uptrends is not a prudent thing to do. This is like stepping in front of a runaway train. Let the market tell you where it is going. There's no reason to guess. It should be pointed out that moving averages work great in a trending environment, either up or down. They are useless when stocks are in trading ranges. As you can see, it becomes impossible to determine where prices are headed. So there you have it... the key to knowing when a stock is in an uptrend or downtrend. Suffice to say, the information is priceless! Begin using it immediately and you're stock selection will improve dramatically!

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Source: http://financialwww.com/

It's likely that either curiosity or skepticism led you to this article, and I would agree that, for most individual investors, trading is approached in a totally speculative manner. Stock trading, in its more popular forms (Day Trading, Swing Trading, Penny Stock Speculating, etc.) includes none of the elements that a conservative investment strategy would have at its very core: Little if any attention is given to the fundamental Quality of the equities selected. Any Diversification that exists in the portfolio is determined by chance alone and is, at best, a transient result of the selection guesswork. No attempt whatever is made to develop an increasing and dependable stream of Income. But stock trading by individual investors doesn't deserve quite as bad a "rep" as it has earned. After all, its very foundation is Profit Taking, probably the most important (and possibly the most often neglected) of the activities required for successful investment portfolio management. Unfortunately for most non-professional equity traders, loss taking is a more common occurrence.

Bond, (and other Income Security) trading is generally avoided by most non-professional traders. Obviously, it takes more investment capital to establish positions in Corporate and Municipal Bonds, Real Estate, or Government Securities than it does in Equities, and the volatility that traders thrive upon is just not a standard feature of the mundane world of debt securities. Surprisingly, most investment advisors and stock brokers have not discovered that there is a more exciting approach to Income Investing that is actually safer for investors and less inflexible in the face of changing interest rate expectation scenarios. Certainly, Wall Street financial institutions pressure their representatives to push individual new issues and/or investment products, but I think that the Market Value fixation that stretches from Wall Street to Main Street is the real culprit. Income securities need to be "valued" for long-term income growth and traded with great pleasure... albeit much less frequently.

Consequently, most trading is done in an Equity only environment that, by its very nature, is too speculative for most mature (in whatever sense you choose) investors. But this is not the way it needs to be. Since stock prices are likely to remain volatile in the short run and cyclical in the long run, there will always be opportunities for profit taking. [Note that it is the combination of volatility, market accessibility, universal equity ownership, and confiscatory taxation that have made "Buy 'n Hold" a tar pit Investment strategy.] Similarly, there are no rules against taking advantage of the cyclical nature of interest rate sensitive security prices. Trading is the world's oldest form of commercial activity, and it is unfortunate that it is treated with such disrespect by our dysfunctional tax code. It is even more unfortunate that it is looked at askance by client attorneys and brokerage firm compliance officers... masters of hindsight that they are.

Trading does not have to be done quickly to be productive, and it doesn't have to focus on higher risk securities to be profitable. And perhaps most importantly, it doesn't have to avoid the interest rate sensitive income securities that are so important to the long-term success of any true investment portfolio. No matter how beaten up a speculative day trader becomes, whatever profit taking experience there has been is invaluable. Once a trader/speculator is weaned off the gambling mentality that brought him to the "shock market" in the first place, he can apply his trading skills to investing and to portfolio management. The transition from trader/speculator to trader/investor requires some education... education that cannot be obtained from product salespersons.

Step One is to gain an appreciation of the power of Asset Allocation using the principles of The Working Capital Model. Asset Allocation is the process of dividing the portfolio into two conceptual "buckets". The first of these will contain Equity Securities, whose primary purpose is to produce growth in the form of Realized Capital Gains. The other bucket will contain various securities whose primary purpose is to produce some form of regular income... dividends, interest, rents, royalties, etc. The percentage allocated to each is a function of a short list of personal facts, concerns, goals, and objectives. The cost basis of the securities, absolutely not their constantly changing Market Values, must be used in all Asset Allocation calculations. Asset Allocation is a critical portfolio planning exercise that is: based on the purpose of the securities to be purchased, long term in nature, and never "rebalanced' or altered due either to current market circumstances, hedging, or some form of market timing (which, of course, is impossible).

Market Values are used in the selection process that identifies trading candidates that will fill the buckets... cash from all income sources, by the way, is always "destined" for one bucket or the other, and may be held unused if no proper candidates exist. Selecting potential Equities must first be "fundamental", then "technical"... i.e. based on the Quality of the security first, and the price second. My experience is that higher quality companies purchased at a 20% or more discount from the 52-week high, with a profit target of approximately 10% (realized as quickly as possible) is a very manageable approach. The proceeds find their way back into the "smart cash" pot for Asset Allocation according to formula. There will be times when "smart cash" grows quickly while the list of new trading candidates shrinks, but when trading candidates are all over the place, "smart cash" is replenished with a portion of every income dollar produced by both fully invested buckets! Thus, insistence upon some form of income from all securities owned makes enormous sense!

But what about trading the Income Bucket securities? Enter the Closed End Income Fund, in the form of a common stock, and in a surprising variety of income producing specialties ranging from Preferred Stocks to Oil Royalties, Treasury Securities to Municipal Bonds, and REITs to Mortgage Income. No more worries about liquidity and hidden markups. No more cash flow positioning or laddering of maturities. And best of all, no more calls of your highest yielding paper when interest rates fall. Instead, you are taking capital gains, compounding your yield, and paying your dues to the Equity Bucket. And when interest rates move back up... you'll have the luxury of reducing your cost basis by adding additional shares. Of course its magic... that's what we do here on Wall Street!

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Author: Nicholas Tan

The forex market is all about trading between countries, the currencies of those countries and the timing of investing in certain currencies. The FX market is trading between counties, usually completed with a broker or a financial company. Many people are involved in forex trading, which is similar to stock market trading, but FX trading is completed on a much larger overall scale. Much of the trading does take place between banks, governments, brokers and a small amount of trades will take place in retail settings where the average person involved in trading is known as a spectator. Financial market and financial conditions are making the forex market trading go up and down daily. Millions are traded on a daily basis between many of the largest countries and this is going to include some amount of trading in smaller countries as well.

From the studies over the years, most trades in the forex market are done between banks and this is called interbank. Banks make up about 50 percent of the trading in the forex market. So, if banks are widely using this method to make money for stockholders and for their own bettering of business, you know the money must be there for the smaller investor, the fund mangers to use to increase the amount of interest paid to accounts. Banks trade money daily to increase the amount of money they hold. Overnight a bank will invest millions in forex markets, and then the next day make that money available to the public in their savings, checking accounts and etc.

Commercial companies are also trading more often in the forex markets. The commercial companies such as Deutsche bank, UBS, Citigroup, and others such as HSBC, Braclays, Merrill Lynch, JP Morgan Chase, and still others such as Goldman Sachs, ABN Amro, Morgan Stanley, and so on are actively trading in the forex markets to increase wealth of stock holders. Many smaller companies may not be involved in the forex markets as extensively as some large companies are but the options are stil there.

Central banks are the banks that hold international roles in the foreign markets. The supply of money, the availability of money, and the interest rates are controlled by central banks. Central banks play a large role in the forex trading, and are located in Tokyo, New York and in London. These are not the only central locations for forex trading but these are among the very largest involved in this market strategy. Sometimes banks, commercial investors and the central banks will have large losses, and this in turn is passed on to investors. Other times, the investors and banks will have huge gains.

Article Tags: FOREX

Article Source: http://www.articlesbase.com/fi

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Author: Star Smith

Investing in penny stocks is often seen as a cheaper alternative to buying regularly traded stock. While it’s true that it’s easier to enter this market, this doesn’t mean that the risk is lower, to the contrary, penny stocks are considered quite volatile.

A penny stock is also known as a microcap (or nano) stock which normally trades for under $5 per share. These smaller stocks are often offered by upstart and struggling companies as a way to obtain quick cash flow for their business. This is not Coca Cola or Microsoft you’re investing in. These companies have not yet proved they are stable enough to stick around for the long haul.

Because of their low cost, you may be tempted to invest in several microcap stocks that look like a good bet. Keep in mind that you cannot just randomly pick a winning stock by your gut feeling. Just like with larger stocks, penny stock investing requires lots of research on the investor side, before putting down any money.

Online, there are several companies that provide stock analysis and lists of their current picks that are formulated according current market trends. It is almost impossible for the average person who has a full-time job to do proper stock analysis by themselves. The speculative nature of small cap stocks is somewhat like riding a roller coaster. Companies you invest in will have their ups and downs.

While you can try winging it yourself, you’ll have better success if you use expert analysis that shows you what are the most promising picks, and whether or not you should keep the stock you already own or sell. Knowing when to buy and when to sell are the key ingredients of successful stock trading. This is especially true when it comes to smaller stocks.

Because these stocks are so much cheaper to buy, you could typically buy 1,000 shares of stock at fifty cents per share for a cool $500. Indeed, this is a lot of shares and if your pick is a good one, you’ll make a pretty profit. However, if it’s a bad one, you’ll lose all of your money. Therefore, choosing the right stock analysis system is really important.

No matter which stock system you choose, you should still plan on losing money, because no system is 100% accurate all of the time. There are just too many variables that can happen to a company that will be completely unpredictable. Being a successful investor, means you want to have more winners than losers.

Every successful investor also knows not to put all of their money into one stock. You will need to spread out your risk. This means investing minimal amounts of money in several stocks and watching them carefully. A wise investor will narrow their picks down to companies that offer the least risk. Finding these companies will take time and patience.

If you are new to penny stock trading, you will find it extremely beneficial to do paper trading before jumping into the market with real money. You can learn how to use a trading system by making fake trades based on real data, and then keeping score of how well you do. Paper trading is a great way to know whether a particular system is right for you without risking any money.

Once you know what to look for in a small cap company, it’s very possible to earn a nice living investing in the future of small businesses. Make sure that you have reliable resources and training tools by your side so that you have the best possible chance at making substantial profits.

Article Tags: Financial, Finance, Money, Stock, Investing, Stocks, Tips, Trading, Market, Day, Profit

Article Source: http://www.articlesbase.com/i

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Author: Paul Judd

It's the Federal Reserve Bank that influences the money supply. Three tools are used to implement monetary policy:

1. Open Market Operations

2. Discount Rates

3. Reserve Requirements

Since open market operations is the tool used most, we will cover it. Here's how it works: When the economy is growing too fast and the Fed is worried about the inflation rate, it will sell government securities from its portfolio to the open market. This decreases bank reserves, which means the money supply decreases. When there are less bank and businesses have to pay the bank more in order to borrow. This discourages consumers and businesses from borrowing. Less borrowing means less spending, which slows the economy and eventually can reduce price pressures.

When the economy is growing too slowly and the inflation rate is low the Fed will buy government securities, such as Treasury bills and notes. This increases bank reserves, which increases the money supply and causes short-term interest rates to decrease. Reduced rates induce consumers and businesses to borrow. Consumers will borrow money for items such as automobiles or home loans. Businesses borrow to build their inventories or finance a new factory. As a result, economic growth will accelerate.

The Fed will also leave rates unchanged if the economy is growing at a moderate pace with low inflation or if they feel the economy will slow down by itself. They will even take a wait-and-see approach with regard to how slowly the economy is growing and the rate of inflation, before determining monetary policy.

The bond market plays close attention to the activities of the Federal Reserve, which is why it’s important for us as well.

The Federal Reserve has three goals:

1. Moderate economic growth (not too fast, not too slow)

2. Low unemployment

3. Low inflation

How does the Fed determine whether they are reaching these goals? They watch the same economic indicators as we do. In other words, they monitor the reports that are released by the Labor Department, the segments of our economy.

For instance, the Gross Domestic Product (GDP) consists of four major components: (1) consumption; (2) investment; (3) government; (4) exports. Most of the key economic indicators fall into one of the above categories. For example:

- Retail sales would fall under consumption.

- Business inventories and housing starts would fall under investment.

- Construction Spending would fall under government.

- Trade would fall under exports.

If the key economic indicators continue to come in strong, the GDP will increase. If the indicators come in weak, it will decrease. In other words, Gross Domestic Product measures economic growth.

Learn more about the Bond Market, sign up for Paul Judd's Free BondLessons, click here.

Article Tags: Bonds, Bond Market, Fiscal Policy, Monetary Policy, Bond Fundamentals

Article Source: http://www.articlesbase.com/

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Author: Muna wa Wanjiru

Gold Coins rock, no doubt about it. Coins have been one of the oldest forms of money ,especially Gold coins Centuries ago Gold coins were used for money transaction, the usage of Gold coins as principal form of money was persistent for a very long time .Somewhere around 1933 most countries stopped using gold coins as their currency for money transaction.

The history of Gold coins goes back to 560BC , the first gold coins were invented by a Lydian king, King Croesus.Today Gold coins may not be a part of our currency, but are a major form of investment.

Gold coins are known to be the safest and most risk free form of investing ones savings.
Value of a the Gold coin depends on numerous factors such as its rarity uniqueness ,its history and its condition ,the amount printed on it also can throw some light on its value.

In 2002 July at Sotheby's a very unknown antique 20$ Double Eagle Gold coin was sold for a remarkable price of $7,590,020 ,till date this is the most valuable coin ever found.

Gold coins which are used for investments in today's times ,can be bought fro Banks or Jewelers, the value of these coins depends totally on the market value of metal gold .

With the constant up and down in the economy ,prices of Gold too keep fluctuating. Every country today has its own mark of Gold coins ,these coins are embarked with the countries specification. For example United States is known for its American Eagle Coin ,Canada for its Maple leaf Gold coin, Australia for its Australian Kangaroo Gold coin China for its China Panda Gold coin ,Austria for its Austrian Philharmonic Gold coins South Africa for its Krugerrand Gold coin and Europe for its Euro Gold coin, Switzerland for its Swiss Vreneli Russia for its Russian Chervonets UAE for its Gold Dinar..

The American Gold Eagle is the official gold ingot of United States ,certified by the Gold Bullion Coin Act 1985.This Gold coin was first coined I 1986 by the United states Mint .This coin comes In various denominations and is made in 22 carat fine gold.

Canadian regime in 2007 coined a 100kg gold coin ,pricing it at $1,000,000,though the gold market rate was $2milion at that time .This gold coin was produced to promote a new range of

Canadian Gold Maple Leaf coins.
Gold coins ca be collectors gold coins with high market value for its historical significance or gold bullion coins which are nowadays used as a safe risk free form of investment.

Gold ingots OR Gold coins are made in variations of Kilograms or Ounce ,I Kilograms they can range from 5gms onwards ,I ounce it is half ounce ,quarter and one-tenth ounce.

These gold coins do not have a printed value o them as the value depends on the weight of the coin and the current market rate. Gold under ISO 4217 has an international currency code of XAU.

Most countries have one design printed on their gold coins ,which remains constant every year ,some countries also produce new prints on their Gold coins for showcasing the significance of that particular year ,as every coin in most case has a date printed on it.

Nowadays ,Gold colored coins ,coins not made out of gold have made an appearance in currencies of many countries.
Gold Coins - hold on to 'em!

Article Tags: Gold Coins

Article Source: http://www.articlesbase.com/

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By: Duncan Lee

Forex trading holds significant differences to stocks trading. Understanding these differences will aid a trader in deciding the right market to enter. Forex trading itself has several advantages over stocks trading and is ideal for the beginner and individual small investors.

1. Low Transaction Costs for Forex Trading.

There are no hidden fees for forex brokers as they are not paid by the traditional commission based fees. The fee paid to the forex broker is calculated directly from the trade in the form of the bid ask spread. In forex trading, the spread is the difference in how much you pay for a currency and how much you sell it for. This spread is commonly expressed in "pips" or points.

2. Forex Trading is a 24 Hour Market.

Forex trading can be done anytime of the day, the forex market is open for business twenty-four hours a day. This is considered a huge advantage for individual small investors who are just starting out forex trading in their spare time. This allows forex traders to juggle their schedule around their trading opportunities; they can schedule their forex trading when it is convenient for them.

For those of you who are night owls and prefer to trade at 1am, then forex trading is just right for you. Depending on where you stay, there are banks opposite the globe open for you to trade.

3. Fast Trade Execution and High Liquidity in Forex Trading

Trading forex means that you are trading in cash. No other form of investment has more liquidity than cash and as such, trades are executed almost instantly. There is no lag time in forex trading.

4. Having Leverage and Margin in Forex Trading

One of the significant advantages that forex traders have is the ability to trade on margin. This gives them a huge leverage in their trading and presents the potential for extraordinary profits with relative small investments. Let’s take for example; with a forex broker that allows a margin of 100:1, you can buy $100,000 in currency with only a small $1,000 deposit. A word of caution for the uninitiated, leverage can go both ways and may lead to large losses if you are not careful.

5. Forex Trading Requires Only a Small Sample to Study.

Stocks trading present thousands upon thousands of stocks to trade. Small and large companies, international companies, newly issued IPOs etc. It is highly impossible to follow them all.

Forex trading, on the other hand, presents only seven major currencies to follow so that you can devote more time to each of them. Many successful forex traders do not even trade in all seven major currencies; they just choose three or four and master them to achieve success in forex trading.

6. No Bear Markets in Forex Trading.

In forex trading, since you can trade either short or long, you will be able to make money whether the prices go up or down, that is if your predictions are accurate of course.

7. Forex Market is Not Easily Influenced.

The forex market is so amazingly huge that no one individual, bank, fund or government body can influence it for a long period of time. Forex trading is the opposite of stocks trading where one negative television appraisal of a company's stock could possibly send it into a tailspin.

Based on the above advantages, forex trading is a clear winner for the beginner and individual small investors. If you are deciding on a form of trading to enter and master, then forex trading is the choice for you.

About the Author:

Duncan Lee, a successful forex trader with over 4 years of experience, has helped countless beginning traders go Fulltime Fast. Now, for a Very Limited Period, you can get an Insider's Special Report worth $47 for absolutely FREE at the official site here!: http://www.ExtremeForexTrading.com

Article Tags: forex, small, trading

Read more articles by: Duncan Lee Article Source: www.iSnare.com Permanent Link: http://www.isnare.com/?aid=102032&ca=Finances

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Author: Wendy Hearn

Almost two months after the big Christmas rush, it is still proving difficult to find the sony wii systems in stock and selling at its recommended retail price. Such is the popularity of the console, even well over a year after its original release, the most hardened shoppers are having difficulty tracking down good deals.

There are now a few retailers that have Nintendo Wii’s in stock but tracking these down can prove difficult and time consuming especially if you have to trawl around the shopping malls looking for them.

The stores that often offer good competitive prices for products are finding themselves out of stock most of them time. Until their shelves are restocked there is little chance of finding a Nintendo Wii there and most of the more expensive resellers are looking to cash in on the shortage.

To find Nintendo Wii systems in stock for a reasonable price will take some web savvy and vigilance. There are a number of websites on the internet devoted specifically to tracking the availability of Wii consoles at various high street and online outlets. If you are lucky you may be able to catch a fresh shipment and get your Wii for as little as $250.

However, you will need to be quick. It is rumored that the last shipment at this price to go for sale on Amazon.com sold out in 10 minutes. The sustained demand for the Nintendo Wii is nothing short of amazing over a year after its release in the United States. Figures show that about 500,000 have been sold every month since its release and that there is no sign of demand slowing.

Article Tags: Nintendo Wii, Wii, Wii Console, Wii Accessories, Sony Wii, Wii Systems

Article Source: http://www.articlesbase.com/

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Author: Harold Hsu

In choosing the right time frame to trade in, you should consider whether you enjoy the immediate (and sometimes instant) profit and loss consequence of trading in the short term, or if you prefer to establish positions and see them unfold over the next few days or weeks.

Trading In Short Time Frames

Trading in short time frames requires substantial time and your total attention because timing is of the utmost importance. Opportunities are created and lost in a manner of seconds, and a distracted trader will often find himself entering or exiting into positions at the wrong time. If you do not have the inclination to devote your exclusive time and energy in monitoring minute and hourly charts, you may not wish to consider becoming a short time frame trader.

Short time frame traders typically trade at a higher frequency with a lower profit expectation and risk per trade. As the trading time frame increases, medium and long time frame traders typically have lower trade frequencies with higher profit expectation and risk per trade.

Does Short Time Frame Trading Fit You?

An inappropriate trading time frame can cause a joyful trading experience to turn into a highly-stressful, frustrating event. Not every one is comfortable with trading like this. However, keep in mind that something stressful for one person may be an exciting challenge for another. There is no right or wrong answer, as choosing a trading time frame is a very personal decision.

Remember, you are making a crucial decision about the business of trading that you will be establishing. Life is too short to be in a position where you are constantly stressed and unhappy. Choose a time frame you are most comfortable with, and that is in line with your long term goals and aspirations.

Article Tags: Forex Trader

Article Source: http://www.articlesbase.com/

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