Archive for the ‘Forex’ category

Forex Market Hours

November 15th, 2011

Traders often ask what the Forex market hours are. This is much different from the normal American stock market hours, technically this market is open 24 hours a day. The Forex market allows you to trade any time of day or night. That doesn’t mean you should trade at any hour, you should find the best time to trade within the market. It does mean if you need to sell a Forex position in the middle of the night, then you can. Click here for the full forex market hours

Stock Trading Algorithms

November 7th, 2011

An algorithm is a logical mathematical angle that when used correctly will solve a problem. For our uses, the trading algorithm will mathematically solve the stock market by following a specific formula or procedure that takes the human element out of stock trading. By creating a mathematical formula you can rule out: whims, gut feelings and other emotions that a trader may have when entering or remaining in a trade. Read more about Stock Trading Algorithms

Buying Stocks on Margin

October 5th, 2011

Should I buy stocks on Margin?

Margin is the act of buying stocks using borrowed money through your broker. The amount of margin you can use is decided upon by your broker and the size of your account. Basically, the broker will lend you money based upon your accounts worth. Very similar to borrowing money for a mortgage on a house. In that scenario the bank looks at your value and what you can put down, then they loan you the rest for the house. With margin, you are attempting to use borrowed money to make a much larger gain. As you can easily see, borrowing money to invest in the stock market can be quite risky. If you buy in a bull market and use all the funds leveraged to you, you will make much more money than you would have without using margin. The same goes for a bear market and taking a loss. You can then lose much more money than you expected. Margin is a dangerous game. Read More about trading on margin.

Buying The Dips

September 26th, 2011

Buying the dips is a strategy used to purchase the stock you want at a better or cheaper price. When you find a stock you like you should begin to follow and chart the stock. Nothing moves straight up and even if your stock is moving upwards it will have a couple days of down prices before continuing its trend upward. Perfect timing when “buying the dips” would be to catch the stock on a pullback to a recent support area and then pick up the stock. You will be at an area of support and hopefully the support will hold and bring the price higher, in this case you will immediately have a green trade. Some traders use the buy the dip strategy to increase their position in a stock as well. Day traders will use this strategy for intraday trades where they look to pick up a gain by scalping. Read more about Buying the Dips

Buying a Stock: The 4 main things to look for.

September 14th, 2011

Lets assume everyone knows how to buy a stock. Get a broker, pick a stock, and pay for it. How many traders know what they are buying though? Here are 4 important things to look for in a company when you wish to invest in their company by purchasing a stock. Read more

How to Trade Stocks in a Stock Chat Room

December 10th, 2010

Trading in a stock chat room can be beneficial but it also has many draw backs. When trading stocks in a chat room you have more eyes on the stock market. In theory this means with more than one set of eyes you should be able to find more profitable trades. For this to actually happen it requires that you find a chat room with strong traders who can find trades that will be profitable and they need to be able to do this on a consistent basis. You will need traders who are at least as good as you and maybe trade a different sector. Read More Stock Chat Room

Arbitrage Trading

December 8th, 2010

What is Arbitrage Trading?
Arbitrage trading is one of many day trading strategies. It is the act of buying or selling a security within the trading day that takes advantage of value differences withing the market the security is being traded in. Every day the stock market is open arbitrage trades are being made all throughout the day.

An arbitrage trader will purchase a security and sell the same security (or one closely related) at the same time. They attempt to profit off of the value differences in the different markets. They may use the difference between CME futures and the NYSE for their trade. Often when news or events occur it can move the index higher or lower. Both markets will not move at the same time or for as strong a move. They will be unequal in price for a given amount of time. This is where arbitrage traders attempt to make their profit. More Arbitrage Trading

Trading with Candlesticks

October 5th, 2010

Since Steve Nison came up with his first book “Japanese Candlestick Charting Techniques” in 1991, forex traders stock traders, commodity futures traders all over the world have been awed and mystified by this centuries old charting tool! The ensuing interest for, and the widespread popularity of this trading tool was simply magical. Every Tom, Dick, and Harry dealing with any form of trading was scrambling for whatever available Candlestick tutorials, books, and lessons there are! Practically everyone in the investment industry was mesmerized by the simplicity and the seemingly promising trading results Candlestick will bring to its users More on Charting Penny Stocks

Swing Trading Strategies

October 4th, 2010

Many people that are interested in trading the stock market hope to replace some, if not all of their income. If your intention is to swing trade as your primary source of income, it’s most likely going to take a good amount of time before you can do it consistently. Do not go into swing trading thinking that a few weeks of practice is going to be enough to get you there. Be prepared to spend months or years learning and getting experience by trading before you can even think about quitting your job to trade full time.

Full time swing traders spend many hours a day, during trading hours and after to research their upcoming trades. People that do it full time also handle pressure very well, so if you don’t, then you may want to reconsider your intentions. Many people come to find out that they cannot handle the stress involved with trading as a full time job. When swing trading becomes your sole source of income, it can cause enormous pressure to consistently bring in money. You may also let your emotions get the best of you after a string of losses and gamble your money on trades that are not well thought out. This cuts short a lot of new traders futures. When you have a string of losses, the best thing to do is stop and evaluate what went wrong, not immediately trade more to try and right the situation.

To be good at swing trading, you do not have to be a genius or have a crazy high IQ; you just have to have self control. You have to have practice constraint, discipline and self calm. You must remain unemotional during all times, especially during loss. When a trade doesn’t go your way, do not try to make the situation right, just look for your next trading opportunity and move on. This is what separates the successful and the unsuccessful traders.

Once you get started swing trading on a full time basis, if you have good profit over a few months, don’t take that as a sign that you can quit your day job. There are ups and downs and you need to make sure you are trading with enough that you can support yourself. If you have monthly expenses of $6000, you cannot expect to make that much trading with $30,000. That would be a nearly 15% gain each month, which is not going to be consistently hit. Some of the best traders in the world only averaged 20%-25% a year over 25 years.

Most swing traders are in the market to add supplemental income or to improve the worth of their investments. This is far less stressful as you are not relying on the profits to live and pay expenses. If you make a mistake or have a string of losses, it won’t put you in a really bad position and you can just move on and learn from the mistakes. Part time swing traders usually do their analysis after they are off work and after market hours. They do their research and plan their trades for the next day.

It takes a lot of time and experience before you can be at a place where swing trading can replace a significant amount of your income, or all of it. You have to have a lot of capital and be able to control your emotions when it comes to trading. If this is your goal, get started slowly learning the stock market and practicing trades and one day you will be ready to take the plunge.

Related Blogs

The Guaranteed Return: A Common Investment Scam

August 30th, 2010

One of the most common investment scams that has been proliferated throughout
communities around the United States during the last few years is the guaranteed
return. In this article, we will address the specifics of this scam and point out
how to avoid it. This single scam may cause more investor losses each year than
every other investment scam added together.

The Guaranteed Return

Bob is an incredible trader. In fact, he is so good that he is willing to give
you 2% per month on your investment. You give him $10k, $50k, $100k, and he will
guarantee a steady check each month of 2% of your principal investment. This is the
basic operation. Now the trader who is running the scam usually does one of three

- He never trades the money in a penny stock, stock fund, forex account, or what
ever the investment portfolio is designed to invest in. Instead he uses it to
finance a lavish and luxurious lifestyle of boats, cars, houses, vacations,

- He deposits the money into an account and trades it, but he also withdraws
money whenever he wants in order to finance that luxurious lifestyle.

- He deposits all the money in a trading account and trades it. He never does
take any out to finance a luxurious lifestyle, but he continually loses money as a
trader. Instead of being forthright about his losses, he keeps losing and losing
until there is no money left in the account.

One of these three scenarios plays out in this scam. The most common is number
1, although number 2 and 3 do happen. The trader perpetuates the scam by continuing
recruiting new investors, but this is where the scam gets very difficult to uncover.
Usually the trader does not do any formal advertisement or marketing. These types
of scams generally perpetuate through word of mouth and circles of trust. For
example, they will often occur in church, civic, and social circles, and because
they perpetuate by word of mouth, new investors rarely question the legitimacy of
the investment operation.

The math works as follows. If a trader has $1 million under ?management,? and he
is promising a guaranteed return of 2% each month, then he only has to pay out
$20,000 each month. That means that in a year he only has to pay out $240,000.
That leaves him with a lot of extra money to spend on whatever he wants. And then,
the more investors he brings in, the longer he can perpetuate the scam. Eventually
everything falls apart when enough investors call up for their principal at the same
time. Then, the trader will not have enough money to pay back investors, and the
entire fraudulent operation falls apart, and investors realize they have been bilked
out of their money.

The scams often tend to fall apart during times of recession and economic
uncertainty because many investors will call for their capital in order to increase
their liquid holdings. When these investment scams are exposed, investors rarely
get any capital back, and if they do, it is generally pennies on the dollar.

How To Avoid The Guaranteed Return Scam

Never invest with anyone that guarantees a return no matter how great it sounds.
It is impossible to guarantee a return in financial markets.

Never invest with a ?trader? that is not fully registered with Regulatroy
official, such as the SEC
of NFA.

These two steps alone will dramatically decrease your chances of falling victim
to the Guaranteed Return Scam. If you believe you may be in a scam at the moment,
the safest thing to do is contact your local FBI office and an attorney and ask them
for advice.

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