tag:blogger.com,1999:blog-61311880868766623412024-03-12T16:06:44.829-07:00Financial BlogUnknownnoreply@blogger.comBlogger473125tag:blogger.com,1999:blog-6131188086876662341.post-72016707096669525132011-12-27T07:21:00.000-08:002011-12-27T07:21:00.248-08:00RISING MARKETS ARE ALWAYS GOOD?Traders who choose to follow our contrarian ripple trading method will be
beneficiaries of a fringe benefit that they are freed from the tyranny of the
“markets going up are good—markets going down are bad” syndrome. It is
typical in the financial press and TV business news to hear talk of a good
day on the market when stocks are up and, in solemn tones, a bad day on
the market when the Dow is Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-10966956035593138562011-12-26T00:33:00.000-08:002011-12-26T00:33:00.063-08:00Option Status Relative to the Underlying StockITM
A call option is said to be ITM when the underlying stock is trading for
more than the option's strike price. By contrast, a put option is ITM when
the underlying stock is trading for less than the option's strike price.
When the strike price of a call option is less than the current price of the
underlying security, the call holder can exercise the option and effectively
acquire the Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-28385737692976574562011-12-25T23:18:00.000-08:002011-12-25T23:18:00.207-08:00Carry Trade Strategy IdeasIs it possible to earn some passive income while you hold certain currency positions
over a period of time? The spot forex market offers just that opportunity. The Carry
Trade Strategy is a popular way of trading the global forex market, and is a strategy
highly favoured by large financial institutions such as hedge funds, pension funds
and banks. What makes carry trades so desirable is the Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-19530647989867544552011-12-21T00:32:00.000-08:002011-12-21T00:32:00.253-08:00When is a trend not a trend?When it’s a range. A trading range or a range-bound market is a market that remains confined within a relatively narrow range of prices. In currency pairs, a short-term (over the next few hours) trading range may be 20 to 50 pips wide, while a longer-term (over the next few days to weeks) range can be 200 to 400 pips wide.
For all the hype that trends get in various Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-69751827423723656702011-12-20T09:45:00.000-08:002011-12-20T09:45:00.756-08:00Margin Investors Learn the Hard Way That Brokers Can Get Tough on LoansFor many investors, Friday, April 14, was a frightening day, as the Nasdaq Composite Index plunged a record 355.49 points, or 9.7%. For Mehrdad Bradaran, who had been trading on margin—with borrowed funds—it was a disaster.
The value of the California engineer’s technologyladen portfolio plummeted, forcing him to sell $18,000
of stock and to deposit an additional $2,000 Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-12234578875121011122011-12-15T05:55:00.000-08:002011-12-15T05:55:00.205-08:00Types of Transaction In Forex MarketThe participants in the foreign exchange markets effect transactions for various purposes,
principally arsing from the need to cover or hedge other financial or commercial operations,
although in practice it is sometimes difficult to draw a clear line between these categories. For
example, covering and hedging operations may well contain elements of speculation. Whatever
the nature of the Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-87143191139058665802011-12-12T05:30:00.000-08:002011-12-12T05:30:03.527-08:00Long-Term LoansPlant and equipment purchases and other long-term investments,
including acquisitions of other companies, are typically
financed with term loans covering periods of one to 10 years,
with terms between three and five years being the most common.
Term loans are designed to finance a major cash outlay
and spread the repayment of the loan, including interest, over
a period of time roughly Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-21930552115564436622011-12-11T05:34:00.000-08:002011-12-11T05:34:00.715-08:00Using Stock Sectors And Groups For Better TradingThis is for equity traders and stock option traders. There are two approaches
you can use to decide what stocks to trade. One is called a topdown
approach, and the other is called a down-up approach. Here are the
differences:
1. Top-down approach:
a. Sector
b. Group
c. Individual
In using this approach, you start the analysis at the sector level
and work your way downward to individual stocks. Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-84271696279330006082011-12-10T03:42:00.000-08:002011-12-10T03:42:00.542-08:00BEWARE OF TAKING PROFITS TOO EARLY“You can’t go broke taking a profit” is something I’ve heard many times
over the last 30 years. But what I’ve found is that you can go broke taking
a profit.
Every method has a certain number of losses and a certain number
of gains. That is the nature of every method. There can be variances
around that number for short periods of time but not over the long run.
Let’s go back to our example of Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-84875498280967608922011-12-09T02:10:00.000-08:002011-12-09T02:10:01.208-08:00Options ExecutionThe options trading floor is still an open-outcry system, but technology
is changing rapidly: Many orders are still executed the old way (floor
execution), with hand signals, screaming, and paper and pencil. As this
style oftrading gives way to faster methods of execution, brokerage firms
can pass along savings by bypassing the staff that is needed to execute
orders in the traditional Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-41566862496947905452011-12-08T07:34:00.000-08:002011-12-08T07:34:00.120-08:00Research The ConsensusAnother insight into market positioning and the value of determining
the consensus view can be gained from the activity surrounding
economic data releases—but this time from the
activity in advance of the release. Surveys are readily available
from media services that quantify the expected responses to the
release of each specific data item. While the consensus number
is valuable in determining Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-59105545789922118032011-12-07T00:56:00.000-08:002011-12-07T00:56:00.378-08:00The Inherent Instability in the Forex MarketSwings in currency value always seem obvious in hindsight, but
those caught up in them almost never know exactly when, or how
much, a currency will move. That is because the “X factor”—the
element of the unexpected that is present in all markets—is far
more potent in the foreign exchange market.
Clive Crook, in the Economist (May 2, 2003), explains why. It
is conventional wisdom that increased Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-84032166007635196072011-12-06T23:31:00.000-08:002011-12-06T23:31:00.384-08:00Avoiding Fraud and Safe Yourself In Trading WorldGenerally speaking, foreign currency futures and options contracts
may be traded legally on an exchange or board of trade that has
been approved by the CFTC. Even where currency trading does not
occur on a commission-approved exchange or board of trade, it
can be conducted legally. In such a case, generally speaking, one or
both parties to the trade must be (or must be a regulated affiliate
of) aUnknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-25902466628380777522011-12-05T04:46:00.000-08:002011-12-05T04:46:00.363-08:00You Should Avoid Boredom!!I was interviewed in Technical Analysis of Stocks & Commodities magazine
a number of years ago. One answer that I gave surprised them. They
asked me what my biggest problem as a trader was.
I told them boredom!
They were shocked; nobody had ever suggested that. Everybody else
thought that trading was exciting.
In the mid-1990s I had the opportunity to train some traders from a
Korean bank. IUnknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-52581863457250420992011-12-03T02:58:00.000-08:002011-12-03T02:58:00.432-08:00BROKER QUALIFICATIONS— DID YOUR BROKER GO TO COLLEGE?Brokers, like other professionals such as doctors, certified
public accountants (CPAs), and lawyers, are required to have licenses
to conduct their jobs. The qualifications required to obtain
a broker’s license, though, are significantly fewer than in other
professions.
Being a medical doctor requires a person to concentrate his
undergraduate years in the sciences followed by many years of more
Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-43898148431774233952011-12-02T00:35:00.000-08:002011-12-02T00:35:00.516-08:00Effect of the Business Climate In Price ValuationThe same forces that affect the value of a business have an
impact on the price of currencies. In fundamental terms, a
company is valued on the basis of its balance sheet and current
or future income as well as intangible factors that will
affect that future income, including business model and plan,
management and leadership, competitive advantage, and
adherence to laws and regulations. ExternalUnknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-72198850432888223032011-12-01T03:07:00.000-08:002011-12-01T03:07:00.538-08:00WHAT ARE STOCHASTICS?Stochastics are a form of oscillator. An oscillator measures the rate of change of prices. The simplest oscillator takes the current price and subtracts the price some number of days ago. For example, suppose EUR/USD closed today at 1.2050 and closed 10 days ago at 1.2000. The oscillator value would be 0.0050. This process would be repeated each day and plotted on a graphUnknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-51901961300511823682011-11-27T07:21:00.000-08:002011-11-27T07:21:00.177-08:00BUY THE RUMOR, SELL THE NEWS . . . OR BUY THE NEWS?Another of those well-worn Wall Street adages and one that has a good
pedigree goes, “Buy the rumor, sell the news.” Stocks often enjoy a good
upward run based on chatter among market professionals regarding forthcoming
news, such as strong quarterly numbers. Often the so-called “whisper
number” circulating among the professionals is higher than the number
that stock analysts have arrived at in Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-18940608129302717942011-11-26T00:33:00.000-08:002011-11-26T00:33:00.344-08:00Types Of Stocks CallsLong Stock
Long stock is the most common position among investors. After analyzing
the fundamentals of a company and deducing that the company's product,
its revenue model, and current market conditions reflect the likelihood
of positive growth, the retail investor purchases the stock as an
investment in that company: Over a period oftime, ifthe investor's analysis
proves correct, the stock valueUnknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-37687821896607482912011-11-25T23:18:00.000-08:002011-11-25T23:18:00.395-08:00How To Filtering False BreakoutsI usually do not trade a price breakout at the first attempt, unless there are other
reasons (technicals or market sentiment) to convince me to do so. While most
people are more afraid of losing out on a potentially great opportunity than losing
their money in a bad trade, I prefer to let the price breakout play out the scene first
before deciding on the next move. One way of doing that is to Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-67843798869946961542011-11-21T00:18:00.000-08:002011-11-21T00:18:00.548-08:00Trading Style: Different Strokes for Different FolksAfter you’ve given some thought to the time and resources you’re able to devote to currency trading and which approach you favor (technical, fundamental, or a blend), the next step is to settle on a trading style that best fits those choices.
There are as many different trading styles and market approaches in FX as there are individuals in the market. But most trading Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-24797143473418741052011-11-20T09:45:00.000-08:002011-11-20T09:45:00.242-08:00TRADING ON THE OTC MARKETOn the exchanges, all trading occurs through a specialist. On the over-the-counter (OTC) market, however, trades are negotiated directly through dealers who maintain an inventory of selected securities. Dealers sell from their inventories at ask prices and buy for them at bid prices.
An investor who wishes to purchase or sell shares engages a broker who tries to locate the dealer Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-49529465813287827922011-11-15T05:55:00.000-08:002011-11-15T05:55:00.952-08:00Major Participants Of Trading MarketParticipants in the foreign exchange market are many and varied and the individual involvement
of each participant can vary dramatically. Surveys over recent years tend to indicate
that participants can broadly be divided into three main groups: banks, brokers and clients.
Commercial banks are by far the most active, while brokers act as intermediaries. Clients can
be classed as anything from Unknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-1471683949287778312011-11-12T05:30:00.000-08:002011-11-12T05:30:00.470-08:00Short-Term LoansShort-term loans often take the form of lines of credit, also
known as “loan commitments,” in which the bank and the
borrower agree in advance that the latter can draw against the
credit line as needed up to some maximum limit. Within this
limit, the borrower decides on the timing and the amount of
the borrowings. In this way, lines of credit function much like
credit cards. The main advantage ofUnknownnoreply@blogger.comtag:blogger.com,1999:blog-6131188086876662341.post-32555129746198801632011-11-11T05:34:00.000-08:002011-11-11T05:34:00.567-08:00Design Your Business PlanRUNNING YOUR TRADING AND INVESTING
AS A REAL BUSINESS
Trading and investing is a real business—run it that way! Just like a restaurateur has accounting to do, food that spoils, overhead to pay, and needs sufficient capital, you will face similar business challenges. Food that
spoils is like being stopped out of trades, money gone. Overhead to pay is like having to buy computers, Unknownnoreply@blogger.com