Candlestick Trading Blog

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The commodity trader understands that commodities are a great way for investors to diversify their portfolio in addition to investing in the more traditional stocks and bonds. More and more people are opting to invest in commodities now that the internet has made is so accessible. Most commodities market participants are institutional or commercial users of the commodities that they trade. They are referred to as speculators and hedgers. Speculators aim to profit from changes in the price of the futures contract while hedgers (hedging) use the commodity markets to reduce the risk of financial loss due to these price changes. The most popular way that the trader invests in commodities is through futures contracts. A futures contact is an agreement to buy or to sell a commodity in the future at a specific price and also at a specific quantity. There are numerous commodities available including gold, wheat, natural gas, corn, cattle, and many more. The price of a commodity is determined by the supply and the demand for that particular commodity in the futures market. There are numerous factors to take into consideration that affect the price of commodities. Some of which include war, weather, as well as many economic factors. Gold investing is one major commodities investment that many opt to participate in. It is popular because it is considered the universal currency and the gold price is directly related to many economic factors. The gold commodity trader knows that fluctuations in gold prices can actually make the markets move. Furthermore, when the economy is forecasted to improve are corporate earnings estimates are on the rise, investors actually tend to turn to equities rather than gold. Additionally, when the economy does not have a favorable forecast and the currency rates decreases, gold investing quickly becomes popular again. Wheat is another popular commodity and is a major ingredient in many popular cereals and foods. Fluctuating wheat prices can have a major impact on many players including companies and consumers. When commodity investing, food producers are able to pass along some of the costs associated but they have to absorb a lot of the costs as well. This can greatly impact their profit margin. The commodity trader learns about numerous types of commodities as well as different commodity trading strategies to help them trade. Continue your commodity trading education and see if commodities are for you. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

posted by Stephen W. Bigalow at 11:19 AM   Add to del.icio.us DIGG THIS!

FX Trader Types When dealing with the forex market, also referred to as the FX market and the foreign exchange market, there are many types of FX traders and market participants. The forex market is the largest and the most liquid of the markets and is available for trading twenty four hours per day. In today's article we discuss the different types of market participants that practice trading in the forex market. Hedgers – this FX trader practices hedging against movements in forex exchange rates or exchanging currency in order to fund international transactions. These are some of the biggest clients of banks and other large institutions (other market participants explained below). Hedgers aim to reduce the uncertainty of the foreign exchange risk through hedging strategies in order to lock in specific exchange rates for the future or to remove risk for the transaction. They are various ways that they do this. Speculators – this type of FX trader aims to make money by taking advantage of fluctuating exchange rates levels rather than to hedge against movement in exchange rates or exchanging currency like hedgers. In fact, some of the largest speculators that participate in this type of forex trading are hedge funds. These hedge funds are unregulated and are quite controversial. They act similar to mutual funds and allow investors to invest large amounts of money that inevitably affect a country's economy and therefore their currency. Central Banks and Government – central banks are involved with the manipulation of reserve volumes in order to meet economic goals which ultimately affects foreign currencies and their value. These central banks often (depending upon the country and currency) act in tandem with government in order to balance inflation and keep interest rates low in order to increase economic growth.  Banks and other types of financial institutions – banks are some of the largest participants involved with forex transactions. In fact, banks act as dealers in that they can buy currency and sell currency at the bid/ask price. They will often exchange currency at a premium to the price that they paid to obtain the currency in order to make money. Banks also have somewhat different exchange rates as well for the same currencies since it is a decentralized market.  The above information should provide you with basic information regarding the type of FX trader that exists as well as a little information about the forex market in general. Continue your forex trading education and see if this market works for you. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

posted by Stephen W. Bigalow at 12:06 PM   Add to del.icio.us DIGG THIS!

Option trading deals with options contracts that give the buyer the right but not the obligation to buy or sell an underlying asset at a set price on or before a specific date. In today's article we provide a list of facts about trading options as well as the different options strategies available to investors.  •    Options are derivatives since they derive their value from an underlying asset. •    Options markets include four different participants. These include buyers of calls, buyers of puts, sellers of calls, and sellers of puts. •    Calls give the holder the right to buy an asset at a specific price within a specific set amount of time and puts give the holder the right to sell an asset at a set price within a specific period of time. •    Stock options contracts represent 100 shares of the underlying stock. •    The total cost of an option is referred to as the premium, which is determined by factors including the strike price, the stock price, and the time that remains until the options contract expires. •    Buyers are typically referred to as holders and sellers are typically referred to as writers. •    There are two main classifications of options known as American and European. •    The strike price is the price at which the underlying stock can be purchased or sold when stock option trading. •    Investors will use stock options when speculating and hedging. •    Long-term options are known as LEAPS. There are several option trading strategies including bullish, neutral and bearish option strategies. We list them below. Bullish Strategies •    Buying Calls •    Selling Calls •    Bull Call Spread •    Bull Put Spread Bearish Strategies •    Buying Puts •    Selling Calls •    Bear Call Spread •    Bear Put Spread •    Put Hedge Neutral Strategies •    Selling Covered Calls •    Sell Straddle •    Sell Strangle •    Calendar Spread There is a lot to learn when learning about online options trading. Continue to research and learn more about options, take online courses, attend seminars, and join online forums. It is important to meet others who practice trading options as well. Find out if online options trading is right for you.  Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

posted by Stephen W. Bigalow at 3:10 PM   Add to del.icio.us DIGG THIS!

Trading forex online is a great way that many investors make money and there is a lot of information that you should know before you begin to trade forex. Forex, also referred to as FX, is the market in which currencies are traded and it is the most liquid and the largest market in the world. It is estimated that the total average traded value is more than $1.9 trillion per day. The forex market is open 24 hours per day, five days per week where currencies are traded worldwide. The major financial centers are London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney. There are generally three types of forex traders including short-term traders, medium-term traders, and long-term traders. We describe each type of trader below. Short-Term Traders – These traders, also known as scalpers or day traders, practice trading forex online by taking advantage of small price movements with a large amount of leverage. These traders will open and close trades within minutes and there is either quick profits or losses when forex trading. This type of FX trading is risky in that it requires large capital due to the amount of leverage required to make a profit from such small price movements.  Medium-Term Traders – These traders, also known as swing traders, typically hold their positions for one or more days. These traders require lower capital than with day trading because leverage is typically only necessary to increase profits. Long-Term Traders – These traders hold positions for months and even years and they base their decisions of fundamental analysis. (Short and medium-term traders base their decisions on technical analysis). Long-term traders require large capital in order to cover volatile movements against their open positions. When learning about trading forex online you must know that currency is traded in pairs. The value of currency is determined by the comparison to another currency. When trading currency, this currency pair tells the trader how much of the quote currency is needed in order to purchase one unit of the base currency. The base currency is the first currency that is quoted in the currency pair when currency trading. It is also the considered the domestic currency that will be used to determine profits and losses. It is for this reason that it is also referred to as the primary currency. For example, if you were looking at the USD/CAD currency pair, the US dollar would be the base currency and the Canadian dollar would be the quote currency. There is a lot more to learn about when trading forex online. Continue your forex trading education and determine if it is the right market for you. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

posted by Stephen W. Bigalow at 12:24 PM   Add to del.icio.us DIGG THIS!

Margin Buying Introduction Margin buying provides a great opportunity for stock investors to make huge profits using less money. It is a very common trading strategy that greatly increases a stock traders buying power but it must be used with great caution and knowledge since it also comes with very high investment risk. A trader's success depends on many factors but these factors are very manageable as long as you take the time to educate yourself and have discipline in your trading. Margin buying allows the stock trader to spend more money that he or she actually has. The trader must put down a certain amount of money to be used as collateral and then he or she borrows money from their stock broker to make up the difference for the total cost of the stock that is being purchased. Again, margin trading is a great way to make a lot of money off of a pretty small initial capital. There are some basic terms that investors will come across when learning about buying stocks on margin. These terms are explained below. Margin Account – this is a type of trading account where stocks can be purchased for a combination of cash and a loan when margin buying. The investor must deposit a minimum balance of about $2,000 to $5,000 into the margin account initially. This is to serve as collateral against what he or she borrows from the broker, and then the owner is asked to either sell a portion of the stock or add more cash if the value of their stock drops sufficiently. Margin Call – a margin call is a demand for additional funds due to adverse price movement when margin buying. This is what happens when you get a call from your broker to add more funds to your account when the value of the stock decreases sufficiently. Margin Rates – margin rates are the interest rate charged on a margin account and it varies from one broker to the next. While it is typically tied to the prime interest rate, it usually ranges from 6.5% to about 10%. Of course you can find lower rates if you go with a discount broker as opposed to a full service broker. There are many advantages to margin buying such as increased buying power with less money, more profit with less invested, and a trader can borrow up to half (50%) of his purchasing price as initial margin. This type of stock trading is more suited more those traders who have a lot of experience and/or trading knowledge. This is due to the risks that are associated with trading on margin such as the fact that you have to payoff interest on margin, you lose big when you lose, trader have much less control with falling stocks prices. Just be sure that you do your homework, have a trading plan, and that you trade with discipline when trading on margin. Online Stock Market Reviews presented live via the internet by Stephen Bigalow	Website Specials

posted by Stephen W. Bigalow at 10:52 AM   Add to del.icio.us DIGG THIS!