How to Understand Binary Options

A Binary Option is a type of option where the payoff is all or nothing. Because of this characteristic, Binary Options can be easier to understand and trade than traditional options.

Binary Options are cash-settled as European-style options, meaning they can only be exercised on the expiration date. If, at expiration, the options settle in-the-money, the buyer or seller of the options receives a pre-specified dollar amount. Similarly, if the options settle out-of-the-money, the buyer or seller of the options receives nothing. This provides a known upside (gain) or downside (loss) risk assessment. Unlike traditional options, Binary Options provide full payout due to a single pip movement.

Despite the term "all or nothing", depending on the actual trading platform, "nothing" can actually mean "something". This means that at expiration time the owner of the option may actually get a certain payout amount, even if the option expired "out of the money".

Steps

1.Learn the two outcome options. A trader of Binary Options needs to anticipate the expected direction of the price movement of the underlying asset. Unlike traditional options, knowing the direction of the price movement, as well as magnitude of the movement, is not required. If the investor has an opinion about an underlying asset and wants to places a trade, s/he can trade Binary Options.

2.Decide your position. Buy if you believe the market price will rise or the economic event will occur. Sell if you think the opposite. If your insight is correct, on the expiration date, your payoff is the settlement value of your contract.

3.Learn how the price is determined. The price of a Binary Option contract is equal to the probability of the event happening. For example, if the contract value has a value of $100 and the last trade of the contract was at $96.00, it is an indicator that 96% of the market believes that the event is going to happen and the contract will end up in-the-money.

4.Learn the advantages of trading Binary Options over Traditional Options.

a.) Binary Options are generally simpler to trade because they require only a sense of direction of the price movement of the underlying asset, whereas traditional options require a sense of direction as well as the magnitude of the price movement.

b.) Binary Options have controlled risk to reward ratio, meaning the risk and reward are pre-determined at the time the contract is acquired. Traditional options have no defined boundaries of risk and reward and therefore the gains and losses can be limitless.

c.) Binary Options provide nearly all the trading and hedging strategies that are possible while trading traditional options. Binary Options maintain a level of trading sophistication and functionality.

d.) Unlike a traditional option, the payout amount is not proportional to the amount by which the option ends up in-the-money. As long as a Binary Option settles in-the-money by even one tick (regardless of how much in-the-money it is), the winner receives the entire fixed payoff amount.

e.) Binary Options offer contracts with short-term durations. In some markets, Binary Options contracts close multiple times throughout the trading day, while others may last as long as a quarter. This provides the trader with several investment opportunities and flexibility as markets change over time.

5.Learn where binary options are traded. Binary Options have been enormously popular in Europe and are extensively traded in major European exchanges, like EUREX. In the United States, there are a few places where Binary Options can be traded. The Chicago Board of Trade (CBOT) offers Binary Options trading on the Target Fed Funds Rate. To trade these contracts, traders must be members of the exchange or investors are required to trade through such members to execute a trade - the value of each contract is $1000.

Tips

Know the underlying asset - Binary Options derive their financial value from underlying assets.Before investing in a Binary Options, make sure you understand the underlying asset, are familiar with the relevant financial markets and where the asset is traded. Example: Silver Futures are listed on NYMEX/COMEX.

Know how to interpret a Binary Option price - The price at which a Binary Option is trading is an indicator of the chances of the contract ending in-the-money or out-of-the-money.

Know when to get out of a position - An intuitive trader acts promptly when he feels that his binary contract is going to end out-of-the-money at expiration. Example: You have a $75.00 Silver contract that you feel is not going to expire in-of-the-money. Instead of holding it until expiry, selling it at $30.00 and neutralizing your open interest will help you manage the loss (i.e. $45.00 instead of $75.00).

Understand the relationship between risk and reward - Risk and reward go hand-in-hand in binary option trading. The more the risk or unlikelihood of a particular outcome occurring, the greater the reward associated with it. An intelligent investor understands and weighs each contract on these two matrices before taking a position in a contract.




As an example, an investor who follows foreign currency movements senses that the USD is gaining ground against the YEN and wants to hedge his risk and try to protect his Japanese investment from dropping in value. He may do this by buying 10,000 binary contracts on HedgeStreet, which are “USD/YEN rate will be above 119.50” by 4:00 PM ET tomorrow. If his analysis is correct and the USD gains ground over the Yen, rising above 119.50, the 10,000 binary contracts will expire in-the-money, yielding a total payout of $1,000,000. If he paid $75 per contract, he will make $25 per contract, which is a $250,000 total profit - a 33% rate of return on his investment. However, if the Yen did not end above 119.50, the 10,000 binary contracts will expire out-of-the-money. In this case, the trader would lose his initial investment on the binaries, but would be compensated by the gain in value in his Japanese investments.

source : wikihow

How to Behave in a Foreign Country

If you've ever been to a foreign country, you will know that fitting in isn't easy. Chances are, they will have a different language, set of customs, monitary unit, and way of life. Here's how to get a basic grasp on things before going to a different country.

Steps

1.Learn about the country. Get a base of knowledge. Where is the country located? What are their traditional foods? These and other questions should be answered. If you know someone who has lived in/been to the country in question, ask them to tell you a bit about the country.

2.Attempt basic phrases. If you do not know how to speak their language, it will be hard to master the entire language in a short amount of time. If you have previously taken the language, brush up on it. If you have never spoken the language, buy a dictionary (i.e. an English to French dictionary, not a French to English dictionary). You may want to invest in a computer language program, or a tutor to help you learn key phrases. Remember that you will not have time to learn the entire language so focus on things like; asking for directions, ordering in restaurants, asking and telling time, and money transactions. Learn these phrases along with the basic please, thank you, hello, and goodbye. Remember that with a polite attitude and a smile, your basic language skills will be forgiven.

3.Try to meet someone who knows about or has been to the country. If it is a country like France or Spain, you may want to ask a French or Spanish teacher from a local high school. Chances are they will not only know the language very well, but will have spent time there. If it is a less known country, you may be out of luck. In this case, search the Internet and the library. You will be better able to learn from a person, but books can be just as resourceful!

4.Have a basic understanding of customs. If you are being tutored in the language, ask your tutor to teach you some of their customs. However, when all else fails, don't point, don't shout, and always say please and thank you. If you do end up in a tangle because of your lack of customs, calmly explain that you are foreign and that it was an accident. Basic English customs are not the same around the world (especially as you get into Asia and Africa) but will provide as a base for most European countries.

5.Handle your money well. Money can be confusing, but cover all your bases. Understand the name of the monetary unit (i.e. dollars) and know the names of the coins/bills within the unit (i.e ten-dollar bill, quarters). Do this in your own country before heading off. Exchange your bills a couple of weeks before you go and practice recognizing them. Know the basic conversion (i.e. one pound is about two dollars). Recognize fair prices and know how to make basic money transactions.

Tips

Be polite and pay attention. As you pick up clues from residents of the country, use them.

Never leave your luggage alone.

Don't be afraid to ask questions about anything.

source : wikihow

Importance of Stock Market

Function and purpose

The stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise additional capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate.

History has shown that the price of shares and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. An economy where the stock market is on the rise is considered to be an up and coming economy. In fact, the stock market is often considered the primary indicator of a country's economic strength and development. Rising share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also affect the wealth of households and their consumption. Therefore, central banks tend to keep an eye on the control and behavior of the stock market and, in general, on the smooth operation of financial system functions. Financial stability is the raison d'être of central banks.

Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that the counterparty could default on the transaction.



The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as employment. In this way the financial system contributes to increased prosperity. An important aspect of modern financial markets, however, including the stock markets, is absolute discretion. For example, American stock markets see more unrestrained acceptance of any firm than in smaller markets. For example, Chinese firms that possess little or no perceived value to American society profit American bankers on Wall Street, as they reap large commissions from the placement, as well as the Chinese company which yields funds to invest in China.

However, these companies accrue no intrinsic value to the long-term stability of the American economy, but rather only short-term profits to American business men and the Chinese; although, when the foreign company has a presence in the new market, this can benefit the market's citizens. Conversely, there are very few large foreign corporations listed on the Toronto Stock Exchange TSX, Canada's largest stock exchange. This discretion has insulated Canada to some degree to worldwide financial conditions. In order for the stock markets to truly facilitate economic growth via lower costs and better employment, great attention must be given to the foreign participants being allowed in.

Relation of the stock market to the modern financial system

The financial systems in most western countries has undergone a remarkable transformation. One feature of this development is disintermediation. A portion of the funds involved in saving and financing flows directly to the financial markets instead of being routed via the traditional bank lending and deposit operations. The general public's heightened interest in investing in the stock market, either directly or through mutual funds, has been an important component of this process. Statistics show that in recent decades shares have made up an increasingly large proportion of households' financial assets in many countries.

In the 1970s, in Sweden, deposit accounts and other very liquid assets with little risk made up almost 60 percent of households' financial wealth, compared to less than 20 percent in the 2000s. The major part of this adjustment in financial portfolios has gone directly to shares but a good deal now takes the form of various kinds of institutional investment for groups of individuals, e.g., pension funds, mutual funds, hedge funds, insurance investment of premiums, etc. The trend towards forms of saving with a higher risk has been accentuated by new rules for most funds and insurance, permitting a higher proportion of shares to bonds.

Similar tendencies are to be found in other industrialized countries. In all developed economic systems, such as the European Union, the United States, Japan and other developed nations, the trend has been the same: saving has moved away from traditional (government insured) bank deposits to more risky securities of one sort or another.

The stock market, individual investors, and financial risk

Riskier long-term saving requires that an individual possess the ability to manage the associated increased risks. Stock prices fluctuate widely, in marked contrast to the stability of (government insured) bank deposits or bonds. This is something that could affect not only the individual investor or household, but also the economy on a large scale. The following deals with some of the risks of the financial sector in general and the stock market in particular. This is certainly more important now that so many newcomers have entered the stock market, or have acquired other 'risky' investments (such as 'investment' property, i.e., real estate and collectables).

With each passing year, the noise level in the stock market rises. Television commentators, financial writers, analysts, and market strategists are all overtaking each other to get investors' attention. At the same time, individual investors, immersed in chat rooms and message boards, are exchanging questionable and often misleading tips. Yet, despite all this available information, investors find it increasingly difficult to profit. Stock prices skyrocket with little reason, then plummet just as quickly, and people who have turned to investing for their children's education and their own retirement become frightened. Sometimes there appears to be no rhyme or reason to the market, only folly.

This is a quote from the preface to a published biography about the long-term value-oriented stock investor Warren Buffett. Buffett began his career with $100, and $105,000 from seven limited partners consisting of Buffett's family and friends. Over the years he has built himself a multi-billion-dollar fortune. The quote illustrates some of what has been happening in the stock market during the end of the 20th century and the beginning of the 21st century.

source : wikipedia, nasdaq, NYSE

Stock Market - history of trading universal

A stock market is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.

The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2008. The total world derivatives market has been estimated at about $791 trillion face or nominal value, 11 times the size of the entire world economy. The value of the derivatives market, because it is stated in terms of notional values, cannot be directly compared to a stock or a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a comparable derivative 'bet' on the event not occurring.). Many such relatively illiquid securities are valued as marked to model, rather than an actual market price.

The stocks are listed and traded on stock exchanges which are entities of a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together. The stock market in the United States is NYSE while in Canada, it is the Toronto Stock Exchange. Major European examples of stock exchanges include the London Stock Exchange, Paris Bourse, and the Deutsche Börse. Asian examples include the Tokyo Stock Exchange, the Hong Kong Stock Exchange, and the Bombay Stock Exchange. In Latin America, there are such exchanges as the BM&F Bovespa and the BMV.

Trading

Participants in the stock market range from small individual stock investors to large hedge fund traders, who can be based anywhere. Their orders usually end up with a professional at a stock exchange, who executes the order.

Some exchanges are physical locations where transactions are carried out on a trading floor, by a method known as open outcry. This type of auction is used in stock exchanges and commodity exchanges where traders may enter "verbal" bids and offers simultaneously. The other type of stock exchange is a virtual kind, composed of a network of computers where trades are made electronically via traders.

Actual trades are based on an auction market model where a potential buyer bids a specific price for a stock and a potential seller asks a specific price for the stock. (Buying or selling at market means you will accept any ask price or bid price for the stock, respectively.) When the bid and ask prices match, a sale takes place, on a first-come-first-served basis if there are multiple bidders or askers at a given price.

The purpose of a stock exchange is to facilitate the exchange of securities between buyers and sellers, thus providing a marketplace (virtual or real). The exchanges provide real-time trading information on the listed securities, facilitating price discovery.

Market Participants
A few decades ago, worldwide, buyers and sellers were individual investors, such as wealthy businessmen, with long family histories (and emotional ties) to particular corporations. Over time, markets have become more "institutionalized"; buyers and sellers are largely institutions (e.g., pension funds, insurance companies, mutual funds, index funds, exchange-traded funds, hedge funds, investor groups, banks and various other financial institutions). The rise of the institutional investor has brought with it some improvements in market operations. Thus, the government was responsible for "fixed" (and exorbitant) fees being markedly reduced for the 'small' investor, but only after the large institutions had managed to break the brokers' solid front on fees. (They then went to 'negotiated' fees, but only for large institutions).

However, corporate governance (at least in the West) has been very much adversely affected by the rise of (largely 'absentee') institutional 'owners'.

source : wikipedia.org, seekingalpha.com

Financial Market - learns to more issue market

In economics, a financial market is a mechanism that allows people to easily buy and sell (trade) financial securities (such as stocks and bonds), commodities (such as precious metals or agricultural goods), and other fungible items of value at low transaction costs and at prices that reflect the efficient-market hypothesis.

Financial markets have evolved significantly over several hundred years and are undergoing constant innovation to improve liquidity.

Both general markets (where many commodities are traded) and specialized markets (where only one commodity is traded) exist. Markets work by placing many interested buyers and sellers in one "place", thus making it easier for them to find each other. An economy which relies primarily on interactions between buyers and sellers to allocate resources is known as a market economy in contrast either to a command economy or to a non-market economy such as a gift economy.

In finance, financial markets facilitate:

a. The raising of capital (in the capital markets)
b. The transfer of risk (in the derivatives markets)
c. International trade (in the currency markets)

– and are used to match those who want capital to those who have it.

Typically a borrower issues a receipt to the lender promising to pay back the capital. These receipts are securities which may be freely bought or sold. In return for lending money to the borrower, the lender will expect some compensation in the form of interest or dividends.

In mathematical finance, the concept of a financial market is defined in terms of a continuous-time Brownian motion stochastic process.

In economics, typically, the term market means the aggregate of possible buyers and sellers of a thing and the transactions between them.

The term "market" is sometimes used for what are more strictly exchanges, organizations that facilitate the trade in financial securities, e.g., a stock exchange or commodity exchange. This may be a physical location (like the NYSE) or an electronic system (like NASDAQ). Much trading of stocks takes place on an exchange; still, corporate actions (merger, spinoff) are outside an exchange, while any two companies or people, for whatever reason, may agree to sell stock from the one to the other without using an exchange.

Trading of currencies and bonds is largely on a bilateral basis, although some bonds trade on a stock exchange, and people are building electronic systems for these as well, similar to stock exchanges.

Financial markets can be domestic or they can be international.

Types of financial markets

The financial markets can be divided into different subtypes:

a. Capital markets which consist of:
o Stock markets, which provide financing through the issuance of shares or common stock, and enable the subsequent trading thereof.
o Bond markets, which provide financing through the issuance of bonds, and enable the subsequent trading thereof.
b. Commodity markets, which facilitate the trading of commodities.
c. Money markets, which provide short term debt financing and investment.
d. Derivatives markets, which provide instruments for the management of financial risk.
o Futures markets, which provide standardized forward contracts for trading products at some future date; see also forward market.
* Insurance markets, which facilitate the redistribution of various risks.
* Foreign exchange markets, which facilitate the trading of foreign exchange.

The capital markets consist of primary markets and secondary markets. Newly formed (issued) securities are bought or sold in primary markets. Secondary markets allow investors to sell securities that they hold or buy existing securities.

Lenders
Individuals

Many individuals are not aware that they are lenders, but almost everybody does lend money in many ways. A person lends money when he or she:

1 puts money in a savings account at a bank;
2 contributes to a pension plan;
3 pays premiums to an insurance company;
4 invests in government bonds; or
5 invests in company shares.

Companies

Companies tend to be borrowers of capital. When companies have surplus cash that is not needed for a short period of time, they may seek to make money from their cash surplus by lending it via short term markets called money markets.

There are a few companies that have very strong cash flows. These companies tend to be lenders rather than borrowers. Such companies may decide to return cash to lenders (e.g. via a share buyback.) Alternatively, they may seek to make more money on their cash by lending it (e.g. investing in bonds and stocks.)

source : dow jones, wikipedia.org

How to Choose the Right Brokerage Account

Steps

1
Know the fees that brokers charge:

* Inactivity fees: (e.g. a £20 charge if no trades were placed during a 30 day period.) Brokers will often charge you for not trading. These are normally brokers that have very low trading fees, they rely on regular trades so need to charge if trades aren't placed. If you just want to place a low number of trades month (less than 10) then avoid broker accounts with inactivity fees.

* Data fees: (e.g. $15 a month to receive UK stock market data.) If you are going to be trading stocks from multiple countries make sure you choose a broker that has cheap (or no) fees for foreign stock market data.

* Trading fees: (e.g. $6 flat fee per trade.) To buy and sell a stock you will be charged a fee per lot. If you are going to be trading regularly then you will need an account with the lowest trading fees possible.

* Withdrawal fees: (e.g. $15 charge if more than 1 withdrawal a month is made.) People that will be trading for a regular wage will need to look out for withdrawal fees as they could be charged for regular withdrawals.

* Interest rates paid: (e.g. 3.5% paid a year to your unused capital.) This is a very important aspect of a brokerage account. Some brokers pay hardly any interest to the money not being used in your account and some brokers pay as much as 0.25% under the base interest rate. If you will be using a large % of your capital then interest rates aren't that important. However, if you have a large deposit and think you will have money regularly sitting in your account, and not being invested in a stock, then choose the broker with the highest interest rates.

* What platform the brokerage account uses: (This applies to online traders.) How will you be buying your stocks? Through a website or a java based application? Make sure you are comfortable using the brokers platform, the last thing you want is to incorrectly place a trade because you are confused by the layout of the platform. This may sound hard to believe but I simply can't stress enough the difference in complexity I’ve seen in broker platforms. Some are easy to use and other seem like you need a rocket science degree to use.

Tips

* Make yourself aware of all the fees a broker will charge.

* Compare brokers.

* Know roughly how many trades you are likely to place a month and choose a broker that will be best value for your style of trading.

source : wikihow

How to Get an Internet Trading Account

Signing up for an Internet trading account is fairly simple. Each trading website has its own requirements for accepting you, and some cost money while others are free. Many factors should be considered when deciding to obtain a trading account.

Make sure that you are working through a trusted agent. It is recommended to go through the official stock exchanges such as NYSE or the NASDAQ exchanges, because the companies listed in these exchanges are regulated by the Securities and Exchange Commission (SEC). One of the most important requirements for companies listed on these exchanges is that they are required to file quarterly and annual reports. When you read the reports of stocks that are SEC regulated you will learn about various aspects of a company's overall financial health, and potential for future growth. The healthier that a company's financial status appears to be in the greater the chance that your stock will make a profit. This is not always the case, but most of the time it is true.
2
Read all you can about avoiding stock trading scams. Sure, you may be signing up for an agent that says they represent the NYSE, NASDAQ, Over the Counter (OTC) exchanges (legitimate but more risky type of stock exchange), Forex and others. However, you need to make sure that your this agent, usually called a broker, will take the money and apply it to the stock you want to invest in. Another type of trading scam to watch out for is described in the next paragraph.
3
Do your homework before considering a too-good-to-be-true investment. If it sounds unbelievable, most likely it is. Some investors take money from current investors and use it to pay off old debts. They hook people in by offering astronomical investment return amounts such as "Earn 40 percent in 7 Days" (a fictitious example), and they expect you to front up large sums of money immediately. It is easy for less experienced investors to become fooled by the attractiveness of an offer such as this.
4
Choose one that will offer you the best online exchange tools. You have quite a few options to choose from, some of which cost only about 10.00 per month or less, while others cost hundreds of dollars. The ones that usually cost less are items such as stock screeners and news alerts, which are downloadable. Be careful which products you download, however, because many contain harmful viruses and spyware which are used by hackers to complete illicit activity such as stealing your money stored in an on line account. This does not mean that all free or reduced priced products are harmful, but it does mean that you have to be careful which ones you choose. You can find ratings on which products are safe to download if you search various stock tools review sites.

Tips
Other tools that you can acquire to help you with your on line trading through an Internet trading account are personal finance software products as well as real time electronic trading software. If you want to practice on line trading you can also use simulation software that will help acquaint you with the procedure of online trading.

source : wikihow

New To Forex - The forex market allows traders to buy and sell distinct currency pairs.

What is Forex (Foreign Exchange, FX) ?

ACM offers online forex trading services for traders wanting to make speculative transactions on the exchange rate between two currencies.

These rates may be influenced by world economic and political events, currency rate differentials, as well as many other factors including extreme weather conditions (hurricanes), acts of terror etc.

Forex is the largest marketplace in the world with more than 3.2 trillion dollars changing hands daily and so making it one of the most attractive and lucrative markets.
How does the foreign exchange market work?

The forex market allows you to buy and sell currencies against each other and speculate on the differences in exchange rates.

Making a transaction on the forex market is simple: the procedures are identical to that of any other market so switching to trading currencies is straightforward for most traders.

Buying/Selling - B/S

If you want to open a position (i.e.: place an order to sell – to make a profit if the exchange rate falls) you have to choose the amount (i.e.: 100.000 EURUSD) from the drop down menu on the platform and then click the mouse on the sell currency button: SELL (if you want to place an order to buy, you should act in reverse).

This will open a position in the market and you will receive an immediate notification of it on your trading station.

To close an open position, you have to do the opposite of the initial operation – in our case buy the 100.000 EURUSD back.

Different order types also exist to open or close a position under a certain condition.

How does the B/S system work?

As with any market, for each currency pair, there are 2 prices. The difference between them is called the spread.

The spread is measured in points or pips – lowest decimal figure in a currency rate.

For a EURUSD a pip equals 0.0001 (or 10 dollars on 100.000), for EURJPY a pip equals 0.01 (or 1000 yen on 100.000). More information on P/L calculation on the following page: profit and loss.
Forex currencies quotation system

Currencies are quoted in pairs, for example – EUR/USD or USD/JPY.

The first currency in the pair is called the base currency and the second is called the counter currency.

The base currency is the ‘basis’ for purchases and sales.
For example, if you buy EUR/USD, then you acquire Euros and sell Dollars. You do this if you expect the Euro to grow against the Dollar.

It is also possible for a currency pair to be quoted as USD/EUR, but this method is used extremely rarely.

Each transaction must have 2 sides – a buy and a sell (or a sell and a buy).
By this we mean that it is impossible to buy 100.000 EUR/USD and then exchange it for another currency pair (i.e.: EUR/JPY) without closing the first position.

Also please note that no physical currency delivery will be made. For these purposes banks and exchange companies, which specialize in low-rate currency conversions are available.

Forex market working hours

The forex market, based on ‘spot’ transactions, is unique in comparison with all other global markets.
This is because trading takes place 24 hours a day, 5 days a week (ACM platform works from Sunday 23:00 to Friday 23:00 CET). Financial centers are open for work, and banks and other organizations exchange currencies in different parts of the world for different purposes.

Therefore, trading never stops apart from a short break during the weekend.
Early closings are possible depending on calendar arrangement such as, for example, Christmas or new year’s eve.
Forex trading margins

A margin deposit is not, as many traditional traders suggest, the payment in cash for purchasing market shares. A margin is in fact a guarantee or a trust deposit, providing protection from losses during a deal? It allows traders to open positions on amounts that greatly exceed their account limits and so increase their buying power. ACM offers a 1% margin (or 1:100 leverage), which means you can control 100 times your deposit in the real market.

If the funds in the account, in the course of trading, fall below the prescribed margin, your positions will be closed automatically without prior notice. Using this system, the client’s account cannot go overdrawn even under volatile, fast-changing market conditions.

The formula for calculating margins is as follows: (account balance + profit/loss) : open position = the margin
Rollover of positions (swap)

For the sake of transparency and unlike any other online broker we actually have a complete explanation of applied cost of carry on behalf of the market or the customer on open positions held overnight. This overnight cost of carry is presented as a simple flat fee either paid or charged on a customer's account. This process makes for extremely simple statements and greatly increased executional transparency since we do not modify the original price of the position entered into by the customer.

You can find a more detailed explanation on the following page: overnight positions.
How to start trading Forex ?

Open a live account if you feel ready to trade in the real market
OR
Open a demo account on one or both of our trading platforms and choose which suits you best

1. Define how long you can trade for.
2. Define the currency pair you feel most comfortable with.
3. Choose the tradable amount.
4. Before opening a position, you have to consider how much profit you wish to make or how much loss you are eventually prepared to take. Depending on this analysis, place stop and/or limit orders.
5. Open your position or place an entry order.
6. Follow significant news events and technical indicators which you can consult inside your trading station or from third party sources (find out more about different types of analysis on the following pages:

* Technical vs fundamental analysis.
* Forex technical indicators.
* Forex fundamental analysis.

Also please consult the following pages for more information or contact customer support.
Learn more about foreign exchange

* Foreign exchange glossary.
* Spreads and margin requirements.
* Execution methodology.
* Trading examples.
* Forex order types.
* Phone trading terminology.
* Trading with a strategy.

source : AC Markets

How to Make Lots of Money in Online Stock Trading

Stock trading is not a risk-free activity. Although all stock traders know that losses are inevitable, they want to minimize those losses and still be around to trade another day. Having the right tools, techniques and skills can help you enter the world of stock trading and enable you to continue to trade for a long time to come

1. Stock trading is not a risk-free activity. Although all stock traders know that losses are inevitable, they want to minimize those losses and still be around to trade another day. Having the right tools, techniques and skills can help you enter the world of stock trading and enable you to continue to trade for a long time to come.

2. Make use of Technical and Fundamental Analyses.

3. Technical analysis is important in finding the best entry and exit points in stock trading, fundamental analysis is important in finding the right stock choices, according to current market and economic situations.

4. You can make lots of money in stock trading if you use both the fundamental and technical analyses and the best time to trade stocks are at the beginning of these phases of change

5. Make sure you know your costs.

6. In stock trading, you have to worry about commissions or transactions fees, you also must watch for any slippage in your trades. You might not execute trades at your desired entry or exit prices even though you may be using stop or limit orders. Slippage, which is the difference between the quoted price and the actual price for the security, is bound to happen, so you need monitor your commission costs, transaction fees, and slippage costs carefully. If the stocks that you trade are held for less than a year, the profits that you make are taxed as current income rather than at lower capital gains tax rates. For a full-time day traders, they enjoy special tax-treatment and in order for you to become that, you must be a "superb" day trader to qualify

7. When to stay and when to exit.

8. Learn when to take your profits and exit and when to cut your losses and close a position before it becomes worse. If the stock market is going your way, you will be tempted by it and want to hold on to it to the absolute peak. Be wise and plan your exit points at the top and bottom of each position long before they even enter that position and, and they stuck by it no matter what. Stock trading is like operating a business, don't get so emotional and get hooked by the winning stock trade. When you have reached your target, quickly exit the market and enjoy your profits. Remember, your winning position might just turn into a loss.

source : wikihow

How to Buy Stocks

from wikiHow - The How to Manual That You Can Edit

Buying stocks is not difficult, but you'll need a few days lead time if you haven't done it before!
On the other hand, making money consistently from buying stock is very difficult. Most managed professional funds do not beat the index, which means even professionals don't find this easy. So take everything you read with a grain of salt.

Steps

1. Do nothing until you have chosen a system, rules for buying and rules for selling. So read widely and study. Watch the market and then paper trade ( that is pretending on paper you bought the stocks!) : prove you can make money at stock speculation before you ever part with a single dime. Once money is in your account, the temptation is too high to spend without careful thought.
   
2. Decide on a system. And then decide on the best vehicle to trade. If stock speculation, not long-term investment, is what you are after, maybe contracts for difference, spreadbetting or binary betting could be a better way - depending on local laws and tax rules - and how quickly you intend to get in and out of the market. Investigate all of the options.
   
3. If you have decided on trading raw stocks, sign up with a stock broker on their website. A broker is registered with one or more "stock exchanges" (e.g. NYSE, NASDAQ, etc.) to execute stock trades on your behalf within that exchange's market.
   
4. Send the broker an initial deposit of funds. (Your broker needs this money to purchase your stocks.) The usual minimum is $2000 but can be as little as $500.00. Some websites don't require a deposit at all.
   
5. Your broker must report your stock trades to the IRS. You will need to fill out the required forms and mail them back to the broker, possibly even before they will allow you to make your first trade. (Your broker will send you the forms.)
   
6. Select your stock, notifying your broker of the company's "symbol" (a 1-4-letter code), the price you're willing to pay per share, and the length of time for which your offer will be valid (e.g. Single day vs. Good till Cancelled).
   

Tips

• Before you buy anything, stop. Watch. Learn. Paper trade. Don't trust anyone's advice until you have confirmed that what they say works consistently. If you are considering buying a trading system from anyone, look at some of the reputable financial forums such as trade2win or moneytec. You will find most of them there....and a heap of dissatisfied customers.
  
• Consider using stop loss before every trade, and exercise it ruthlessly. Don't make decisions on the fly! Be aware, however, that in volatile markets, stocks can easily lose 50% and then go up 5 times the value. It is better to buy low and sell high if you are trying to invest, rather than buying high and trying to sell higher in speculation.
  
• Don't buy too much of one investment, so you be better able to deal with temporary setbacks; balanced portfolios increase in value in the long-term.
  
• Index funds provide a balanced, low-cost (low/no management fees) way of investing, and have consistent long-term gains.
  
• Instead of offering a specific amount (and a timeframe) for the stock, you may purchase the stock "at market value", which executes immediately.
  
• Although you should "diversify" your stock portfolio by owning stock in several industries, buy stock primarily in industries you are familar with. (tech stocks if you're a geek, auto stocks if you read a lot of car magazines, etc.)
  
• Search for "online discount brokers" on a search engine to find a list of brokers that you can use to buy and sell stocks online. Scottrade, Etrade, and TD Waterhouse are just a few of the many options. Be sure to compare their fees and see if they have any hidden fees before signing up.
  
• "If in doubt, do nought".
  

Warnings

• Before buying stocks, make sure you have a decent idea of how to choose which stocks to buy.
  
• There is plenty of free advice from reputable people. There is also plenty of free and seemingly credible advice that is both misleading and wrong.
  
• Many of the established text books and bibles on trading - particularly on technical analysis - contain assumptions repeated so often they have gained the status of fact without ever being proven! If you find that hard to believe then download a stock price into a spreadsheet and test the moving average crossing methods repeated in every book on technical analysis and shudder at how much money you would have lost! It just isn't as simple as it is painted.
  
• Make sure your broker is registered with the SEC. Stick to the brokers advertising on network TV if you are unfamiliar with the industry.
  
• Depending on the brokerage fees, it will be difficult (or take a long time) to recoup an investment of less than $1500 on any single stock purchase.
  
• In addition to the price-per-share that you offer for the stock, your broker will charge you a flat transaction fee, as well as an SEC insurance fee. The SEC fee is about $5. You pay these extra fees when both buying AND selling a stock.
  
• Realise that people who promote a stock often do so because they want to sell it. In other words they hype a product in order to sell it. This way of looking at things is called "Contrarianism". So when people say "BUY", its actually time to "SELL", or if you don't hold stock already, it maybe not the time to buy at all! Always DYOR (Do Your Own Research) and then some.
  
• Most day traders lose money, and very few fund managers beat the indexes over any length of time. Stock trading is easy. Making money is hard. So look for a system, prove it to yourself, and then dont deviate!
  
• Do not let your emotions or bias cloud your judgment when you are buying stocks. Just because you love Krispy Kreme doughnuts does not mean you should be buying stock in this company. Even the best products can be run by companies with terrible management which will eventually run them into the ground.
  

Related wikiHows

• How to Get Rich Easily
  
• How to Keep Your Investing Focus
  
• How to Avoid Investment Trading System Scams
  
• How to Manage Your 401k Investments and Choose Your Funds
  
• How to Invest in Stocks
  
• How to Choose Stocks
  
• How to Buy Bonds
  
• How to Earn Regular Income from Stock Investing Via Dividends
  
• How to Start an Investment Club
  

Sources and Citations

• Jim Cramer
  
• http://www.investopedia.com
  
• http://www.HowTheMarketWorks.com
  
• Questions and Answers about Spread Betting
  

Article provided by wikiHow, a wiki how-to manual. Please edit this article and find author credits at the original wikiHow article on How to Buy Stocks. All content on wikiHow can be shared under a Creative Commons license.

How to Trade Forex Online

Trading forex (foreign exchange) is highly risky. Due to the leverage available, with very little money down you can have big gains, but also big losses. In addition, there is financial friction, since you are paying fees in the form of the spread. Only highly sophisticated investors should trade forex -- and if you're not sure what you are, then you're probably not highly sophisticated. Whatever you do, don't trade more than you can lose -- because odds are, you will lose everything.

Steps :
1. Research the best ways to invest. Forex is supposedly the biggest market in the world. It's bigger than the US stock market, because the daily turnover is in the trillions. First understand that you, the retail investor is not going to move the market, the banks trade in multimillions, you won't be doing so.
2. Consult a trusted broker. You need to trade through a margin broker who will give you 100:1 leverage on your trades. That means if you have a $1000 margin deposit with the broker, you can control 100,000 units of base currency
3. Understand world currency and its fluctuations. Currencies are traded in pairs. Choose a single pair to learn how to trade and stick to it until you get to know the personality of the pair.
4. Get a charting package which allows you to see the current price as it happens and make technical analysis
5. Learn a system which gives you an indication of when to enter and when to exit trades
6. Start using a demo account and not real money. When you are confident and consistently making good trades, and only then, go live. Start with a micro (1k lot size) or mini account (10k lot size).
7. Enroll in a financial education course. Get a course which gives you an education, a strategy and a way to carry out all the above steps successfully and affordably, from a reputable dealer. Good luck!

* If you want to trade live and standard lot size and leverage (100,00 units, 100:1), you will need a significant amount of capital. A micro or mini account can be create with far less cash. The more money you start with, the more you can lose.

by WikiHow

Fundamental Analysis of a Business Involves Analyzing its Financial Statements and Health

Two analytical models

When the objective of the analysis is to determine what stock to buy and at what price, there are two basic methodologies
Fundamental analysis maintains that markets may misprice a security in the short run but that the "correct" price will eventually be reached. Profits can be made by trading the mispriced security and then waiting for the market to recognize its "mistake" and reprice the security.
Technical analysis maintains that all information is reflected already in the stock price. Trends 'are your friend' and sentiment changes predate and predict trend changes. Investors' emotional responses to price movements lead to recognizable price chart patterns. Technical analysis does not care what the 'value' of a stock is. Their price predictions are only extrapolations from historical price patterns.

Investors can use and or all of these different but somewhat complementary methods for stock picking. For example many fundamental investors use technicals for deciding entry and exit points. Many technical investors use fundamentals to limit their universe of possible stock to 'good' companies.

The choice of stock analysis is determined by the investor's belief in the different paradigms for "how the stock market works". See the discussions at efficient-market hypothesis, random walk hypothesis, Capital Asset Pricing Model, Fed model Theory of Equity Valuation, Market-based valuation, and Behavioral finance.

Fundamental analysis includes:

1.Economic analysis 2.Industry analysis 3.Company analysis

On the basis of this three analysis the intrinsic value of the shares are determined. This is considered as the true value of the share. If the intrinsic value is higher than the market price it is recommended to buy the share . If it is equal to market price hold the share and if it is less than the market price sell the shares.
[edit]
Use by different portfolio styles

Investors may use fundamental analysis within different portfolio management styles.
Buy and hold investors believe that latching onto good businesses allows the investor's asset to grow with the business. Fundamental analysis lets them find 'good' companies, so they lower their risk and probability of wipe-out.
Managers may use fundamental analysis to correctly value 'good' and 'bad' companies. Even 'bad' companies' stock goes up and down, creating opportunities for profits.
Managers may also consider the economic cycle in determining whether conditions are 'right' to buy fundamentally suitable companies.
Contrarian investors distinguish "in the short run, the market is a voting machine, not a weighing machine"[2]. Fundamental analysis allows you to make your own decision on value, and ignore the market.
Value investors restrict their attention to under-valued companies, believing that 'it's hard to fall out of a ditch'. The value comes from fundamental analysis.
Managers may use fundamental analysis to determine future growth rates for buying high priced growth stocks.
Managers may also include fundamental factors along with technical factors into computer models (quantitative analysis).
[edit]
Top-down and Bottom-up

Investors can use either a top-down or bottom-up approach.
The top-down investor starts his analysis with global economics, including both international and national economic indicators, such as GDP growth rates, inflation, interest rates, exchange rates, productivity, and energy prices. He narrows his search down to regional/industry analysis of total sales, price levels, the effects of competing products, foreign competition, and entry or exit from the industry. Only then does he narrow his search to the best business in that area.
The bottom-up investor starts with specific businesses, regardless of their industry/region.
[edit]
Procedures

The analysis of a business' health starts with financial statement analysis that includes ratios. It looks at dividends paid, operating cash flow, new equity issues and capital financing. The earnings estimates and growth rate projections published widely by Thomson Reuters and others can be considered either 'fundamental' (they are facts) or 'technical' (they are investor sentiment) based on your perception of their validity.

The determined growth rates (of income and cash) and risk levels (to determine the discount rate) are used in various valuation models. The foremost is the discounted cash flow model, which calculates the present value of the future
dividends received by the investor, along with the eventual sale price. (Gordon model)
earnings of the company, or
cash flows of the company.

The amount of debt is also a major consideration in determining a company's health. It can be quickly assessed using the debt to equity ratio and the current ratio (current assets/current liabilities).

The simple model commonly used is the Price/Earnings ratio. Implicit in this model of a perpetual annuity (Time value of money) is that the 'flip' of the P/E is the discount rate appropriate to the risk of the business. The multiple accepted is adjusted for expected growth (that is not built into the model).

Growth estimates are incorporated into the PEG ratio but the math does not hold up to analysis.[neutrality disputed] Its validity depends on the length of time you think the growth will continue.

Computer modelling of stock prices has now replaced much of the subjective interpretation of fundamental data (along with technical data) in the industry. Since about year 2000, with the power of computers to crunch vast quantities of data, a new career has been invented. At some funds (called Quant Funds) the manager's decisions have been replaced by proprietary mathematical models.

Navigating Earnings in Dow stocks

The December issue of Active Trader measured how the 30 component stocks of the Dow Jones Industrial Average (DJIA) fared in the days and weeks immediately following quarterly earnings season, which begins in January, April, July, and October.

The analysis found Dow stocks tend to climb overnight after earnings are released (most public companies announce earnings when the stock market is closed). The study also showed Dow stocks tend to sink the next day before heading higher within a week or so.

But we largely ignored the question of how earnings measured up to analysts’ expectations. The following three figures show how Dow stocks behaved overnight, the next day, and the subsequent two weeks when their companies beat, matched, and missed analyst estimates of quarterly earnings per share (EPS) From October 2001 to September 2009.

Figure 1 shows that after positive earnings surprises, Dow stocks rose 0.77 percent overnight, fell 0.26 percent the following day, and gained 1.06 percent two weeks later. In other words, the market rewarded stronger-than-expected earnings, which isn’t a big surprise.

According to Figure 2, Dow stocks were less active after they merely matched expectations as they went nowhere overnight, dropped in-line the next day, and gained just 0.3 percent two weeks later

Finally, the market punished Dow stocks with earnings that disappointed the Street. They opened 2.06 percent lower, slid another 0.76 percent that day, and fell 0.6 percent further within two weeks.

by David Bukey, www.activetradermag.com

Zecco Trading Features

The Zecco Trading brokerage launched with relatively simple online brokerage functionality and a limited service offering in 2006, but has since added many features. Currently Zecco Trading offers customers:

* Stock trading including limit orders and trailing stops
* Options trading including complex strategies such as spreads, straddles, condors, butterflies, etc.
* Online mutual fund trading and mutual fund screener
* Bond trading through a broker
* Real-time positions and balances
* Quotes and research (stock quotes, charts, analyst ratings, company financials, etc)
* Research reports provided by S&P
* Options analytics tools
* Stock alerts
* Streaming data platform (fees apply)
* Performance tracking and tax reporting tools (fees apply)

ZeccoShare Comunity

The online financial community on Zecco.com is called ZeccoShare. It shares much of the common core community functionality found on sites like Facebook and MySpace like forums, blogs, groups, a customizable profile page, 1:1 emails, shout boxes and an activity feed.[

However, ZeccoShare is customized to investing and has many novel features as a result. For example, users can elect to share their verified trades, holdings, trade notes and performance taken directly from the brokerage. Users can subscribe to (and follow) star performers’ trades, and discuss trade ideas with them. Zecco argues that this provides a level of transparency not found in previous financial communities which were rife with pump and dump schemes.

Commisions

# Online stock trades: 10 free trades per month with a minimum of $25,000 in assets or 25 trades per month. $4.50 otherwise.
# Options trades: $4.50 per trade plus $0.50 per options contract.
# Mutual fund trades: $10 per transaction.
# Bond trades: $4.50 per bond with a $22.50 minimum per transaction.
# Treasuries: $24.50 per transaction.
# Forex: bid/ask spreads as low as 0.7 pips depending on currency pair, size of account, and market conditions.

Regulation

Both Zecco Trading and Zecco Forex are subsidiaries of Zecco Holdings, Inc., but the two are subject to separate regulatory bodies.

Zecco Trading is a registered broker-dealer, member FINRA. FINRA (Financial Industry Regulatory Authority) is the primary regulatory body of the securities industry.

Zecco Forex is a separate but affiliated company from Zecco Trading. Zecco Forex is subject to regulation by NFA (National Futures Association).

Learn more Zecco pricing and products page at zecco.com

by zecco.com

The Rules of Real Stock Investing

The stock market is the anticipator of the economy. That is right, but it is not how to succeed with stock investing. If the balance sheet of a company is sound its stock will rise either sooner or later. Doesn't this sound plausible? Well, even if the whole stock market contained good and rock-solid companies, this wouldn't mean that their stocks will rise.

Well, one of the oddities of stock investing is that stocks do not necessarily behave according to the company's condition. Everybody remembers the years 1998-2000. The internet stocks appeared in the markets and there were plenty of these stocks. And they rose like brokers never dreamed of before. But their fundamentals were unbeaten when it came to making huge losses!

The rule to that booming time is still valid today. Buy stocks when they make strong upward movements accompanied with a huge trading volume. So the upward movement should come together with a lot of buys and sells. That is one of thestock investing principles. Buy when the stock market begins to roll and sell when the stock market makes a big break. One strategy is to buy stocks which have newly surpassed their all-time-high. This is done because it is often seen that those stocks begin to soar even more after having significantly broken the all-time-high-resistance line. This way ofstock investing or trading is called the Darvas strategy.

Naturally, the mere buying of rising stocks doesn't mean stock investing work is finished. The real hard work begins just after purchase. Now the phase of managing stocks has begun. What must the investor do, if they begin to fall and what when they soar? This is the most crucial point ofstock investing . Generally, whenever stocks are bought, the maximum pain level must be set up. This is also called the stop loss. This must be done in order to cut losses to a level, which doesn't bother the investor too much.

But even if stocks go vertically upwards after purchase it is very important to adjust the stop loss level that means this level has to be increased in order to lock in some profits.

Doing it that way, increases the probability of stock investing to be profitable. But the main problem is to do all this with discipline and this exactly is the point where the most investors or traders fail.

by Jophan Celebi

Understanding Your 401k

Understanding Your 401K

A 401K is a retirement plan sponsored by your employer. It is a defined contribution plan where you contribute a certain portion of your income into the account. 401K accounts are popular because of two main reasons.


As a retirement investment, the 401K has both advantages and disadvantages:
Pros:
Tax deferred until withdrawal.
Possibility of additional contributions from employers

Cons:
Withdrawal penalties of 10% with certain exceptions.
Lack of liquidity if the contributor needs the money for another purpose.



Benefits of a 401K

First they are a tax deferred plan, as an example let's say you put $4,000 dollars into the account over a year and earned $54,000 that year, only $50,000 would have to be claimed as income. On the other hand, the benefits upon withdrawal once you've retired are taxed as income. Second, employers may offer a matching contribution giving you a strong incentive to deposit into the 401K account because of the increase in assets gained if employers match the deposit.

The tax deferment option can be advantageous because retirees generally require fewer expenses than during their career so can live off of a smaller yearly income. This drives them to a lower tax bracket so they have to pay less on the withdrawals from their 401K than they would have paid during their working years.

Although a 401K is an employer provided benefit, if you were to change employers and your new employer has a 401K plan, you can transfer your old 401K plan to the new employer. If your new employer does not offer a 401K plan, it can be transferred to an IRA at another institution or the old employer may charge a fee to keep the 401K managed through them.

The money deposited in a 401K is distributed among a variety of assets that could include stocks, bonds, mutual funds, money market funds and others. The options available are based on the specific plan your employer allows and the proportion of funds in each can be regulated by the contributor manually.
Deposit Limits

401K contributions are limited to a maximum of $16,500 a year in 2009. People age 50 or older are allowed an exception to this limit in the form of "catch-up" contributions. These catch up contributions are limited to $5,500 in 2009. These limits are also imposed if more than one 401K (such as a traditional and Roth) are owned by the same person, there can be no more than $16,500 contributed to both accounts combined. These limits are set by the IRS and can differ from the limits set by your employer's plan which may limit it based on a % of yearly income.
Withdrawing Funds from a 401K

The current age requirement to begin withdrawing funds from a 401K is set at 59 ½. At this point withdrawals can freely be made with no penalty, but an income tax must still be paid. If withdrawals are made before this point, there is a 10% tax added on to the income tax for the withdrawal.

There are a few exceptions to this rule. Some plans may allow the employee to take a loan out from their 401K plan. Loan conditions can vary greatly based on individual plans offered by employers but won't exceed 5 years and will be a reasonable income rate. The income is then paid back and added to the 401K account but does not get the tax deferred treatment that regular deposits get.

In addition to the available loan, 401K plans will not suffer the 10% withdrawal fee if the contributor dies, is disabled or cannot work any longer. If upon leaving the employer which holds the plan, the employee cannot find another plan to transfer the funds to such as an IRA or a new 401K, the funds can be distributed without penalty.
Types of 401K plans

All of the above information was in reference to a traditional 401K plan, the following is a list of non-traditional 401K plans available and how they differ from the traditional plan.

Roth 401K

A Roth 401K differs from a traditional 401K primarily in that it is does not have a tax-deferred contribution. This means that an income tax is paid on all income before the contribution is made but at the time of withdrawal, no income tax is paid. There are additional restrictions associated with a Roth 401K. The $16,500 limit is imposed on a combination of traditional and Roth 401K that an employee may have so they cannot invest $16,500 in two separate accounts.

SIMPLE 401K

This is a type of 401K plan available to companies with 100 or fewer employees. The employees eligible must have received at least $5,000 in pay from the company in the last year. Traditional 401K plans have a requirement for the employer to test whether the higher compensated employees in the company are being treated as equally as lower paid employees. The SIMPLE 401K eliminates those testing requirements so allows small businesses to provide retirement benefits to their employees without high costs. One difference is that the SIMPLE 401K has a lower limit of $11,500 contribution per year in contrast to the $16,400 limit in a traditional 401K.


401K plans are popular among employees and are the major source of retirement income for 44% of all workers. It is important when planning for retirement to understand the different options available and fitting them to your personal preferences. You can read more about how a 401K fits into saving for retirement and retirement investing.

by Finantage

Why Online Stock, Futures and Forex Currency Day Traders Prefer to Learn to Trade on a Live Account rather than a Trading Simulator

Online Day Trading is the only business out there today that lets you invest a small amount of money to get started as compared to most other businesses out there. It is also risky at the same time like any other business. It is also the only kind of business that does not require a lot of fixed time commitment, rules and regulations, employees and all other sorts of overheads that are typically associated with any other kind of traditional business. Online Day Trading is a very lucrative form of business that tends to attract people from all walks of life towards it. Yet it is a true but sad fact that only ten or so percent of people that are drawn to trading finally become successful at it and make it in the business and move on to become professional online stock, futures or forex currency day traders.

It all begins with the false notion that an online day trader can make a lot of money very easily and quickly. People from outside the world of trading think that trading is very easy and simple to do. That is because any individual with a few hundred or thousand dollars to spare and who has access to a high speed internet connection can open an online trading brokerage account and start trading like many of the the professional traders out there. That is by far not the way trading goes. There is a lot more to trading than just pulling the trigger to buy and sell securities. After all even a five year old can click on a Buy or Sell button and make a trade in a brokerage account. The outcome is anyone's guess. Trading is a psychological game mostly where only the mentally tough people survive. That is why it is so important to start off trading in the right way.

A trader must begin his or her trading career with real money. There are no other ways around this. The only way a stock, futures or forex currency day trader can start off on the learning curve in the trading business is by trading a small real money brokerage account. The money in that brokerage account is called "Risk Capital" in the trading business. A trader must always trade with money he or she can afford to lose without making an impact on them financially or mentally. They must never trade with money that they might need for their day to day living expenses or that they might have saved for some other purpose such as money in a retirement account or a college fund. They should never trade with money that has been borrowed from a friend or even a credit card. That is what is called Scared Money in the trading world. Scared Money rarely wins the game.

It is also not a smart idea to try to learn to trade on a trading simulator. A trading simulator, offered by many brokers out there today, just helps a trader form bad habits. Trading on a simulator does not condition a trader mentally as it is only play money he is trading with and he can afford to lose an unlimited amount of money without it affecting his emotions. By trading a small sized brokerage account with real money in it enables the trader to build his mental edge. Using real money will definitely help the trader be more cautious with his trading approach and force him to only take trades that have met his rules set out in his day trading business plan. This way he will prepare himself mentally for some inevitable losses that always come in trading and in any other business. He will also be able to trade more confidently as he will see real money added to his account in the form of trading profits. Starting with a small real money account helps build a strong and consistently profitable trading profession for the future.

learn more about the Watts Online Trading System for forex trading, currency trading and more from Ryan Watts of the Watts Trading Group and see how it can be used to profitably scalp, day or swing trade stocks, futures, forex or any other liquid market and any time frame. It is the only online trading system out there that we found works well in all trending markets. Add to you references to invictatrader.com/

by Ed Kingston

Forex Online System Trading - Online Trading to Earn Money

Forex online system trading is an excellent opportunity for those who want to work from home.

Forex online system trading is an excellent option that helps individuals earn great sums of money. If you do not know what forex trading is, in simple terms it relates to trading of currencies. Another advantage that forex trading carries with it is that it can be done from home. You do not have to travel to an office or own one to trade in forex. All you need to have is an internet account and a pc.

This makes it a simple way for many individuals who are looking at some opportunities where they can earn money from home.

Unlike any other business or trade, forex trading is simple and does not require an individual to have extensive knowledge about it. However many professional traders recommend that you need to be aware of the basics and the terminologies. This will help you read the market better and make the right judgment. The intricacies of the job can be learnt along the way, provided you're ready to experiment.

Individuals who trade online need to keep a close watch on the money market so that they strike at the right opportunity. However, a flexible trading system is recommended for those who cannot possibly watch the market on a continuous basis. The trading system used should help them learn about the current trends the market is following. Before you finalize on a particular online trading system or market, it is best to make a thorough research. This will help you stay away from fraudsters. If you are looking to earn better returns, you should have a well formulated plan. A fickle plan will not help you earn money in any way; instead it will bring in an emotional decision.

Forex online system trading will require the individual to know how to read the financial market and its developments. This will help them earn a profit. For more information, http://www.bestonlineforexsystemtrading.com

by Alan Lim

Transfer Funds to Canada - Issues to be Aware of Before Transfering Money to Canada

Between the internet and endless wireless capabilities, there are now tons of ways to wire cash to Canada or anywhere in the world. One thing is for certain, its nothing like the old days of money transfer when you were left with only a few options.


Many transfer services are gaining stock even with the economy. To strengthen, these companies are even collaborating with leading banks so their services can be offered from multiple locations.


It is yet to be seen how the pre-paid credit card market and internet based transfer services will change, but with the boom in pre-paid cards and phones, it is anticipated to positively affect the transfer world.


In the meanwhile some banks are feeling the need to allow customers to use cells phones to make transfers. So far only the iPhone can store account information for a pay-as-you-go type application, but other phones are expected to offer similar options.


More traditional transfer companies do not expect to see an effect from alternative options until 2012, at the earliest. But the good news is that even with unstable economy, the transfer service industry seems to be have the right tools to stay afloat.


Currently, the best way to transfer money to Canada is through a bank or an old-fashioned service. This is recommended because of the guaranteed security. Now although the industry is growing tremendously and some newer methods may come across as good options, be cautious as these systems are still in the works, therefore with safety as your number one concern you should always make sure to choose a credible establishment.


One big roadblock is getting the global community to agree on rules to govern money transfers. So until banks and governments see themselves on the same page when it comes to regulating pre-paid cells and money transfers, you will be forced to settle on either a bank-to-bank or a location-based transfer service to get your money to Canada. Regardless of which you choose rest assured knowing both will have your money arriving safely at one convenient spot.

ATMCASH is a cheaper solution to send and receive money internationally. Its a easy, convenient, and the best value when sending money across the country or across the world. Learn More About This

by Money Transfer

Choosing a Forex Broker

Today's Forex trading is well known as a lucrative way to make money online. It became an essential part for investor's portfolio as you can simply gain thousands in minutes by trading currencies at home. For those who are new to the trade, Forex means Foreign Exchange Market where it involves buying and selling the different currencies of the world. Profits are made through the difference of selling and buying price - you earn when you buy-low sell-high while lose when buy-high sell-low.

As in any trading market, individual trades in Forex market are mostly done via currency brokers. There are certain issues you must consider when choosing for suitable Forex broker, listed below are a few of the important ones.

1. Certification of the Forex brokerage firm

Forex trading involves a huge sum of money. As a trader, I am sure you want your money handle by reliable broker. This is why certification of the Forex brokerage firm is important. Traders are recommended to deal only with authorized currency traders. If you are trading in United States, make sure your Forex brokerage firm is registered with Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). Also, most large brokerage firms are connected in some way to a bank or financial institution. Since the majority of Forex business is based on credit, the partnership with financial institution is crucial to offers their clients better in Forex investment.

2. Low spread trading

Currencies are normally traded in pairs of ask-bid price. The difference of the selling (bid) and the buying (ask) is known as spread. For example of EUR/USD 1.2435/1.2440, the Forex quote here means you can buy 1 Euro Dollar with 1.2440 USD or sell 1 Euro 1.2435, and the spread is (1.2440 - 1.2435) = 0.0005. As Forex brokers do not charge commissions on their client trades, they are making money off the spreads. If the spreads are low, this means they are offering a cheaper service and thus traders have better profit value. Thus, Forex brokerage that offers lower spread is more preferred.

3. Trading tools and tips

Different Forex brokers will offer different trading tips and tools. When selecting Forex broker, check what kind of trading tools and analysis data they are offering. Not all brokers offer the same set of tools and data thus careful consideration is necessary. A good Forex brokerage firm should offers real-time charts, technical analysis tools, real-time trade alerts, and website support. If you are new to Forex trading, you also look for broker that offers demo account before opening up a real account.

4. Avoid brokers with strict margin rules

Strict Margin Rules - When you are trading with borrowed money, your broker has a say in how much risk you take. As such, your broker can buy or sell at its discretion, which can be a bad thing for you. Let's say you have a margin account, and your position takes a dive before rebounding to all-time highs. Even if you have enough cash to cover, some brokers will liquidate your position on a margin call at that low. This action on their part can cost you very much. Unfortunately, you cannot verify this factor before starting up your account with the broker. The best way to avoid this kind of brokers is to ask more in Forex trading forums or other experienced Forex traders.

5. Leverage level

Some brokers offer 1:50 trade margins and some offer 1:200. The fact is leverage level might varies a lot for different brokerage firm. While higher trade margin does not guarantee your profit in Forex market, higher trade margin however will give you a better chance to win big when the opportunity comes. High leverage level is especially important when you have little capital outlay.

By filtering Forex brokers with the condition listed above, you actually raise your profit chances in Forex trading. Without a doubt, Forex is gaining its popularity fast against other kind of trading. No limited market access, no liquidity issues-after market hours, zero commission fees, low capital requirements with high leverage rates, and no restrictions on short selling -- Forex can be very beneficial to a variety of people. Like any other trading business, if you are new to it, best advice you can get is to learn and practice more before you test your 'wings'. Seminars, eBooks, Internet, papers, video courses - all these are helpful to raise your confidence level before you trade with your real hard-earn dollars. Plan your investment wisely by investing first on yourself; you shall get your reward at the end of the road.

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By Sutikno Slamet

Options Trading Is a Opportunity For The Small Investor Too

The stock market appeals to people for many reasons. Some see it as a quick way to make a nice nest egg to tuck away for their eventual retirement. Some see it as a way to live out their fantasies of being a powerful, corporate type. And some are actually more logical about it, seeing the stock market as a potential way to make money, if they play their cards right. They know that there are no sure things in life and nowhere is that more clear than in the stock market. But options trading is a opportunity for the small investor too.

Options trading has grown in popularity, especially with the smaller investors over the course of the past ten years. Unlike other forms of trading that can require large amounts of venture capital, options trading can be accomplished with often a very small initial outlay. Of course, because they can be easily started, it can allow the uninitiated or poorly informed to get in well over their heads in a matter of a very short time. Not allowing yourself to understand the market before you make the first trade is financially foolhardy and personally dangerous.

First of all, as the name implies, option trading is not buying actual stocks, but rather busying the right to own or sell them. The options trader can make the same profit with stock options that he would make as if the owned the outright stocks, but that also means that he would face the same risks if that stock did not do well on the market. As with other forms of trading, options trading will require that you learn some facts and make some decisions before hand. Know everything you possibly can about options trading, as well as trading in general. Know how to track stocks for movement and know how to watch for trends.

Know what the basic types of options trading is- and understand how each works. And, as with any other type of trading, make sure you know and adhere to your personal limits, including your absolute loss cap. Do not overextend yourself, even if you just got a tip on a great stock.

Options trading can focus on stocks that are heading in one of two directions, up or down. Call options will focus on rising stocks, while Put options focus on those on the decline. Both allow you the right to buy the option on a stock at a fixed price, but do not force you to do so. Knowing how to work this system to your best advantage is key. Invest in yourself, learn the basics and expand on that to become profitable in options trading.

At conservativetrader.com they have many tools and resources to help the small investor and trader become more profitable.

by William Oedge

Advantages Of A Day Trading System

Day traders are offered with a number of ways to earn money from the stock market. Through obtaining solid principles of day trading, they are able to reach their goals in a productive way. In this light, it is important for day traders to invest in a day trading system that will help them in enhancing as well as perfecting their trading strategies.

Most successful and experienced day traders employ solid principles, which they have adapted from trading experts including Warren Buffet and Peter Lynch among others. These trading experts make use of trading fundamentals in accordance with their trading strategies and methods. They implement their personal trades that aid in achieving their goals as day traders. In addition, trading experts counter issues that come from investing in wrong or unacceptable stocks. Just like any other experts in their fields, trading experts have also started from scratch, learning the fundamentals of trading prior to becoming skilled and accomplished people in the business.

Learning the basic principles in trading can establish entry points, which are suitable for the budget of every trader. More so, it can help in realizing actual loss of money in the stock market. On the other hand, it is recommended that day traders invest in a day trading system, which can offer them an appropriate background setting, practical and useful features, and learning tools. Day traders should choose a system that does not require much time and knowledge to learn. More so, the system should be able to help them make substantial decisions related to stock market trading through exact monitoring of market picks.

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by Gabriel Knight

Stock Analysis Software - How to Make The Right Choice!

I'm sure you've seen all the fancy software's online and the tools that are offered by large investing companies, but how do you know which one to use? It has become quite popular among investors that using stock charting software is how most they make trades and stay on top of their game. It provides the assistance in making decisions without having to do all the grunt work. For each stock investment or option all the data, analysis and research is given to you at hand to help speed up the decision making process that needs to be made in a fast timely manner.

Stock charting software's are very helpful being able to offer you information without much research. It is great for all investors at any level from the novice to the expert and beyond. So how can you pick the right software? There are certain things that you should look for before purchasing one.

Stock Analysis Software Tips, the Rundown

* A good way to know what software will give you the best bang for its buck is to look into its past performance. Generally, locating an established software with a solid track record can offer you more reliability with positive results. Besides, remember that if it has been around for a while then apparently it's bringing something good to the table

* Check to see if you are given a free demo to try out. You definitely don't want to jump into buying something that you can't try out regardless of how much hype is put into it. What others might find works great for them, might not work well for you.

* You want to find a program that offers a variety of functions. This will give you the ability to have everything all in one place. This enables you to make quicker and faster decisions on your investment because you're able to access all your tools at once immediately.

Stock charting software can be a great tool to assist you in your investing decisions. It will ultimately cut out the grunt work and ease your work load by giving you information and analysis upfront.

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by Dave B

Relative Strength Index

The Relative Strength Index (RSI) is a financial technical analysis momentum oscillator measuring the velocity and magnitude of directional price movement by comparing upward and downward close-to-close movements.

Momentum measures the rate of the rise or fall in stock price. Is the momentum increasing in the "up" direction, or is the momentum increasing in the "down" direction.

A simple way to picture momentum: Imagine a ball rolling down a hill. It starts off pretty slow and then as it gets further down the hill it picks up momentum and starts rolling faster.

The RSI was developed by J. Welles Wilder and published in Commodities magazine (now called Futures magazine) in June 1978, and in his New Concepts in Technical Trading Systems the same year.

Note that the term relative strength also refers to the strength of a security in relation to its sector or the overall market. For instance, XYZ might rise 2% when S&P 500 rises 1%. This is sometimes called comparative relative strength to avoid confusion. It's unrelated to the Relative Strength Index described here.

Calculation :
For each day an upward change (U) or downward change (D) is calculated. "Up" days are characterized by the daily close being higher than yesterday's daily close, i.e.:

U = closetoday − closeyesterday
D = 0

Conversely, a down day is characterized by the close being lower than the previous day's (note that D is nonetheless a positive number),

U = 0
D = closeyesterday − closetoday

If today's close is the same as yesterday's, both U and D are zero. An average for U is calculated with an exponential moving average using a given N-days smoothing factor, and likewise for D. The ratio of those averages is the Relative Strength,

RS = { EMA[N] of U / EMA[N] of D }

This is converted to a Relative Strength Index between 0 and 100,

RSI = 100 - 100 x { 1 / 1 + RS }

This can be rewritten as follows to emphasise the way RSI expresses the up as a proportion of the total up and down (averages in each case),

RSI = 100 x { EMA[N]of U / (EMA[N]of U) + (EMA[N]of D) }

The EMA, in theory, uses an infinite amount of past data. It's necessary either to go back far enough, or alternately at the start of data begin with a simple average of N days instead,

AvgU{initial} = { U1 + U2 + ... + UN } / N }

and then continue from there with the usual EMA formula,

AvgU{today} = a x U today + (1-a) x AvgU yesterday

Wilder recommended a smoothing period of 14. This is by his reckoning of EMA smoothing, ie. α=1/14 or N=27.

Wilder posited that when price moves up very rapidly, at some point it is considered overbought. Likewise, when price falls very rapidly, at some point it is considered oversold. In either case, Wilder felt a reaction or reversal is imminent. The slope of the RSI is directly proportional to the velocity of the move. The distance traveled by the RSI is proportional to the magnitude of the move.

As a result, Wilder believed that tops and bottoms are indicated when RSI goes above 70 or drops below 30. Traditionally, RSI readings greater than the 70 level are considered to be in overbought territory, and RSI readings lower than the 30 level are considered to be in oversold territory. In between the 30 and 70 level is considered neutral.

Wilder further believed that divergence between RSI and price action is a very strong indication that a market turning point is imminent. Bearish divergence occurs when price makes a new high but the RSI makes a lower high, thus failing to confirm. Bullish divergence occurs when price makes a new low but RSI makes a higher low.

Wilder thought that "failure swings" above 70 and below 30 on the RSI are strong indications of market reversals. For example, assume the RSI hits 76, pulls back to 72, then rises to 77. If it falls below 72, Wilder would consider this a "failure swing" above 70.

by J. Welles Wilder

Stochastic oscillator

Interpretation

The idea behind this indicator is that prices tend to close near their past highs in bull markets, and near their lows in bear markets. Transaction signals can be spotted when the stochastic oscillator crosses its moving average.

Two stochastic oscillator indicators are typically calculated to assess future variations in prices, a fast (%K) and slow (%D). Comparisons of these statistics are a good indicator of speed at which prices are changing or the Impulse of Price. %K is the same as Williams %R, though on a scale 0 to 100 instead of -100 to 0, but the terminology for the two are kept separate.

The fast stochastic oscillator or Stoch %K calculates the ratio of two closing price statistics: the difference between the latest closing price and the lowest price in the last N days over the difference between the highest and lowest prices in the last N days:

Where:
CP is closing price
LOW is low price
HIGH is high price
The usual "N" is 14, 9 or 5 days but this can be varied. When the current closing price is the low for the last N-days, the %K value is 0, when the current closing price is a high for the last N-days, %K=100.
The slow stochastic oscillator or Stoch %D calculates the simple moving average of the Stoch %K statistic across s periods . Usually s=3:


The %K and %D oscillators range from 0 to 100 and are often visualized using a line plot. Levels near the extremes 100 and 0, for either %K or %D, indicate strength or weakness (respectively) because prices have made or are near new N-day highs or lows.
There are two well known methods for using the %K and %D indicators to make decisions about when to buy or sell stocks. The first involves crossing of %K and %D signals, the second involves basing buy and sell decisions on the assumption that %K and %D oscillate.

In the first case, %D acts as a trigger or signal line for %K. A buy signal is given when %K crosses up through %D, or a sell signal when it crosses down through %D.[2] Such crossovers can occur too often, and to avoid repeated whipsaws one can wait for crossovers occurring together with an overbought/oversold pullback, or only after a peak or trough in the %D line. If price volatility is high, a simple moving average of the Stoch %D indicator may be taken. This statistic smooths out rapid fluctuations in price.

In the second case, some analysts argue that %K or %D levels above 80 and below 20 can be interpreted as overbought or oversold. On the theory that the prices oscillate, many analysts including George Lane, recommend that buying and selling be timed to the return from these thresholds. In other words, one should buy or sell after a bit of a reversal. Practically, this means that once the price exceeds one of these thresholds, the investor should wait for prices to return through those thresholds (e.g. if the oscillator were to go above 80, the investor waits until it falls below 80 to sell).

The third way that traders will use this indicator is to watch for divergences where the Stochastic trends in the opposite direction of price. As with the RSI this is an indication that the momentum in the market is waning and a reversal may be in the making. For further confirmation many traders will wait for the cross below the 80 or above the 20 line before entering a trade on divergence. The chart below illustrates an example of where a divergence in stochastics relative to price forecasted a reversal in the price's direction.

by George Lane