Forex Trading - a Beginner's Guide

No matter how hard it is to believe, but the fact is that the global forex trading market is far more lucrative than the equity market. The foreign exchange market is a place where currencies of different countries are bought and sold. The market is operational from 1970 when the concept of floating currencies and free exchange rates were introduced.If you head to the website, http://www.globalforextrading.org/ you will see more about the global forex trading market. While it is not as well known as the equity market, it's still a high value market with it's daily trading over $2 trillion dollars.The astounding success of the forex trading market can be attributed to various reasons. First and foremost, the market remains open round the clock because of the fluctuating nature of currencies. No matter which time zone you are in, you can trade any time you want to. Not so with the equities market where you can trade only during the market hours.Leverages are also very different in forex trading. Consider your regular stock account, you can open a margin account and use double leverage trading. But with forex trading you can go much further getting leverages of twenty, fifty, even a hundred times.An important aspect of the forex trading market is leverage, which gives you a tremendous edge. However, you really need to train yourself properly to use this tool to your own advantage. Many traders get enchanted by this kind of leverage, but you need to be careful.There are cautions to consider when it comes to leveraging. If used properly you can make a lot of money with leverage, but it also can take all your money away just as easily. To learn more about the pros and cons of leveraging you can check out this website http://www.globalforextrading.org/forextrading.html.Before jumping into trading on the global forex market, you need to have a plan. Analyze the market, know what is happening and know how you will work your trading. This market is very speculative and you need to be ready to stick with brainpower to run your trades, not experimentation.It is always safe to try and utilise tried and tested strategies. Also, it pays to study trustworthy Forex charts and graphs that have proved to be powerful indicators of the market. If you have the time, try and enrol in a formal training session and study various tutorials.You need to keep educating and updating yourself. The more knowledge you soak in, the better position you are in to profit from the market. You can also set up a system of your own and stick to it. Try not to venture into margin trading in the initial stage. Beginners lose maximum money in the margin-trading scenario. You must keep in mind the volatile nature of the market before plunging in.

Option Trading Tip - Credit Spread Cashflow

You may or may not have heard of credit spread option trading but they can be used to profit in bullish, neutral or bearish conditions. They are a cashflow generating strategy that involves both the buying and selling of either calls or puts of different strike prices but same expiration date to establish an overall 'credit' i.e. spendable cash.It is a great option trading strategy for taking advantage of the 'time decay' that option selling provides, but with limited risk.The amount of potential profit of course is limited to the credit received when the trade is first made.Let me give you an example of this powerful, yet underutilized option trading strategy.Let's say that the QQQQ (The Nasdaq 100 tracking unit) is trading at $30.50 and we believe that it will continue to go up in price.To create a vertical credit spread using puts (selling puts is profitable if the market rises), we could do the following:1) Sell the $30 put (expiring this month).and2) Buy the $29 put (expiring this month).TIP:In my experience, it's always best to sell short-term, 'Out-of-the-money' option premium for 3 main reasons:1) Out of the money options have lower deltas, meaning the stock has to move further before the value of our sold option increases (remember we want it to decrease).2) Selling 'current month' options (30 days or less to expiry) is when time decay is at it's most rapid and the value of our sold option is eroding away with each day.3) Contrary to buying options, if the stock does moves very little or not at all, we win!Let's say we received $0.90 cents per contract for selling the $30 puts and we paid $0.40 cents per contract by buying the $29 puts.This transaction gives us an overall credit of $0.50 cents per contract ($0.90-$0.40).If we sold 20 contracts of the $30 Put and bought 20 contracts of the $29 Put, this would give us a total credit of $1,000 (2000 shares x $0.50 cents).So basically, if QQQQ expires at any price above $30 we will make our maximum profit, which is the initial credit we received ($0.50 cents).On the other hand if QQQQ expires at any price below our breakeven point of $28.50, we will be facing a loss.Let's look at all the possibilities.Once we have entered the trade the QQQQ can either:1)Go up a little bit.2)Go up a lot.3)Go sideways.4)Go down a little bit.5)Go down a lot.The beauty of this style of trading is that we will win in four out of five of these situations, and in many instances we can even win in all five!Let me demonstrate how.The QQQQ is trading at 30.50, if it moves up a little bit to say $30.80, our sold option ($30 Put) will expire worthless and we will keep all of the premium.If the QQQQ moves up a lot to say $32, the same will occur and we will get to keep the premium.If the QQQQ moves sideways and stays around $30.50, again the ($30 Put) will expire worthless and we will get to keep the premium.If the QQQQ goes down a little bit to say $30.15, the same will occur and we will keep the premium.OK, so far so good!The only way we can LOSE in this trade is if the QQQQ goes down a lot to below $29.50 (which is the higher strike price minus the premium).If it were the end of the month of expiry and the QQQQ was trading below $30 (our sold option strike price) we would be exercised and our total loss would be the difference between the sold option strike price and the current stock price less the total credit we received.Our maximum loss will be realized at any price at or below our bought option strike price.$30 - $29 = $1, less the premium of $0.50 cents = a maximum loss of $0.50 cents per contract or $1000 (20 contracts - 200 shares x $0.50 cents)However, before it gets to this point, we would intervene. If the QQQQ is falling strongly then we were obviously wrong in our initial analysis.Before we entered the trade though, we decided that if the QQQQ fell through support at $30 (which it does) we would move to plan B.At this point we can do a little 'magic'.With the click of a mouse through our online broker, we can instantly jump from the bullish camp to the bearish camp!We do this by buying back the options that we sold which in this case is the $30 puts, and this removes all of our obligation.At this point though, we have taken a loss BUT, we are still long the $29 puts which would have already increased in value.If the QQQQ wants to go down, then we are going to let it and just ride the $29 puts as far as they will go.The more the QQQQ falls in price, the more our option will increase in value.If it falls far enough, which in this case it does, (falling to $28.50) then we will not only make all our money back, we will start to move into a profitable position.With credit spreads, we give ourselves the flexibility to change our position mid stream, and the chance to not only recoup some of our losses (if we get it wrong), but to possibly move from a loss into a PROFIT!And this is just the plan B if things go wrong. Plan A, on it's own, has statistically, a very high probability of success.If on the other hand we had the view that the QQQQ would go down, we would simply construct a vertical spread with Out-of-the-money Calls.We would sell the $31 Call and buy the $32 Call for an overall credit and should the QQQQ close below $31 by the end of the month, the spread would expire worthless and we would simply keep the premium.

Gambling system Scams

All gambling systems or betting systems fail at some point or another. There is a huge probability stacked against these games. Dice and roulette ball throws are independent of each other. Since these have no memory, the probability of a number occurring or not occurring is the same. Some systems use complex mathematical equations and probabilities, but at the end of the day, only a miniscule portion of the systems will actually work.When playing at a casino, there is no gambling system efficient enough to beat the casino. The casinos with their huge bank roll and tables can efficiently beat any gambler. The longer you play, the riskier the investment becomes. You may lose more money if you play for a longer time rather than a shorter time. Some people believe that their gambling system will always work. They have almost a religious belief that it will work. But the casinos are still standing and nobody has been able to dent them till now. Casinos with their sheer volume have beaten every gambler hollow at some point or the other.The biggest gambling system myth is known as the ‘gambler’s fallacy’. This means that if an event hasn’t occurred as yet, then it’s due to happen sometime in the future. So if number 14 hasn’t come in the last 10 throws, then it’s sure to come up in the next 2 moves. The gambler will then bet on number 14 for the next two times believing this fallacy. For the gamblers, the odds of something happening in the near future become almost overdue and then they bet on something that they believe will surely give them profits.There are innumerable gambling systems that are being sold on the internet that have proven track records and will also give you testimonials of people for whom it has actually worked. Of course, there are many people waiting to exploit the innocent gamblers. They will give a great sales copy and people will buy it. But when the system fails, they have no one but themselves to blame for the fallacy.Another gambling system that is played out by the gamblers is known as the Martingale. The idea is that by doubling your bet after a loss, you can always win to cover up for your losses and still make a profit in the game. This means that if you start with Euro 1, and you lose it then you double it and get Euro 2. This bet also is lost by you and you further lay a bet of Euro 4. This means in three successive bets, you have lost Euro7. But in the next round, you win 8 Euros. So, you have recovered your past losses and even paid a profit of a unit. But no gambler can predict when the losing streak ends and the winning streak begins. What happens if there are no winnings, and then you have just lost all your money in double the time taken, if you would have restricted the bets.

Option Trading Tip - Savvy Straddle Secrets

In basic terms there are only 2 types of options you can trade, Calls and Puts. As a buyer of options you always want the underlying stock to go up if you buy calls and down if you buy puts.Determining which way a stock is likely to go is the challenge. However if you know a stock is going to move strongly in one direction or another, then you might consider buying a straddle.To buy a straddle you simply by the At/Near-the-money Call and the At/Near-the-money Put option. In order to profit from using this strategy, you would need the premium of one of your options to rise by more than both the Call and Put premiums put together.TIP:One way that I have profited using this strategy is to follow companies that have pending announcements with the http://www.fda.gov (particulary drug/biotech stocks) and buy a straddle the day before the announcement is due to be made.If the announcement is good and the stock rises strongly my call options will rise strongly and I can still profit, even though my put options will probably be worthless.If the announcement is bad and the stock falls strongly my put options will rise strongly and I can still profit, even though my call options will probably be worthless.As a buyer of a straddle we don't really care which way a stock moves, so long as it moves far enough in one direction for us to profit on the trade overall.However, there is one important thing to take into consideration here and that is Implied Volatility.Implied Volatility, which is really a measure of potential 'future' volatility, can inflate the time value of options greatly. As a buyer of options and in particular At/Near the money straddles we need to be careful of this because should the underlying stock 'not' move strongly in either direction after we buy the straddle, this Implied Volatility can fall or deflate and therefore erode the value of our options.As we have purchased two lots of options (calls and puts) to create the straddle, this can be a double whammy if we are not careful. A great indicator that we can use to warn us of high implied volatility is Bollinger Bands. When the bollinger bands are wide (expanded) compared to the past few months, than this can suggest that implied volatility is high and options may be 'overvalued'. A warning sign here is when the bands have been wide/expanded and have started turning inward or contracting.This can suggest that the implied volatility is now declining and 'dragging' on the premium (time value) of the options on that stock.As an option buyer, we ideally like to see the bollinger bands coming from a 'narrow' contracted state and starting to 'flare' out.This can be an indication that implied volatility is on the increase, which will support the premium of our options and even increase their value, without the underlying stock needing to move substantially.Please note though that this insight should only be used as a guide and is based on my own personal observations and experience, nevertheless if used as part of an effective overall strategy/system, it will certainly help to stack the odds of success in your favor.Happy option trading!

FOREX Trading - Not Just for the Big Boys

It seems that almost everyone is familiar with the stock market and many employees are actually invested in it because of their company’s 401k. Everyday as part of the news report, we are always given the latest report on the Dow Jones or New York Stock Exchange. Yes, it has its ups and downs and we all know someone who has made large profits as well as devastating losses. The stock market can be very volatile. If there was a market you could trade in without as much of this volatility, had easy access and low cost, what would it be? FOREX. FOREX (Foreign Exchange market) is the largest financial market in the world with almost $1.5 trillion traded daily. Compare that to $200 billion in the equity market. Basically, FOREX is the exchange where you can sell one country’s currency for another. Let’s say that you purchase British pounds and then after the pounds/dollar ratio goes up, you sell the pounds and buy more dollars. Until recently this market was only accessible by the major banks, large corporations and those with very large investments. Due to federal regulations, the Foreign Exchange market is no longer a monopoly which means you and I can also profit in this huge market.Let’s look at some of the benefits of FOREX trading. Accessibility. 24 hours a day, 5.5 days a week. The currency exchange market is an over the counter market which means that there is not one specific location where buyers and sellers meet to exchange currencies. Transactions can be easily handled through websites designed for this purpose. No exchange or commission fees. Unlike other markets where brokerage fees are incurred, the FOREX market is a worldwide inter-bank market. Trades can be made between the buyer and seller in an instant.Low minimum Investment. For an initial investment of $300, you can start your FOREX account. This market requires less money to begin trading than any other market. This keeps your risk low.These are just a few of the many advantages of the FOREX trading. Are you ready to jump into an exciting new adventure that can be very profitable? Can you imagine getting into this market and having someone train you for free? There is a free course currently being offered that will teach both beginners and experienced currency traders how to profit in this market. “FOREX Freedom” is the course you should check out if any of this sounds like the opportunity that you have been waiting for. It will guide you every step of the way.

Option Trading Tip - Make A Promise & Get Paid Cash!

Writing Naked Puts is simply selling a put option on a stock that you would be happy to own should the price come down to your desired buy price.When we write a naked put we are effectively 'promising' to buy someone else's shares in the future should the stock price fall below a certain level.For doing this we are instantly paid spendable cash for each share that we 'promise' to buy. If the stock does not fall below this level (the strike price), then we simply keep the cash without having to buy the stock.TIP:Just like covered calls, only write naked puts on stocks that you would be happy to own and if you want to be more conservative, only sell the contract equivalent of the amount of shares you wish to buy, should the stock fall below the strike price.As each option contract represents 100 shares of the underlying stock, you can work out how many contracts you can afford to write simply by dividing the amount of capital you want to invest in that trade by the strike price of the option you want to sell and then divide that number by 100.Here's the formula:Capital/Strike Price/100 = Number of ContractsSo if you have 20,000 to invest in one trade and let's say that the strike price of option is $10, then you can safely write 20 contracts.By 'safely' I mean that you can afford to buy the stock should you be assigned.Another thing to remember is that should you be assigned, you would effectively be buying your shares at a discount.Let's say for writing the $10 put option, you received $0.50 cents per share (5% yield).Because you receive this $0.50 per share, your overall purchase price (should you be assigned) is lowered by $0.50 to $9.50.Should the stock fall and you be forced to buy it, a great way to keep this cash flowing and at the same time continue to reduce your risk is to simply turn around and start writing covered calls on it. That being said, it's never a good idea in my opinion to write naked puts on a falling stock. Always look at a stock's chart for:1) Moderate uptrends.2) Sideways trends, especially 1-2 months AFTER a steep sell off.If you go to: http://www.stockcharts.com and pull up the QQQQ chart for the first quarter of 2003, you'll find a great example of this second pattern.During this time I began writing naked puts on the QQQQ and then when I was eventually assigned I then wrote covered calls on the QQQQ profitably for a number of months.In sideways or rising markets, writing naked puts to potentially aquire stock (and be paid while you wait) and then writing covered calls on the stock when and if you are exercised, may well be the ultimate strategy for generating a cashflow income from the markets.Also, considering that a large majority of options are never exercised, much of the time you may never even be required to buy the stock.When it comes to writing naked puts, you often get paid for a 'promise' that you don't end up having to keep. Now that's what I call leverage!Happy option trading and investing!

Option Trading Tip - Savvy Straddle Secrets

In basic terms there are only 2 types of options you can trade, Calls and Puts. As a buyer of options you always want the underlying stock to go up if you buy calls and down if you buy puts.Determining which way a stock is likely to go is the challenge. However if you know a stock is going to move strongly in one direction or another, then you might consider buying a straddle.To buy a straddle you simply by the At/Near-the-money Call and the At/Near-the-money Put option. In order to profit from using this strategy, you would need the premium of one of your options to rise by more than both the Call and Put premiums put together.TIP:One way that I have profited using this strategy is to follow companies that have pending announcements with the http://www.fda.gov (particulary drug/biotech stocks) and buy a straddle the day before the announcement is due to be made.If the announcement is good and the stock rises strongly my call options will rise strongly and I can still profit, even though my put options will probably be worthless.If the announcement is bad and the stock falls strongly my put options will rise strongly and I can still profit, even though my call options will probably be worthless.As a buyer of a straddle we don't really care which way a stock moves, so long as it moves far enough in one direction for us to profit on the trade overall.However, there is one important thing to take into consideration here and that is Implied Volatility.Implied Volatility, which is really a measure of potential 'future' volatility, can inflate the time value of options greatly. As a buyer of options and in particular At/Near the money straddles we need to be careful of this because should the underlying stock 'not' move strongly in either direction after we buy the straddle, this Implied Volatility can fall or deflate and therefore erode the value of our options.As we have purchased two lots of options (calls and puts) to create the straddle, this can be a double whammy if we are not careful. A great indicator that we can use to warn us of high implied volatility is Bollinger Bands. When the bollinger bands are wide (expanded) compared to the past few months, than this can suggest that implied volatility is high and options may be 'overvalued'. A warning sign here is when the bands have been wide/expanded and have started turning inward or contracting.This can suggest that the implied volatility is now declining and 'dragging' on the premium (time value) of the options on that stock.As an option buyer, we ideally like to see the bollinger bands coming from a 'narrow' contracted state and starting to 'flare' out.This can be an indication that implied volatility is on the increase, which will support the premium of our options and even increase their value, without the underlying stock needing to move substantially.Please note though that this insight should only be used as a guide and is based on my own personal observations and experience, nevertheless if used as part of an effective overall strategy/system, it will certainly help to stack the odds of success in your favor.Happy option trading!

Advantages of Forex Trading

Foreign exchange trading involves buying and selling different currencies. It works on the theory that is similar with share market. As we know that to make the profit, you have to buy at lower price and sell at higher price, or we can also sell at higher price first and buy at lower price. But its not as easy as it sounds. By studying certain market conditions, you can actually make profits in forex. All you have to do is to analyze the forex in a correct way and do the good trade.Why to go for Foreign exchange trading? There is an option to invest in stock market also but here are a few important advantages of currency trading over stock market.24-hour TradingForex trading is done on 24-hours basis. This market is open throughout day and night as somewhere in the world, there must be this buy and sell trading is going on. Traders involved in forex trading strategy can always get that first hand information and can act accordingly. The currency rate is actually run through telecommunication all over the network of banks 24 hours a day from 00:00 GMT on Monday to 10:00 pm GMT on Friday. There are ECNs (Electronic Communication Networks) which bring together buyers and sellers.Greater LiquidityThere is a superior liquidity in the market as there are always buyers and sellers to purchase and sell foreign currencies. Forex trading market size is 50 times bigger than the New York Stock Exchange and liquidity of such large market ensures price stability. Forex trading stop orders could be carried out more simply. This makes Forex trading signal more liquid and permits Forex traders to take benefit of trading opportunities as they happen rather than waiting for the market to open the next day.100:1 High Leverage in forex trading100 to 1 leverage is commonly available from online forex dealers, which substantially exceeds the common 2:1 margin offered by equity brokers. This gives them a huge leverage in their trading and presents the potential for extraordinary profits with relative small investments. Leverage can also go the opposite way and may lead to huge losses if you are not careful.Forex trading transactions have no commissions. Forex Brokers can earn money by fixing their own speculation between what a currency could be bought at and what it could be sold at. In difference, Forex traders have to pay a commission fee or brokerage fee for every futures transaction they come in to the view. The forex market is so large that no one individual, bank, fund or government body can influence it for a long period of time. In forex trading strategy, you can trade between seven currencies but not everyone trade in all.

Advantages of Currency Trading

Foreign exchange trading involves buying and selling different currencies. It works on the theory that is similar with share market. As we know that to make the profit, you have to buy at lower price and sell at higher price, or we can also sell at higher price first and buy at lower price. But it’s not as easy as it sounds. By studying certain market conditions, you can actually make profits in forex. All you have to do is to analyze the forex strategy system in a correct way and do the good trade. Why to go for Foreign exchange trading? There is an option to invest in stock market also but here are a few important advantages of currency trading over stock market. 24-hour Trading- Forex trading is done on 24-hours basis. This market is open throughout day and night as somewhere in the world, there must be this buy and sell trading is going on.Traders involved in forex trading strategy can always get that first hand information and can act accordingly. The currency rate is actually run through telecommunication all over the network of banks 24 hours a day from 00:00 GMT on Monday to 10:00 pm GMT on Friday. There are ECNs (Electronic Communication Networks) which bring together buyers and sellers. Greater Liquidity- There is a superior liquidity in the market as there are always buyers and sellers to purchase and sell foreign currencies. Forex trading market size is 50 times bigger than the New York Stock Exchange and liquidity of such large market ensures price stability. Forex trading stop orders could be carried out more simply. This makes Forex trading signal more liquid and permits Forex traders to take benefit of trading opportunities as they happen rather than waiting for the market to open the next day. 100:1 High Leverage in forex trading - 100 to 1 leverage is commonly available from online forex dealers, which substantially exceeds the common 2:1 margin offered by equity brokers.This gives them a huge leverage in their trading and presents the potential for extraordinary profits with relative small investments. Leverage can also go the opposite way and may lead to huge losses if you are not careful. Forex trading signals have no commissions. Forex alerts Brokers can earn money by fixing their own speculation between what a currency could be bought at and what it could be sold at. In difference, Forex traders have to pay a commission fee or brokerage fee for every futures transaction they come in to the view. The forex market is so large that no one individual, bank, fund or government body can influence it for a long period of time. In forex trading strategy, you can trade between seven currencies but not everyone trade in all. There are certain trading signals that give indications to the trade. These forex signals are delivered by email, instant messenger or direct to your desktop. Some services even offer auto-trading, allowing you to auto-execute their trading signals direct into your broker account. For more about these forex, forex trading strategy, forex signal visit: www. Official-forex-trading-system.com or you may contact at: contact@official-forex-trading-system.com

5 Strategic Tips for Success – Stock Trading

1. If news that could potentially affect the price of a stock is announced on TV, don’t run with all the amateurs, giving it an upward throttle. The more experienced market makers and traders will sit in a corner, biding their time until the stock is right for shorting it and driving it back down. As the stock price plummets, these amateurs that purchased it at the highest price of the day now have no one to sell it to.

2. Don’t ever trade with money that you can’t afford to lose such as bill money, retirement money, or any other finances that could affect your living style if you were to lose it. Only trade with a stash of money that you have saved up for the specific purpose of trading. Just as a few people have been very successful at

3. The stock markets, there are even more who have failed, losing homes, cars and furniture, and nearly everything. Don’t be one of them!

4. Never get into a trade that has a poor risk-to-reward ratio. You should only consider trades that will bring you a decent profit, otherwise, the risk isn’t worth it.

5. Get out of the trade as soon as you realize the odds are against you. The longer you wait, hoping that the tide will turn again in your favor, the more money you could be losing. Plus, you might find it very difficult to sell.