Choosing the Benefits of Binary Options Trading

When people are thinking about trading any type of options, they want to find what is going to give them the best return. Binary options trading is not going to cost them anymore than what they originally invest. There are other types of options that could cost them more.

Most companies that allow people to trade binary options will have the best software for it. It will be set up for their particular situation and let their customers see what their options are doing. It is important to understand that what someone invests in this trading may be lost, but it could also grow a profit for them.

Whatever they invest is going to be all that they may lose. They will not get a bill for another amount that is over and above what they had originally invested though. This is something that is very important for many investors.

Choosing the best affiliate marketing company will be very important. It is also important to choose a company that is able to give them the best return on their investments. This is often difficult to figure out until someone tries out their services though.

Binary options trading is something that is a great option for some people. For others, it may not be the best option. Some people are good at knowing where to invest their money and will do amazing at this type of investment opportunity.

Other people will hire other people to invest their money for them. They may have to pay these people to do this for them though. This can cut into what their profit would be.

It is important for people to know how much their potential gain could be. While each situation will be different, most of them will have a limit on how much their return will be. Most people want to invest in the ones that could give them the best return and the ones that have the best chance of gaining them a profit.

There are a lot of differences in each type of option though. It depends on which contract they are investing in. Someone who does this type of thing on a regular basis is going to have a good idea of where to put their money, but there is always a chance of losing money even with the options that have consistently gained over time.

Choosing something that is simple to trade will also be an advantage. This is going to offer a lot to the investor. There are a lot of reasons why certain companies will offer them an easier way to trade.

One of these things will be the platform on which they are trading. They need something that is easy to understand and gives them enough details so that they know what they are doing. They also need to be able to track what they have traded and what the outcome of each trade was.

Finding something that interests the person that is trading can also help them. They will know what companies are growing and which ones are losing ground. Potentially, investing in a company that has lost some ground, could be a good investment if they are expected to increase sales and grow profit margins in the future.

Binary options trading can be tricky. It is nothing different than investing in anything else though. There is a risk in any type of investment, but choosing the investments that are the least risky is going to help people who are wanting to gain on their investments. There are certain things that are watched when doing this.

Affiliate marketing is something that is growing in popularity. Choosing the best company to help with the success will be vital. The binary options should be available through online trading and more. VIP Affiliates is able to offer a high CPA. They can increase the CPA and Rev share deals through any broker. This is something that is important. Knowing that investing in the firm is going to give people a profit, they are more willing to do this. For more information and to find out what VIP Affiliates can offer, check out their website at http://vipaffiliates.com. They have the necessary experience.

By: Djelloul On 11:48 PM

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Binary Options Trading As an Investment Vehicle

It is human nature to try to make the most of our assets, including our financial assets. Apart from those people who have no ambition and throw away their money, the majority look for ways to increase the amount they have. They look to the future, and try to build enough resources to let them see out their retirement in a financially stable way.

One of the most common ways to try to build up cash reserves is to use existing cash to put into some kind of investment scheme. There are many different investment vehicles available, and one of the most popular ones in recent times has been binary options.

Like all investment schemes, there is an element of risk involved, but one of the reasons binary trading has become so popular is it provides an opportunity to make substantial profits over a relatively short time period.

Bad investments

There was a time when people were quite happy to leave their spare cash in a bank. They felt it was secure there, and that gave them such confidence that they did not worry too much about the poor rates of interest they were receiving.

Today, unless you have a very large sum of money to invest, putting your money in a savings account is like throwing it away, albeit over a long time period. Interest rates on standard savings accounts are now almost always lower than the rate of inflation.

That means that even though the dollar amount in your savings account may be growing year on year, its real value is actually falling. In other words, you can buy less with the amount in your savings account now than you could with the amount you originally invested. In the present financial situation, putting your money in a bank savings account has to be regarded as a bad investment. This is especially the case for long term goals, such as a comfortable retirement.

Why binary options trading is a viable alternative?

As already stated, binary trading provides a way to make decent profits over relatively short time spans. One of the key aspects of this type of trading is that results are known quickly, giving investors the option to take corrective action before large losses are incurred.

Later, we will look at how this type of trading compares to other forms of investment. First, it is important for the potential trader to understand what this type of trading involves, and how it is different from other more standard types of investing. The best way to do this is to compare this type of trading with stock market investments.

To make our explanation clearer, we are going to create a fictitious company called Ace Products Inc. whose stocks are traded on the NASDAQ. The company is doing well, and its share price has risen by more than a dollar in the last year to $7.95 today.

Stocks

Stocks or shares are issued by companies that have floated on one or more of the world's stock exchanges, such as the NASDAQ or the London Stock Exchange. Companies issue shares at a given price, and anybody can then buy some of these shares. Shares are bought and sold through the stock exchanges. The price of shares is dictated by supply and demand. The more demand for a given the share, the higher the price will be.

When you buy shares in a company, you become a part owner in that company, no matter how small your share allocation is. That means you have a say, albeit a tiny one, in how the business is run.

Shareholders are entitled to vote at the company's AGM, where they can take part in votes to appoint people to the board, and to approve the company's annual accounts. Most people who have small shareholdings do not bother to attend the AGM to do this. They can appoint a proxy to vote on their behalf. If they do not attend and do not appoint a proxy, they assign the right to vote on their behalf to one of the board members.

If the company they have invested in makes a profit, the board may decide to issue a dividend. The company decides it has a surplus of cash that will be divided amongst the shareholders. Each share will have some monetary value, and the total payable to a shareholder is the share dividend value multiplied by the total number of shares he or she owns. When the dividend is paid out, most companies permit shareholders to reinvest the money by purchasing new shares, or they can opt to receive a cash amount.

For the purposes of our illustration, we will assume you own 1,000 shares in Ace Products Inc., which you bought 6 months ago at $7.25 each. The company has announced that it will pay a dividend of 2c per share. That means you are entitled to a $20 payout from the company. For simplicity's sake, we will ignore brokerage fees and bid/offer spread (of which more later), but if you decide to sell the shares, you can now make a profit in your investment. Here's how:

Sale price: 1,000 x 7.95 = 7,950

Dividend: 20

Gross worth: 7,970

Amount invested: 1,000 x 7.25 = 7,250

Gross profit: 720

The key factors here are:

1. As a part owner of the company you got a dividend of $20 from profit distribution.

2. When the company is doing well, the price of shares tends to rise.

3. If the company did not do well, there almost certainly would have been no dividend, and the price of shares is likely to have fallen.

4. If the price of shares falls below the price at which you bought, your holding will be worth less than what you paid for it. You will have just two choices. You either sell at a loss, or hold on to your shares in the hope that the share price will go up again.

5. When you bought your shares, you did so because you expected the share price to rise.

6. You own your shares, and you can hold on to them for as long as you like.

Binary options trading

The term "binary options" harks back to the early days of this type of trading, when there were only two possible outcomes. You either made a profit or make a loss - there was no other scenario. Today, there are many more complex ways in which you can take part in this type of trading, but beginners should stick to the most basic.

Binary trades always have an underlying asset. This could be a stock, a currency, a commodity, a stock market index, and so on. We will use Ace Products Inc. as our underlying asset.

A key element of this type of trading is that you must specify an expiry time in the future. This could be just a few minutes, an hour, a month etc. Another key element is the strike price. When you make a trade, you take a position that says the strike price will be at or above a certain level at some time in the future.

If you think that Ace Products Inc.'s share price will have risen to $8 in 30 days' time, you can make a call option. You back your belief with an investment amount. On the trading platform, another trader will have the opinion that your prediction is wrong. He or she will make an offer that will be a percentage of your investment amount.

You both enter into an irrevocable options contract. When the contract expires or closes, the Ace Products Inc. will either be at or above the $8 you predicted. Is so, you get your investment amount back, plus the additional percentage you were offered. If the share price is below $8, you lose your entire investment amount.

When you make a call option in a binary options trade, you are not buying anything physical. If you take a call option on the share price of Ace Products Inc., you do not own any shares in the company. Taking a call option means you think the price of the share is going to increase to at least the specified price at the specified time.

For the sake of completeness, it is worth pointing out that even if the share price of Ace Products Inc. had exceeded $8 during the lifetime of the contract, which is irrelevant. It is the price at the exact expiry time that counts.

With this type of trading, you are not restricted to making contracts based on rising prices. You could also make contracts based on the value of the underlying asset falling. This is termed a "put" option. This works in exactly the same way. For example, you can take a put option that Ace Products Inc. price will have fallen to $7.90 in 30 days' time. You will be shown an offer amount that you will get if you are right. If you are wrong, you lose your investment.

Why is binary options trading better than investing in the stock market?

Hopefully, it should be fairly clear from the example above that this type of trading provides you with a vehicle for making quick profits. This is almost impossible with share investments.

If you buy or sell stocks, there are other factors you must take into account. We mentioned the bid/offer spread above. This is often referred to as the bid/ask price. When you see a quoted price for Ace Products Inc. share price, which is an average of the selling price and the buying price, because these two prices are different. The amount that you can buy a given share for is always higher than the amount you could sell it for at that particular time. The difference between the two is the bid/offer spread.

The bid/offer spread can be quite substantial, and it is not unusual to see spreads of 1 - 2%. That means if you buy some shares in Ace Products Inc., the share price has to rise by at least the bid/offer spread percentage before you could possibly make a profit on selling the shares. In addition, you will almost always have to pay brokerage fees on both your purchase and on your sale.

This means your investment is going to be tied up for some time before there is any chance of making a profit on it. Another vital aspect of investing in stocks is that there is no way to make a profit or even break even if the stock price goes down.

If the stock price starts falling, you are faced with the agonizing decision of whether you should sell at a loss, or wait in the hope that the price will rise again. There is nothing you can do to improve your position. Another important factor is that you will have to make quite large investments in stocks to gain a reasonable profit.

With binary options trading, you can make a good profit from a series of small investments. You will know the results very soon, and you have the opportunity to offset negative results relatively quickly. In other words, you have much more control over your investments.

Is binary options trading better than investing in property?

As with stocks, when you invest in property you own the asset. You will have to make a large investment in buying property, and that can be tied up for quite some time. The costs of buying property are high and there are many associated fees for owning/buying a property. You can expect to pay about 10% above the purchase price in fees, duties and taxes. You will also have to pay legal fees when you sell property.

All this means that you cannot possibly make a profit from property investments until the price of your asset has risen by at least 10%. That means your investment has to be considered a long term one, and your capital is completely tied up. As with stocks, if property prices go down instead of up, there is no way for you to regain your investment.

So in conclusion, there are always risks involved in all kinds of investments. When you invest in stocks, property or other standard investment vehicles, you have no way to offset falling prices. Investments in these vehicles tend to be long term.

Investing in binary options trading gives you much more control over your capital. You are dealing in a short-term marketplace, so you get the opportunity to take corrective action if trades go against you. You can invest small amounts of money and still have the chance to make good profits. Binary options trading is certainly something to which the savvy investor should give some thought.

Learn more at http://topbinaryoptionreviews.com/

By: Djelloul On 8:11 AM

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Several Valuable Online Stock Trading Tips For Inexperienced Traders

If you want to make a ton of money as an investor, it is important to learn all that you can about working in this market. This means that you have to know how to balance the allocation of your assets, diversify and limit risk among other things. The online stock trading tips that follow will give you some of the guidance you need when just getting started.

Choose a good broker and trading platform. The brokerage you work with will have a significant impact on your bottom line. The best companies offer great support and an array of learning resources. They also have platforms that are intuitive and easy to use. Some of the top companies even have mobile trading apps.

Licensing and regulation are also important considerations to make. Regulated brokers maintain transparent operations and they keep your money separate from their own. This is a very important consideration if using stock pairs through binary options companies.

Make sure to read through the conditions and terms of account bonuses before accepting them. A lot of brokers will give you extra funds to trade with as an incentive to working with them. These come with both benefits and drawbacks. There are times when bonuses might lock your own funds up until you fulfill all required conditions.

Stick with platforms that will allow you to take advantage of a demo account before facing actual risk. These are accounts that mimic actual market conditions. You can make a variety of investments and see how these might pan out in the real world. This is great practice for short-term investors. Demo accounts are actually some of the most important learning resources that you can have access to.

Focus on trading with companies that you have a keen understanding of. You will be better able to predict the direction of a company's value if you understand the market that it services and the goods it produces. People who experiment with companies that they know little about have a higher likelihood of loss. It is also important to determine your level of risk tolerance. This is your ability to tolerate financial loss, both in a financial and emotional sense. Understanding your level of risk tolerance will help you to avoid making decisions that cut your profits short or create loss.

Think about working with binary options brokers so that you can trade stock pairs. There is a lot of money in these financial instruments and you can learn how to trade them in almost no time at all. Your goal is to see which of two stocks is going to perform the best. If you put your money on the underdog, the profit potential of a transaction could be 400%.

Make sure that you are reviewing the allocation of your assets on a regular basis and that your portfolio is balanced accordingly. There should not be too much risk in any area of your portfolio. This way, if you do implement a losing transaction, you will still have enough investment capital to bounce back. Planning is essential for succeeding in these endeavors.

By: Djelloul On 9:49 AM

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How To Profitably Sell Gold Jewellery

So you wish to sell some of your gold? Luckily, there are numerous companies and outlets out there, even online, that would be more than glad to pay you for that old jewellery. However be very careful when doing it. You require to be extremely market savvy and alert whenever you try to sell! Yes, it is possible to receive plenty of good cash for your gold, but it requires that you go in with both your eyes wide open.

How Can I Do It?

When dealing with online companies, first you request for their free pre-paid wrapper or envelope that you will utilize in sending your gold to them. A majority of these company envelopes or wrappers come pre-insured in the event of loss or theft during transit. You may opt to secure extra insurance should your gold amount be worth more their cover or alternatively just split it into a number of smaller pre-insured packs.

Most of these online gold companies will subsequently email or call you with their valuation, which you either could reject or accept. Some others will simply automatically dispatch to you a cheque worth what they valued the gold. You should return this cheque within a specified time normally ranging from 10 to 12 days if not pleased with their appraisal. Ensure that you verify their policy on returns prior to selling or sending your gold to them, because policies do vary.

Are These Companies Trustworthy?

A number of these companies have been trading for years and as such you may be confident that being established jewellers they are bound to be trustworthy when dealing with you. However, it is possible to have a handful of companies out for that quick profit and unsurprisingly; such are unlikely to give much heed to fairness. Neither are they concerned with their company's reputation or customer service. They are just out for a quick buck and then run.

It therefore pays to make use of your common sense as you sell gold. Do they have positive media coverage and dependable testimonials? For how long have they engaged in the business? Do a Google search on them and check various online forums and chat rooms to see what about them turns up.

The Jewellers Association of Australia Limited (JAA) came into being to represent and protect the combined interests of jewellery consumers and the jewellery industry. The JAA website contains a full list of all members. This website also has information that could assist you in selecting a jeweller and other such useful information.

Are They Offering You a Decent Option?

If your gold jewellery is still in fair condition, it is worthy to get assessments from several local jewellers. This is because they are likely to take into consideration the craftsmanship that went into the jewellery itself and not merely the amount of gold contained. You then could contrast the quotes from the jewellers with the online listed gold prices, which had not taken the jewellery retail value into account

Be particularly cautious of online companies which are not revealing their gold price list. It pays to compare the prices and if they are displaying their prices lists, probably they are not even worth your effort and time. The members of the Jewellers Association of Australia Limited have nationally voluntarily adopted the Jewellery Industry Code of Conduct with the objective of putting in place principles for jewellery industry fair trading. The Code additionally aims to promote ethical competition among gold retailers.

By: Djelloul On 2:18 AM

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Have You the Nerves for Stock Trading?

Stock Trading, can be a great home based business. Many try but most give up quickly as it is not usually an overnight successful business. To succeed you need to devote some time and effort to master the right skills. It is advisable to gain knowledge from experienced traders as this type of home based business is rarely one you can learn yourself.

The top traders are successful because they have learnt to hone in on their skills with dedication and apply good old-fashioned practice. They have learnt what works and what does not.

So how do you start to master this online home business?

• This type of industry requires steady nerves. If you are the type of person who can stay calm when others around you are fearful, then you will do well. Successful traders know that like playing poker it is imperative not to panic when things start going wrong, but to remain in control.

• It is preferable you learn from a reputable broker and has proven to be consistently successful. Check that they offer a trading platform that you can understand, is a lot to master. This is not a business you can hurry results. Many beginner traders get impatient because they want instant results, so will change to another trader platform. This not to be recommended because you will receive conflicting information, get frustrated and worst of all lose money.

• Once you put money into your online trading account, the most important thing to remember is that this money is at risk. So use money that is definitely not required for your daily living expenses, such as bills, groceries etc. Consider your trading money as if it were holiday money. Have the same attitude toward trading. That way you will be able to accept small losses. The ideal is to focus on your trades and accept any small losses you make, then you will be much more successful in the long run.

• Choose a trader program which gives a full money back guarantee and contact email for support so you can get answers quickly.

It really is a case of success breeds success and your confidence will grow. Stock trading can be great way to make money online, as a home based business. You will become a profitable trader only though if you take your time and accept that there will be a steep learning curve.

Wendy Heyworth lives in Tauranga New Zealand
Wendy has had a successful varied business background from sole operator business to directorship in multi-national businesses. She now has her business working from her home.
She inspires and empowers others to seek out opportunities to work from home.

By: Djelloul On 5:46 AM

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A Managed Forex Account

These are forex accounts that are not traded by you, but by a money manager on your behalf.  This is a similar situation to employing an investment advisor to trade equities and bonds on your behalf.  It is suitable for use if you do not have sufficient knowledge or time to trade yourself.  Many traders do not want to learn the often complex and intricate mechanisms of this large financial market.  Individuals who prefer having a professional manage their funds would prefer this type of account.

The Advantages of a Managed Forex Account

One of the most important advantages of a managed forex account is that your money is held by your broker and not by your manager.  This gives the money manager the responsibility to do the trades for you, but he or she will not have the authority to withdraw money from your account.

The other advantages linked to this type of account are:

• Large brokerages offer you extensive experience in this market which you have access to.  Your money manager will inspect your portfolio on a regular basis and diversify your investments if necessary.

• You do not need to have experience in the forex market as your manager will be doing your trades.  This provides you with a knowledge base based on practical experience which is to your advantage.

• You will normally receive a daily report on all the positions you currently hold.

• The possibility of showing profits irrespective of the state of the market is increased by using this type of account.

• Through your money manager, you will have access to the market 24 hours of every day.  If you choose to trade personally, there is always the possibility that you may miss out on a profitable trade because you were not online at the time.

Disadvantages of a Managed Forex Account

Since you are not personally managing your account, you may face several risks.  The risk of being scammed is high as you may have chosen to use an untrustworthy broker.  You may be assigned a money manager who is incompetent and this could cause you to lose funds.

Scammers should be quite easy to recognize as they will constantly request deposits from you.  Their main aim is to get as much money out of you as possible.  To avoid this risk, obtain details from your broker as to the manner in which your account will be managed.

Check if you have been assigned a normal account as the account will then be a personal one and in your name.  This means that all the funding you put in will go to the broker.  If you are assigned to a pooled account, your funds are normally sent directly to the money manager who is responsible for pooling funds received from various clients into an account that he or she controls.

One of the scariest aspects of a managed forex account is that you could lose all your money through incompetence.  To avoid this, you should ensure that you read and understand your contract before you sign on the bottom line.  You must be aware of who will be handling your account and the methods they intend using.

By: Djelloul On 4:29 AM

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A Beginners Guide To Trade Currencies Like A Professional

With many people over the last few years having money just sitting in the bank earning next to nothing due to the very lower interest rates that the banks now offer, some have taken up trading on the currency markets. Once only the home of the big investors and governments, people can now get involved themselves for as little as $50 with some brokers. Now that amount is not something that is going to make you rich, but you need to start low and work your way up. Making money from trading the Forex markets can be as difficult as you make it.

When you do some research into trading on the Forex markets you have probably come across numerous pictures that show the currency pair moving up and down, and then it is probably covered in lines, and underneath is a number of graphs. Well unless you understand all of them and how they work, switch them off. Do not fill your trading screen up with all kinds just to try and make it look good. The best advice a professional trader will give a beginner is to setup the screen to show one currency pair that is trending, shown in candlestick mode, with nothing else on the trading screen.

This means that you are setup to just watch the way the currency pair behaves, and this will give you a feel for the way the markets move. If you are a beginner, then you should not be looking to be doing any scalping (very short term trades), so your timeline should be at least 1 hour, but preferably 4. This is to teach you to be patient, if you are watching shorter timelines and a market looks like it is going against you, then you are likely to bail out at a loss. Whereas people who have patience will have no interest when the market turns against them, as when they look at the screen after an hour it has recovered in their favor.

You may have to spend a long time staring at the market, but once you have entered a trade, walk away and do something else. You have either set a stop loss as a value, or you may time your trades, and bail out after a set time. It is recommend you use a set value though.

Some people prefer to set a trade and leave it for a day before they decide to take action on it, and if you really want to go for the long term then you would be looking at being in the marker for weeks. If you do that and get it right then it can really pay off big time. Whatever timeline you decide to start with though, stick with it, if you keep changing it then you will not get the feel for any of them. When you see a professional trader on TV, you will not see them flicking through various screens and constantly changing settings.

By: Djelloul On 4:25 AM

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Why Forex Is The Best Market For New Traders

It is my belief that Forex is hands down the best market for new traders. When everyone thinks about trading, they automatically think about the Stock exchange. What they don't understand is that it cost a lot of money to actively day trade the stock market. By law, the SEC, requires a large minimum balance for day traders. In this article, I will give you several examples why new traders will find it easier to trade the Forex market as day traders and as other short time frame based currency traders in this market.

There are some inherent advantage to Forex. The first benefit is that you can fund an account with a broker with as little as $5 and as much as a million. Forex makes it so that any trader, no matter their account size has an opportunity to trade. Another advantage of Forex is the fact that you have a lot of leverage you can use, you can use up to 1:400 leverage with some Forex brokers. Leverage is the same as buying with margin. Stock brokerage accounts do not provide this amount of leverage. All short term traders need high leverage to make the most out of their small incremental wins.

More opportunities to trade equals more money that can be made. The stock market opens at around 8 in the morning and closes before 5 pm, that is a short window to trade and makes it so that anyone with a day job can't trade. Forex doesn't have this problems. Forex is a 24 hours market that you can trade anytime of day. It is a global market with participants from all around the globe trading  at every hour of the day, it never closes. You can trade before work and after work.

Open crossover is another reason why Forex is so great. Although, the Forex market is open 24 hours, it does have several opens. An open is when a countries banks start trading. For example, London's open is at 3 am EST and the US open is at 9 am EST. There are also opens for the Asian countries too. What this means that their is a ton of liquidity being pumped into the market through out the day. When these trading periods cross over you have a ton of people moving the market. For day traders and scalpers this is a goldmine.

As you can see, Forex is the best market for a new trader to trade. They will find greater success in Forex than in any market. It is also easier to open an account and get high leverage in Forex. One of the great benefits of Forex is that it is a 24 hour market that you can trade day or night. A new trader can go to work in the day and come home and trade during his or her leisure time. It is a market that gives the trader the advantage.

By: Djelloul On 4:22 AM

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Best Online Forex Trading Practices for Beginners

Becoming a professional in any field requires dedication, experience and understanding of the field. After all, no one is expected to become a seasoned doctor within six months. In the same way, traders too cannot become experts at Forex trading within a few months. One also should not overlook the fact that the market competition is cut throat and there are seasoned traders that newbies are competing against. These traders have invested many years of their lives in this field to earn the amount that they do.

Therefore, newbies in the Forex market trading should learn and explore to the maximum their education and gains from the market. There are a few aspects which beginners in Forex trading should keep in mind. One of the foremost things to do is be vigilant as the market changes regularly. They should be well aware of the currency they are dealing in along with the market to be able to make money without any hassle. Traders can also make use of the different applications and software in order to monitor the markets and learn about:

a) Transaction tracking
b) Real time Forex quotes
c) Charts

Another important thing to do is opening a demo account. This account will help traders learn more about trading currency without putting at risk their own investments. The simulated view will allow new traders to make efficient use of their resources and teach them the much required traits like patience, etc. When dealing in the Forex markets, new traders have to make sure that they do not make decisions or get carried away due to sheer excitement. This is important in order to curb the risks of substantial losses.

They should also learn to evaluate trading and draw out the investment at the earliest in case they make a wrong decision which will have a positive impact in saving their investment in the long run. When it comes to learning they should make sure to go through the various online tutorials often uploaded by the broker agencies which will provide them with useful and up to date information about the trade and the market. In fact, by using online tools they can also communicate with the experts in the field. They can make the most of the tools by learning about topics like:

1. Risk management
2. Basic account functions
3. Trading using bots and much more.

The main aim of beginners in the Forex trading should be to maximize their knowledge about the industry and minimize their losses.

By: Djelloul On 2:25 AM

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The Most Important Stock Indicator

Overall the most important stock indicator is Volume. Candlesticks are an important price indicator, however candlesticks do not complete the chart analysis which is a crucial aspect of successful trading. There are three data that come from the market which are Price, Time, and Quantity. Price is represented on the chart by the candlesticks, Time is represented by the chart timeframe, and Quantity is represented by volume bars.

Quantity the data stream, has two primary types. The total number of shares traded at that time whether it is a millisecond or a year, and this is the total number of shares represented by volume bars. Quantity can also refer to the number of shares per transaction, but that is not discussed in this article.

Volume bars should be represented on your charting software with green bars for up days and red bars for down days, because this provides exceptional analysis easily and quickly. If you use a solid color such as blue and do not differentiate up or down days, your analysis will be impaired and will take much longer. Each volume bar on a daily chart represents the total number of shares that traded hands that day, therefore one side of the trade and not both are represented in the volume bar.

Use daily charts and analyze end of day volume, because then you are analyzing the "consolidated" tape volume. This volume differs from intraday because it includes all volume from every trading platform and venue, not just the exchange volumes. ATS Dark Pools, Electronic Communication Networks for Electronic Trading aka Day Trading, and Regional exchanges all must report their data. All of this data is called the consolidated tape, which includes the total volume from all sources.

The total consolidated volume is an important part of making sure your stock chart analysis for selecting stocks is correct. With the consolidated volume provided at the end of the day from your charting software, you can quickly go through stocks using the basic criteria of at least 100,000 shares traded per day average. Always make sure that you check the volume for any stock you trade.

Avoid trading stocks that are illiquid. This means is there are so few shares traded per day that buying the stock can be very risky. Without sufficient volume, there is a lack of interest by the market participants and this can lead to weak picks, poor trading profits, or even losses. Illiquidity also skews any indicator you might apply to the stock, and lack of volume makes price action extremely volatile and unreliable. To determine if the stock has sufficient liquidity always study volume bars first before checking any other indicators.

By: Samory Borry On 10:54 AM

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Growth And Value What S The Difference

While the majority of American investors understand the importance of diversifying across growth and value investments, few are able to achieve a passing grade on a test of their knowledge of the differences between the two, according to a new American Century Investments survey.

Test your knowledge with the Growth & Value IQ quiz below:

1. Which best describes a growth stock?

a) Stock that offers guaranteed rate of growth tied to consumer price index.

b) Stock in a company specializing in agriculture, lumber, landscaping, and other organic products.

c) A stock in a company demonstrating better than average profit and earnings gains.

d) All of the above.

2. Which best describes a value stock?

a) Stock in fast-growing company specializing in high-value, low-cost products, like a discount retailer.

b) Stock in a company specializing in valuable goods, like precious metals and jewelry.

c) Stock that has a low price-to-book ratio.

d) All of the above.

3. Which statement is true?

a) Value stocks outperformed growth stocks between 1927 and 2001.

b) Smaller company value stocks outperformed larger company value stocks between 1927 and 2001.

c) Maintaining a portfolio with a combination of growth and value stocks generally is considered a prudent investment approach.

d) All of the above.

4. During periods of strong economic expansion, which fund generally performs better?

a) Growth.

b) Value.

c) Neither.

d) Both.

5. Generally speaking, value funds outpaced growth funds in 2000 and 2001.

a) True.

b) False.

6. Generally speaking, growth funds outpaced value funds during the 1990s.

a) True.

b) False.

7. Which type of fund is more likely to invest in stocks paying a significant dividend?

a) Growth.

b) Value.

c) Neither.

d) Both.

8. Higher price-to-earnings ratios normally would be associated with stocks in which type of mutual fund?

a) Growth.

b) Value.

c) Neither.

d) Both.

9. What kind of stock is described in this example: “Established baked-goods company with strong balance sheet and good cash flow experiencing temporary drop in reaction to changes in senior management.”

a) Growth.

b) Value.

c) Neither.

10. What kind of stock is described in this example: “Software company, enjoying steady sales increases, is in the process of rolling out an eagerly anticipated update to a popular software application.”

a) Growth.

b) Value.



Key: 1(c); 2(c); 3(d); 4(a); 5(a); 6(a); 7(b); 8(a); 9(b); 10(a). – NU

By: Samory Borry On 3:15 PM

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Stock Market Window Dressing The Art Of Looking Smart

As investors, and we all are investors these days, it is important that we understand the idiosyncrasies of the Stock Market pricing data we use to help us in our decision making efforts. On Wall Street, investing can be a minefield for those who don’t take the time to appreciate why securities prices are at the levels that appear on quarterly account statements. At least four times per year, security prices are more a function of institutional marketing practices than they are a reflection of the economic forces that we would like to think are their primary determining factors. Not even close… Around the end of every calendar quarter, we hear the financial media matter-of-factly report that Institutional Window Dressing Activities” are in full swing. But that is as far, and as deep, as it ever goes. What are they talking about, and just what does it mean to you as an investor?

There are at least three forms of Window Dressing, none of which should make you particularly happy and all of which should make you question the integrity of organizations that either authorize, implement, or condone their use. The better-known variety involves the culling from portfolios of stocks with significant losses and replacing them with shares of companies whose shares have been the most popular during recent months. Not only does this practice make the managers look smarter on reports sent to major clients, it also makes Mutual Fund performance numbers appear significantly more attractive to prospective “fund switchers”. On the sell side of the ledger, prices of the weakest performing stocks are pushed down even further. Obviously, all fund managements will take part in the ritual if they choose to survive. This form of window dressing is, by most definitions, neither investing nor speculating. But no one seems to care about the ethics, the legality, or the fact that this “Buy High, Sell Low” picture is being painted with your Mutual Fund palette.

A more subtle form of Window Dressing takes place throughout the calendar quarter, but is “unwound” before the portfolio’s Quarterly Reports reach the glossies. In this less prevalent (but even more fraudulent) variety, the managers invest in securities that are clearly out of sync with the fund’s published investment policy during a period when their particular specialty has fallen from grace with the gurus. For example, adding commodity ETFs, or popular emerging country issues to a Large Cap Value Fund, etc. Profits are taken before the Quarter Ends so that the fund’s holdings report remains uncompromised, but with enhanced quarterly results. A third form of Window Dressing is referred to as “survivorship”, but it impacts Mutual Fund investors alone while the others undermine the information used by (and the market performance of) individual security investors. You may want to research it.

I cannot understand why the media reports so superficially on these “business as usual” practices. Perhaps ninety percent of the price movement in the equity markets is the result of institutional trading, and institutional money managers seem to be more concerned with politics and marketing than they are with investing. They are trying to impress their major clients with their brilliance by reporting ownership of all the hot tickets and none of the major losers. At the same time, they are manipulating the performance statistics contained in their promotional materials. They have made “Buy High, Sell Low” the accepted investment strategy of the Mutual Fund industry. Meanwhile, individual security investors receive inaccurate signals and incur collateral losses by moving in the wrong direction.

From an analytical point of view, this quarterly market value reality (artificially created demand for some stocks and unwarranted weakness in others) throws almost any individual security or market sector statistic totally out of wack with the underlying company fundamentals. But it gets even more fuzzy, and not in the lovable sense. Just for the fun of it, think about the “demand pull” impact of an ever-growing list of ETFs. I don’t think that I’m alone in thinking that the real meaning of security prices has less and less to do with corporate economics than it does with the morning betting line on ETF ponies… the dot-coms of the new millennium. [Do you remember the "Circle of Gold" from the seventies? Isn't GLD, or IAU, about the same thing?]

As if all of these institutional forces weren’t enough, you need also consider the impact of tax code motivated transactions during the always-entertaining final quarter of the year. One would never suspect (after watching millions of CPA directed taxpayers gleefully lose billions of dollars) that the purpose of investing is to make money! The net impact of these (euphemistically labeled) “year end tax saving strategies” is pretty much the same as that of the Type One Window Dressing described above. But here’s an off-quarter buying opportunity that you really shouldn’t pass up. Simply put, get out there and buy the November 52-week lows, wait for the periodic and mysterious “January Effect” to be reported by the media with eyes wide shut amazement, and pocket some easy profits.

There just may not be a method to actually decipher the true value of a share of common stock. Is market price a function of company fundamentals, artificial demand for “derivative” securities, or various forms of Institutional Window Dressing? But this is a condition that can be used to great financial advantage. With security prices less closely related to those old fashioned fundamental issues such as dividends, projected profits, and unfunded pension liabilities and perhaps more closely related to artificial demand factors, the only operational alternative appears to be trading! Buy the downtrodden (but still fundamentally investment grade) issues and take your profits on those that have risen to inappropriately high levels based on basic measures of quality… and try to get it done before the big players do. To over simplify, a recipe for success would involve shopping for investment grade stocks at bargain prices, allowing them to simmer until a reasonable, pre-defined, profit target is reached, and seasoning the portfolio brew with the discipline to actually implement the profit taking plan.

Yeah, I do miss the days when there were just stocks and bonds, but maybe I’m just a bit too old fashioned. Interesting place Wall Street…

By: Samory Borry On 3:13 PM

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Profitable Trading System

After you have found a profitable trading system that you already back-tested, how can you be sure that this system will produce the same gains in future?

Nobody can predict the future, your system can easily make losses in next years or can be no tradable.

There are some tests you must do before accepting a trading system, these tests swill show the robustness of your system and when passing these tests, it will be more likely to show gain in future.

Test 1 : Make sure that you put liquidity rule, that your entry and exit prices are realizable.

Test 2: Examine again your trading systems and your rules (This is very important).

I made dozen of trading systems that showed great results but after more examination, it showed that i cannot follow them in real life.

Check if there is one stock that made very big gain, the system will maybe become no profitable without this stock.

Test 3: Change twice or 3 times the date of begin for the simulation, if it still show good results then it has passed the test 3.

Test 4: Change values of some parameters or variables you have in your trading system rules, you must change one value and then back-test, change another and then back-test…

If the results are not affected very badly then it passed the test 4.

Test 5: Try to restrict the system from buying 20% or more of stocks you previously bought when doing the back-test. Then re-run the back-test. To pass this test, system must show pretty the same results as before.

Test 6: Equity chart must have a good look, check some statistic values like sharpe ratio, sortino ratio, standard deviation, maximum drawdown, average day for gains recovery…

It depends on the risk you are willing to take but choose only systems that have : higher sharpe ratio, higher sortino ratio, lower standard deviation, lower maximum drawdown…

Exclude systems that have very big max drawdown, standard deviation and average day for gains recovery.

The must important factor i think is average day for gains recovery.

Its the average number of day that you must wait until your equity value will goes back to the same level before the drawdown happen.

Big values will let you wait for long times before recovering gains and for sure many traders will abandon their trading system, and that’s the worse thing that can happen to a trader because just after that, the system will show excellent results. (That’s always happen)

Theses tests are very restrictive and you will reject maybe all your trading systems, but when trading you will put your money, real money, so i think you must be very selective to make all chance in your side.

By: Samory Borry On 3:11 PM

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How the Stock Market Saved My Life

Most people know the stock market to be a rough and challenging world but in reality it is a savior. For many people the only experience they have with the stock market is staying away from it but I guarantee you that you can make money as long as you put in a little bit of effort. What most people don't understand about the stock market is that it isn't the most experienced that are making the most money, it is the people who take the time to do the proper research.

Why the stock market saved my life

A while back I went making a lot of money every month to making nothing because of the changes in the internet and my local businesses but the stock market was the only thing that was still there I could adjust quickly enough to make money that very day. What I learned from the stock market is to trade when others are trading and take a firm position.

What did this mean for me

What this meant was while so many people where looking at the casino business from afar I wanted to get up close and dive right into my favorite stocks. I chose to buy 2 different casino stocks that own more than 6 hotels and casinos in Las Vegas because I knew that the Las Vegas tourists would be flocking the city very soon.

What happened next

The next thing I knew I was sitting on more than $5,000 of pure profit from my 2 stocks and that was only within 4 weeks of buying them. The thing about this money was that I traded the stocks over and over again until I got as much money as I could out and now I am just holding the stocks as a long term gain.

The stock market is more than just a way to make money, it is my savior because I know there is nothing else out there that can make me that much money that fast without doing anything. Do you know of anything that will make you $5,000 in less than 1 month without doing anything? Probably not and that is why the stock market should be there in case you need it too.

By: Samory Borry On 11:41 AM

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Real Forex Traders Learn To Like Losses

As a forex trader you have to learn how to take losses. Period. Don’t be a crybaby. Learn how to take losses.

Learning how to take losses is one of the most important lessons you must learn if you want to survive as a trader. Nobody is 100% right all the time.

Losses are inevitable. Even Michael Jordan and Tiger Woods lose sometimes and they’re considered the best in their field.

There will be trading streaks where you’ll have a number of successful consecutive trades, but that will eventually come to an end you will take a loss.

As that point it’s very important not to lose your head, you must remain in control of yourself. Don’t have a cow man.

Take a break. Calm down and relax. Take a chill pill dude.

Until you’ve regained a clear mind and an ability to think logically again, stay out of the market.

Don’t whine about your loss and never carry a prejudice against a loss.

The key to manage losses is to cut them quickly before a small loss becomes a large one.

I repeat. The key to manage losses is to cut them quickly before a small loss becomes a large one.

Never ever think that you will never lose. That’s just ludicrous. Losses are just like profits, it’s all part of the trader’s universe.

Losses are unavoidable. Get over the loss and move on to the next trade.

By: Samory Borry On 12:33 AM

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Forex Currency Trading

You can develop into a better and more profitable trader by applying some of the more imperative forex currency trading rules consistently with an appropriate amount of discipline. There are few principles that can help to perk up your chances of success if they are understood, practiced, and implemented in your trading on a regular basis and these rules have been learned in the trenches, mostly through testing and scrutinizing the common mistakes nearly every trader makes when starting out in the forex currency trading business. The first step is to set up and apply specific goals and objectives.

The majority of forex traders who often find themselves on the losing end of a trade make the same common and recurring mistakes. Most forex traders don’t have a clear direction, never take the time to develop a sound business plan and lack a formal written strategy for putting a well thought out plan in place. In forex currency trading, the primary goal is clearly to make money, but it’s important to have goals that are not strictly money related as well. Your personal objectives and ambitions should be very specific and measurable to you, but they should include the characteristics that are needed for the trading.

Having a clear-cut idea of what you want to accomplish in your trading and the precise time frame you want to achieve it, make your efforts more focused. In order to establish a track record of winning trades, you need to develop discipline and a personal forex currency trading system that makes sense for you. The spread generally referred to as the bid/ask spread is what brokers charge instead commission fees. Forex brokers are typically linked with large banks due to the large amount of capital that is required to operate in the forex market. Leverage is a ratio of total capital available to actual capital which is the amount of money a broker will lend you for trading. Finally you should select a trading account that fits your budget.

Basic Forex trading strategy begins with fundamental and technical analysis. Fundamental analysis is mainly used to anticipate and better understand long-term trends in the currency market. Technical analysis is widely used to examine the forex because it identifies and measures sustained trends. Successful traders use a combination to make more accurate predictions. Once you have the knowledge of how the forex currency trading works open a demo account and paper trade to practice until you have what it takes to make a consistent profit. It’s important to take the time to build, test and implement a sound trading plan before you put capital at risk.

By: Samory Borry On 12:30 AM

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Currency Rates You Have To Know The Trends If You Expect To Earn On Forex

Currency rates and the differential between countries and over time is the meat of the foreign exchange game. They are constantly changing and the better your ability to predict these changes the more money you are going to make over time in this market. So naturally a few tips in this area are worth their weight in gold.

So what are some of the things that should be learned when attempting to understand the changes in currency rates? What affects currency and the perception of their value up against the currency of any number of other countries? I make no guarantees in this article but hope to point you in a few worthwhile directions so that you can understand and therefore profit in this goldmine of a market.

Before I start I want to mention the potential for profit if you understand and are willing to put some time into mastering the factors involved in the changing currency rates. Perhaps the most important thing to understand is that thought this market has been around for a long time relatively few people are taking advantage of it. The market is not saturated and therefore there is a lot more room to compete and be at the top of the game. Why is this? For one thing it just has never been as flashy as the stock market. Part of this is how things have played out in the media and in our economy. Industry is for some reason valued more than the overall economy and the public’s perception of striking it rich is stronger in the stock market. It is true that the potential to strike instant riches is greater in the stock market with new companies forming and old ones failing far faster than countries are forming and failing. However the potential for constant and predictable gain is more in forex.

Why? Well for several reasons. One the currency rates, or in other words the value of a currency is dependent on something that is far easier to evaluate and predict. The chief operator in this game is the overall economy of that country, which is far more stable and predictable than the ability of a company to earn a profit in the cutthroat world of business. You can judge with far more accuracy how a current event or change in leadership is going to affect an economy globally than you can how a company will perform.

The main reason for this is the information differential that there is more information available on current events and the lives and values of governmental leaders than there are on private companies. This is due to the concentration of the media in this area and the fact that it is more important for a company to be private in order to not give an advantage to their competition.

So in order to be good in the currency rates game you have to read your newspaper and have a general idea of the public and global perception of an event and a government and how these things will affect the economy of a country. Something that we do almost every day anyway.

By: Samory Borry On 12:25 AM

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Free Stock Picks: A Proper Perspective

Remember the good old days of investing? Days when you would call your stockbroker, ask his advice and then invest accordingly? Those days are long gone thanks to the Internet and self-directed investing apps. Today a good many investors rely more on free stock picks than sound advice from investment professionals.

Do not misunderstand; free stock picks have their place - just like advice from paid professionals. However, any investor able to think for himself uses every investment resource with proper caution. No single source of advice or information is foolproof, nor should it be trusted without question. That includes free stock picks.

Why They're Good

The good thing about free picks, and particularly U.S. stock picks, is the fact that there are so many experienced people out there doing the legwork for you. That means the investors writing the daily stock articles will be right from time to time. They also have some market insight that the casual investor lacks, providing them a better glimpse into the future of a given stock.

Free picks are useful inasmuch as they give you more information to work with. A good strategy is to take picks from several different analysts and compare them against one another. If all of them generally agree on a specific stock, that's something to seriously consider when making investment decisions. If they are all over the board regarding another, it tells you to stay away.

Why They're Not Good

The problem with free stock picks it that the analysts offering them have no real incentive to make sure they are as accurate as possible. They can advise according to any criteria they set for the day; criteria that can include, among other things, whether or not their favorite team won the game last night. Casual investors rarely track the records of those offering U.S. stock picks for free, so they do not really know how well an analyst performs over the long haul.

That said, the number one rule of investing in stocks is to pay attention to long-term performance. Making good money off the stock market is a pursuit that is generally not achieved overnight. So when investors don't know the historic performance of a stock analyst, they also don't know if the analyst picks are worth anything.

What It Means to You

Self-directed investing is a great opportunity to take advantage of what the stock market has to offer. By all means, take into consideration the U.S. stock picks offered by analysts for free. Nevertheless, do your own homework on any stock you think you are interested in purchasing.

At the end of the day, self-directed investing comes down to the casual investor learning and understanding for himself. Free stock picks are just one tool in that process. As long as they are viewed with the proper perspective, such picks can be helpful. But if an investor bases his entire strategy on what analysts are putting out for free, he is just asking to lose his shirt.

By: Samory Borry On 5:42 AM

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Penny Stocks Explained

A "penny stock" isn't a literal term, but compared to the prices of higher stocks, it may seem like a bargain. Common stocks that cost less than $5 are usually called penny stocks, and while they have a lower individual price, investing in small stocks can be just as risky as any of the higher priced variety, if not more so in some cases. There are some misconceptions about penny stocks that should be cleared up:

·Penny stocks are not a "get rich quick" stock.

·Penny shares are not a guaranteed profit.

·Not every tiny stock is a bargain.

With that in mind, let's look at how to invest in penny stocks for the absolute beginner.

Getting Started

The first step is to do your research. There are a lot of stories about penny shares helping investors to get rich overnight, but you need to figure out what makes the most sense to you. There are brokers that actually specialize in handling penny stocks. These brokers may be able to point you toward some stocks to watch, but do your own research before you make an investment through the brokerage. Learn how to read the company financial statement.

Also, think about investing in a small stock that is listed on the NASDAQ. If you have absolutely no experience in investing in the stock exchange, then these are the stocks that are going to have the most "security," although it is still not a sure thing. Stocks that have been de-listed are usually indicative of a company that is going through some financial turmoil, and what you want is something that is a little more stable, whether you're investing in tiny stocks or larger offerings.

Keep Researching

After you've made your investment, stay on the lookout for other good tiny stocks and how they're performing on the market. Because penny stocks should account for 1/10th of your investment portfolio or less, these aren't going to be your prime performers. Instead, they're a way to diversify your investment strategy and get in on some unique and affordable investment opportunities. The more research that you do on the subject, the easier it'll be to find the best penny shares for your investment strategy.

Awesome penny shares aren't usually obvious to the new investor. Your broker can most likely point you toward some options that are worth considering if you want to get the best bang for your buck.

By: Samory Borry On 5:33 AM

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Stock Market Investing Is Not Trading

There is a huge difference between investing and trading in the stock market. Although both involve owning stock, the effect on for market participants is very different. As an educator for investors, I get annoyed at all the people who talk about investing and then discuss or teach only short-term trading.

First, the time involved to trade requires much more time than investing. Short-term trading is a full-time job. Day trading requires you to be at your computer screen during market hours. It is very difficult to hold another job that pays the bills while you do short-term trading. Even if you are swing trading, it is still very time intensive. However, with my investing I monitor my holdings for about 20 minutes per week.

Next, trading is extremely time-consuming and difficult to learn in the first place -- it is the hardest thing I have ever done in my life. Many successful day and swing traders took 3-5 years of at least full-time work and study to learn. I have heard of people doing it faster than that, but that is the exception and not the rule. Whereas you can learn to be an advanced investor in a few weeks in my courses. In 30 minutes you can learn a technique that offers 5-50% a few times a year when a special situation presents itself.

Next, the money involved to learn. Trading is a very high-risk, low-odds-of-success activity. The vast majority of traders lose some or all of the money in their accounts trying to get good at it. (If you don't believe me, look it up on Google. There is plenty of research supporting this claim, including the Johnson report, the Hieronymous study, and the Odean study.) I have listened to several successful traders blow out several large accounts before finally getting it right.

On the other hand, owning stocks for the long-term has a built-in likelihood of making a profit -- stock prices typically go up over time. There are ways to lose money investing, and there are ways to make more than buy and hold (I have spent the past 25 years researching what those strategies are), but even if you do not know them, the odds are with you at least for the long-term.

The essential problem with short-term trading is that you must first determine the direction of short-term stock prices, which can be very volatile over brief periods of time, then make a big enough profit to cover commissions and all the other times when you guess wrong. Believe me, it is not easy to do.

In the end, most Americans need to learn how to invest, not to trade. Make sure you go to the right place to learn better investing strategies.

By: Samory Borry On 5:30 AM

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