Posts Tagged ‘trading system’

What Is A CDO And Why Should I Care?

Thursday, April 15th, 2010

For many in this country economics have become a nightmare. On top of all of the basics about how money works, another layer has come completely unraveled. That being the business of “shadow banking”.

To the degree that the population becomes wise to how this works, is the degree to which all of us can avoid the pitfalls of financial oppression.

The warning signs were clear that nothing good would come from the development of Collateralized Debt Obligations, CDOs. I was fortunate to have been in banking and in a group which voiced serious concerns over the development of crazier and crazier esoteric instruments. They were to be peddled as “same as cash” but were in fact far from that. By July 07 the auctions for these began to fail as financial institutions backed away.

The bankers started pushing the CDOs out the door. They managed to get them off their books and into the hands of others, most of whom were sold these as “same as cash” which of course they were not.

The instruments were created by companies such as Blackrock and Nuveen. By mid-February 08 the market for these seized up entirely. We are talking about a 300 billion dollar market freezing up.

Those who had trusted that these instruments were really the same as cash found their economic lives grinding to a halt. The regulators of course were flooded by complaints.

The brokerages insisted that they had done nothing wrong. Investigations ensued. Brokerages agreed to make their smaller investors whole at least.

Was the press interested? Well, it didn’t boil down to a quick set of soundbytes. Besides, the perpetrators were some of the biggest financial institutions in the country.

Finally, when Bernanke and Paulson held the country ransom for 700 billion dollars the story got media attention.

What kind of accountability is it that plays Robin Hood on the taxpayer for the benefit the banks?

Two days after the Presidential Election the markets continue to sputter. The word on the street is that that market is not pleased with the idea that full the street will not get full bonuses at year end.

So what kind of bonuses are we talking. Dick Fuld, had in 07 cleared 34 million.

Clearly Rand’s notion of enlightened self-interest did not trump raw greed for the banking industry. For more on Rand, see Objectivism and the 1957 novel “Atlas Shrugged”.This all plays nicely into the capital C Conspiracy Theorists who are ready to gloat over the “I told ya so’s”.

These “Too big to fail” are not national institutions. They are international. The idea of a sovereign nation is a thing of the past.

Will the New Vikings prevail? Stay tuned

James Horne has been a financial analyst for over 10 years. He is CEO of Pure Reason LLC, the home of Shadowtraders. His voice has been heard by hundreds of students learning to trade Futures with Shadowtraders online day trading strategies. Before you buy any trading software, make sure you attend Shadowtraders Monday Night Webinar, and hosted by Barbara Cohen

The Forex Robot Called Ivy Bot

Thursday, April 8th, 2010

It seems as if there are so many foreign exchange robots that are getting released in the market. Day traders need these trading robots as a way of finding out if they are betting on the right stuff.

When it comes to the foreign exchange, day traders have the ability to earn so much but they can also lose a lot from bad bets.

Although there are so many trading robots to choose from, you will have to think long and hard before purchasing anything.

This is because trading robots aren’t all the same. There are some trading robots that only work for long trades while there are others that only work with short trades.

Ivybot is a trading robot that works for short trades. It’s a fact that short trades are easier won than long ones.

Ivybot is unique in that it generates bets that follow the existing trendlines instead of oppositions. The reason for that is to ensure that the bets are accurate.

If you are one of those people who like to do manual trading, Ivybot includes forex market indicators as well as different scripts that you can easily download.

For the record, Ivybot works only with 1 hour time frames so that in one week, you will be able to trade at least 3 to 10 times in a week.

For a software that deals with real money, it’s important that it’s made to perform in its optimum. Ivybot has years of extensive trading research under its belt.

To make sure that Ivybot is really legitimate, it went through so many testings and developments.

It takes a lot of things before Ivybot could increase its winning probabilities. It has to take into consideration things like liquidity and volatility of the markets.

You will be able to receive four different trading robots in 4 different currencies. You can also avail of product updates without any charge.

Wait. To read a bit more about ivy bot then go to my site quick. And take a look at my great proxy list website right this second.

Ivy Bot Forex Trading Robot

Tuesday, April 6th, 2010

Why are there some people who do not apparently work but still they can afford the lavish lifestyle and go one dream vacations?

I’m pretty sure these people do not come from ridiculously wealthy families and they don’t have well established companies a well. But why are they making so much money?

He may be one of those day traders who work through their computers. The foreign exchange market is perfect because you really don’t need that much money in order for you to start trading.

Trading in the foreign exchange market can allow you to trade using different currencies and in different times of the day.

The thing is that you don’t need to be an expert in the foreign exchange market for you to earn from it. All you need is the basic knowledge on how things operate and you’re good to go.

You do not have to be as knowledgeable as the senior traders. A forex robot will be able to supply you with winning bets.

There are a number of forex robots available online but IvyBot is among the really good ones.

Ivybot, like so many others, come up with bets basing on existing trendlines for accuracy. In every 100 trades, you only get 5 losses.

IvyBot was conceived after years of extensive trading research. It went through numerous stages of testing and development.

It bases its bets on a number of important factors including price actions, technical price patterns, market liquidity and volatility.

However, there are a number of things that you need to know about Ivybot. It only works on short trades because short trades are easier won than long ones.

The robot also only works with 1 hour timeframes that will give you 3-10 trades per week.

Stop. To find out more about ivy bot then go to my site quick. And take a look at my free proxy list website right this second.

Futures Trading Basics For The Novice Futures Trader

Monday, April 5th, 2010

Futures trading for Tradestation traders is concerned about trading Futures Contracts. What does a Futures Contract mean? How can Tradestation traders benefit from learning to trade it? A Futures Contract, a cash forward sale, or a “Forward” Contract, is a contract between a buyer who wants to purchase a specific product, and a seller who supplies that same product. It’s a forward contract because it must be delivered by a specific date. Futures Contracts are actually formal agreements. That means that each contract obligates the buyer and the seller; neither may default. Trading Futures is characterized as zero sum, every dollar made by the buyer is a dollar lost to the seller and vice versa. When prices are too low or too high, then it is either the buyer or the seller that profits, and the one that profits does so at the expense of the other. Let’s see an example. Say oats prices rise, the farmer benefits but the oatmeal manufacturer suffers. If oats prices fall, the farmer suffers, but the oatmeal manufacturer’s bottom line goes higher.

Futures trading takes place in two different ways. Commodities are traded at a Futures exchange, on the floor like at the Chicago Mercantile Exchange (CME), where there are open outcry pits. But Futures trading can also be done “electronically,” with an internet connection, where individual investors place their buy and sell orders straight from their desktop trading platforms, like Tradestation.

Futures traders can be broken into 2 groups, hedgers and speculators. An example of a hedger would be a farmer, manufacturer, exporter or importer. The goal of the hedger is to create futures positions that reduce the risk that the price of their commodity may fall. For example, a pork belly farmer believes that his pigs will be grown by August. He signs a pork belly futures contract before the slaughter at the current price in May for delivery in September. In May, the price of pork bellies is high because of reduced supply. Should the price of pork bellies drop by September (when the contract expires), the farmers’ price has already been ensured. Mind you, the farmer is assuming a risk. What if there is a virus and many pigs die before September. The price of pork bellies would rise even further, but the farmer is already obligated to deliver pork bellies at the price negotiated in May. The farmer would lose additional profit. Conversely, in September there might also be a huge number of pigs and the price of pork bellies ends up being lower than his May price. In this case he wins.

Speculators, on the other hand, are trading Futures for the sole purpose of earning a profit, not for protecting the price of their crop. Speculators actually comprise the majority of traders in most markets. Speculators are willing to assume risk in the hope that if they buy low, they can sell high (going long), or by selling high, they can later buying back low (going short). For example say the soy speculator knows that the weather has been a problem for months and the soy crop will be limited in September. The speculator is happy to buy the soy Futures contracts in July at the current price. He is betting that the price of soy will skyrocket and he will make a killing in September after the small harvests in August. Speculators provide the liquidity needed to fuel the Futures market. Without speculators, no one would take the other side of the hedgers contract. As in the example above, the farmer sells the soy to the speculator in July for the current price. The speculator assumes risk, hoping that by September, the delivery date, the price of soy has risen and he can make a profit at the farmer’s expense. What he prays doesn’t happen is that come September, the price of soy goes down, meaning that he over paid.

Prior to organized Futures exchanges, like the Chicago Mercantile Exchange (CME), Futures trading was a far more risky proposition. Contracts were drafted between one farmer and one speculator, and signed wherever the farmer happened to be selling his produce, for example, in farmers markets. There were a lot of problems with these personal contracts. First and foremost, either the farmer or the speculator was allowed to default on the contract. Who would enforce payment or delivery? If the speculator was going to lose his shirt, he would not complete his side of the contract. If the farmer realized that the price of pork bellies had risen dramatically, he would default and sell the pork bellies in the open market. Since these contracts were drafted between 2 parties, the speculator could not sell his contract to another speculator. Here’s another problem…there was no one who would certify the quality of the delivery. Farmers could fill their side of the contract with lower grade pork bellies, and the speculator could not do much about it.

Since the start of organized exchanges, it became the job of the exchange to validate quality, payment and delivery. Exchanges regulated that now good-faith money was required with a third party to make sure of contract performance. This reduces the number of contract defaults. Exchanges were finally able to standardize contracts, stipulating the terms of each contract, like commodity delivery dates and product grades.

Organized exchanges have taken Futures trading far beyond buying and selling of just commodity contracts like corn, wheat, rice, soy or pork bellies. Today, there are futures contracts for several different asset classes, including energies, treasuries, currencies and equities. Futures belong to an asset class called “derivatives,” securities whose prices are derived from one or more underlying assets. As an example, the S&P 500 Futures Contract underlying asset is the New York Stock Exchange’s (NYSE) S&P 500 Index. The S&P 500 Index is one of the most intensely watched equity indexes around the world. The index represents the top 500 well recognized stocks that are now traded on the NYSE. Here is the difficulty with the S&P index, however…you cannot trade the Index. The CME devised the S&P 500 Futures Contract that you are able to trade. As with the case of the S&P 500 Futures Contract, when the value of the S&P 500 Index inflates, the S&P 500 Futures Contract inflates with it, and vice versa.

Now, Futures can also have a currency index as its underlying asset. For individual investors, the Currency Futures Market is designed for the small number of contracts that individual investors intend to trade. With Currency Futures, individual investors can trade the exact same currencies that are being traded in the Forex market, but trade on the CME.

Shadowtraders specialty is in training individual investors how to be Trading Futures. Most of the other Futures education companies can only train investors in trading the S&P 500 Futures Contract, and in particular, the Emini, earmarked towards individual traders. Shadowtraders is much more interested in presenting to its clients a variety of different Futures, including energies, treasuries, currencies, etc. We trade many assets, all of which have liquidity and volatility. For example, we know the days of the week that a particular Future trades, the times of day it is easiest to trade, how many contracts are traded for that, whether or not you can even trade it, etc. That is Shadowtraders expertise.

If you are a Futures trader and experiencing losses, if you are stuck trading just the S&P 500 Emini and you want to expand your horizons, or if you are new to Futures trading and want to get more information, attend Shadowtraders Webinars held on Monday nights.

Barbara Cohen has been a professional day trader for over 10 years and is the CIO of Shadowtraders. She has trained hundreds of students to trade the Futures Market with Shadowtraders trading course. Before you purchase any trading course, make sure you attend Shadowtraders Monday Night Webinar, and hosted by Barbara Cohen

One of the Most Important Trading Strategies for Trading Emini Futures Contracts

Friday, April 2nd, 2010

To understand the essential nature of pivot trading, you’ll need to first of all understand that the stock market is controlled. Perhaps it could be best said that the Stock Market is entirely controlled and if it were not, then millions of Futures contracts and millions of shares of stock could not change hands each day so competently.

If you don’t believe that the market is controlled, then examine this example of how control might work. Towards the end of May 2009, Treasury Secretary Tim Geithner traveled to China and met with Chinese economic officials. The Chinese admonished Geithner, the conversation went, probably, like this…the Chinese telling Geithner that they have thoroughly invested in the U.S. stock market and in the U.S.Treasury bonds. Yet they are willing to withdraw from the US. Market if the stock market does not go up soon.

Geithner knows that could literally crash the U.S. economy, an economy held together with bobby pins.

Can Geithner and his buddies in the Treasury do anything? Geithner’s meeting with the Chinese takes place at the END of May. Upon his return, the Dow goes from 8,200 to 8,800 in two weeks, a 600-point spike. This is a market that had not moved for over two months, hanging around 8,000. How could the stock market move 600 points in two weeks if it hadn’t moved in over 2 months? In July and August, the stock market went up almost 1,000 points. Look at the Dow chart for the last five years. You can see that May through August are always thought to be summer doldrums. How, then, could the market go up 1,300 points in just over one month?

How does control make you a 12-minute trader? That’s easy. The market is controlled. The market’s “movers and shakers” know where they are want to take the market and they how fast to get it there. Movers and shakers abide by very controlled trading rules, a most important one being Futures Pivots. In order for you to become a 12-minute trader, you must learn the movers and shaker’s rules…buying when they buy and selling when they sell. You’ll need to truly become a market shadow.

What then, are pivots? Pivots are support and resistance price levels that allow the insiders to control daily highs and lows during any given trading day. There are in actuality 17 Futures trading pivots — eight intraday (occurring in just one day) and nine inter-day (occurring over more than 1 day). Futures Market insiders use Futures Pivots and stock market insiders use Stock Market pivots. To be a successful 12-minute trader, you need to have the pivots to appear on your technical analysis charts. It is very difficult to trade without pivots because you won’t know where the market may turn on a dime.

Want to uncover more about being a 12-minute trader? Want to learn more about Futures Market pivots and technical analysis? Attend a Monday night webinar on trading the Futures marker put on by http://www.shadowtrader.com. You’ll see for yourself the 17 pivots in action on the current day’s technical chart. Shadowtraders always demonstrates the current day’s chart, not some chart from several weeks or months earlier.

Before you buy another trading course, make sure you attend one of Barbara Cohen’s excellent free Monday night Webinars

Futures Trading Provides An Inexpensive Way To Make More Money

Wednesday, March 31st, 2010

People throughout the world want to be day trading for a living. But potential traders tell us that, “I really want to day trade instead of working, but I just can’t afford the funds required by the brokerage to open an account. Since 9/11 in order to day trade stocks, the NYSE and NASDAQ say you must have at least $25,000 to open your brokerage account. With the tight economy everyone is experiencing worldwide, with highest ever unemployment, $25,000 can be an actual barrier.

At last there is a way for you to be day trading and not have to have the minimum $25,000 in your brokerage account. It is another form of trading education… learn to day trade Emini Futures Trading. EMini Futures trading affords you the ability to open a brokerage account with a mere $2,500, significantly less than what it costs to open an account for day trading stocks. There are several highly volatile Emini Futures contracts that need just $500 / contract for daytrading. Name a stock today that you can be daytrading for just $500 that has both liquidity and volatility.

As an example of a contract you can be daytrading for a mere $500/contract…the Emini S&P 500 Futures Contract. On margin, the S&P 500 Emini only requires $500/contract, and there are several brokerages where you can trade for even less.

The Emini S&P 500 is a Futures Contract. The “E” means it trades electronically over the internet, and the “Mini” means it is a smaller version of the exact same contract traded by the hedge funds and institutions. Futures trade in “Contracts” instead of shares. The symbol for the Emini S&P 500 Future is “ES”. Think of trading this Emini as if you were day trading all of the top 500 stocks that make up the S&P 500 Index at one time. The Emini S&P 500 Futures Contract goes up and down just as the S&P 500 Index does on the New York Stock Exchange.

Think of day trading Emini Futures as the same thing as day trading stocks. Your technical analysis charts that you use with stocks work the same, with MACD, stochastics, moving averages, etc. You can use the same trading strategies and same trading software that you would when you are day trading stocks. You can setup up trading alerts, the same alerts that work with your stock trades. Best of all, you are trading the S&P 500 Emini, a contract that represents all the top 500 stocks on the NYSE. You’ll only need 1 technical analysis chart to represent all 500 stocks, not 4 or 5 charts.

Day trading 1 Emini S&P 500 requires about $500 per contract. That depends upon your broker of course. Emini S&P 500 Futures day trade with margin, and your broker must decide the margin he can allow for each customer. Most Futures brokers permit your trading 1 contract for $500. You really should open an account with a Futures broker not a brokerage that primarily trades Stocks and also allows day trades Futures, because Futures Brokers offer discount commissions and lower margins.

For each “tick” profit, the Emini S&P 500 earns you $12.50. 1 tick is 1 price movement, like 1 penny increase on stocks.

Lets see an example of how E-Mini S&P 500 Futures day trading compares with daytrading 100 shares of stock that will cost you $25/share. Remember, day trading 1 S&P 500 Emini Futures contract will cost you $500/contract. To begin, you generally day trade stocks in 100 share lots, so initially you’ll need $2500 for that stock. With the S&P 500 Emini Futures Contract, you can be day trading with just $500, because you can trade Futures with just 1 contract. In order to profit $12.50, the 100 stock shares would have to appreciate about 13 cents, 13 real price movements. The S&P 500 Emini, conversely, only needs to appreciate 1 tick, just 1 price movement. Comparing each investment, dollar for dollar, you could actually trade five S&P 500 Emini Futures contracts for the same $2500 investment for the 100 shares of stock. In that way, 1 tick gives you a handsome profit of $60 not $12.50. Each share of stock must now appreciate $6.00, or 600 price movements, to equal the profit from day trading 5 S&P 500 Emini contracts moving up only 1 price movement.

Here is the best part. One price movement day trading the S&P 500 Emini could take you under 4 minutes of actual live trading time. Perhaps your elapsed time in front of the computer may be longer, but actually live in the Futures Market, less than 4 minutes.

If you would like more information about this kind of day trading, attend a Monday night Webinar hosted by http://Shadowtraders.com. See for yourself what trading Futures is all about. Shadowtraders offers a 4-Day intensive online trading seminar, an online trading course, trading software with built in trading strategies and trading alerts using technical analysis charts.

Barbara Cohen is a professional day trader. She has trained hundreds of students to trade Futures with Shadowtraders trading systems. Before you purchase any trading software, make sure you attend Shadowtraders Monday Night Webinar, and hosted by Barbara Cohen

Investment Trading- The Keys to Success

Thursday, March 18th, 2010

It might be high time for you to seriously give investment trading a shot. You’ve probably already heard of how many people have succeeded at it and created a more secure future for themselves and their families. Before you make the leap though, there are a couple of important points that you need to personally thresh out in order for you to truly succeed.

Trading Reasons

People generally want to succeed at trading because they want to be able to quit the rat race and retire wealthy. It is common knowledge that getting into the stock, forex or commodities markets is the best way to realize genuine financial stability. Another reason that people usually hold is the opportunity to work without the need to deal with difficult bosses, office conditions and fellow employees. These two reasons however are general ones. To be able to truly make it big, you need to arrive at more specific points.

Setting Goals

The chance to come up with specific trading reasons comes when you sit down and set your goals. It is important to lay down very particular and personal reasons and goals so that you will get motivated to succeed. You can for instance decide to trade so you can provide sufficient funds for kids who are about to go off to college. After coming up with a similar reason, take another step by specifying the exact profit figures and the dates you would want to reach them. Specific terms are what will enable you to generate the drive and commitment to push through with finding profitable trades.

Identifying your reasons and goals however is not the end of the story. Before you start imagining what you need and want, make sure you know what is realistic and what isn’t. Always remember that hardly anyone ever becomes rich in the trading markets overnight. You shouldn’t be trading if you have drand dreams of instant millions.

Market Selection

The stock market is perhaps the most popular market. You can however choose to trade in futures, commodities and forex markets. Often though, beginners will do well to start with the stock market alone because this offers the least risk with assets that are not leveraged. Move on to making diverse investments in other markets when you have mastered the simpler concepts involved in stock trading.

Trading Strategy

Trading plans are sometimes taken for granted. Following a personal set of rules however on when to enter and exit trades is among the best ways to ensure success. When combined with the principles of risk management, you can hardly fail. Once you decide to follow a particular plan, make the commitment to stick to it regardless of how the market turns. This will keep you on the track of logical instead of emotional trading.

There are many systems that other big time traders have made public. Some new traders choose to follow these templates. It is however often best to find or create a personal system. This is simply because not everyone has the same set of goals or risk preferences. Creating or modifying a system will ensure that you have a plan that fits you as an individual perfectly.

Once you have a plan in mind, make sure to write it on paper. This is a way for you to own your plan. This is an important step because it eliminates the possibility of you blaming someone or something else for possible failures. Once you own your plan, you become ultimately responsible for it.

Investment trading is always an excellent choice. You shouldn’t think though that this decision is a piece of cake. Before you start entering trades, give yourself some time to look over what it takes to succeed.

Discover the benefits of a trading plan. Visit http://www.freetradingsystems.org/.