Archive for July, 2008

Being able to understand stock trading is one of the greatest things you can do to increase your finances. It can build a passive income or if you really get a good at it, you could be able to live on it full-time.

A great way for a newbie who doesn’t have that much money to invest in the market to start off is by just looking at a penny stock listing.

A penny stock listing offers an investor a ton of different penny stocks in which they can invest in. But with that big of a list, how do you know which ones to invest in?

That’s why you have to take the time to learn a little bit about the stock market. You just can’t go in their like a bull in a china shop. I guess you could but that would be a really bad idea.

You have to start off with what kind of financials does the company have. It doesn’t matter if you are looking for a company that’s making billions of dollars in revenue every quarter or is just starting out. You want to see not only profit, but profit potential.

Another thing to keep a close eye on are technicals of the stock. Just open up a chart and see what you can find. Sometimes that’s all it takes. Learn the proper ways to understand price movement. When you become really good at this, you’ll see price patterns coming from a mile away.

For most people, this must seem like a tall order, but to have success in the forex markets requires a little bit of work.

Luckily for all of us there is software that can help automate the process. The software scans many penny stocks every single day to cover which stocks have the best chance for a really strong upward movement.

Nowadays everybody is looking for the short cut when it comes to trading. They don’t focus on the oldest form of technical analysis: Price Action. It’s a shame more traaders aren’t interested.

You can tell this is true by looking at any forex forum on the internet. What is it that you normally see on these sites? Usually it’s people that are talking about some system that has 40 moving averages or some forex expert advisor that’s supposed to be the new holy grail.

Can you tell what’s wrong with all of this?

For one thing, traders must understand that all these kinds of indicators, like RSI or stochastics, are only good for letting you know what has already occured. If you want the ability forecast future movements in prices, then i strongly recommend nor using these indicators.

Traders also need to be able to understand that 9 out of every 10 forex traders are losing money as you read this. If this is the case, why use the same exact tools that all the other struggling traders are using?

Think about this logically. Most of the forex traders you see in forums are usually struggling. If they weren’t, then why would they be in a forum? The successful forex traders are usually to busy paying attention to the market that they don’t have time to spend in a forum.

The real popular discussion on these forums are about the Forex Expert Advisors. For anybody that doesn’t know what these are, they are basically trading robots. Developers use trading systems with lagging indicators so that this robot trades for you, while you’re away.

I could see why this would attract most newbies traders. I mean, who wouldn’t want to have all that free time to yourself. You can go to the beach, the ballgame, dinner and a movie and all the meanwhile you’re becoming rich, right? Well, not exactly. That’s not the way it works.

Remember with expert advisors, you’re asking something from a computer that 95% of all the traders in the world can’t accomplish. Being that the forex markets are so new driven, do you really think that a computer is going to be able to quantify any kind of breaking economic news that comes out?

For those that want to have a deeper understanding of the market then, I recommend you get rid of all your indicators and start trading the markets on a clean chart. Just follow the price action. See if you can start to notice patterns that are always happening. These are the kind of patterns you need to focus on, because this is how you forecast future prices.

The ability to buy and sell shares in a company is referred to as liquidity. For instance, if a trader wishes to buy some shares in a company like the National Australia Bank (NAB) it is a very simple matter to telephone the broker and the shares can be bought in seconds. Similarly, if a trader wishes to sell shares in NAB, the process is quick and simple ? telephone the broker (by the way, the trade is just as easily transacted via an internet broker) and the shares can be sold in seconds. NAB is referred to as a highly liquid share.

Compare this with an investment in a residential unit. It is not a simple matter to purchase a residential unit; it may take days, weeks, months to find the right unit. Once one is found the negotiation process may take days or weeks. Once agreement is reached the settlement will take around six weeks at least. Imagine now one wishes to sell a residential unit ? this process to can take many days, weeks, months or perhaps years. Of course one always has the choice to drop the price of the unit to a level where interest can be attracted quickly, and so speed the sale this way. A direct property investment is thus an illiquid investment; it cannot be bought and sold quickly like NAB shares.

There are shares on the share market though, that, like the residential unit, are illiquid. There is such a lack of interest in some of the shares on the share market that finding buyers for these shares is often very difficult. These shares can be contrasted with NAB shares; if one wishes to sell one’s NAB shares the process is quick and simple, there are always buyers, about. But for illiamid shares hovers may only be found if theshares are offered for sale at very low rates. Liquidity is the measure used in the share market for the ease with which a share can be bought and sold. A liquid share can be bought and sold readily in any normal market condition; an illiquid share, on the other hand, and like our residential unit, cannot be bought and sold quickly in normal market conditions.

Illiquidity introduces extra risks into trading. The primary rule of trading is to only trade shares that one can buy and sell readily. If one is left holding shares that one cannot sell, trading capital can be tied up indefinitely and a final, frustrated sale of the shares may result in substantial losses (because, like a residential unit that cannot be sold, an illiquid share could probably be sold if the price is dropped low enough ? and this is not good trading practice). The liquidity of a share varies with a couple of factors. The most obvious is market capitalisation. The larger is a company’s market capitalisation, then generally the better the liquidity of the company. Market capitalisation is a measure of the size of a company. It is measured by multiplying the number of shares on issue in a company by the share price of the company.

As at the time of writing of these notes, the market capitalisation of the National Australia Bank was:

(No. of shares on issue 1,550,303,000) multiplied by (market price of $28.55) Gives $44,261,150,650 We can compare this with a small market capitalisation company. We will leave this company unidentified, but shall name it “Tiny cap.”. (No. of shares on issue 83,150,470) multiplied by (market price of $0.02) Gives $1,663,009

Another reason that liquidity varies is the level of interest in trading the shares of a company. For instance, recent figures suggest that around 1 in 10 Australians own shares in Telstra. This is a very, very high level of interest and this is reflected in the ease with which Telstra shares can be bought and sold. A high level of interest equates to high liquidity. How does a trader assess the liquidity of a share, bearing in mind that one can reduce trading risks by only trading liquid shares? One way is to look at the volume of shares being transacted.

With everybody going nuts over all the latest fad forex trading systems that are loaded with indicators, it’s easy to get caught up in all the hoopla. But for anybody looking outside in, they must be wondering if its possible to be rich trading forex without using indicators?

To answer this question, you only need a little bit of a history lesson and study the most famous investment traders in history.

Look at famous traders like Jesse Livermore. Livermore became a multi millionaire trading the stock market at the turn of the century. He was just be at the market floor trading shares just based on price action.

This is somebody who did not even have a chart to follow. The only thing he did was pay attention to how the other floor traders were trading the stocks and how it was affecting the price. Pretty impressive considering he didn’t even have a simple bar chart to go off of.

If a trader at the beginning of the 2th century can become rich trading without any indicators, or even a chart, what excuse do you have?

If you think about it, is there any other way for you to truly understand what the market is doing besides trading just the price action. Think of all the indicators most people plaster all over the charts. Can you really explain what 3 moving averages crossing each other actually means? The truth is nobody can. It’s the same case for any of these popular indicators. They may know the rules of how to trade them, but they don’t have a clue what it actually means.

If and when you have the courage to wipe away these indicators from your charts, then you’ll get an opportunity to understand why the market moves the way it does. You actually see it as energy that is constantly moving.

When you’re able to see the market this way, there is no way that you’ll ever go back to using stochastics.

I am fairly new to the world of stock trading and have been researching stock trading software for a bit of time now.I believe that if I can see how a particular stock has done over a period of time, that I will better understand what I should do with investing.

Some of the stock analysis software is really quite beyond my ability or knowledge of my computer. I know only the basics of how to set up or utilize a database within my existing computer’s software and am not sure of how best to track the stock trading world in general with what I know now. It is because of this fact that I have been trying to find a way to learn more about tracking software and how to use it to help boost my portfolio as well as my computer use.

In looking at several web sites that sell software to help with market research and stock charts, I found many that were more complicated than it would be worth for my time and effort. However, there was at least one piece of stock market research software that seemed easy enough for even me to use.

The great tutorial video showed how to use the market research tools and stock screening functions, as well as many of the other functions. I’m not too familiar with my own Microsoft Excel but the tutorial actually shows how to use that along with this software.

With detailed, step by step, instructions on how to download current stock reports and over 146 different tracking options, I bet that even I could use the information analysis in a useful way! The reporting agencies are from on line sites that show current updates from markets all over the world and are then imported to your Excel spread sheet with just a few clicks of a button.

They had some really positive reviews from much more advanced market trackers than I am and I think that speaks well of the software and they have some great support from what those reviews said too.

I really think that once I get the hang of this type of software that my stock research can help my stock trading strategies soar and help me make much more money. In being able to analyze the stock market on a basic level, it will be able to see and understand the market trends right from my own home computer.

Our Review of Forex Killer of last week was centered around the basic principles of this industry. This week see the extension of this discussion to more advanced concepts such as systems as well as the completion of our current review of forex killer.

Well, they come in two flavors, FLEXIBLE or FIXED. In the Flexible Forex Rate System, the central bank is responsible for adjusting the exchange rate according to supply and demand.

When the Central Bank has to compensate for currency market fluctuations changes by buying or selling currencies, we have a Fixed Forex Market System. In this case, the Bank acts as a buffer between currencies.

So if the price of foreign currency increases, the Central Bank must sell that currency in order to avoid any price increase. Conversely, in the even that there is a decrease in the market currency value so will the Central Bank need to purchase additional currency in order to maintain a stable market price.

Just like a Pendulum swings in an ever lasting attempt to reach a status where the swinging movement stops, so that the Bank act to stop currency fluctuations until the balance is re-established.

What about the money though?

Or lots of them.. In fact way more than lots of them since the Forex market in the biggest market in the financial world and that’s just not here but throughout the world. If you ever wondered why exchange and forex traders seemed to be rolling in it, it’s because they really are!

Indeed we are taking about insane amounts of money here. So much so that you would need 12 zeros to the right of the number 2 to get a representation of what that market really is, and that would just be for a single day’s trade!

This means that 2,000.000.000.000 USD are traded daily. Two trillion USD or two thousand million American Dollars! Talk about the potential of a Forex Killer Trader.

The Forex market is an over the counter market with no physical location, central exchange and or clearing houses. Indeed, all it is, is an electronic network of banks, corporations and individuals purchasing, “trading”, currencies from one another. Open 24 hours a day, it is uniquely suited to both end of the business spectrum, namely corporate institutions and independent or at home traders.

FX Traders (Forex traders) buy and sell to and from each other and this process is then fed into these networked computers to then be displaced on official quote screens.

Profiting from free online forex trading courses is easy when you know where to take them. These courses are free and the only thing you are asked for in return is a little conviction on your part. With your conviction you can achieve success much like how forex trading greats have. These free online forex trading courses will surely take you a step forward towards gaining your fortune.

Your first million is what you should pay attention to, because after your first, your succeeding millions will become easier and easier. In order for you to achieve that mythical first million you need to know everything about what you are getting yourself into; this is just plain old common sense.

When life changing decisions are involved, you need to be constantly informed. Preparation will truly get you far. Similar to how generals choose to do battle, you need constant and correct reconnaissance to mobilize your troops and resources. You need this information to profit in the battlefield of the trading market. The calculated risks you take should always lean toward you making a profit. There is no point in taking unnecessary misinformed risks.

This is the beauty of free online forex trading courses. You get to become an educated trader. You get to know the basics of trading currencies in international markets. Not only are you taught how to profit on your trades but this course is free. Since it is free, you are left with more money to trade in Forex.

You may be wondering what you can get with these courses. What you get out of this is simple; you get what is needed for you to move towards your goal of becoming a trading success. Your success is the goal of these free online forex trading courses. If you’ll work hard enough for it, combined with the knowledge and guidance being offered, your success is never far away.

These free online forex trading courses offer you the basics and the practical tips needed for financial success in forex trading. They offer you sound advice that has already made millions for many. The basics taught in these courses will provide you with the keen sense for improving your success on trading days.

The lessons you learn on these courses will not only provide you with the needed technical know-how, but will also foster in you the confidence required to succeed in forex trading. After all, if you know everything, there is little you fear and much to gain.

Head on over to my page if you want exclusive detail on where to take free online forex trading courses.