Currency trading, lots of people may already have heard about it, although not all know what it is all about. One may regularly think it's for the '...
Currency trading, lots of people may already have heard about it, although not all know what it is all about. One may regularly think it’s for the ‘big’ ones, massive companies and associations. But that’s not hence in truth, there are plenty of normal people who are into foreign exchange trading. Different states or countries have different currencies. Though not all currencies are traded in the FX market. There are 7 major currencies traded in the market.
Currency trading is the selling and buying of currencies in pair. You can doubtless do the trade without a currency pair. A common example is the US bucks / Japanese Yen.
The last 2 options are miles better particularly if you’re new in the FX market. This way, you can benefit a lot from having well-experienced instructors. You are to have a genuine time experience which you may use later on when you do your trade. You have got to understand the method of foreign exchange trading first. Remember the FX market has no bounds or barriers. So before leaping into the market, you’ve got to know the right entry points.
Charting and mapping are also critical aspects in foreign exchange trading. Charting software are freely available, you can secure one so you can find out about it ; as well as learning to correctly map it. Through this, you can see the way in which the market moves. And you can now make good calls whether to purchase or sell a currency, and make profits in exchange.
There are at present brokers who can help people and little corporations by breaking down inter-bank units. If you have an interest in currency trading, you can do it alone, but attempt to attend a currency exchange class first, or practice as a neophyte. The currency market is unstable, and new traders may find it tough due to the risks that it involves. The last 2 options are better particularly if you’re new in the FX market. This way, you can benefit a lot from having well-experienced instructors. You are to have a genuine time experience which you can use later on when you do your trade. You’ve got to understand the method of foreign exchange trading first. Remember the FX market has no bounds or barriers. So before leaping into the market, you have got to know the right entry points. Charting and mapping are also significant aspects in foreign exchange trading. Charting software are freely available, you can secure one so you can find out about it ; as well as learning to correctly map it. Through this, you can see the way in which the market moves. And you can now make good choices whether to purchase or sell a currency, and make money in turn.
Good profits often inspire more folks to trading so much, without thinking about the risks. Discipline is one feature that you should practice and learn.
If for a brief period you made a large amount of losses, maybe now’s the time to stop purely for sometime. Do not be carried away in doing the trade, or you may suffer a lot of losses. New starters who immediately gain a large amount of profits may think that they know too much. However it helps to know it is not the same all throughout. Good profits oftentimes inspire more folks to trading so much, without thinking of the risks.
There isn’t any substitute to correct learning. It gives you a good grip about the trade, and you may be assured that you are making good choices. These would reflect a lot from the profits that you are about to gain.
Before you start trading with real money, you must spend time to and move on only when you have a solid
Federal Reserve Chief Ben Bernanke spoke at the Bank of Japan on May 25, 2010, demanding that central banks be considered “independent” of politics. “In undertaking financial reforms, it is important that we maintain and protect the aspects of central banking that proved to be strengths during the crisis and that will remain essential to the future stability and prosperity of the global economy,” Bernanke said. His meaning was perfectly clear. Congress — don’t pass legislation that allows you to audit the Federal Reserve. He said, “Chief among these aspects has been the ability of central banks to make monetary policy decisions based on what is good for the economy in the longer run, independent of short-term political considerations. Central bankers must be fully accountable to the public for their decisions, but both theory and experience strongly support the proposition that insulating monetary policy from short-term political pressures helps foster desirable macroeconomic outcomes and financial stability.”
Bernanke’s speech comes right after Congress nearly unanimously passed a measure on May 11th, granting authorization to the Government Accountability Office (GAO). Congress told the GAO to audit the Federal Reserve’s emergency-response programs. In a very split Congress, between Democrats and Republicans, imagine that this was nearly unanimous, one of the only bi-partisan measures passed in years. This measure is part of the bank reform legislation. “This makes it clear that the Fed can no longer operate under the kind of secrecy it has been operating under,” said Sen. Bernie Sanders. The measure also grants authorization to the GAO to engage in audits of any financial institutions that borrowed Fed Funds during the financial crisis. And finally, the measure also authorizes the GAO to engage in continuing audits of the Fed’s policies.
Why is the Fed so opposed to this audit? Might it be that one of their “undocumented” actions is their direct participation in the Plunge Protection Team (PPT) and they do not want it exposed? German Economy Minister Rainer Bruederle announced on May 28th, that the US Federal Reserve actively buys and sells stocks in the secondary market. The Fed is actively involved in currency intervention to realize profit from their stock purchases. “It is a regular procedure of central banks,” to intervene in currency markets, Bruederle said. “It is not a secret,” that central banks have a foreign exchange rate target,” he added. Bruederle comments follow statements made by in Switzerland, that the Swiss National Bank purchased Euros to bolster the single currency.
Bernanke was very adamant about Fed independence during his May 25 speech. He said, “A broad consensus has emerged among policymakers, academics, and other informed observers around the world that the goals of monetary policy should be established by the political authorities, but that the conduct of monetary policy in pursuit of those goals should be free from political control.” “Undue political influence on monetary policy decisions can also impair the inflation-fighting credibility of the central bank, resulting in higher average inflation and, consequently, a less-productive economy.” Again, he reiterates — stay away from the Fed.
In January, Charles Biderman, CEO of TrimTabs Investment Research, pronounced that the Treasury, the Fed and major Wall Street firms like Goldman Sachs were having direct impact in the stock market rally each and every day, driving prices higher and higer. Biderman, without hesitation, observed that the normal source of funds flowing into the market could not substantiate a $6 trillion increase in U.S. stock-market capitalization. “We cannot identify the source of the new money that pushed stock prices up so far so fast,” Biderman said. Biderman made sure to elaborate that financial inflow was not coming from traditional sources such as companies, hedge funds, retail investors, pension funds, or foreign investors. “We know that the U.S. government has spent hundreds of billions of dollars to support the auto industry, the housing market, and the banks and brokers. Why not support the stock market as well?”
Suspicions that the Fed has been a long standing participant in the Plunge Protection Team (PPT) have reigned forever, even though the Fed actively denies their participation. If the Fed is audited, they will be forced to reveal how funds are controlled, where they go and to whom, how often, and how much.If the Fed artificially inflated the stock market and thereby caused rising stock valuations through undercover PPT activities, this will be determined by the audit.
During his speech, Bernanke said, “In some situations, a government that controls the central bank may face a strong temptation to abuse the central bank’s money-printing powers to help finance its budget deficit.” Could he be saying right here that the Fed is part of the PPT? “As we move along the path of reform, however, it is crucial that we maintain the ability of central banks to make monetary policy independently of short-term political influence.”
The “official” role of the Plunge Protection Team was to prevent another 1987 “Black Monday”. The PPT now has the U.S. Treasury at its finger tips, and can manipulate stock markets through derivative trading. Wikipedia defines derivatives as “a financial instrument – or more simply, an agreement between two people or two parties – that has a value determined by the price of something else (called the underlying).”
Propping up the Market through derivative trading by the Fed was revealed by the Guardian as early as 2001. “A secretive committee – the Working Group on Financial Markets, dubbed ‘the plunge protection team’ – includes bankers as well as representatives of the New York Stock Exchange, Nasdaq and the US Treasury. It is ready to co-ordinate intervention by the Federal Reserve on an unprecedented scale.” The fed buys equities from mutual funds, pension funds, and other institutional sellers when there is evidence of panic selling in conjunction with international financial institutions.
The PPT makes use of U.S. Treasury assets to artificially amplify commodity and stock prices through derivative trading. Executive Order 12631 signed by Ronald Reagan handed the Fed authorization to establish a “Working Group” on Financial Matters consisting of 1) the Chairman of the Board of Governors of the Federal Reserve 2) the Secretary of the Treasury 3) the Chairman of the Commodity Futures Trading Commission 4) the Chairman of the Securities and Exchange Commission. As of late, this “Working Group” has been extended to include large brokerage firms (Goldman Sachs).
The GAO audit will expose the Plunge Protection Team. Former Federal Reserve Board member Robert Heller stated that “Instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market (through derivatives), thereby stabilizing the market as a whole.” What is the impact to the stock market that is used to being bolstered up after the Fed is audited? Could it be that finally the market must stand on its own 2 feet, either make it or lose it, no more being held up with bobby pins and rubber bands by the Treasury without the approval of US taxpayers.
During his speech, Bernanke said, “We are committed to exploring new ways to enhance the Federal Reserve’s transparency without compromising our mandated monetary policy and financial stability objectives.” The question is…when did participation in the PPT become mandated? When did currency manipulation to increase stock valuations become mandated, and if so, by whom?
The bank reform bill that was just passed by the Senate and House oversees usage of derivative trading, a key resource of the Fed and the PPT. “We are sending a clear message to Wall Street, the party is over. Never again will reckless behavior on the part of the few threaten the fiscal stability of our people,” said House Speaker Nancy Pelosi. “The legislation will finally protect Main Street from the worst of Wall Street.”
Isn’t this the reason the Fed opposes bank reform, especially given the section concerning Fed oversight? Bernanke himself said on Tuesday, “As has been demonstrated during financial panics for literally hundreds of years, the ability of central banks to independently undertake such lending allows for a more rapid and effective response in a crisis. The nature and scope of the independence granted regulatory agencies is likely to be somewhat different than that afforded monetary policy.” The PPT is definitely different…
Barbara Cohen has been a professional day trader for over 10 years. She has trained hundreds of students to trade the Futures Market with Shadowtraders online day trading strategies. As the CIO, Barbara frequently hosts Shadowtraders daily online trading chatroom. Before you purchase any trading software, make sure you attend Shadowtraders , and
Welcome to May…now sell all your stocks. This week, U.S. stocks plunged 772 points in heavy trading volume the first week of May. This was the worst May ever in this history of the Market. The Euro vs the Dollar dropped to 1.27. Why? Concern over Europe’s debt situation especially in Greece, questioning the pace of any economic recovery. From the April high to the May 6 low, Japanese stocks are down 4.2%, Europe dropped 9.5% and the U.S. plunged 7.6%.
“No one really wants to be long over the weekend with the Greece situation hanging out there,” said Alan Valdes, who is the director of floor operations at the New York Stock Exchange for Kabrik Trading. “Everything is based on that concern right now.”
With last week’s trading, the Futures Market was where all the action was. On Thursday, in just a few quick moments, the Market plummeted almost 1000 points before it rebounded somewhat. At the exact same time, the S&P 500 EMini dove 50 points, with the S&P 500 EMini trading in points not ticks. Day traders were making money faster than they could count. The Chicago Mercantile Exchange traded over 5million contracts, its highest ever volume. Normally, traders are happy to make 2 or 3 ticks, not 2 or 3 points in each trade!
With this kind of dramatic sell off, the good economic news played second fiddle. Unemployment news was released on Friday, showing that the US added 290,000 jobs. Even excluding temporary census jobs, the US continued to add 224,000 nonfarm jobs, and nearly all of the jobs were from the private sector. This is the first real sign of economic recovery. Moreover, the previous two month payrolls data increased by 121,000 jobs. Finally, we began seeing some relief in the job market after waiting 2 years.
But with Portugal downgraded by Standard and Poor’s and Greece rioting, and given the looming possibility of further downgrades by Spain and Ireland, the Market simply gave up its gains for the last 2 months. The CBOE’s Volatility Index, the VIX measured the US Stock Market’s fear by rising over 40. The VIX works in reverse, the higher the number, the more fear in the Market. For the week, the VIX went up 88%.
But this provided unlimited opportunities to trade the S&P 500 EMini. With the Market plunging, it is a perfect time to go short. To see trading opportunities, watch the video that Shadowtraders.com put out on to show the trading opportunities.
Rising fear in the Market had more fuel due to the fact that more banks failed this week, bringing the total number of failed backs in 2010 to 66. San Diego, Calif. 1st Pacific Bank, Mesa, Ariz. Towne Bank of Arizona, and the Bank of Bonifay, Champlin, Minn. Access Bank, were all closed, the Federal Deposit Insurance Corp. (FDIC) said. These failures cost the FDIC fund $213.7 million, said the FDIC.
The question still remains…what caused the Market to crash 1000 points on Thursday. Wall Street hadn’t seen such volatility since Black Monday, the October 1987 crash. For conspiracy theorists, here are the reasons why the Market plunged…
There was a “fat finger trade”, someone entered a “b” for billion instead of an “m” for million in a trade involving Procter & Gamble. According to CNBC, sources told the network that a trader (possibly at Citigroup) caused the problem.
There might have been computer errors. Rich Adamonis, New York Stock Exchange spokesman, said that “there were a number of erroneous trades” on May 6th.
Another conspiracy theory was that automated trading programs triggered stop loss orders. That pushed the stock market down even further. When the market plunges to lowest levels, there are automated trading programs that get started, acting almost as a rollercoaster. They trigger more and more stop loss orders. Hedge funds and larger institutional traders watch for Market crashes and start selling, creating their own self-fulfilling prophecy that the Market will deteriorate even further.
Or was it fear that Greece’s financial debt situation would spread like wildfire to other nations. Portugal was downgraded. Will Spain be next country, or Ireland? If this were the real reason, then what Citi analysts projected on Friday could happen…a Market correction of 20%. Citi analysts said that while even though there were financial problems in the recent past, the Greek crisis is “graver than these were.”
Could it actually have been cyber-terrorism? Automated trading programs now account for 60% of all trading in the New York Stock Exchange. Regardless of which conspiracy theory is true, this is a Market that trades in nanoseconds. Certainly by this time we should know what caused the Market’s crash. By not informing investors what happened, the Market may not recover any time soon. Investors remember that there were just recovering from the 2008 crisis where they lost 3 trillion. Now they are facing the Greek crisis. This may permanently keep them out of the Stock Market.
Barbara Cohen has been a professional day trader for over 10 years. She has trained hundreds of day traders in trading futures with Shadowtraders online day trading strategies. As the CIO, Barbara frequently hosts Shadowtraders daily online trading chatroom. Before you purchase any trading education, make sure you attend Shadowtraders , and
On Tuesday, April27, Senator Levin, who is the chairman of the Senate Sub-committee investigating Goldman Sach’s involvement in collateralized debt obligations (CDO’s), questioned several Goldman Sachs executives on their management of Timberwolf I. Timberwolf I was a $1 billion CDO that collapsed just 5 months after its inception. Carl Levin determined that Goldman Sachs made roughly $3.7 billion from shorting CDOs in 2007, of which Timberwolf I was one. This came during a time when their investors lost millions in investments from buying these CDO’s that Goldman created.
Thomas Montag, the previous head of sales and trading at Goldman Sachs, called Timberwolf I “one shitty deal. He actually wrote this in an internal e-mail released by Senate lawmakers and a key point made clear in the hearings held on Tuesday. Was Thomas Montag removed from his post for his dealings in this matter? Of course not, in fact, he was rewarded. Bank of America hired Montag to be the president of global banking and markets. See, he’s a good guy. Matthew Bieber, another Goldman executive questioned by the Senate subcommittee, and Goldman’s trader responsible for controlling the deal, described the day that Timberwolf was released as “a day that will live in infamy”. Wasn’t this the same language used by President Roosevelt after the Japanese attacked Pearl Harbor?
Timberwolf I was one of the securities that Goldman Sachs sold to its clients after they decided to reduce their mortgage holding. Bear Stearns, now liquidated, was among the buyers of Timberwolf I for about $300 million. Within five months of the CDO’s issuance, Timberwolf I lost 80% of its value and the Bear Stearns hedge funds collapsed.
Wikipedia defines a “wolf” as “is the largest wild member of the Canidae family. It is an ice age survivor originating during the Late Pleistocene around 300,000 years ago. DNA sequencing and genetic drift studies reaffirm that the wolf shares a common ancestry with the domestic dog. Gray wolves are typically apex predators in the ecosystems they occupy.” The main word here is “predators”. What exactly is the definition of a predator? “Any organism that exists by preying upon other organisms.” Timberwolf I definitely elevated Goldman Sachs to “predator.”
Timberwolf was more than a bad deal for its buyers. But listening to Goldman exec’s, all they said was that they made some “bad business decisions”. And while they take “responsibility” for their actions, they do not see any evidence of wrongdoing. If Goldman actually withheld information from Bear Stearns about the viability of Timberwolf, this is serious wrongdoing as regards futures trading.
Another victim of Timberwolf I, Basis Yield Alpha Fund, a hedge fund that was savaged by Goldman’s Timberwolf I after they bought $100m right before Timberwolf folded. Needless to say, Basis Yield Alpha Fund is very interested in the Goldman hearings and watching with bated breath.
The interesting set of questions posed to Goldman Sachs executives at the hearing came from Senator Susan Collins. She asked the question, whether Goldman Sachs has a duty to act in the best interests of its clients. The answers from the executives varied dramatically. Dan Sparks said, after pausing, “I believe we have a duty to do well for our clients.” And Fabrice Tourre, executive director in structured products, said “I do not believe we act as an investment adviser to our clients,” What do these executives think an Investment Banker is, a Timberwolf predator who just preys on its investors?
Barbara Cohen has been a professional day trader for over 10 years. She has trained hundreds of day traders to trade the Futures Market with Shadowtraders online day trading strategies. As the CIO, Barbara frequently hosts Shadowtraders daily online trading chatroom. Before you purchase any trading systems, make sure you attend Shadowtraders , and
Automated Forex trading systems are software programs that allow you to keep a watch on the forex market, allowing it to purchase and sell transactions in your place all while you do something at the same time. Many foreign exchange traders, especially those who consider themselves to be beginners, find automated Forex trading software to be particularly handy, and this sort of trading system lets them gain many opportunities so as to achieve the profits that they’d like.
as the foreign exchange market is a high paced platform, using automated trading systems is very efficient. The currency market is open 24 / seven, and unceasing monitoring of the market is vital. As the currency market is influenced by socioeconomic and political factors which can change at a second’s notice this implies that automated Forex trading is an invaluable asset in your armory of currency exchange tools.
There are two differing kinds of automated Forex trading systems desktop and internet-based. What are the diversities between the two? Here they’re in a nutshell detail :
Desktop-based systems
A desktop system needs you to use your PC, and an internet connection isn’t always needed to keep it going. All of your information in the foreign exchange market and charts are stored on the drive of your PC. This makes it totally mandatory that traders who choose this type of system have some sort of data backup programme. This is the least popular kind of automated trading technique.
The problem with this sort of system is it’s always under threats from virus attacks or security breaches. An occurrence of this sort would cause your personal computer to lose info, explaining why having some kind of backup system is a unreserved requirement. All your charts and information could be extinguished from your personal computer. Not to mention, other strangers may gain access to your personal information and trading methodology.
If you select this type system, and you have extra money to spend, it’d be smart to have another PC to use solely for your Forex trading. If not, there are other things you can do to protect your PC.
You can set your backup file to update more continually. You could have a different password for your personal information in your Forex trading stats. By having your automated Forex trading software guarded by a password, it will help in keeping others out of your account. You must also have your antivirus and trading software updated more regularly to optimally protect you from virus attacks.
web-based systems
With a net-based system, there’s no need to install any extra programs on your computer in order to make the system work to benefit. Your account is the only responsibility of your net-based service supplier. Your server will also handle the storage of your information, and your provider is also answerable for supplying you with acceptable security. In addition, encryption is used to offer yet another shield of protection if anything should occur also, backup is usually automatic.
This gives you a lot more flexibility, because a net-based system enables you to initiate trades in the forex market anywhere you need. There are many that say you will need a high speed connection in order to get the most out of this system.
As it is with anything else, both types of systems have their ups and downs. All that you need to do is make sure that whichever one you choose will be the one which is most customizable for your own needs in the currency market. Your capabilities in the forex trade and your speed in learning the best way to use your foreign exchange software are both factors you should consider when choosing the proper automated Forex trading software platform to use.
Before you start trading with real money, you must spend time to and move on only when you have a solid
Today’s economics are not for the timid. Above and beyond knowing the basics of how money works, there is another layer which needs to be fathomed. That layer is called by many 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.
For the bankers the bigger fool theory was the rage by then. Systematically, the institutions such as Merrill Lynch, and Wachovia Securities dumped millions of dollars of these into the hands of unsuspecting companies, and even retirees to get them out of their holding before the wheels fell totally off the cart.
When the auctions failed totally in Mid-Feb 2008 300 billion dollars in “same as cash” became illiquid. That is to say they about as far from “same as cash” as you can get.
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.
Of course, no on e in the industry had really done anything wrong. The result was that at least a number of small investors got back their principal.
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.
It is not my ideal of accountability to have the taxpayer pay for the financial excesses of the financial institutions.
The rough condition of the stock market just after the last election was rumored to in part have been due to the rumor that “full bonuses” may not be forthcoming to the architects of the meltdown.
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 purchase any trading software, make sure you attend Shadowtraders , and
Futures trading is all about trading Futures Contracts. Just what is a Futures Contract and how does it trade? A Futures Contract, also known as a “Forward” Contract, or even a cash forward sale, is a contract between a buyer interested in a specific product, and a seller intent on supplying the product on a future date for a specified price. Futures Contracts are formal agreements, obligating both the buyer and seller. Futures Trading is known as a zero sum game. Every dollar made by the buyer is a loss to the seller and vice versa. Prices that are too high or too low…either the buyer or the seller profits, but at the expense of the other. For example, if soy prices rise, the farmer benefits but the soy milk manufacturer suffers. If soy prices fall, the farmer suffers, but the soy milk manufacturer’s bottom line does better.
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.
There are 2 types of Futures traders: hedgers and speculators. A trader who is a hedger would be a farmer, manufacturer, importer, or exporter. Hedgers create futures positions for the purpose of reducing the risk that the price of their commodity may fall. For example, a soy farmer knows his crop will be harvested in August. He negotiates a soy futures contract before the harvest at the current price in July for delivery in September, after the harvest. In July, the price of soy is high because of limited supply. Should the price of soy fall in September (when the contract comes due), because of a bumper crop, the farmers’ price is already protected. Of coarse, the farmer is taking a risk. Should there be no bumper crop in September, the price of soy would rise even further but the farmer is already be obligated to deliver soy at the price negotiated in July. He would lose the additional profit. In September there could be a bumper crop and the price of soy is lower than his July price. In this case he wins.
Speculators want to be trading Futures to earn a profit, not to protect the price of their commodity. Speculators actually embody the majority of traders in almost all markets. Speculators are able to assume risk. They hope that if they buy low, they can sell high by going long. Oppositely, speculators can sell high and later buy back low, going short. As an example, say the pork belly speculator knows that there has been a virus and pork bellies will be limited in September. The speculator is happy to buy the pork bellies Futures contracts in May at the current price. He is betting that the price of pork bellies will skyrocket and he will make a fortune in September after the small roundup. Speculators give the Futures Market liquidity that is needed. Without speculators, no one would accept the other half of the hedger’s contracts. As in the example above, the farmer sells the pork bellies to the speculator in May for the current price. The speculator assumes risk, hoping that by September, the delivery date, the price of pork bellies has risen back up and he can make a profit at the farmer’s expense. What he really doesn’t want to happen is that in September, the price of pork bellies goes down, meaning that he paid far too much, and he is the loser.
Before there were organized Futures exchanges like the Chicago Mercantile Exchange (CME), Futures trading was much more risky. Contracts were written between one farmer and one speculator. The contracts were signed wherever the farmer happened to be selling his produce, like in farmers markets. There were many problems with individual contracts. First of all, either the farmer or the speculator could default on the contract. Who would ensure payment? If the speculator was going to lose his shirt, he would not pay for the contract. If the farmer saw that the price of soy had skyrocketed, he would default and sell the soy on the open market. Moreover, as contracts were between individuals, the speculator was not allowed to sell his contract to any other speculator because the contract was specifically created for that one speculator. Another problem was, who would certify the quality of the delivery? Farmers could fulfill their end of the contract with lower grade soy. What could the speculator do about it.
Since the coming of organized exchanges, it became the responsibility of the exchange to certify delivery, quality, and payment. Exchanges now require good-faith money with a third party to ensure contract performance,thereby reducing the number of contract defaults. Exchanges were also able to standardize contracts, stipulating terms, such as 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.
There are also future derivatives whose underlying asset is a currency index. For smaller investors, the Currency Futures Market is created for the few contracts that individual investors intend to trade. Trading with Currency Futures, individual investors can trade the exact same dollars/euros that are being traded in the Forex market, but trade them 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 tired of just trading the S&P 500 Emini, or you are new at the Futures trading game and want to find out more, attend a Shadowtraders Webinar 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 seminar. Before you purchase any trading course, make sure you attend Shadowtraders , and
More and more people want to get into day trading. We hear them say, “I am interested in day trading but I don’t have the funds necessary to open the account and meet the minimum requirements. Since 9/11, day trading stocks requires at least $25,000 in your brokerage account. With the economy as tough as it is for everyone, with highest ever unemployment, $25,000 can be a barrier.
At last there is a way for you bypass the barrier to daytrading even though you do not have $25,000 in your brokerage account…learn to trade Emini Futures, a whole new form of education. Emini Futures gives you the capacity to open a brokerage account, and yet have only $2,500. That is significantly less than what you need to open an account to day trade stocks. And imagine trading with only $500/ trade. There are many volatile Emini Futures contracts which require just $500 / contract. Can you name shares of stock that you can be traded for $500, a stock with volatility and liquidity?
For example, there is one Futures contract you can be day trading for just $500/contract…the Emini S&P 500. On margin, it only needs $500/contract to trade, and some brokerages demand 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.
For example, compare day trading 100 shares of stock costing $25/share and day trading 1 S&P 500 Emini Futures contract costing $500/contract. First of all, you will need to trade the stock in 100 share lots. Immediately, you’ll need $2500 for trading that stock. But with the S&P 500 Emini Futures Contract, you will be trading with $500 for 1 contract. In order to profit $12.50, the 100 stock shares must appreciate about 13 cents, 13 price movements. The S&P 500 Emini need only appreciate 1 tick — 1 price movement. Comparing investment to investment, you could actually be trading five S&P 500 Emini contracts for the same $2500 investment. Then 1 tick gives you a profit of $60 not $12.50. 1 stock share now must appreciate $6.00, 600 price movements, to match the profit from trading 1 price movement up of the S&P 500 Emini.
You’re only moving up 1 price movement with S&P 500 Emini Futures, and 1 price movement could well be under 4 minutes of live trading time. Mind you, it could be that your elapsed time trading in front of the computer is longer than 4 minutes. But we’re talking actual day trading live in the Futures Market, less than 4 minutes.
If you are interested in this kind of day trading, you should attend a Monday night http://Shadowtraders.com Webinar and see for yourself what Emini S&P 500 Futures trading is all about. Shadowtraders offers an online trading course, a 4-Day intensive online trading seminar, trading software, 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 strategies. Before you purchase any trading software, make sure you attend Shadowtraders , and
To understand the relevance of trading with pivots, first understand, the market is controlled. It could even be said that the Market is completely controlled. If it were not controlled, millions of shares and millions contracts could not change hands every day so efficiently.
You don’t believe that the market is controlled? Let’s see an example of how control works. At the end of May 2009, Treasury Secretary Tim Geithner went to China and met with Chinese government officials. The Chinese handed Geithner a kind of warning, the conversation most likely went like this…their telling him that they have invested in the U.S. stock market and in Treasury bonds. They are willing to sell their holdings if the stock market does not rise 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 that kind of control help you to become a 12-minute trader? Simple. The point of this story is that the market is controlled. The market’s “insiders” know where they are interested in taking the market to and they can control just how fast it gets there. Insiders follow very controlled trading rules, an important one of which is Futures Pivots. To become a 12-minute trader, you need to learn the insider’s rules…buy when they buy and sell when they sell. 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
For many currencytraders, automated currency trading systems are the perfect solution to their problems. In fact, many would testify to the fact that using automated currency trading systems allow them to attain big profits in the Forex market – more so than if they were to trade manually. Those who are successful in using automatic currency trading software will tell you that not only do they earn a lot of money, but they continue to make it constantly.
Unfortunately, good things are not always easy. There are other traders that say that using automated Forex trading software did not help them at all. Some will even say that they lost out on many transactions. In all actuality, any time failure is achieved using automated currency trading software, it depends on how the system is configured for your needs, and how you take advantage of opportunities. Most of the times, many dealers make stupid/common mistakes which could have been avoided.
So, what are these things that you shouldremember, and what are some of the common errors that are made when using automatic Forex trading software systems?
Broadly Speaking, mistakes occur when you are just starting out selecting your Forex trading software. Naturally, you should consider the reviews of other customers, but do not just depend on these, as they could be false testimonials. It is probably best to check Internet forums where there are not only opinions, but also facts which detail what problems a customer had with a particular software and how they were solved.
One big mistake that traders make selecting automated Forex trading software, is in picking a piece of software that has good ratings and good customer feedback. They erroneously trust that the software program is perfect. However, this is not the case, as many problems can occur. Always insure that the software you choose has enough customer service, whether by web or telephone.
Another big mistake that many currency dealers make is in believing that because they have automatic Forex trading software it is not possible for them to lose in a transaction. It doesn’t matter how good a program is, or how expensive it is, mistakes still happen, and you can lose a lot of your profits if you’re not careful. Achieving success in the currency market is not something that happens overnight. You could make bigger profits and fewer transactions – the amount of transactions you make does not determine how much cash you make. In order for you to accumulate the most profits, it is best for you to have a number of good transactions under your belt, before expecting your higher aspirations to come true.
Some dealers mistakenly believe that they could win at least one trade per day. This is not the case all the time. It takes a lot of patience in order for you to win big in the Forex market. Overtrading will not make you successful in the Forex industry.
All too often, many traders depend too much on their automatic trading software and neglect becoming more involved in the trades. If you are lackadaisical in learning the currency market, this is a huge stumbling block for you. Just because you have automatic software working in your place, this does not mean that you should not learn more about the ins and outs of the Forex market.
This cannot be stressed enough – just because you have the best mentors or talk to the best experts in the Forex market does not mean that you will be guaranteed success either. It takes a lot of knowledge to formulate the right strategy and trading system for you to apply it to your automated software.
It is also important to note that just because you may have used software in the past that did not work properly, this does not mean that all automated Forex trading system software is justas bad. Keep pressing towards the goal, and do not be pessimistic – just have patience and keep looking.
Everyone is human, and everyone makes mistakes – even if you are using automatic Forex trading software. All you need to do is ensure that a particular software you choose is configured to agree with your particular trading system and strategies.
Before you start trading with real money, you must spend time to and move on only when you have a solid
