The problem is that way too many new option traders slap down significant money and start trading iron condors immediately upon discovering them without first equiping themselves with the proper knowledge and skills needed to trade them properly. They are so captivated by the stories and claims of ten percent months and 90 percent probabilities that somehow they don’t stop to think about what they are going to do if their trade doesn’t go exactly as planned.

And it seems that a good percentage of them – if not most of them – promptly wind up getting their groins kicked in, their heads ripped off, their eyes poked out, and getting hurt really, really bad.

Now wait -

Let me explain something here before you start to get the wrong impression.

I LOVE iron condors.

And yes – I really do think it’s a great and dependable way to trade.

And yes, I absolutely believe all those stories and claims you hear swirling around about iron condors generating ten percent plus monthly returns and providing trades that have the probability of winning somewhere in the range of eighty to ninety percent. In fact, I KNOW those stories are true because I see it happen all the time in my very own trading account.

Here is the problem: All those fresh, green and excited new option traders have no idea what they don’t know. This trading options for income thing is like an alien planet – with a whole new set of rules inside a brand new reality. And when the person who has introduced them to this new way of trading just tells them about the good but forgets to tell them about the bad – they wind up jumping in with way too much confidence, misunderstanding, and expectations that are completely wrong.

See what isn’t being talked about with iron condors is that while yes, they can provide great monthly returns and high probabilities of winning- they also come attached with a horrendous risk to reward ratio – sometimes as poor as 10 to 1!

This means that in order to achieve those 80 to 90 percent probability trades – you need to risk ten dollars to make just one – or to be more realistic – you need to put at risk $10,000.00 for the chance to make just $1,000.00.

And as my dear old mammy used to say: ‘that smells a lot like an awful bad egg’. Which in fact it is. That risk to reward ratio is nothing but a low down, no good, smelly rotten deal!

Because once you do the math you find that even with those glorious monthly returns with 80 to 90 percent probability of winning – all it takes is just one problem month to come along and cause a loss that will completely obliterate the 8 to 9 wins you’ve managed to rack up – as well as potentially the rest of your entire account!

Nevertheless…

All is not lost…

Like I said before, I LOVE the iron condor trade.

It’s one of my favorite trades – and it continually generates profits for me.

So clearly there must be a way to profitably trade this strategy without allowing that awful risk to reward issue to get in the way.

And there is.

It’s all in how you manage the trade.

As soon as you discover the ‘right way’ to place these trades initially – and then how to properly go about managing and adjusting them – that risk to reward dilemma instantly vanishes and goes away.

Once you possess the correct iron condor knowledge and know how – and understand how to apply a couple super easy to implement adjustment tricks – you’ll know exactly how to exterminate any problematic market threat that comes your way, allowing you to experience the iron condor trading strategy for all that it’s ‘actually’ cracked up to be.

To learn these ‘tricks’ to trading the Iron Condor , go to this Iron Condor Adjustments site and watch my free video. It will show you an extremely simple method for properly placing, managing, and ADJUTING iron condor trades.

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Increased competition is great for a market place and just before we get into the detail of how to select one of the many spread betting companies, I want to talk about what this competition means. In a positive sense we as traders now get a better deal. The spreads are tighter, the minimum bet size is smaller and the trading software is better. That is great but something does worry me. To attract so much competition they must be making big money. They could be making it from you so just think about that.

Are you new to spread betting and want to open your first account? If you are then this process will be a little slower than if you already have an account open with another broker.

Do you know how you will be trading? Daily bets or binary bets? You need to know this before looking at the spread betting companies. This is a big factor as the type of bet is crucial to your trading system and it needs to align. If they don’t offer what you want then you can strike them off you list straight away.

Spread betting companies are very creative when it comes to markets. There are so many markets out there for you to choose from. Make sure that they offer the market that you trade in. Also think about other markets as you may wish to diversify your trading in the future.

It is clear that you should be absolutely clear of what you require from the spread betting companies. Make sure you know what you absolutely need and what you can do without. Once this is sorted then you should have no problems at all.

Before you look any further for spread betting companies please visit Tom’s website. Tom will show you what you need clear before looking at spread betting companies there are available.

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What sorts of bets can you make in the financial markets then? Well firstly there is spread betting UK stocks. All the stocks in the FTSE 250 are very easy to bet on. Most companies allow the FTSE 350 but the spreads on these tend to be a bit larger. Make sure you know the size of the spread before you start.

A further option you have is spread betting UK indices. The most popular of all is the FTSE 100 and this is by far the most liquid of the indices in the UK. You are not limited to that though, you have the other FTSE indices as well as indices from other countries. In fact nearly every country in the world. As with individual stocks, the spread are tightest in the more liquid markets so look our for that.

If you ever suggested trading in commodities to someone they would think that you are mad. They will tell you that they are too volatile and hard to value because they don’t derive any income. Mostly they are correct. They are volatile and it is very hard to value them because they don’t produce an income. The thing is that the volatility is there to help you. As a trader you need to use that to your advantage.

The Forex market is also available to you. You have the option of trading in almost any currency pair whether you are spread betting UK sterling against the dollar or the Euro against the Yen. You have the ability to move between markets very quickly and take advantage of even the smallest currency movements.

Whatever your motivation for trading there should be plenty of spread betting UK companies available to you. Just do a search in Google and there are plenty to choose from.

Tom has spent long hours on his website Spread Betting UK. If you want to find out more further guidance on spread betting uk go to his website. Feel free to ask Tom questions.

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And that leads to ask a basic doubt: How do you will find value in stock market?

It relies upon whom you ask…

The fathers of value investing, naturally, were Ben Graham and David Dodd, 2 instructors at Columbia Business School who wrote the investment classic, Security Analysis.

Both argued that value investing is in relation to buying companies which are selling below their intrinsic value.

How can you determine that? According to Graham & Dodd, which means purchasing companies that… Deal at big discounts to book value. Receive high dividend yields. Have low price-to-earnings (P/E) ratios. Buying in this way is not only supposed to lead to higher returns. It’s also intended to deliver a significant “margin of safety.” The thought is to facilitate if bought a security right, your downside is limited.

A number of academic analyses have revealed that in case you adhere to the principles of Graham and Dodd, you can perform well on the long period.

However one can find possible problems with this method…

To begin with, stocks are rarely so inexpensive while they used to be back in 1930s when Security Analysis was printed. And also as low-priced as they were back in 1982 while the standard stock offered for lower than book value and eight times earnings and yielded greater than 6%.

If you sat out the previous twenty eight years out because stocks had been extremely costly, you missed an awful lot of opportunities.

If you do discover a stock that will meets Graham and Dodd’s stringent requirements, you furthermore may need to be patient. Why? Because companies which are the lowest are from favor for any purpose. Sales can be level or downward. Earnings are weak. Profit margins are low.

You can’t be successful simply by buying a company that’s low-cost. (It can always turn out to be more affordable.) You must purchase a firm that could one day – and perhaps not too distant – be dear for others. Or else, when will you’re taking gains?

Therefore maybe Graham and Dodd’s message needs modifying. (Warren Buffett, Graham’s most recognized student, has absolutely found ways to change it.)

I’ve found the explanation of value as well as instruments to accomplish a margin of security are flexible. Also The Oxford Club has established lucrative methods to bend them.

To my opinion, any stock that goes from $10 to $50 was a “value” at $10. I don’t worry what the P/E or price-to-book was at the time. With the luxury of hindsight, it was clearly a bargain. Why quibble?

However die-hard value traders will say that if ever the stock was “overvalued” at $10, it is just more grossly so at $50 – and thus, you’re on big risk holding it.

I disagree. If you employ trailing stops your upside is limitless plus your gains completely protected. Provided a stock maintains trending up, we’re satisfied to hold on – it doesn’t matter what the valuation. When the stock sooner or later turns, as entirely do eventually, our stops will remain the gains from slipping by way of our fingers.

As for value analysis, quite frankly, we don’t spend a lot of time poring over P/Es and book values. We’re now serious about finding businesses which are more likely to show dramatic, better-than-expected growth in quarters ahead. These shares tend to be more expensive than average, just like companies that will show a small amount or no development are usually less expensive than average.

Growth stocks often run. Gains frequently come sooner instead later. Most traders don’t have the patience to be good value traders. John Templeton, as an example, held businesses in the flagship Templeton Growth Fund an average of 7.5 years.

Yet clients will start to grouse if a stock does not move for 6 months. They term it “dead money” and start keen to move it somewhere else.

I understand this instinct. However deep value investing and quick investing do not mix.

If you’re a patient, really long-term oriented trader, value investment can do miracles. If you are not, you’ll be happier searching for firms that are set to smash estimates.

Once it doubles or triples – otherwise move up 50-fold or else more like Apple (Nasdaq: AAPL) and Amazon (Nasdaq: AMZN) – don’t be bothered, other traders will concede it had been “value” before.

Investing in stocks is difficult, especially in today turbulent and uncertain times. Subscribe to the Best Blue Chips which shows you the TOP 10 blue chip stocks to buy in this uncertain times. Click here to get your free Best Blue Chips Newsletter and build your long-term core holdings portfolio.

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A stock option is simply a contract that gives you the right to buy or sell a stock at a specific price on or before a specific date. Once more they can be extremely powerful and can greatly increase your returns if you are right, or increase your losses if you are wrong.

For instance say stock XYZ is trading at $48. We believe that this stock will make a large move upward in the near future and because of this we have a couple options here. We could choose to buy the stock or we could buy the $50 call option on it for $4. If the stock goes up to $58 then your option would be worth at least $8 ($58-$50).

This means that the option contract would have given you at least a 100% return whereas if you had simply bought the stock instead you would have made a 20.83% return. Of course both are great returns, but the second one will affect your account much more and will help you to achieve your financial goals 5 times faster than the first option.

But for every upside there is a downside. Since options are actually dated and will eventually expire you may find that your options will simply end up expiring worthless one day.

There are always ways to manage your risk, but if you are unable to trade stocks profitably then investing into stock options will pretty much only increase your losses.

On the other hand, if you are making money then stock options can be extremely powerful and can even help you to increase your returns and control more shares with less money. Just remember that you have to use these tools carefully and have a plan.

If you are just using them because you heard they were powerful and you want to get rich quick without a plan or experience, I would reconsider.

Now that you know, What is option trading here is an interesting article on stock options

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Another reason for most of the sophisticated investors taking up forex trading is the fact that it is similar to bond and equity trading in many ways. Those investors who have been trading equities and know something about fundamental analysis and technical analysis can easily switch to forex.

Recent advances in technology means price transparency and a better trading experience with the use of stop loss and trailing stops. What this means is that traders can execute their trading plans using a combination of these orders to better manage their currency risk.

Managed forex account also make forex trading easy for many people who don’t have the time to learn forex trading. These accounts are managed by professional traders on behalf of their clients who have full access and control over their capital in the account. These managed forex accounts give them the opportunity to profit from the forex market without having to trade it.

The last and one of the most important reasons for the increased popularity of retail forex is the increasing sophistication of algorithmic trading systems popularly known as Expert advisors or Forex Robots. More and more investors are using these automated trading systems in making money online.

In December 2009, the first ever Forex Robot World Cup (FRWC) was held. This was the first ever live trading competition. FRWC had a cash prize of $150,000 and hundreds of robot developers participated in the competition.

Forex robot developer from Croatia won the cash prize of $100,000. The next round of the FRWC will be even bigger than the first and will start in a few months time. Transparency and tough participation rules meant that the robots that took part in this competition had to really prove themselves in live trading. This live trading started in December and ended in January.

What this all means is the future of retail forex trading is exciting. These robots can be used by anyone. Even those who have never traded forex before can use these forex robots to make money from the comfort of their homes.

Mr. Ahmad Hassam has done Masters from Harvard University. Read this shocking 40 page FRWC Brutal Truth FREE Report on forex robots. Download this 1 Minute Forex Trading System FREE that makes money anytime instantly.

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If you want to profit from commodities than futures trading is the best and direct method of getting access to the commodity market. There are several active futures trading exchanges in the US. Three of the world’s largest futures exchanges are located in Chicago.

The number one is the CME ( Chicago Mercantile Exchange). The futures contracts that get traded on CME include among others stock index futures, foreign currencies, interest rates, commodities, environmental futures and others. Futures trading is no doubt risky but if you learn it, it can be highly profitable. As said before, Ricard Dennis and his turtles used to trade the most liquid contracts in the market.

The commodities futures that get traded on CME include cattle, butter, limber, pork bellies, Goldman Sachs Commodities Index, live cattle, milk, lean hogs, feeder and fertilizer. Now as said before, commodities is an important asset class. CME provides you with the opportunity to trade many commodity contracts.

CME provides you with the opportunity to trade futures contracts on these stock indexes as well as their mini versions the E-Minis. Now, one of the ways to trade stock market is to trade stock indexes like the various S&P 500 like the S&P 500 Midcap, Small Cap as well as the Russell 2000 and the NASDAQ 100.

Other important futures contracts that get traded on CME include single stock futures, futures on ETFs and futures on Japanese Nikkei 225 Index. CME group also has the GLOBEX Electronic Trading Platform that allows electronic trading of futures contract almost around the clock.

The world premier futures exchange is the Chicago Board of Trade (CBOT). The futures contracts that are available on CBOT include agricultural futures like the corn, wheat, soybeans, ethanol, rice and mini contracts on corn, soybeans and wheat.

Interest rate related futures contracts that get traded on CBOT include Treasury Bonds, FED Funds, spreads, municipal bonds, German debt and swaps. Dow Jones Industrial Average (DJIA) futures popularly known as Dow futures and its E-Mini version plus gold and silver futures and their mini versions also gets traded on CBOT.

The next major futures trading exchange is the New York Mercantile Exchange (NYMEX). This is infact the global hub for energy trading and offers futures contracts on light sweet crude, natural gas, unleaded gasoline, heating oil, electricity, propane and coal.

Futures contract on precious metals like gold, silver, platinum and palladium also get traded on NYMEX. Futures contracts on metals like copper and aluminum also are available on NYMEX.

Mr. Ahmad Hassam has done Masters from Harvard University. Know this shocking Dow Futures secret that can make you rich. Get your FREE COPIES of the HVMM Ultimate Day Trading System and the Universal Risk & Money Management Tool just now.

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In some cases,a stock gets so much shorted that there are no more shares of that stock left for you or your broker to borrow anymore. Now, you cannot always short a stock instantly. Most of the investors work on rumors. In that case, you simple will have to cross your fingers and see how the other short sellers do on that stock while you search for another stock to short!

Now, day traders are not fundamental traders. Day traders are simply interested in the daily volatility in the stock. Most even don’t do any financial or fundamental analysis of the companies whose stocks they are trading. Almost all are technicians or what you call technical analysis experts. Now, shorting is one of the favorite strategies employed by day traders. A day trader may short stock on the mundane reason like its price had been going up for three days and it’s time to come down!

Now, you cannot straight away short a stock as there are mechanisms in place employed by msot of the stock exchanges that don’t want a massive shorting attack on a stock. There is the famous Uptick Rule that has been put in place to prevent that from happening. What the Uptick Rule means is that you cannot short a stock unless it moves up on the last trade. This rule has been placed to prevent a stock from being driven down to almost zero by short sellers. In simple words, once the stock starts to move down, you cannot short it. You will have to wait for its price to move up on the last trade, before your short selling order can be executed by the broker.

If you are wrong in your short selling decision, your loss can be catastrophic.How much risky short selling can be? Well, in theory there is no stopping a stock price to reach the sky. But don’t worry, short sellers also use stop loss so if the price starts to move up, your position will get closed automatically by the stop loss order.

Now, don’t get caught in the market with short selling when good news spreads about the stock that you had shorted driving its price up. This is known as Short Squeeze. Once that happens, almost all short sellers get desperate to dump their stocks and exit but when they try to buy back the stock, they get more hurt as the prices go even higher and higher on rising demand for the stock in the market.

As said before, companies, investors and many brokers hate short sellers. They think that short sellers had intentionally driven down the stock prices. So sometimes, they will spread rumors of good news to create a momentary short squeeze. Sometimes, a campaign will be started by the owners of a particular stock instructing their brokers not to loan out their stocks to short sellers. So if you have already shorted that stock, you might get a call from your broker to return that stock immediately. In such a case, you will have to immediately return the stock even if it doesn’t make any sense to you!

Mr. Ahmad Hassam has done Masters from Harvard University. Turn $200 into $100K in just 3 months with this Penny Stock Trading FREE Report!Read this 49 page Quantum Swing Trading FREE Report plus the shocking Profit Button Report that applies no matter what you trade-stocks,forex, futures or options!

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The first question. How do you identify whether this is a Hanging Man or a Hammer? Hammer and the Hanging Man both have a very small candle body accompanied by a long wick either on the bottom. If this type of pattern appears at the top of an uptrend with the long wick at the bottom, it is a Hanging Man. And if it appears at the bottom of an downtrend it is a Hammer.

Now, in most of the cases, you will also find a small wick on the top of the candle body. Now suppose, you find the Hammer or the Hanging Man. What you need is to look for the confirmation the next day!

If you think that you have spotted a Hanging Man appear on the top of an uptrend, wait for the next day’s opening price. If the opening day is lower than the last day’s close, you have spotted a true Hanging Man.

A Hammer should have a very small candle body with a long wick at the bottom. Similarly suppose, you think that you have correctly spotted the Hammer in a downtrend. You should confirm this with the opening price on the next day. If the opening price is higher than the closing price the previous day, you have a true Hammer. If the opening price is not higher than the closing price the last day, it is not a true Hammer!

When you trade candlestick patterns, you need to look for the confirmation on the following day to confirm that the candlestick pattern formed was indeed true. Once you have the confirmation signal, you can safely trade on that candlestick pattern. If you cannot get the confirmation, you should ignore that pattern considering it to be false. Most of these candlestick patterns are ideally suited for the daily charts.

Spinning Top is just like the Hanging Man and the Hammer. Spinning Top is a signal that the battle between the bulls and the bears ended in a draw. It will start next day again with ony side giving in. What this means is that an explosive move in the price action can take place the following day.

Spinning tops appear much more frequently and are very easy to spot with a very small body in the middle of the candlestick and almost equal wicks on the two sides. A spinning top is a nice indication that the trend is about to change direction. Knowing about a trend change early is a highly profitable trading signal.

Mr. Ahmad Hassam has done Masters from Harvard University. Master Candlestick Patterns with this 82 page PDF FREE Candlestick Guide! Download your FREE COPIES of the HVMM Ultimate Day Trading System and the Universal Risk & Money Management Tool!

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Forex trading is the hottest market right now after the recent stock market crash. Many small investors lost their lifetime saving in the stock market crash of 2008. Investors have turned towards forex in droves. Forex trading is considered to be a recession proof business as there is neither a bull market nor a bear market in currencies. Currency prices are always quoted relative to one anther and currencies are traded in pairs. What this means is that if one currency goes up the other goes down. It is being said that many millionaires will be made in the currency markets.

When you trade a currency pair, you go long on one currency and short on the other. In other words, you simply buy one and sell the other. Many people don’t know this that you can trade gold on forex too. Many forex broker platforms that you use to trade forex, allow trading of gold and silver against the US Dollar (USD) from the same platform. Both these precious metals have high demand in the industrial sector and as the global economy recovers from the recession, the prices of gold and silver are expected to skyrockets as industrial production picks up and consumers start buying again.

But when you trade gold, you take long or short position in gold in the spot market with the opposite position in US Dollar (USD). In other words just like trading a currency pair like EURUSD, JPYUSD, GBPUSD and other pair involving USD as the counter currency when you trade gold, you are trading against USD.

Now, suppoe the price quote in the spot market is 1100 XAUUSD. What this means is that one troy ounce of gold in the spot market right now is equal to $1,100 USD. So, in spot gold trading on forex, you are trading one troy ounce of gold against USD. Interestingly the symbol for this is also XAUUSD with XAU representing one ounce of gold.

Just like anyother financial market, the price quote in the gold spot market has got a bid/ask spread. So if the price quote is 1110/1115, it means that you can sell one troy ounce of gold in the spot market for $1,110 and buy one troy ounce of gold at $1,115 meaning you will have to pay a spread of $5 per troy ounce when trading in gold in the spot market.Spot gold trading on forex is a fast moving market and the spread keeps on changing throughout the day.

Spot gold market is a fast moving market and the price quotes keep on changing. So, suppose just after 60 minutes, you find the quote to be 1120/1126. You see a profit and decide to get out selling at $11,200 making a profit of $30. Now if you had used leverage, you would have needed a much lower initial investment to make a profit of $30 in just 60 minutes. Now a standard lot in currency trading is equal to $100,000. But in case of gold on forex, a standard lot is equal to 10 troy ounces of gold. So, if you find the price quote to be 1112/1117 and you are interested in going long. In that case you will have to buy 1 lot of gold that is equal to $11,170.

Gold is also know as anti dollar. What this means is that their is an inverse correlation between gold and USD. This inverse relationship can help you hedge your positions in other currency pairs.

Mr. Ahmad Hassam has done Masters from Harvard University. Get this Forex Swing Trading Forex-4 Pack Training Kit FREE! Download this 1 Minute Forex Trading System FREE.

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