Earning Money Online Articles

...Articles about Earning Money Online.

Stock Trading

...now browsing by category

 

The Rewards Of Stock Investing Computer Software

Saturday, September 3rd, 2011

Is trading and investing one thing you’ve always wanted to get into? Or maybe you happen to be a skilled trader. You are able to benefit tremendously from the utilization of trading software, regardless of what your degree of knowledge is in the stock market, whether you are a specialist or just a novice. It may undoubtedly be tricky to learn when to do what in today’s market. Occasionally, you may feel puzzled and confused by trading. Nonetheless, you may be helped out a lot so that it all becomes a a bit more workable if you are using stock trading software.

Trading and investing software is totally efficient, especially trading software that is based on the pair trading system. For anybody who’re in fact a new comer to trading, pair trading may be the buying of one stock while concurrently selling a different stock that is correlated once the stocks diverge away from one another more than normal. Once the two stocks converge again, then the trade is exited. Remarkably utilized by investment banks and organizations, this is an efficient method. Plainly, this is well-liked due to the many strengths and benefits involved.

Pair trading software is frequently utilized by expert traders, fund managers, and hedge funds. You will be provided buy and sell trade signals, and conveniently, they are provided to you in real time when you use this stock trading software. You will genuinely be working on a global level with stock trading software. Importing data for upwards of 1 million instruments from many various stock market exchanges all around the earth is something you’ll be able to do. This tends to make stock market trading a lot easier to deal with on a daily basis and also very exciting.

Should you be looking to truly benefit from the market, stock trading software is an excellent idea. Making the entire process loads easier for you and everybody involved, you will find a lot of different features that are incorporated. A few of the functions that you will benefit from when you use trading software can and frequently include stock tips, technical analysis, basic principles, back testing, charting, and audio alerts. It is simple to picture how all of these tools can significantly help you to enhance your trading.

You can find challenging conditions for the average trader in today’s current market. This is regular, and it’s something that everyone faces. What you need in the market is a trading strategy which will be lucrative. That’s where pair trading and trading software program that will help you with that procedure comes in handy. If you find the proper stock trading software, you’ll be able to take advantage of the fact that this environment is really great for pair trading.

For anybody who really wants to boost their trading, stock trading software is a must. In order to make some profits by taking advantage of the markets, you need buying and selling software.

If you are looking for the best trading software or stock trading software visit our website.

Posted in Stock Trading | No Responses »

Preparing Yourself For Day Trading Is A Good Way To Overcome Trader’s Fear

Friday, September 2nd, 2011

Your biggest enemy as an incipient Day Trader how to day trade is Fear. You will probably never entirely get over it, but you can reduce it by becoming aware of several factors that contribute to what I call “Trader’s Fear”. You need to consider these “Trader’s Fear” factors before you launch into Day Trading :

Fear Factor Number One: Being Uncomfortable With The Market.

If you want to make as much money possible as a Day Trader day trading for dummies, you need to squarely face a few issues, including the actual comfort you personally have with trading in the Stock Market. If you are terrified of making a mistake, that fear will paralyze you and cause you to make the same mistakes over and over, for example pulling out when you should stay, trading prematurely (or long after the Indicators signaled you should have entered a trade) — just to name a few. If you are scared the entire time you are in a trade, you won’t be able to move past the problems that will dog you, and you won’t be able to “pull yourself together” when you absolutely need to.

Fear Factor Number Two: Going Cheap on A Broker.

Choose an experienced broker. It’s tempting to go with a broker that charges a low commission, but many times these individuals have little or no experience and they won’t be effective in recommending stock or helping you foresee unexpected problems. In my own case, as an example, I went with a broker who was “new to the game”, having just entered Stock Market brokering from a career in High Tech. He recommended some high risk Biotech companies that lost most of the money I invested. You need to go with an experienced broker, not a cheap one.

Fear Factor Number Three: Not Enough Practice Trading.

Spend time in the practice account before turning to real transactions. Don’t rush into “live trading” until you have spent a great deal of time practicing with the broker’s “funny money”. Practice accounts have an upside and a downside. On the one hand they help you see the impact of changes in the market on your profits and losses. You can make a few risky decisions in the knowledge that you are not really risking your own, real money. The downside is that you make risky decisions that you won’t make with your own money, and practice trading won’t really reflect what you do when you trade in a “live” account. The “Trader’s Fear” factor isn’t with the demo account the way it will be when you convert over to a “live” account — and that can mean all the difference in the world. Still, you can determine your most comfortable investing style with a practice account, which will be helpful.

Fear Factor Number Four: Not Knowing Enough About The Companies You Are Investing In.

Once again, had I known that Biotech stock was as risky as it was, I wouldn’t have touched it. Do your homework. Find out exactly who owns the company, how it is doing financially, what economic factors may influence it, and what Market Gurus are saying about it. Find good sources what is day trading of information and read as much as you can before you “place your bet”. Check out financial reports you can purchase online. This information will always lag behind events, however, so find sources that are as “real time” as possible.

Fear Factor Number Five: Launching Too Soon.

Take your time getting started. As long as you feel like you are leaping off a cliff, the anxiety will be much higher. Take your time with research, with dummy trading, with getting to know the Market in general. Read what advisers and market gurus have to say about how to trade with confidence. If you are careful about how you get started, things are going to go much smoother and you will have fewer problems. Never just dash into the process and hope for the best; prepare yourself as best you can, but also keep in mind that at some point in time you have to actually start. You can’t let fear keep you from doing THAT, either.

Fear Factor Number Six: Failure To Learn To Live With Risk

Day Trading is living with risk. Get used to it. Learn to love it and thrive on it. At the same time, learn how to reduce it. Learn how much money you can risk in a trade, and prepare yourself to lose it all. This means you don’t mortgage your house, or bet your retirement. Never risk more than you can lose, and be prepared to lose it.

Reducing fear as a Day Trader requires that you have a basic foundation in the Market: the manner in which it operates, how it is going to influence your trades, and how to make a profit. Avoiding the market until you decide to start Day Trading might make you anxious and nervous while you figure out what your best approach will be, but taking the time to reduce these “Trader’s Fear” factors is vital.

Above all, don’t rush it. Take your time to make sound investment decisions and ensure that you are on your way toward ultimate success. Some people can do this in a short period of time, but don’t let that stampede you. There is no set time for you to become comfortable with the market — and become a successful Day Trader.

Posted in Stock Trading | No Responses »

What Is The Quickest Way To Reach A Success Trading In Agreements For Diversity?

Monday, August 22nd, 2011

If you consider the chance to make fast profits and to receive great returns, then it is time to think about trading in Agreements for Diversity. Sometimes, it is also entitled as CFDs. Nevertheless, it is wrong to think that CFD trading is obviously simple and is a type of negotiating that may be taken by any person. Generally, any person who has the desire to negotiate in CFD can take this opportunity, but not all individuals desire to stay in this trading process after some period of experience. You should remember that if you decide to deal with the leveraged production you are to bear in mind that you have the identical chances either to make huge successes and returns or to have the big losses. There are a lot of people around the world who try to realize whether there is the secured way for making the success in CFD trading or not.

When you start your negotiating procedure you are to create your CFD trading plan. This plan should have the assured foundation. In order to create such plan you should spend many years for the studying process during which you will study the market and various views of the people. The good foundation for your trading plan implies the definite back testing and that is stated as one of the points where most of the people have their mistake. Doing the back testing of your trading plan will be very effective and will give you a lot of positive results in the future, because you will receive the necessary data that includes all required ways of acting during CFD trading procedure.

Another key point that may occur to be very essential is to trust the CFD trading plan you have. If you test your trading plan and you are ensured in that it is very effective and may help you making great amounts of cash, you can move into the markets without any uncertainties. It is better not to hope for the fast profits, because they usually happen when you have the high level of leverage. High level of leverage means high returns certainly, but you should not forget that it also means high losses. Any trader wants to get rid of the cases of high losses. The only method with the help of which you can make your successes is your definite CFD negotiating plan. If you have your own plan it should be made in that way so that you have the chance to enlarge your profits and to lower your losses.

So, if you are a new in the sphere of negotiating in CFDs you are to learn the information and to create your own plan with which you will trade. If you have some doubts concerning your attempts you may address the specialists for the help.

Posted in Stock Trading | No Responses »

Contract For Difference: Critical Recommendations On Getting Started.

Monday, August 15th, 2011

Contract for difference (CFD) is a tool that allows online transactions. To put it simply, CFD is a deal to exchange the difference in value of a some sort of financial instrument between the opening and closing times. With the help of this tool you will be able to buy and sell currencies, shares, and so on.

CFD trading has a lot of advantages, for example very small transaction charges, commission that starts from just 0.1 percent. It should be besides stated that dealing with CFDs will not require great initial investment and everybody is able to start with a low trading deposits. Actually, when your position is opened you will not have to pay the whole transaction amount, you should just pay 5 percent of the whole contract value.

CFDs can be used to trade a very extensive variety of financial products, so this kind of trading offers an uncomplicated method to start trading across a large cross-section of the market.

I think now you would like to find out how exactly you can start trading Contract for Difference.

First of all, there is a need to point out that CFDs can be traded online by means of a platform, which is a software program that provides live and latest information concerning the markets. And here is how this works.

The initial step you will have to make is to complete online registration with a trading platform. Actually, this is a very simple process anyone can cope with from the comfort of the home. As for me, the greatest thing about it is that there is no need to take care of any lengthy form filling or individual visits to the organization.

As soon as you register you will get an access to CFD trading tools which contain charts, detailed reports, analysis, research and so on. There is no need to mention that this info is very essential for making decisions.

It is also worth for you to bear in mind that service providers usually offer online/ offline seminars that will assist to get compulsory knowledge of the market trends.

The last but not least thing for you to be aware of is that the software is set with versatile options that will help you, for instance, to limit your CFD trading risks. The truth is that there are Guaranteed Stops that provide the opportunity to select a threshold for the losses.

Posted in Stock Trading | No Responses »

Major Tips About CFD Trading

Sunday, August 14th, 2011

If you are interested in CFD trading then it goes without saying that you need to know some advices to achieve success. In this article you will find out several major tips for every CFD trader to know about and stick to.

CFD Trading Recommendation #1.
First of all, you should consider that it is critical for you to have some cash in order to make investments. It is obvious that money is needed for the reason that in the other case you will not be able to start trading. As a matter of fact there is no precise figure recommended in order to make trades. But it should be stated that investors typically want to know how much money are needed to start trading. So, if you have $10,000, you can expect to become a profitable trader.

CFD Trading Advice #2.
The other crucial advice for stock trading is determining the methods of obtaining capital evaluating trader’s resources. Basically speaking, you should identify where you can obtain your capital in order to do this. Actually, all funds sources you do not need for your day-to-day life (I am talking here about cash, savings and so on) are perfect for investments. But you should not forget that the market of investment involves a big deal of risk. It should be also mentioned that losses are quite possible and now and again even inevitable. So, it is tremendously essential to remember that you should not place yourself in a risky situations by position investing money that are crucial for you and your family. You need also to keep in mind that it is possible to borrow the start-up assets with the help of banks. But before doing this, you need to make certain that you will be able to refund and continue making profits. Besides, there is a need to point out that it is not recommended to concentrate only on trading profits and leave your regular job just because you heard that someone was successful in this sphere.

CFD Trading Recommendation #3.
One of the key hints for you to memorize is that it is essential to have enough real funds before you start making trades. So, you need to know what exactly amount of capital you have for your trading. In addition, you should be certain about its management.

If you are in search of more info about CFDs, visit this site.

Posted in Stock Trading | No Responses »

Elliott Wave Forum On Elliott Wave Principle

Saturday, August 13th, 2011

Thursday, August 11, 2011
Possible Short Term Wave Counts, S&P/Euro

Using my Elliott Wave Principle fundamentals can give us an edge on predicting future movement of the financial markets.

I’m posting the internals after the close today. My intraday post from this morning is below. Internals were extremely bullish however volume continues to pull back, now down below 2 billion NYSE shares today. Not encouraging for the bulls. With the new highs made today above my wave ((a)), it’s possible wave ((c)) of Minor wave 4 is already over. And the late day selloff into the close may be a hint of Minor wave 5 already beginning. We’ll see tomorrow. If wave 5 is already underway then it should be almost a straight line down tomorrow. If wave 4 up is still working itself out, then we’ll either get a sideways or up move tomorrow. Either way, my finger is on the “sell” button at every opportunity.

ELLIOTT WAVE THEORY COUNT

Please read yesterday’s post below for bigger picture bottom line analysis. Basically I think a Minor wave 4 correction is underway that may take the form of a triangle (sideways move). Another possibility may be a simple zig-zag correction (ABC) as shown above. Tuesday’s big triple digit Dow rally looks impulsive, which could make it an ((a)) wave, then you have a clear 3 wave decline with yesterday’s selloff for wave ((b)), then this morning we have a clear impulsive rally again which is probably just a wave (i) within wave ((c)). If correct, the market should rip higher in wave (iii) of ((c)) fairly soon.

This is very very speculative on my part and just food for thought of something to watch out for the rest of the day and tomorrow. I’m not getting long at all, I’m merely tracking this count to determine when to get short on a rally. At any time this market can easily break down to new lows since it’s now in a clear and strong large downtrend. A sharp rip higher would put the above count on track.

This count only works on a closing basis so confidence in it low in that respect. Ignore the degree of trend since I’m unsure of it right now. I’m just sticking with EWP basics of 1-2-3-4-5 / a-b-c right now. On a closing basis it’s such a perfect EWP pattern, I just can’t ignore it. If correct, the euro should be headed sharply lower very soon. The above chart and count warrants at least a short term short position in my opinion since the risk/reward is so great with risk held at a new high on the day (stop 1.4293), or the start of the impulsive decline (stop 1.4400).

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

Gain useful advice in the sphere of SEO Consultant – make sure to study the site. The time has come when proper info is truly within one click, use this chance.

Posted in Stock Trading | No Responses »

Top Trading Setups REVIEW – Guide To Trading – What You Ought To Start Trading

Tuesday, August 2nd, 2011

Stock trading is really a profitable venture but like any other businesses it also has risks and uncertainties that you need to deal with to be able to make good money from this. Of course, you need to begin with the start and from the very basics. You also have to acquire the best knowledge to be able to succeed in this venture.

If trading interests you and you want to try your hands on this profitable venture, this is a simple guide to stock trading which will introduce you to some of the stuff that you might be needing in starting your way to purchasing and selling stocks in the stock exchange.

1. Money

Of course, like every other small business ventures, you will need money to start trading stocks. The question of how much investment you will put on the stock market largely depends upon both you and your savings as well. It’s not necessary to invest your hard earned money in to the venture. Be reminded that although stock trading is profitable, the potential risks can be huge and therefore, you should make wise decisions on how much you are prepared to risk with this particular investment. Investing your whole savings on stocks may not be wise. You can invest around 5 percent of the savings if you can manage to lose it.

2. Software system and strategy

If you already have the money you are willing to risk on stock trading, you also must have a trading plan along with a strategy. You have to remind yourself that competition can be hard within the stock market and without a good plan on the best way to invest making profit, it may make everything riskier and disastrous for your investment. Bad decisions can lead to losses and also to be able to maximize your profits, you have to have a good strategy on what stocks are best to buy and you must also have done your quest about the stocks and firms that you are interested in. You might also need to possess a concrete strategy on when you should buy so when to market, which is standard available trading.

3. Charts and other data feeds

Cruising that may serve as your best guide to stock trading are charts and data feeds that may help you make better decisions on whether or not to buy in order to sell your stocks and whether which stocks are great to have for that long-term. Good data will even show you when is the optimum time to trade that can bring you good profits and less risks.

4. Software

You can also get a good stock trading software that you can use in order to get good data on the stock exchange and assist you to set up your trading strategy too. These days, people would want to make things easier particularly when you are looking at earning money and when you would like more than just a great guide to stock trading, you might want to obtain a forex trading platforms to help you in your trading needs and help you test your trading strategy too.

5. Broker

Last although not the least, you will also require a broker to represent you within the stock market. Stocks are bought and sold in the stock exchange and a broker is a that may find you a good buyer or a seller. Keep in mind though you need to select a broker wisely to be able to maximize your trading profits as well.

Stock trading can be risky and something thing that can be done in order to survive and flourish in this type of risky venture would be to be certain that you’re well-equipped before even trying their hands on it.

Now, without a doubt about Top Trading Setups

Learn How to Find the MOST EXPLOSIVE Trade Setups for Huge Profits !!! Be a Master of Knowing Exactly: Things to Trade, When you should Enter, When you should Exit, How to Manage.
Top Trading Setups provides solutions to the most common trading problems through detailed instructions and examples of how to locate and trade the highest probability setups. You will learn the precise factors and steps you have to ensure consistent profitable trades. It explains proper entry, when to take profits, how to manage risk, and the reasoning behind each trade. It will likewise educate you concerning ways to enhance your trades with powerful tips to create thousands of dollars in additional profits. This Guide Will Show You Steps to make as much as possible in the Shortest Period of time for everybody who is a:
BEGINNER, INTERMEDIATE, or EXPERT and Trades STOCKS, OPTIONS, FUTURES, or FOREX As A DAY, SWING, MOMENTUM TRADER, or INVESTOR. This is a Should have for Anyone Serious About Making Money in Trading! This informative guide is made to only provide you with the precise important information to create as much money as you can within the quickest amount of time. It highlights just the top price patterns and setups which have proven consistent success and profitability. It details the steps to find and trade these trades whatsoever amount of time and also the least amount of risk. These setups are designed to provide a high profit to loss percentage and provides processes to reduce risk along the way.
This ebook is definitely an instructional manual to instantly enhance your results and become referred back to for many years while you develop your skill. This e-book includes :
* The very best 3 Setups that Can Cause you to Wealthy for Life
* The Most Powerful Price Pattern Professional Traders Use to create Millions
* The 3 Step Process to Find the Strongest Trades Before They Remove
* The Most Important Component of a great Trade
* High Profit Factors that Increase Trade Potential
* Where and how to Find the Best Trades
* How you can Manage Your Trades for optimum Profit
* The right way to Trade Gaps and Breakouts
* The Most Profitable Chart Patterns and How to Trade Them
* How to Limit and Control Risk
* Patterns that Show When to Enter and OUT
* How you can Trade Double Tops and Bottoms with a 95% Success Rate
* How to Simplify Your Trading While Improving Results
* How to Determine a Pullback from a Reversal
* And Much, A lot more!

If you are curious about Top Trading Setups REVIEW, TopTradingSetups.com reputation, or Is Top Trading Setups SCAM or The Real Deal? You are able to visit: http://reviewq.net/top-trading-setups-review-how-to-find-and-trade-the-most-explosive-setups-for-huge-profits

Readers who are searching Internet for more info about the topic of free traffic, please make sure to check out the web page that was mentioned in this line.

Posted in Stock Trading | No Responses »

Why Day Traders Use DMA CFDs

Monday, July 25th, 2011

Direct Market Access or DMA is the term often used to describe a kind of CFD that has become prevalent within the Australian market, these are generally known as DMA CFDs. With DMA CFDs your trade is passed immediately through to the underlying share market with no dealer or market maker involvement, this means that orders are executed at the real market price and in a timely manner without re-quotes. Trading DMA CFDs is much like trading shares via the internet.

DMA CFDs provide complete order transparency. Traders are also able to take part in the market depth of the underlying stock on which the CFD is quoted by joining a bid or offer queue and also the open and closing auction phases of the market. DMA CFDs provide all the advantages of buying and selling shares with the added leverage that CFDs offer.

Trading DMA CFDs is very similar to trading shares, traders are able to hit the bid or offer or join the buy or sell queue. DMA CFD traders have major advantages over traders using market made CFDs in that they’ve got the potential to enter and exit trades at superior prices.

When trading DMA CFDs you’ll be required to subscribe to exchange data, the cost of data varies from exchange to exchange. Once subscribed you will have access to real time prices and market depth allowing you to see the amount of buyers and sellers at each different price level and take part in order queues enabling partial fills and superior execution.

One shortcoming of DMA CFDs is that guaranteed stop loss orders are not offered, however they are not always necessary as typically DMA CFDs traders use options to manage their downside risk however these are often overly complex for the newbie trader.

When trading DMA CFDs traders have the ability to be price makers meaning that when an order is placed it’s always transmitted to the actual market and can impact the price of the stock over which the Contract for difference is based.

Buying and selling CFDs using a Direct Market Access (DMA) model is best suited to frequent traders that trade on an intra day basis. Frequent traders will find that DMA CFDs will enable them to buy and sell freely without dealer involvement and obtain better prices when buying and selling. DMA CFDs are suited to active day traders and day traders who are seeking to take advantage of small price changes quickly.

There are a variety of CFD platforms which you can trade DMA stock CFDs on, the two most popular platforms in Australia are web IRESS and ProDeal. Both platforms permit customers to participate in the market depth of the DMA CFD on which they are trading. The webIRESS platform is also extremely popular throughout the share trading community, mainly due to diversity of order types on offer, whereas ProDeal is very common amongst Contract for difference traders, this is because of the broad range of CFDs on offer and its advanced charting functionality.

It is imperative to note that prior to starting to trade DMA CFDs you consider whether this kind of CFD suits your trading style, choosing the wrong CFD variety will have an effect on the success of your trading plan.

Posted in Stock Trading | No Responses »

When To Hold Them And When To Fold Them: The Trading Mindset And How To Get It

Sunday, July 17th, 2011

So you think you want to start trading stocks? You’ve been studying up on how to find clear path to trading, and perhaps you’ve already taken a deep breath and are ready to make the plunge. Before you do, however, you should hum a few bars from that great Kenny Rogers’ song, “The Gambler”: “You got to know when to hold ‘em, know when to fold ‘em.”

Keep singing that song as you sit down at the metaphorical stock trading gambling table, because it will remind you that a stock trader has to have the cast iron gut of the Gambler in that song. As you hum the tune, hold back the part that says “Know when to walk away/know when to run…” You’ll want to start singing that part later.

Well, you’ve been looking for the right signals to pick up the cards and play the game, but before you do, you should start with a little self evaluation. Ask yourself the following questions:

1) Do you need somebody else to tell you what to do?

Most of us come from 8 to 5 jobs where we sit in cubicles, insert parts into other parts, write reports (to regurgitate what we are told to write), or… (fill in the blank — involving some other slavish non-thinking). The question you’ve got to ask yourself is: “can I really act for myself…think for myself?” Take a careful…and honest…personal assessment of yourself and the situation you feel most comfortable living in. How much latitude have you been allowed? Can you really act independently, according to your own judgment or assessments? Do you need permission before you do something? More to the point: Do you need somebody to tell you when to buy, or when to sell stocks? The answers to those questions may spell the difference between winning and losing at the stock market gaming table.

2) Do you have a problem making a profit?

Some people have a real problem with the notion of making a profit. This may sound crazy, but many of us are imbued with the notion that making a profit is somehow “immoral” or “unethical”. Note that the Kenny Rogers song ends with the gambler breaking “even”, somewhere “in the darkness”. Somehow “breaking even” lends a note of moral superiority to the song, making it more socially acceptable. A lot of us have this hangup, and if you have it, you need to get rid of it. Decide to enter the stock market to make a profit, pure and simple, with no apologies to anybody.

3) Do you always have to be in control?

If you are somebody who absolutely has to have everything “under control” you’re in the wrong place with the stock market. The most you can do is study the signs…have good sources stock trading of information and predictions by seasoned investors, economics theorists and recognized prophets, and base your trades on their predictions and past stock market behavior. But remember that you can’t control the forces that will determine whether your trades are profitable or not. A need for absolute control can easily lead to a trip to the hospital with a stomach ulcer. The tip from the Gambler is that “you never count your money while your sitting at the table”. When the market has it…it isn’t yours. It may give it back to you, with a little extra, or it may take it away altogether.

4) Can you handle losing?

Some people will never expose themselves to a situation in which there is a chance of losing. In the case of riding motorcycles, for example, some say that the moment you get on one is the moment you’ve decided to “get dumped”. The same is true of the stock market…the moment you start to play you’ve guaranteed the day you will lose. The best thing to do is to learn how to handle the risk, and don’t let the “house” make the rules. You avoid this by managing your risk: assessing the probability of making a profit and never betting more than a reasonable percentage of your assets…what you can comfortably lose.

5)Do you have the patience for adequate research?

You need to know the market you are getting into: it’s history, the economic forces that govern it; the probability of its future behavior. If you don’t have the patience to adequately investigate the trades you are contemplating making, if you don’t have an adequate understanding of the patterns of the past (and don’t want to spend the time to find out), you won’t be able to predict the future or be ready for the ups and downs of the unexpected.

6) Can you “hang tough” when you are losing?

Do you have the cast iron stomach to watch your investment fall with the certitude that it will “come back up again” because of your confidence in your market analysis? Too many people bail prematurely on an investment, and are constantly making losing trades because they “jump” at the first sign of loss. This is where thorough market research is absolutely vital, and faith in your judgments comes into play.

Well, at the end of the song the Gambler was so broke he had to bum a cigarette and drink the “last swallow” of the listener’s whiskey. That won’t be you. Why? Because you’ve made a personal assessment of yourself; because you have evaluated the maximum risk you can take; because you watch the market assessments stock trading made by the professionals; because you know your stock, what it has done, what affects it, and have a very good idea of what it will do in the “planned chaos” of the stock market.

Posted in Stock Trading | No Responses »

Ongoing Greek Debt Saga

Monday, June 27th, 2011

Virtually every financial market is watching the outcome of the Greek negotiations very carefully – after all, global equities, bonds, gold, currencies, etc. have been dealing with various degrees of volatility, hand-wringing and general unease as a result of Greece’s predicament for the better part of a year now. Indeed, one of the major reasons why both the U.S. dollar and the Treasury market have been strong through the end of QE2 has been their safe-haven status away from the Euro, a currency that looks increasingly fragile under the weight of several concurrent member-nation debt crises.

Regardless of one’s beliefs about the immediate solutions available to Greece, the strategic outlook for the Euro is a real mess. A hard-line approach, favored by the Germans, is to force Greece to restructure its debt and thus its bondholders the pain. The problem there, however, is the Byzantine cross-holdings of that debt and its optionbit derivatives – Greek banks would be hammered, as would German, French and British ones. Moreover, a large number of U.S. financial institutions own swap contracts against that debt, which would be executed upon any default. Greece may seem like a local problem on the nightly news, but it is most assuredly a global one in terms of balance sheets.

While attractive in theory, the German approach risks another worldwide elliott wave of capital markdowns in a financial industry barely off life support from the last one. Any restructuring of maturities – the favored option at the moment – would undoubtedly be treated as a default by capital markets, and very few within the financial system have sufficient incentive to push for such a move. A default, even one of a technical nature that modifies payment schedules & maturity dates, would kill Greek banks, accelerate payment clauses in derivative contracts and swiftly impact the investment ratings of more than a few global financial institutions. Indeed, while the German solution is the most correct one from the perspective of market theory and the “too-big-to-fail” syndrome, practically speaking, it is not the most likely one. If it is one thing we have learned in the markets, it is that fear is usually more powerful than greed, and rarely does the “greater good” come at the expense of profits and/or losses.

And issues of moral hazard abound in this discussion. The private sector was more than willing to cash in double-digit yields on Greek debt for years while the country was dragged along to prosperity through its inclusion in the Euro, and it should be the private sector that also pays the price of any default. However, as we saw ad nauseum during the U.S. financial crisis, even the bastion of free markets is not above bailing out an entire industry or three if the private sector is going to get it right between the eyes. But the alternative is equally unpalatable (and unpolitical), as the riots in Athens last week amply showed.

Ultimately, we think Greece will be bailed out. There is virtually no other choice. It will be horrendously expensive, very messy and, because of the involvement of the EU, the IMF, the World Bank, the Fed and the ECB, will take much, much longer than would be the case were financial markets driving the bus. Furthermore, the precedence value is huge – other European nations in the same boat as Greece (and also members of the Euro) such as Portugal and Spain are going to watch what happens very carefully, as are global bond investors.

One of the interesting ironies of all this is that historically, half-measures like bailouts and provisional measures usually don’t work. They merely delay the inevitable. Eventually, it is highly likely Greece defaults anyway, making any taxpayer-fed bailouts a waste of both money and time, two things of which Europe as whole has little to spare. Theoretically, Greece needs to devalue its currency and reissue new debt, but this avenue is unavailable so long as the country remains tied to the Euro. So, like any cash-strapped business trying to make a bank payment, the country is looking to sell assets, in its case airports and train lines to raise cash. To say the European Central Bank is in uncharted territory due to this mess is an understatement; one only has to look at Spanish and Portuguese bond spreads over German bunds to see how the global financial market views the situation.

Either way, the Greek vote of confidence today will be remembered as a departure point. If Papandreou survives, Greece will be the test case for a national bailout. If he doesn’t, it becomes highly likely that Greece will eventually be ejected from the Euro currency (which incidentally would result in a massive rally in the European currency). In either case, Greece is now a guinea pig in global finance, a position we do not envy. It’s no wonder, when one looks at the overall situation, why gold, silver and other hard assets have soared.

For those who are searching the Internet for more info about the sphere of free traffic, make sure to go to the web site which was quoted right in this paragraph.

Posted in Stock Trading | No Responses »

« Older Entries