By Mika Hamilton

Currency and currency investments change just as the trends in the stock market do. There are currencies which perform better in the stock market then others. There are several issues to take into consideration when choosing which currency you should trade with.

The most important points are the volume of that currency and the liquidity. These are both important because it will increase how quickly you can sell to ensure high profits or low losses. The most commonly traded currencies besides the American Dollar include: Japanese Yen, Swiss Franc, British Pound, and The Euro.

If you are a long term investor, a day trader, or a causal personal investor all these currencies have good liquidity, good trend performance (short and long term) as well as daily peaking for day traders.

While the focus by financial experts are usually on the big three: Euro, Dollar, Yen. There are other considerations which can increase your profits for the short term and offer solid long term trends.

The activity of a particular currency can not be a guaranteed an indicator of future performance is past performance. Below are a list of currencies and they associated “personality” in the stock market:

British Pound - The British Pound has a much smaller volume than the Euro or the Yen. This means short term trading with the British Pound needs to be kept to a minimum. Low opening interest rates combined with small volumes can cause unstable price spikes. However, the British Pound does very well in long term investing.

The Euro - If you are interested in and new to trading currencies, the Euro is the place to start. It has good volume, a high open interest, and is volatile enough that it can offer profits to the day trader.

The increasing popularity of the Euro makes it extremely safe to trade with it. The Euro is good for experienced traders as well as new investors.

Japanese Yen - The Japanese Yen is good for any long term investing. It can offer volatility for the day trader but it is much more erratic in it’’s daily behavior then the Euro and therefore much more unpredictable. The volume and interest is also high.

Swiss Franc- The Swiss Franc is similar to the British Pound - thin volume and low open interest. It’’s future viability is unknown because the Swiss economy is slowly becoming integrated into the European economy. It does have good long term growth which is ideal for any currency investor looking for long term trends.

Day trading with the Swiss Franc is out of the question, the volume is too low and there are no substantial daily spikes to make it worth while

Australian and Canadian Dollar - Both currencies are great for long term trading because each has low volume, low opening interest, and large price spikes. These currencies are good consideration if you are a currency trader and are seeking diversification away from the larger more commonly traded currencies.

About The Author

Mika Hamilton runs a website offering free investment tips and strategies for people looking to get started in the investment world.
http://www.Global-Investment-Institute.com

By Richard Cochrane

A hedge is an investment made to offset the risk incurred by entering another investment. Essentially you are setting up a bet on both sides so that one offsets the other and you can end up winning either way.
Think of it as a form of insurance.

Options are frequently used in hedging.

For example, you can speculate that the market price will rise in the future and buy a call today. But, because the market is uncertain and you”re not certain it will rise, you simultaneously buy a put option.

By carefully selecting the appropriate combinations of strike price, expiration date and type of option an investor can minimize risk and maximize the probability of making a profit.

So how does it all work?
Well let’’s take a look at a common hedging strategy: the Strangle.

In this strategy, an investor holds both call and put options with the same maturity, but with different strike prices.

The contracts are purchased ”out of the money” and are therefore cheaper. ”Out of the money” means the strike price of the underlying asset is higher (for a call) or lower (for a put) than the current market price.

For example let’’s say Intel (INTC) is currently trading at $40 per share. You could buy one call at $3 and one put at $2 with the call having a strike price of $45, the put $35. Your total investment would be ($3 x 100) + ($2 x 100) = $500.

If the price over the length of the contracts stays between $35 and $45 the total possible loss = $500, the cost of the options. So your risk in this kind of hedge is limited to $500.

Suppose the price drops near expiration to $25. The call would expire worthless, but the put is worth ($35-$25) x 100 = $1000 - ($2 x 100) = $800. Subtract the cost of the call, $800 - $300 = $500. So that’’s your net profit (ignoring commissions and taxes).

The difference between the exposure and the potential profit represents a kind of hedge. Though you are essentially ”betting” that the price could go either way, your downside is limited to the combined cost of the put and the call.

There are, not surprisingly, nearly as many hedging strategies as there are investors. A couple of common types are:

The collar: Hold the underlying asset and simultaneously both buy a put and sell a call of the same asset. The short call limits gains, but the long put hedges against any losses from the underlying asset.

The protective put: Buy the asset and also buy a put option on the same asset. At expiration, the asset may have gained (eliminating the value of the put option), but the rise in the asset offsets the loss.

And there are a whole host of other variations. Most do involve speculating on the price direction of the underlying asset, while taking advantage of the leverage, cost and timing characteristics of options. As with any investment strategy, make sure you understand the pros and cons before laying down your bet.

About The Author

Richard Cochrane is an investor, trader and educator on stock and options trading, with a focus on day trading and swing trading strategies for investors. For more information on successful stocks and options trading techniques visit http://www.intradaytrades.com/idt3.html

By John Porter

Online trading has gained immense popularity because of the convenience it provides to the investor and the ease with which it can be carried out. If we go back about ten to fifteen years prior to today, trading on the stock market was a thing reserved for only a few. Of course the common man could still buy stocks, but one hardly had any hands on experience in it. It was all about going through the business pages of the newspaper to mark out your preferred companies and then let your broker take over. One hardly did the trading himself.

But things began to change dramatically towards the end of the last decade. And this was made possible because of tremendous development in the communication sector, especially the internet and also a huge progress in the kind of personal computers we used. With internet coming in a big way, we could be connected to anywhere at anytime. And the trading institutions did not miss out on the potential that the internet promised. Online trading was made legal and the whole character of trading on stocks and shares changed.

Now more people are involved in trading than ever before. And the reasons are quite apparent. One does not need to leave his house to do trading. There is no paperwork to be handled. One can trade at anytime of the day, whenever he is free and feels like. And one need not bother about what his broker is offering and how much commission he is charging.

The initial days of online trading weren”t that smooth though. With dial-up internet connection data transfer was slow and transactions took a long time. But all that was soon going to change. From the days of only a few kilobytes being transferred per second the internet’’s speed leapfrogged to a few megabytes of data transfer per second.

And this was largely possible because of the broadband technology. With optical fibers carrying huge amounts of data within seconds from one end of the world to another, online trading transactions could now be conducted in a matter of seconds. With virtually little or no time-lag online trading was now ready to take-off. And take-off it did.

But the internet also poses a few threats. Online trading has been plagued with attacks from hackers and frauds. But as the security system of the web also gets stronger by the day, these external threats can soon be a thing of the past.

About The Author

Find more Online Trading info @ http://www.DAY-TRADING2DAY.INFO and @ http://www.DAY-TRADING4U.INFO For online trading related articles: http://www.online-trading101-fyi.info

By John Porter

Online trading is huge today with more and more investors opting to go online rather than stay with the tradition way of trading involving loads of paperwork, fighting it out on the stock market or haggling with the broker for lower rates of commission. Online trading allows you to trade anytime you want, from anywhere you want.

But if you have never traded before and it is only after online trading was introduced that you became interested on trading in stocks, then you must realize though the method of trading might have changed the fundamentals of trading haven”t. So the first thing you need to know before you even start trading are the basics of a stocks and shares. There are plenty of books on the subject which will allow you to form preliminary ideas and give you tips on investing. Get a clear idea as to how the stock market functions.

Then get a hang of how the markets have been performing over the last year or so. Which industries have been on the rise, which are on the decline, and which are all set to show tremendous growth. This background on stock market will stand you in good stead when you will be going through the numbers and help you analyze and understand them better.

Online trading is not real time. This you have to understand. Yes your orders can be transacted in matters of minutes or even a few seconds. But remember there are millions who today trade online. So if you are trading on a particular stock there will be hundreds or even thousands who will be placing orders of the same stock at the same moment. So even in seconds there can be huge troughs and crests on the price of a particular stock. If you are unaware of such chances your plans can go haywire. The best option in such cases is to place price limit orders. Then you wouldn”t be losing beyond what you expect.

Online trading is the future of stock trading if it is already not the present. The positive about it is that everyone can now participate on trading. But that also has a negative effect. Because of the ease many will opt for trading without being properly prepared. And with so many investors without knowledge as to how the markets work, the bigger players will have a field day. The market will also lose its stability. So if you want to succeed do your homework.

About The Author

Find more Online Trading info @ http://www.FUND-MGMT.INFO and @ http://www.INSIDER-TRADING-NOW.INFO For spyware related articles: http://www.online-trading101-fyi.info

By Amar Mahallati

When your broker buys or sells currency for you, he or she is “executing” an order.

You can place different types of orders with your broker, depending on what you want to do, your situation, analysis and goals.

These are the most common types of orders your broker can place for you:

Market Orders

This is the simplest kind of order and is the most common type used in day-trading. Simply, a broker places a market order to buy or sell a currency at the current market price. A trader places a market order by determining what type of currency pair he wants to trade, plus the number of lots he wants to trade.

For the most part, you should be able to execute very quickly, just by clicking your mouse. Your order should go through almost instantaneously, at the price you requested.

Limit Orders

You use a limit order to buy or sell currency when the currency reaches a particular price. For example, you might see that USD/JPY is currently trading at 117.50, with the price on a downward trend. Your analysis shows that it should go to about 117.25 and then start coming back up.

Instead of waiting for it to drop to 117.25 and then placing the order, you can place what’’s called a “limit order” at 117.25. What will happen is that the order will be placed when the currency hits that price, automatically and without your having to sit around and wait for it to drop there.

Now, if your analysis is off and the price only goes to 117.30 before it starts coming back up, the trade will not be executed at all. It must hit 117.25 before the trade executes, with this type of order. In this case, the order is usually canceled at the end of the day if it does not execute.

Stop-Loss Orders

Experienced traders usually use stop-loss orders to help minimize losses.

If, for example, you expect the price of a particular pair of currencies such as GBP/USD to go up, you can place a buy order at 1.8255 and a stop-loss order at 1.8235. However, if your analysis is incorrect and the price goes to 1.8185,a stop-loss order can protect you by automatically selling at 1.8235. Therefore, instead of losing 70 pips, you only lose 30 pips.

OCO

“OCO” stands for, “One order cancels the other order”. What this means is that two orders are placed with prices both above and below the current price. When one trade goes into play, the other cancels.

For example, if the price of USD/CHF has been staying around 1.2435 for some time and you have a feeling it’’s going to change soon but you”re not sure which way it’’s going to go, you place an OCO order to buy at 1.2445 or alternatively, to sell at 1.2455. This way, your trade takes off as soon as the currency goes one way or the other. One trade is canceled as soon as the other is executed.

About The Author

Visit http://www.123onlinetrading.com to find more great information about online forex trading. Besides a large selection of free educational articles you can also find powerful books about online trading in general.

By Amin Sadak

Trading covers a multitude of sins, or at least a multitude of markets. Mention “trading” to a non-trader and they”ll probably think of stock and shares but there

are many other markets you can trade in. These include commodities, futures, indices, CFDs and options. They all have their pros and cons and some require specialized knowledge.

The most popular markets used by traders are stocks, commodities, futures, indices and forex. Some traders switch between markets, others stick to just one. Let’’s highlight some of the similarities and differences between them.

Shares

In the USA there are over 40,000 shares so you have a lot of markets to choose from. You can”t deal in all of them so you need to home in on those that offer good trading opportunities using whatever trading methods you decide to use.

When buying shares you usually have to put up all the money at the time of sale. That might seem obvious but it’’s not so with all markets. Some brokers offer a 50%

margin with shares which means you can trade to the value of twice the amount in your account. This seems like a good deal but if your shares start to go down you”ll get a “margin call” and will either have to put more money in your account or sell the shares at a loss.

Shares are normally traded in lots of 100. If you want to trade an expensive share - and some shares are very expensive, particularly in the US markets - you need a considerable amount of money in your account.

It’’s not easy to sell shares short. Selling short is a strange concept to many people who think of buying shares at a low price and selling then at a higher price.

But it’’s often easier to predict that a share will fall rather than rise so what you”d like to do is to sell it at a high price and then buy it back later at a low price. The net result is the same whatever the order of the deals - buy low, sell high.

However, you can”t sell something you don”t own so in order to sell shares short you must “borrow” them from your broker. This is not quite as straightforward as buying and not all shares are available for selling short.

Finally, share dealing takes place during market hours so if you don”t live in the country where they are being traded you must adjust your trading hours to suit.

Futures, commodities and indices

Commodities are goods such as corn, copper, crude oil, orange juice, oats, gold and wheat.

Technically, a futures contract is an agreement to make or accept delivery of a commodity on a certain day at a certain price. In practice this rarely happens unless you”re a manufacturer who actually wants the goods. The vast majority of futures traders are simply speculating on whether the price will go up or down and never take delivery of an item.

Futures contacts include commodities and also stock market indices such as the S&P 500, Dow Jones and the Russell. Indices are simply a composite of securities that provide an overall reading of the market or some section of it.

The S&P 500 (Standard & Poor’’s 500) tracks 500 of the largest companies in the US market. The Dow Jones Industrial Average tracks only 30 of the largest and longest-established companies while the Russell 2000 is an index of smaller stocks.

Essentially, commodities and indices are futures and traded in much the same way although traders may use the terms interchangeably.

Unlike shares, futures can be sold short just as easily as they can be bought. Each futures contract has its own fluctuating price and many traders deal in just one lot contracts.

Brokers usually charge a flat fee commission per contract, often expressed as a “round turn” which is one buy and one sell transaction. This may be a few dollars,

often less than the value of a point or two on the contract. If you”re trading a long time frame the commission is negligible but if you”re day trading and scalping for a few points here and there it becomes a considerable part of the cost.

Futures brokers usually offer a margin of around 20% of the value of the underlying instrument so you can control $10,000′’s worth of a contract for maybe $2,000.

However, the same rules apply - if you over-leverage your account you”ll receive a margin call or your positions will be closed at a loss. Margin and leverage are a double-edged sword.

Many brokers offer a demo account so you can get used to the trading platform and test your trading strategies before you put real money on the line.

Forex Currency Trading

Currency trading, foreign exchange or forex as it’’s more commonly known, has fast become one of the most popular markets for private traders in recent years.

As its name suggests, it involves buying and selling foreign currency. The most commonly traded currencies are referenced against the US Dollar and are sometimes referred to as a “currency pair” even though you are only trading one instrument. For example, the GBPUSD is the UK Pound/US Dollar pair. A value of 1.7625 would

mean that the one Pound is worth 1.7625 Dollars. Other popular pairs include the Euro (EURUSD), the Swiss Franc (USDCHF) and the Japanese Yen (USDJPY) although there are others.

So unlike shares and futures, you don”t have a mass of markets to choose from, but there is variety within forex currency trading to give you a range of markets to trade.

The value of each pair differs slightly but the minimum movement - called a “pip” - is worth approximately $10. The GBPUSD has been averaging 100-150 pips per day

which would be $1000-1500. Many brokers let you trade half or even quarter-size lots which are useful when you”re starting out. Also, many brokers offer a demo account so you can practice before risking real money.

The total value of the forex market is worth trillions of dollars per day, far larger than shares or futures. It is also a truly international market with dealing

taking place all around the globe 24 hours per day from Monday to Friday. You can, therefore, trade at any time of the day or night at times to suit you. It’’s worth noting, however, that the bigger moves generally occur during the US and European trading sessions.

You can sell short forex just as easily as you can buy and brokers offer highly-leveraged accounts too - but the same warning regarding margins apply here as well.

Brokers tend not to charge a commission for trading forex and you will often see adverts for “commission free” trading. However, they make their money on the spread which is the difference between the buying price and the selling price. The spread is usually between 3 and 5 pips although some brokers may offer a 2 pip spread on some pairs, and some less-popular pairs may have a larger spread.

Paying on the spread is particularly useful when trading mini lots. A 3-pip spread on a quarter lot will be about $7.50 whereas on a full-size lot it would be $30.

Again, the spread is more important when trading short time frames where you”re only aiming to make a few pips per trade. You need to build the spread into your trading system so you don”t overestimate the amount you might make per trade.

One interesting aspect of forex currency trading is that there is no central clearing house where absolute prices are quoted, unlike shares and futures. So it’’s quite possible to see different brokers quoting slightly different prices for the same pair. As the market has become more efficient, this difference has reduced,

in most cases, to a few pips but it highlights the importance of checking that the data you are using for analysis is the same - or close to - that used by your broker for placing your orders.

The market you decide to trade will depend on many things, not least of all, your budget, but also how many markets you want to look at and what hours you want to trade. There are trading vehicles to suit all preferences and pockets.

About The Author

More information, recommendations and guides can be found at http://www.forextradinglive.com

By John Porter

There are a few kind of risks that are there when you trade online. The first kind of risk is from the hackers. The first thing the hacker needs to do is to steal your username and password. There are numerous ways in which they can do this. And new ways are being developed all the time. Once they have your username and password they can easily access your account and buy or sell whatever they want to. Exactly the way you do. So this hacker is most likely to sell all the shares that you have accumulated, and with the money he thus receives will but shares on micro-caps.

What are micro-caps? Also known as penny stocks these are thinly traded stocks. What the hackers do is by buying shares of that micro-cap with your money he drives up the price for the particular share. Once the price is quite high he sells his own holdings at a considerable profit. The money is then wired to an account in a different country or a series of straw men and dummy corporations are used to transfer it to their account.

Also internet provides a great opportunity to manipulate stocks which are unheard of and have very light trading. Say a broker wants people to trade on a particular stock. For people to trade on a stock, they must know about it, and then they must be made to understand there will be a definite positive gain in trading on that stock. What the broker will do is start a thread on that stock. Most discussion forums and threads in them allow the same person to post innumerable messages under different aliases.

So the broker will create n number of aliases for himself and post messages about the particular stock. The text of the message would of course be favorable toward that stock now with so much discussion about a particular stock and most of it being positive, investors will get interested.

They have no way to find out that it is the same broker who has been posting all the messages under various aliases. Rising interest transforms to rise in activity on the trade of that stock. A stock is manipulated. A similar thing can be done by the PR executive of the company or a large shareholder of the stock. This is a definite abuse of the internet.

About The Author

Find more Online Trading info @ http://www.ONLINE-TRADING4U.INFO
and @ http://www.PENSION-FUNDS.INFO For Online Trading related
articles: http://www.online-trading101-fyi.info

By John Porter

High-speed internet connection and advanced personal computers have opened new gates for people who have always been interested in trading online but never had the inclination to be out there on the market and trade from the floor of the stock exchange. The other option he had was to let a broker carry out transactions for him, but then one lost out on the charms of trading. It was not something where you can be involved yourself.

Today you can conduct trade on stocks of all sorts of companies right from the comfort of your house. No hassles. No brokers. Nothing. But one must also understand that the internet has also opened up great avenues for scams to be carried out. The main reasons for internet being such a hit with frauds and tricksters are its ability to reach millions of people at one go and the ease with which one can hide his or her identity behind the worldwide web. Many experts believe that internet is a much bigger threat than the physical world when you are talking about someone being duped. Let us see how these frauds are carried out. We will discuss one here.

Internet provides a great opportunity to manipulate stocks which are unheard of and have very light trading. Say a broker wants people to trade on a particular stock. For people to trade on a stock, they must know about it, and then they must be made to understand there will be a definite positive gain in trading on that stock. What the broker will do is start a thread on that stock. Most discussion forums and threads in them allow the same person to post innumerable messages under different aliases. So the broker will create n number of aliases for himself and post messages about the particular stock.

The text of the message would of course be favorable toward that stock now with so much discussion about a particular stock and most of it being positive, investors will get interested. They have no way to find out that it is the same broker who has been posting all the messages under various aliases. Rising interest transforms to rise in activity on the trade of that stock. A stock is manipulated. A similar thing can be done by the PR executive of the company or a large shareholder of the stock. This is a definite abuse of the internet.

About The Author

Find more Online Trading info @ http://www.NASDAQ-FYI.INFO
and @ http://www.ONLINE-BONDS.INFO For Online Trading related
articles: http://www.online-trading101-fyi.info