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Saturday, October 31, 2009

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - What is October Effect?

 

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  1. What is October Effect?
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What is October Effect?

October effect is the belief that the market tends to decline in the month of October. Today this is considered only as a psychological expectation of traders rather than an actual phenomenon. Statistics over the years shows that October is just like any other month. An opposite phenomenon is observed in the month of January known as January Effect, which is more common and is related to tax paying.





The month of October makes many traders and investors nervous as many serious market declines occurred in the month of October. The 1907 panic, 1929 Wall Street crash which preceded the great depression, black Monday and crash of 1987 and the recent 2008 credit crisis occurred in October. Moreover, it is the month of the last earnings season of a year, so prices are expected to fluctuate in either direction.

Statistics of the last 30 years shows that on an average, October is not the worst month of the year, it is September. In the late 90s and early 2000, October was the most profitable month of the year. In 1946, 1957, 1960, 1966, 1974, 1987, 1990, 2001, and 2002 October was also the month which ended some of the major bear markets. One reason for this is, as the phenomenon is widely known and expected, traders are prepared to exploit any decline/sell-off.

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Friday, October 30, 2009

Trade One Day Free With Our Pros At The CME

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Email Trenton@protradingcourse.com to arrange your trade room access 

"Free Pass" in the subject.

 
   
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The PTC trade room is designed to offer the insights of trading side by side with professional traders.  Trading alone can be very difficult and there is a reason that professional trading groups have a higher success rate than at home traders.  The advantage of having pro traders guide you during the live trading market while offering trade signals allows the at home trader the same benefits only afforded to those in the trading groups.
 
How should you use the trade room?
 
EXPERIENCED: If you already have a strategy and a game plan, then use the live professional guidance
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NOVICE:         If you are new to trading or just need a fresh start, then use the trade room to teach you
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To unsubscribe from our services please email Trenton@protradingcourse.com "unsubscribe" in subject.

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - In Neck and On Neck Candlestick Patterns

 

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In Neck and On Neck Candlestick Patterns

Both In Neck and On Neck are bearish trend continuation candlestick patterns indicating a continuation of an existing bearish trend, after a bullish day. Both are two candlestick formations, comprising a long bearish and (preferably) a short bullish candlestick.






The requirements of In Neck and On Neck candlestick patterns include:
  • The pattern should form in a significant downtrend.
  • The first day is a long bearish day comprising a long black or colored candlestick.
  • The second day is a bullish day where prices open a gap below the first day's closing.
  • For In Neck pattern: the second day candlestick closes at or just (barely) above the first day's closing. If the candlestick closes way above the first day's closing, it forms Bullish Piercing Line pattern, a reliable bullish reversal formation.
  • For On Neck pattern: the second day candlestick closes below the first day's closing. The candlestick needs to be short; if it is long, it may form Bullish Meeting Lines pattern.
Both In Neck and On Neck candlestick formations occur commonly in downtrends and are considered undeveloped versions of bullish piercing line pattern. As bulls are failing to close trades distinctly above the first day's close, the downtrend is expected to continue, at least for a short term.

Both In Neck and On Neck are moderately reliable candlestick patterns. The bearishness of the formation increases with increase in length of the first day bearish candlestick. Confirmation of trend continuation is recommended.

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Thursday, October 29, 2009

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Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - QStick Momentum Indicator

 

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  1. QStick Momentum Indicator
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QStick Momentum Indicator

QStick or Q-Stick is a momentum indicator developed by Tushar Chande. It is a simple indicator used to identify the trends over a period of time. QStick indicator shows the numerical value of a trend. It is calculated by taking the moving average of the difference between opening and closing prices for a period.





With QStick momentum indicator, values below zero indicate that the trend has a bearish bias, which increases with increase in negative values. Values above zero indicate that the trend has a bullish bias. Crossings of the zero level are used to identify trend changes. Traders may also use a short-term moving average of the indicator as a trigger line.

QStick is an easy to trade momentum indicator, trading signals can be generated in many ways.
  • Crossovers: Buy signals are generated when the indicator crosses zero line from below and sell signals are generated when indicator crosses zero line from above.
  • Extreme Values: Buy signals are generated when the indicator is in extreme low levels but turning up and sell signals are generated when the indicator is in extreme high levels but turning down.
  • Divergences: Buy signals are generated when the indicator is moving up but price is moving down and sell signals are generated when the indicator is moving down but price is moving up.
Like any other momentum indicator, QStick also offers better results when used in conjunction with other indicators.

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Wednesday, October 28, 2009

$299/Month Ends Friday, October 30th

 

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Trade Room Rate of $299/Month Ends Friday

Regular Rate $699/Month

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~
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 ~
Live Trade Calls from the FLOOR hosted by Active Professional Floor/Pit Trader Richard Regan!

Trading Pic 1
Currenex Premier Institutional Platform - Minimum $2, 500 Deposit through PTC
 
* Direct access to trade with all the major banks in the REAL Interbank market
* NO dealing desk
* Professional software
* Average EUR/USD spread of 0.5 - 1.1 Pips (Sometimes spread is ZERO)
* Reduced deposit requirement (Typically $25, 000 - $100, 000)
* Rebates on commissions
* Trade Room Subscription Required
* Request a demo at freetraderoom@protradingcourse.com - please include name and phone number
0
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Virtual Trade Room at the CME Group
CBOT
Trade Room
Live from 7:30am - 3pm daily, Managing Director Richard Regam gives real time Futures and Forex trade calls and ongoing market commentary from the floor at the CME Group.
0
Price: $299 per month through October 31st 
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How Do I get it for Free?

Currenex will give you rebates of $10 per million dollars traded to put toward the cost of the trade room.  

5 Standard Lots round turn = $10 rebate

Mini lots can be added together for the same rebate!  Any rebates you receive over the cost of the trade room are yours to keep!  

 
 
GET ENROLLED
 
E-mail freetraderoom@protradingcourse.com for a demo of the trade room or to request an enrollment form.  Subscriptions are month to month with no further obligation.  You can also call 312.379.3571 to sign up.
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Upon enrollment you will receive instructions on how to open your Currenex account as well as how to access the trade room. 
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Start saving AT LEAST a pip per trade and get all of your orders filled, plus daily trade calls by Professional Trader Richard Regan from the CBOT Floor at the CME Group!
 
Sincerely,
The Pro Trading Course Team
312.379.3571 

 

Webinar Today at 4:15pm EDT - Live at the CME Group

 

PTCLogo

Webinar Wednesday, October 28st at 4:15pm EDT https://www2.gotomeeting.com/register/716860154

Get Currenex with 0-1 Pip Spreads
~
Free Access to the Trade Room at the CME Group
 ~
Live Trade Calls from the FLOOR hosted by Active Professional Floor and Screen Trader Richard Regan!

Trading Pic 1
Currenex Premier Institutional Platform - Minimum $2, 500 Deposit through PTC
 
* Direct access to trade with all the major banks in the REAL Interbank market
* NO dealing desk
* Professional software
* Average EUR/USD spread of 0.5 - 1.1 Pips (Sometimes spread is ZERO)
* Reduced deposit requirement (Typically $25, 000 - $100, 000)
* Rebates on commissions
* Trade Room Subscription Required
0
MajorPairs
Virtual Trade Room at the CME Group
CBOT
Trade Room
Live from 7:30am - 3pm daily, Managing Director Richard Regam gives real time Futures and Forex trade calls and ongoing market commentary from the floor at the CME Group.
0
Price: $299 per month, See how to get it for free! 
stockchart
How Do I get it for Free?

Currenex will give you rebates of $10 per million dollars traded to put toward the cost of the trade room.  

5 Standard Lots round turn = $10 rebate

Mini lots can be added together for the same rebate!  Any rebates you receive over the cost of the trade room are yours to keep!  

 
 
GET ENROLLED
 
E-mail freetraderoom@protradingcourse.com for a demo of the trade room or to request an enrollment form.  Subscriptions are month to month with no further obligation.  You can also call 312.379.3571 to sign up.
0
Upon enrollment you will receive instructions on how to open your Currenex account as well as how to access the trade room. 
0
Start saving AT LEAST a pip per trade and get all of your orders filled, plus daily trade calls by Professional Trader Richard Regan from the CBOT Floor at the CME Group!
 
Sincerely,
The Pro Trading Course Team
312.379.3571 

 

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - Trading Agriculture ETFs

 

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  1. Trading Agriculture ETFs
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Trading Agriculture ETFs

Agriculture Exchange Traded Funds or ETFs are ETFs that enable traders to profit from ever-changing agriculture commodity prices. They are becoming increasingly popular and are growing in number. Investing in agriculture ETFs is considered a good way of diversifying the portfolio as agriculture commodity prices often move independent of stocks and exchange indexes.





Now there is a variety of agriculture ETFs available for trading.
  • Some of them track single agriculture commodities such as wheat, soybean, cotton, coffee and sugar.
  • Some track a particular type of commodity such as grains, soft commodities, etc.
  • Livestock ETFs.
  • Normal and leverage ETFs.
  • ETFs which track specific agricultural indexes and ETFs which track futures price of specific commodities.
  • ETFs which give same weightage to all commodities they track and ETFs which give more weightage to specific commodities.
Like the agricultural commodities, supply and demand is the main factor which controls the price of agricultural ETFs. The long-term and near-term predictions & news affect the price. Agricultural ETFs are good for all those traders who want to profit from changing commodity prices but do not want to trade the commodities directly. They are also good option for traders who want to hedge their portfolio, want to diversify the portfolio, and who trade futures & options on these commodities.

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Tuesday, October 27, 2009

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - Trading Entry and Exit Points

 

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  1. Trading Entry and Exit Points
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Trading Entry and Exit Points

Market timing is all about finding the right points to enter a trade at the start of a trend, namely, entry points; and the right points to exit the trade at the end of the trend with maximum profit, namely, exit points. Entry and exit points are important in all forms of trading, but are most important in short-term trading, when traders want to capitalize on a relatively small price movement.

  • The entry and exit points should match traders' trading style, market/security volatility, anticipated price movement, trading goals, margin, position size, etc.
  • The trader should be clear about the nature of the trend that he can capitalize with his setup - his trading skill, risk tolerance, money flow, trading system, etc.
  • There are a variety of tools available for finding entry points; traders can use indicators, chart patterns, candlestick patterns and fundamentals to find an opportunity.
  • Traders should use more than one tool to confirm the opportunity. It is good to use the tool(s) one is most comfortable with to find the entry points and use others to confirm it. It is also better to use different kinds of tools, rather than the same one.
  • Perhaps finding exit points is more difficult than finding entry points. There are some indicators which predict reversals, support and resistance levels; and trend strengths can be good tools for finding them.

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Saturday, October 24, 2009

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - ETF Sponsors and Creation Units

 

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  1. ETF Sponsors and Creation Units
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ETF Sponsors and Creation Units

ETF sponsors are financial firms that create and manage exchange traded funds. Now there are a number of ETF sponsors offering different types of ETFs that track different products and markets; examples include iShares, PowerShares, State Street, etc.

ETF sponsors create ETFs by creating an underlying index which is passively managed. This underlying index can be of stocks, currencies, derivatives, bonds, commodities, etc. Institutional investors help them in creating the initial underlying index by delivering them the stocks or derivatives needed for that. In exchange they receive creation units from ETF sponsors. The institutional investors can then market the shares of the creation units they are holding to retail investors in open markets or centralized exchanges.

Creation Units
Creation units are ETF shares which are considered as units of ETFs. Creation units can vary with the ETF provider and with ETF; usually a creation unit can contain 25,000 to 600,000 ETF shares; and units containing 100,000 shares are most common. It is the creation units that give liquidity as they are the small units of an ETF which is available for intraday trading. ETF sponsors also make necessary changes to the ETF portfolio with time, to best mimic the tracking index. They exchange old securities with the creation unit holders to get new securities.

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Friday, October 23, 2009

0-1 Pip Spreads and Free Live Trade Calls at the CME Group

 

PTCLogo

Webinar Wednesday, October 28st at 4:15pm EDT https://www2.gotomeeting.com/register/716860154

Get Currenex with 0-1 Pip Spreads
~
Free Access to the Trade Room at the CME Group
 ~
Live Trade Calls from the FLOOR hosted by Active Professional Floor/Pit Trader Richard Regan!

Trading Pic 1
Currenex Premier Institutional Platform - Minimum $2, 500 Deposit through PTC
 
* Direct access to trade with all the major banks in the REAL Interbank market
* NO dealing desk
* Professional software
* Average EUR/USD spread of 0.5 - 1.1 Pips (Sometimes spread is ZERO)
* Reduced deposit requirement (Typically $25, 000 - $100, 000)
* Rebates on commissions
* Trade Room Subscription Required
0
MajorPairs
Virtual Trade Room at the CME Group
CBOT
Trade Room
Live from 7:30am - 3pm daily, Managing Director Richard Regam gives real time Futures and Forex trade calls and ongoing market commentary from the floor at the CME Group.
0
Price: $299 per month, See how to get it for free! 
stockchart
How Do I get it for Free?

Currenex will give you rebates of $10 per million dollars traded to put toward the cost of the trade room.  

5 Standard Lots round turn = $10 rebate

Mini lots can be added together for the same rebate!  Any rebates you receive over the cost of the trade room are yours to keep!  

 
 
GET ENROLLED
 
E-mail freetraderoom@protradingcourse.com for a demo of the trade room or to request an enrollment form.  Subscriptions are month to month with no further obligation.  You can also call 312.379.3571 to sign up.
0
Upon enrollment you will receive instructions on how to open your Currenex account as well as how to access the trade room. 
0
Start saving AT LEAST a pip per trade and get all of your orders filled, plus daily trade calls by Professional Trader Richard Regan from the CBOT Floor at the CME Group!
 
Sincerely,
The Pro Trading Course Team
312.379.3571 

 

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - Cup and Handle Formation

 

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Cup and Handle Formation

Cup and Handle formation, or the Cup with Handle formation, is a bullish continuation chart pattern. The formation was discovered by William O'Neil and introduced in his 1988 book 'How to make Money in Stock'. Cup and handle formation is very popular among investors, and that is one reason for the success of the pattern; because traders buy in high volumes creating the bullish breakout at the end of the formation.


The requirements of cup and handle formation include,

  • The pattern should form after a not too mature (2 or 3 months old) strong bullish trend. The pattern weakens when formed after matured uptrends, as the upside potential is low.
  • The pattern must have two components, the U-shaped Cup and a handle. The handle must always follow the cup.
  • The cup is like a semi-circle and is formed as a result of (steady) price decline followed by flattening of trend and then a (steady) price increase.
  • The handle is a downtrend after the formation of the cup.
  • The end of the handle formation is marked by increased buying volume resulting in a sharp upside breakout.
The shape and duration of the cup formation is important. V-shaped cups, formed because of sharp decrease and then sharp increase of the price, are not considered valid. The more rounded the formation, the better reliable it is. The cup formation lasts for a few weeks or months; the ideal one extends from 2 to 6 months. The depth of the cup should be below 30 to 50 percentage of the prior trend; depths above 65% are considered less reliable. In an ideal cup formation, both sides have equal highs. The handle formation lasts 1 to 4 weeks and the depth should be below 30% of the cup formation.

Many traders enter the trade when the breakout after handle formation crosses the descending trendline (drawn connecting the highs of the handle). Many other traders wait till the breakout crosses the two peaks of the cup formation. With cup and handle formation the confirmation of breakout, in the form of sharp increase in trading volume, is essential.

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Thursday, October 22, 2009

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - Chande Momentum Oscillator or CMO

 

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  1. Chande Momentum Oscillator or CMO
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Chande Momentum Oscillator or CMO

Chande momentum oscillator or CMO developed by Tushar Chande shows the momentum of the underlying security. CMO is similar to Relative Strength Indicator, Rate of Change indicator and Stochastic Oscillator but differs from them in many ways. It uses the data of both up days and down days, uses no smoothing of data and does not hide any short-term movements; but like other oscillators it is ranged between +100 and -100.





Chande momentum oscillator is the difference between the sum of all gains and the sum of all losses for a period divided by the sum of all price movements. The formula for CMO is,

CMO = [(Su – Sd) / (Su + Sd)] x 100

Where Su is the sum of the difference between current and previous closes on up days and Sd is the sum of the difference between current and previous closes on down days.

Positive values of Chande momentum indicator show bullish trends and negative values show bearish trends. Oversold level is identified when CMO is below -50 and overbought level is identified when CMO is above +50. The 0 level is used to identify the change in momentum. With CMO, many traders use a (nine period) simple moving average to generate buy and sell signals. Buy signals are generated when the oscillator crosses above the signal line, and sell signals are generated when the oscillator crosses below the signal line.

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Wednesday, October 21, 2009

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - What is Reflation?

 

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  1. What is Reflation?
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What is Reflation?

Reflation is the intentional practice of a government to reverse the existing deflation. Today the word is also used widely to describe the first phase of recovery after a recession. Reflation is a complex process and involves many steps which aim at increasing a country's economical output. Usually a reflation policy includes,

  • Reducing (almost all types of) taxes.
  • Changing the money supply or injecting money to key economic sectors like infrastructure development.
  • Lowering interest rates.
The resultant injection of money into the economy causes rise in commodity prices and inflation. Many investors take the reflation phase as an investing opportunity. They can change their investments from low-risk low-profit instruments like treasury investments to high-risk high-profit investments like stocks. They can also take this as an opportunity to reinvest the pre-invested money. But the success of these strategies greatly depends on the trader's investing knowledge and skill in money/risk management.





Over the years, many countries and governments have implemented different reflation policies with different levels of success. Reflation policies are also implemented widely to sustain the economic boom by reducing the chances of backward growth. One thing every reflation policy does is increase the national deficit or debt. Over a long term, this increased debt tempts the policymakers to reverse the entire procedure - increase taxes and increase the interest rate - to fill the debt.

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Tuesday, October 20, 2009

Forex Platforms - Retail vs. Currenex Webinar

 

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Webinar Wednesday, October 21st at 4:15pm EDT https://www2.gotomeeting.com/register/660046467

Get Currenex with 0-1 Pip Spreads
~
Free Access to the Trade Room at the CME Group
 ~
Live Trade Calls from the FLOOR hosted by Active Professional Floor/Pit Trader Richard Regan!

Trading Pic 1
Currenex Premier Institutional Platform - Minimum $2, 500 Deposit through PTC
 
* Direct access to trade with all the major banks in the REAL Interbank market
* NO dealing desk
* Professional software
* Average EUR/USD spread of 0.5 - 1.1 Pips (Sometimes spread is ZERO)
* Reduced deposit requirement (Typically $25, 000 - $100, 000)
* Rebates on commissions
* Trade Room Subscription Required
0
MajorPairs
Virtual Trade Room at the CME Group
CBOT
Trade Room
Live from 7:30am - 3pm daily, Managing Director Richard Regam gives real time Futures and Forex trade calls and ongoing market commentary from the floor at the CME Group.
0
Price: $299 per month, See how to get it for free! 
stockchart
How Do I get it for Free?

Currenex will give you rebates of $10 per million dollars traded to put toward the cost of the trade room.  

5 Standard Lots round turn = $10 rebate

Mini lots can be added together for the same rebate!  Any rebates you receive over the cost of the trade room are yours to keep!  

 
 
GET ENROLLED
 
E-mail freetraderoom@protradingcourse.com for a demo of the trade room or to request an enrollment form.  Subscriptions are month to month with no further obligation.  You can also call 312.379.3571 to sign up.
0
Upon enrollment you will receive instructions on how to open your Currenex account as well as how to access the trade room. 
0
Start saving AT LEAST a pip per trade and get all of your orders filled, plus daily trade calls by Professional Trader Richard Regan from the CBOT Floor at the CME Group!
 
Sincerely,
The Pro Trading Course Team
312.379.3571 

 

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - NobleTrading Newsletter, October 19, 2009

 

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NobleTrading Newsletter, October 19, 2009

The Week Ahead: Markets recoiled Friday after an unexpected drop in October consumer sentiment and a reported $1.4 trillion budget deficit. In addition, Bank of America's $1 billion loss and GE's reduced bottom line versus a year ago did not help. Watch the PPI report along with the housing starts number on Tuesday. Jobless claims are due on Thursday along with September's Leading Economic Indicators from the Conference Board. Existing home sales are released on Friday.

Stocks to Watch: Apple Computer (AAPL) will release its widely anticipated quarterly results on Monday. Other significant earnings reports include Boeing (BA), Ebay (EBAY), and Wells Fargo (WFC) all released on Wednesday. Cytec Industries (CYT), a specialty chemical producer, beat estimates for Q3 by .23 and increased full year guidance for '09 as the stock regained levels last reached in October '08. Cryptologic Limited (CRYP) which develops internet gaming software sank hard after forecasting a Q3 trading loss of $3.4 million.

Special Note: Stock indexes look to complete very near term peaks in momentum as prices approach and push into strong upside resistance between 10,100 and 10,400 on the Dow Industrials, 1100-1125 on the S&P 500, and 2200-2250 on the Nasdaq. The timeframe for these moves could be from now until mid November. Another technical warning comes from the 10-day CBOE total U.S. equity/index put call ratio which has dropped to .755 near levels reached at the 2007 top.

Commentary provided by Barry Ward, Registered Principal, NobleTrading.com, Inc.

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Monday, October 19, 2009

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E-mail
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Upon enrollment you will receive a welcome letter with instructions on how to open your Currenex account as well as how to access the trade room. 
 
Start saving AT LEAST a pip per trade and get all of your orders filled! 
Sincerely,
 
The Pro Trading Course Team
 
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Sunday, October 18, 2009

0-1 PIP SPREADS & FREE LIVE CALLS FROM THE CME FLOOR

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TRADE A CURRENEX ACCOUNT WITH FREE PROFESSIONAL COACHING

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CURRENEX PREMIER INSTITUTIONAL PLATFORM FOR FOREX TRADERS
 
 
* Direct access to trade with all the major banks in the REAL Interbank market
* No dealing desk like at all Forex dealers
* No orders rejected or "price changed" error
* Professional software
* Average EUR/USD spread of 0.5 - 1.1 Pips (Sometimes spread is ZERO)
* Reduced deposit requirement: 2.5k (normally requires at least 25k)
* Rebates on commissions
* Trade Room Subscription Required

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 Managing Director Richard Regam gives real time Forex trade calls & offers insights of trading side by side with professional traders.  Interactive coaching and Q&A.  Live daily from 7:30am-3:00pm from the floor at the CME Group.
Price: $299 per month
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GET ENROLLED

E-mail Trenton@protradingcourse.com for more information or to request an enrollment form.  Subscriptions are month to month with no further obligation.  You can also call 312.379.3579 to sign up.
 
Upon enrollment you will receive instructions on how to open your Currenex account as well as how to access the trade room. 
 
Start saving AT LEAST a pip per trade and get all of your orders filled! 
Sincerely,
 
Trenton Grens
 
Pro Trading Consultant 
 
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Hi My Friend

LETS  BE A GOOD FRIEND
Friendship is sharing a laugh or two;
Friendship is leaning on each other when
we e to a bend in life's road;
Friendship is taking the time to encourage

There's a miracle called "Friendship." Oh what a miracle it is
in just keeping' it real. The "Friendship" dwells way, way down deep in the heart and soul of a person or individuals.
You don't know how this "Friendship" happens, it just happens so soulfully... It is a light from the "Friendship" that provides sunlight to the soul
whenever it happens. But you know and recognize the gift from above.

My name is Trecy from United States of America hope to tell you more out myself as soon as I hear from you.
 
Thanks
 
Trecy

Saturday, October 17, 2009

Hi My Friend

LETS  BE A GOOD FRIEND
Friendship is sharing a laugh or two;
Friendship is leaning on each other when
we e to a bend in life's road;
Friendship is taking the time to encourage

There's a miracle called "Friendship." Oh what a miracle it is
in just keeping' it real. The "Friendship" dwells way, way down deep in the heart and soul of a person or individuals.
You don't know how this "Friendship" happens, it just happens so soulfully... It is a light from the "Friendship" that provides sunlight to the soul
whenever it happens. But you know and recognize the gift from above.

My name is Trecy from United States of America hope to tell you more out myself as soon as I hear from you.
 
Thanks
 
Trecy

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - What is Stock Replacement Strategy?

 

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What is Stock Replacement Strategy?

Stock replacement strategy, as the name suggests, is a strategy to mimic the returns of trading stocks through derivatives. The strategy aims at profiting from a stock, without directly trading the stock. In stock replacement strategy, traders use options (especially deep in-the-money options) and futures on the stock. For example, traders can buy deep in-the-money options having delta close to 1, then a $1 rise in stock price will also cause a $1 rise for the option.

Advantages of stock replacement strategy:

  • The strategy offers all benefits associated with trading (group of) stocks.
  • Reduces costs associated with opening long positions and holding them.
  • Offers more leverage, most money can be retained for hedging purposes.
  • Offers low downside risk, with options traders having the option to do or not to do, and futures positions can easily be offset.
  • Both simple and complex options trading strategies can be followed for getting custom results.
Disadvantages of stock replacement strategy:
  • Needs good trading experience and skills to master the strategy.
  • The strategy may fail, when the stock stays on (almost) the same price or moves sidewise with minimal volatility.
  • Sometimes the costs of trading options can match or exceed those of trading stocks.

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Friday, October 16, 2009

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Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - Bullish Deliberation Candlestick Pattern

 

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Bullish Deliberation Candlestick Pattern

Bullish deliberation is a bullish trend reversal candlestick pattern indicating the possible reversal of an existing downtrend. The pattern resembles three black crows pattern, but the latter is a bearish candlestick formation. Bullish deliberation is a three candlestick pattern, formed of all black or colored candlesticks.


Requirements of a bullish deliberation candlestick pattern include,

  • The pattern should form at the bottom of a significant downtrend.
  • The first day is a long bearish day.
  • The second day is also a long bearish day, opening within the body of the first candlestick and closing at a new low.
  • The third day is also a bearish day characterized by a small bearish candlestick which opens near of a gap below the second candlestick and closes at a new low.
Although the formation seems bearish (and the existing downtrend can continue), a close look would reveal that the trend is weakening. The long bearish candlesticks on the first two days indicate that the bearish trend is strengthening, and also contribute to a gap down opening on the third trading day. But the formation of a small candlestick on the third day indicates that the downtrend is losing momentum; at least temporarily. There is a sign of indecision, hence the name deliberation, and as prices are at low levels, trend reversal is possible.

Bullish deliberation pattern is a weakly reliable pattern; and is less popular than bearish deliberation pattern. Reliability of formation increases with previous downtrend and with shortening of real-body of third day candlesticks (doji and star formations). Most traders do not take bullish deliberation as a true reversal pattern, but as a short-term price change indicator. Traders use the pattern to lock profits and to move up the stop-losses.

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Thursday, October 15, 2009

GREETINGS!

GREETINGS!

I am sure this mail would be coming to you as a surprise as we have never met and you would also be asking why I have decided to choose you amongst the numerous internet users in the world. Precisely I cannot say why I have chosen you but do not be worried for I come in peace and something very positive is about to happen to your life right now and to the lives of others through you if only you can carefully read and digest the message below. The internet has made the world global villages where you can reach out to anyone you have never met.
 
Before I move further, permit me to give you a little of my biography. I am Mother Deborah Witt Olivier, an 87year-old woman and the wife to Late Sir Jackman Olivier who died in a Plane crash on Monday, the 7th of September 1998 GMT 14:22 UK while they were flying from New York to Geneva. Please see site below for more detailed information.
 
http://www.cnn.com/WORLD/9809/swiss air.victims.list/index.html
 
After the death of my husband, I and now that I am old and weak, I have decided to spend the rest of my life with my family and loved ones whom I never had time for during the course of my business life. Before the death of my husband, we had a plan to use the last days of our lives to donate half of what we have worked for to the less privileged and charity homes while the other half for ourselves, family members and close friends. It is so unfortunate though that my husband is not alive today to do this with me and I am very weak and old now, I have thus decided to do this philanthropic work on behalf of my late husband and I. Presently, I have willed out half of our assets to several charity homes and to some of the less privileged in different countries.
 
Despite the agreement between my late husband and I to give aid to the deprived, we also agreed to render support to an individual we have never met before in life due to the fact that when we were still young in life, we received an anonymous help from an individual we didn't know and still don't know till date. The impact we got from this gesture has prompted us to take this decision to do same.
 
I am sorry to inform you that you will never have the chance to know me because I have just concluded the assignment which my husband and I have agreed on before his sudden death and you happened to be the beneficiary of our last WILL. 

Irrespective of your previous financial status, I need you to do me and yourself the favour of accepting our offer that will cost you nothing.

I have presently deposited a cheque in the sum of £5,800,000.00 British Pound with FedEx Express to deliver to you. What you have to do now is to contact the FedEx COURIER SERVICE as soon as possible to know when they will deliver your package to you because of the expiring date. Please NOTE that I have paid for the Delivering Charge, Insurance Premium and Clearance Certificate Fee of the cheque indicating that the funds is not meant to sponsor Terrorist attack in your Country.

The only money you will send to the FedEx COURIER SERVICE to deliver your Draft direct to your Postal Address in your country is £255.34 British Pounds being the Security Keeping Fee of the Courier Company thus far.

You have to contact the FedEx COURIER SERVICE now for the delivery of your Draft with this information below:

Contact Person: Mr. Mark Robbins
Email Address: uk_fedexservices@yahoo.co.uk
TEL: +44 702 402 6544

Again, don't be deceived by anybody to pay any other fee except £255.34 British Pounds. I would have paid this fee as well but the courier company insisted that I should not because they weren't sure when you will be contacting them and to avoid Accumulation of Demurrage.

You are to reconfirm the below information to them to avoid any mistake on the delivery and ask them to give you the tracking number to enable you track your package over there and know when it will get to your address.

Postal address:
Full Names:
Direct telephone number:

Below is the security keeping code: (SCT/0543/CC) of you draft, you are to present it to them for verification before delivery.

Please reply only to the above email address (uk_fedexservices@yahoo.co.uk) as I will not be available to respond to your email. 

Let me repeat again, ensure to contact them as soon as you receive this mail to avoid any further delays and remember to pay them their Security Keeping Fee of £255.34 GBP for their immediate action.

Note: Please I do not want you to thank me or my husband. All I need you to do is to invest wisely with it and do the same good to someone’s life someday as this is the only way this world would be a better community if we render selfless services to one another.

Be also notified that I will no longer be reading my emails or surfing the internet as I have retired completely from the outside world to my ranch. At this moment I have nothing to do with cars, emails and other luxuries, all further correspondence should be forwarded to the courier company for the delivery of your cheque to you.

Yours Faithfully,
Mrs. Deborah Witt Olivier

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - Money Flow Index or MFI

 

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Money Flow Index or MFI

Money flow index or MFI is a momentum indicator used to gauge the strength of a trend by analyzing the price and volume associated with a security. It is similar to Relative Strength Index or RSI, the difference is it also considers volume, whereas RSI only considers price. MFI measures the strength of money flow in and out of the security and is a comparison of positive and negative money flow. The formula is,





Money Flow Index, MFI = 100 - (100/1 + Money Ratio)
OR
MFI = 100 x (PMF / (PMF + NMF)

Both calculations give the same result. Money ratio, PMF and NMF values are calculated by,

Typical Price = (High + Low + Close) / 3
Money Flow = Typical Price x Volume.
Positive Money Flow (PMF) = Sum of money flow for days where typical price is increased.
Negative Money Flow (NMF) = Sum of money flow for days where typical price is decreased.
Money Ratio = (Positive Money Flow /Negative Money Flow)

Money flow index is represented as a range bound oscillator having a maximum value of 100 and minimum value of 0. It is interpreted the same as RSI, the values above 80 are considered overbought and values below 20 are considered oversold. Divergences of price and MFI are considered more important signals. When price and MFI moves in opposite directions, it indicates the weakening of an existing trend and a possibility of trend reversal. Like RSI, MFI is also widely used with a 14 day time period, but traders can adjust that to get custom results; the lesser the time frame, the more the volatility of the indicator..

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Wednesday, October 14, 2009

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - Trading ETF Options

 

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Trading ETF Options

Like futures contracts on exchange traded funds or ETFs, options contracts on the same are also available. Currently there are around hundred ETF options available for traders. ETF options can serve the dual purpose of limiting the downside risk of holding the ETFs and maximizing profitability. They also allow traders to buy or sell specific ETFs at a point of time in the future.





ETF options are very similar to stock options; the difference is that ETF options track specific exchange traded funds rather than specific stocks. They have all other specifications similar to stocks. Both call and put options are available and all the simple and complex trading strategies followed for trading stock options are also applicable to them.

Advantages of ETF options
  • Options let you fully explore one of the most liquid and diversified trading instruments, ETFs
  • Traders can use them to lock profits, explore short-term and long-term price trends, maximize the return from holding the ETFs or find the right buying/selling opportunities.
  • ETF options are suitable for both novice and experienced traders as a range of trading strategies are available.
  • There is no downside risk compared to directly buying/selling/holding ETFs.
Disadvantages of ETF Options
  • They are not suitable for all types of investors, especially very small-scale traders, and traders who are not comfortable with options & options strategies.
  • The opportunities an option offers depends on many things, like underlying instrument, expiration date, option premium, volatility, etc. Thus it might be hard to find the right opportunity at the right time.
  • The trading costs and option premium should also be considered.

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Tuesday, October 13, 2009

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - NobleTrading Weekly Newsletter, October 12, 2009

 

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NobleTrading Weekly Newsletter, October 12, 2009

The Week Ahead: A Labor Department report shows there are 6 unemployed people for every 1 job opening which is the highest level recorded since this data began 9 years ago. In addition companies looking to hire is also at historic lows. Bond markets are closed for Columbus Day on Monday. The FOMC Minutes from September are released Tuesday. Retail sales and import price data come out on Wednesday. The CPI and jobless claims arrive on Thursday and Industrial Production numbers on Friday.

Stocks to Watch: NCR Corp. (NCR) after a sizeable drop Thursday from the sudden resignation of its CFO rebounded Friday, but it does appear the stock may have peaked for a while. Sunrise Senior Living (SRZ) will sell 21 assisted living communities for $204 million to Brookdale Senior Living (BKD) as both stocks benefited. Regal Beloit (RBC) which manufactures electrical products boosted its Q3 EPS guidance by 33% from earlier estimates. Scientific Learning (SCIL) had strong Q3 earnings and record revenue almost doubling in price before selling off.

Special Note: The Dow Industrials have surpassed the September closing high, but so far has not been confirmed by the S&P 500 or Nasdaq. An alternating pattern seems to be in progress for the main indexes since 2007 with October and November marking high points in '07, low points in '08, and what appears to be a high in development for the same two months this year. Insider selling as a ratio to insider buying is still expanding reaching 44 to 1 in early October.

Commentary provided by Barry Ward, Registered Principal, NobleTrading.com, Inc.

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Saturday, October 10, 2009

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - Trading Technical Corrections

 

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Trading Technical Corrections

Technical corrections are common market phenomena in which the price of a stock (or any other instrument) sharply declines (often to the next short-term support level), and often stocks are revalued with respect to their performances and market expectations. Most technical corrections last for a short-period, the original bullish trend is expected to continue, and thus is considered a very good buying opportunity. However, trading in technical corrections is a very risky strategy because of unpredictability of market movements.

Short and steep technical corrections can be considered good buying opportunities; but trading in long and steady corrections is much more risky. This is because with time, the price of the stocks holding decreases, trading expenses (per share) increase, chances of sharp market recoveries diminish, the cash-flow slows-down, and portfolio allocation and goals can change. The short and steep corrections are also not that much easy, the trader should have good market knowledge, access to info resources and enough experience to time his trades.

  • Although you are trading a short-term correction, prepare for long-term ones—plans for right stop-losses, ways to reduce trading expenses, ways to increase your money-flow, and hedging of risks are needed.
  • Buy slowly till the correction continues.
  • Stick to the basics – right portfolio allocation, no greed, right risk management, move with the market (avoid predicting it).
  • Understand market history, support and resistance levels.
  • Concentrate more on value stocks. This can reduce the risk.

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Friday, October 9, 2009

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - Bearish Deliberation Candlestick Pattern

 

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Bearish Deliberation Candlestick Pattern

Bearish deliberation is a bearish trend reversal candlestick pattern indicating the possible reversal of an existing uptrend and the start of a new downtrend. The pattern resembles bearish advance block pattern and three white soldiers pattern (which is a bullish formation). Bearish deliberation is a three candlestick pattern, formed of all bullish (white or colorless) candlesticks.






Requirements of bearish deliberation candlestick pattern include:
  • The pattern should form at the top of a significant uptrend.
  • The first day is a long bullish day closing at a new high.
  • The second day is also a long bullish day opening within the real-body of the first candlestick and closing above the first candlestick, forming a new high.
  • The third day is also a bullish day characterized by a small candlestick which opens near or a gap above the second day's candlestick.
The long bullish candlesticks of the first two days indicate that the bullish trend is in full swing. But the formation of a small candlestick on the third day indicates that the bulls are losing their strength; at least temporarily. This is a sign of indecision, hence the name deliberation, and as prices are at high levels, trend reversal is possible.

Bearish deliberation pattern is a moderately reliable candlestick formation. Reliability increases with previous uptrend and with shortening of real-body of the third day candlestick. Bearish deliberation pattern is not usually considered a true reversal pattern, but rather as an indicator of possible correction/short-term price decline. Many traders use the pattern to liquidate long positions rather than open short positions. Confirmation of trend-reversal is needed, which can be a bearish candlestick, a lower close or a large gap down opening on the fourth trading day.


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Thursday, October 8, 2009

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Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - Relative Momentum Index Indicator

 

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Relative Momentum Index Indicator

Relative Momentum Index or RMI is a momentum indicator developed by Roger Altman and is used for finding oversold and overbought levels. RMI was created by modifying the Relative Strength Indicator or RSI, one of the most popular momentum indicators. RMI effectively shows overbought and oversold levels as RSI does and it also reduces the inconsistent oscillation of the index between those levels (which is its major advantage over RSI).





Relative momentum index has an additional momentum component than RSI. Instead of counting the up and down days from close to close (as RSI does), it counts the up and down days from the close relative to the close x-days ago; and the 'x' needn't be 1 as RSI requires. The modified formula is

RMI = RM / (1 + RM)

Where RM = average up momentum (over 'n' period) / average down momentum (over 'n' period)

Relative momentum index is interpreted as the same as RSI, in fact with RMI the situations can be better interpreted than RSI. The values range from 1 to 100; values below 30 are considered oversold levels and values above 70 are considered overbought levels. The value of 50 is considered a crossing point for a change in trend. In non-trending market, RMI predictably fluctuates between the oversold and overbought levels (often between 10 and 90). Support and resistance level formations and chart patterns, breakouts and divergences within RMI can be used to enter and exit trades. Like any other momentum indicator, RMI can offer better results when used in conjunction with other indicators.

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Wednesday, October 7, 2009

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Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - ETF Evolution - A Quick Update

 

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ETF Evolution - A Quick Update

Ever since the introduction of the first exchange traded fund (ETF) in 1993, the ETF market has stayed a highly active and attractive market. The market is evolving so quickly; now the market is so much diversified and liquid. Here is one quick update.

  • More than 50 percent of the market is constituted by two big ETF managers, Barclays (through its iShare ETFs) and State Street Global Advisor (through its SPDRs). Together they have around 200 greatly diversified ETFs. Vanguard is the third big ETF manager; steadily growing its market share and is offering a great diversity in their products.
  • Many new players are emerging. This includes many established banks and asset management firms such as PowerShares Capital Management, ProShares, WisdomTree Asset Management, Rydex Investments, Bank of New York, Victoria Bay Asset Management and First Trust Advisors. Many of these ETF managers follow aggressive ETF management strategies rather than traditional diversified low-cost approach.
  • Active ETFs are becoming popular. Leveraged ETFs, Ultra ETFs, Inverse ETFs, emerging market ETFs, sector specific ETFs, Currency/Geography/Commodity specific ETFs, etc are now common.
  • Market consolidation: as new and new funds are coming up and competition increasing, many ETFs - with few assets - are getting eliminated. Besides, duplicate ETFs offered by small firms are less preferred. The consolidation process will continue as performance histories of new ETFs become available to traders.
The great diversity in ETFs has provided more choices to investors, but the choice is rather simple. When choosing an ETF to include in the portfolio, one should be clear about its management, his portfolio goals and risk tolerance.

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Tuesday, October 6, 2009

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Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - Weekly Stock Trader Newsletter, October 5, 2009

 

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  1. Weekly Stock Trader Newsletter, October 5, 2009
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Weekly Stock Trader Newsletter, October 5, 2009

The Week Ahead: The unemployment rate creeps up to 9.8% with over 7 million jobs lost since December of 2007. The U-6 unemployment rate now tops 17%. The Fed's expected to keep rate hikes on hold for a while. Watch the consumer credit report on Wednesday, and the kick-off to earnings season for the third quarter with Alcoa (AA) reporting first. Chain store sales figures are released Thursday along with wholesale trade numbers and the weekly jobless claims. The week ends with the August trade balance report.





Stocks to Watch: PNC Financial Services (PNC) received a downgrade by a major brokerage on concerns that earnings estimates are too high. Like many volatile bank stocks this one has tripled its March low. Invesco (IVZ) is seen as the leading contender to acquire Morgan Stanley's Van Kampen Fund business. Amdocs Limited (DOX), a software company, received a downgrade by BoA/ Merrill Lynch because it sees little upside from current price levels. The Steifel Nicholas brokerage is upbeat on Nu Skin Enterprises' (NUS) anti-aging product.

Special Note: The support line drawn off the March and July lows has been breached on the S&P 500 and Nasdaq Composite indexes. The Dow Industrials is the only hold out of the three.. This doesn't preclude another rally to a higher high, but diminishes the bullish momentum in the markets achieved until now from the March low. The topping process is complete or nearly so with the potential of one more zigzag higher to the 10400 level on the DOW by January, but this is far from certain. The area surrounding 9000 is the next significant area of support.

Commentary provided by Barry Ward, Registered Principal, NobleTrading.com, Inc.

Click here to Open an Account.

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Monday, October 5, 2009

PLEASE DO NOT IGNORE!!! Contact: Email: (helpetters@colegas.com)

Dear Friend,
I am Mrs. Elizabeth Etters from Iceland, married to Late Engr Brown
Etters {PhD} who worked with MULTINATIONAL OIL COMPANY EXXON AS A
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child. He died after a brief illness that lasted for only four
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Dollars with a bank In Canada and this fund is presently with the bank
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Recently, my Doctor told me that I would not last for the next Eight
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l took this decision because I don't have any child that will inherit
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transfer.Upon your reply I shall give you the contact of the bank. I
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you the present beneficiary of this money. Reply to my very
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Await your responds and God bless you.
Mrs. Elizabeth Etters
Email: helpetters@colegas.com

I am Mr.Vincent Cheng Hoi Chuen,GBS,JP Chairman of the Hong Kong and Shanghai Banking Corporation Limited. Sensitive proposition, confidential from Hong Kong and I am urging your partnership.(officeofcheng_101@yahoo.com.hk)

Saturday, October 3, 2009

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - What is Risk Repricing?

 

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What is Risk Repricing?

Risk repricing, or risk based repricing, is a market process similar to price corrections; but here correction takes place according to the risk of holding a security. Risk repricing usually occurs in/at the end of a long bull or bear market. Strong market movement in one direction can lead to poor estimates about the risk of holding a stock or bond. As risk should match return, an eventual repricing occurs which can be noticed by widening or tightening of the spreads.

The basic idea behind risk repricing is that different instruments have different levels of risks and high risk investments offer higher returns. The risk of holding/trading a security is determined by many factors such as its price, liquidity, historical performances, future performance expectations, and other economical, political and natural factors. Often, this risk is poorly estimated. For example, in a strong bull market a high risk stock of a company can be as liquid as a blue-chip stock; the price can rise quickly and with tight spreads. But once investors realize that this stock holds more risk (or when they get poor returns), risk repricing can occur which is evident by the declining prices, widening of spreads, low trading volume/low buying demand.

One recent example of risk repricing occurred during the 2007 subprime market fall, when investors realized that the mortgage backed securities (MBS) were riskier than they had believed them to be. This led to the demand for higher return (risk premium), and widening of spreads. As the financial performances of these securities are at doubt and as their valuations do not justify their risks, the downward repricing started.

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Friday, October 2, 2009

Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - Bearish Side by Side White Lines

 

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Bearish Side by Side White Lines

Bearish side by side white lines is a bearish trend-continuation candlestick pattern indicating the continuation of an existing downtrend, even after two bullish days. This is a three candlestick formation comprising one bearish (black/colored) and two bullish (white/colorless) candlesticks. Bearish side-by-side white lines pattern is a very rare formation.







The requirements for bearish side by side white lines candlestick pattern include,
  • The market should be characterized by a significant downtrend.
  • The first day is a long bearish day
  • The second day is a bullish day which opens a large gap below the first candlestick and closes below the first day's closing price
  • The third day is also a bullish day which is very similar to the second day candlestick (almost same opening and closing prices)
Bearish side-by-side white lines formation occurs as a result of short-covering of positions. The long bearish candlestick on the first day indicates that the bearish trend is still strong. This strong downtrend also results in a gap-down opening on the second day. Although the prices rise on the second day, the candlestick does not completely fill the gap. On the third day, the prices again open lower (close to second day's opening) and again fail to fill the gap. This creates the feeling that the bulls are unable to control the market and the downtrend should continue.

Bearish side by side white lines is a moderately reliable pattern. The reliability increases when the upper shadows of the second and third candlestick do not reach up to the real-body of the first day candlestick. Confirmation of trend-continuation is needed which can be a bearish candlestick, a gap down opening or a lower close on the next trading day.

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Thursday, October 1, 2009

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Stock Forex Market Trading Blog, Daily Trading Blogs for Traders - Comparative Relative Strength Indicator

 

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Comparative Relative Strength Indicator

Comparative relative strength indicator or CRS indicator is a simple yet effective indicator for finding profitable trading opportunities. The indicator simply compares the performance of two securities/sectors/markets, or a security with the market or sector. CRS is calculated by dividing the first security price by the second security/market (known as base security or benchmark) price.





CRS = First Security Price / Base Security Price

Comparative relative strength is also an easy to interpret indicator.
  • When CRS is moving up, the first security is performing better than the base security.
  • When CRS is moving sidewise, the first and base securities are performing the same (same volatility).
  • When CRS is moving down, the first security is performing worse than the base security.
Comparative relative strength indicator is widely used by traders to develop spreads; to buy the outperforming security and to sell the underperforming security. It can also be utilized for better portfolio tuning to maximize returns. CRS indicator is helpful for all kinds of traders trading all kinds of securities - stocks, options, ETFs, mutual funds, futures and forex currencies.

Footnote: Comparative relative strength indicator is totally different from Relative Strength Indicator or RSI. The latter is used to find oversold and overbought levels.

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