Learn More About Day Trading Strategies

By Suzanne

The term Day Trader refers to a person who buys and sells stocks (or any market) in the same day, investing huge amounts of money to cash in on small fluctuations in the prices of stocks and indexes that are highly liquid and volatile. Certain stocks are suitable for Day Traders, liquidity and volatility are the two most essential aspects that are looked at by Day Traders.

The essential elements of successful Day Traders are, Excellent trading psychology and mental state management, Proven money management systems, Proper tools and training, Profitable trading system. There is a certain amount of risk involved in every trade. The risk increases for those without sufficient knowledge and training.

Day Trading used to be practiced generally by financial firms, investment bankers and speculators. However, with new leaps in technology and the introduction of electronic trading and margin trading, it has become more popular with casual at home traders.

There are many styles within Day Trading. Many focus on short term trading, as in they close all their transactions before the close of the day to avoid all unmanageable risks. Others focus on price momentum. While yet some others lay emphasis on technical patterns. Day Traders often borrow certain amounts of money to trade. This is called Margin Trading.

Some of the strategies followed in Day Trading are discussed here:

* Trend Following - This basically follows the principle that prices of stocks once rising will always be rising, and vice versa.

* Contrarian Investing - This follows the principle that prices that have been soaring will reverse and prices that have been falling will go up.

* Range Trading - This is based on keeping record of stocks and seeing the range in which they fluctuate. Thus stocks are brought when they are at a low and sold off when they reach their peak.

* Scalping - This is a trading style where traders buy stocks that are on the rise and sell them off in minutes or seconds to get the profit instantly. This basically exploits the market when the market is volatile.

* Rebate Trading - This technique involves trading low priced stocks in huge amounts which helps them trade more shares and have more liquidity. This uses ECN as the primary source of profit.

* News Playing - This is the most important aspect which Day Traders exploit. Often there are rumors in the market of stocks going up or falling and these have to be understood by the Day Traders and stocks are bought or sold off in accordance to maximize their profit.

It is estimated that around 90% of Day Traders fail or lose their capital and it is a hard discipline. However, with the advent of newer technologies and statistics it has become somewhat stable. For a good Day Trader the most important aspects are good training, a proven system, and managing emotions. - 23211

About the Author:

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Choosing A Profitable Forex Trading System

By Mark Thomas

In this business world, one will eventually find his way to success if he is able to depend on himself and not on other people. A businessman who does not rely on other people will be able to generate big profits. If you are a trader, you should learn how to create your own profitable forex trading system. Even if you are a novice, there are easy ways on how to build one all on your own.

A forex system will be very efficient if you are able to make the system simple. Do not go for those that are complex with lots of rules. This is because you are the only one who will need to keep up with the rules by yourself. Instead of utilizing such system, go for the ones that are truly simple because these have been confirmed that they are very effective and there is lesser chance that you will come across those times when you will fail.

Your system should be able to create more income and help you sever those losses. You are engaged in a business so this means that your major goal is to have steady cash flow and not waste them. Your profitable forex trading system should be focused on a longer term so that you will know the big trends that can help you capitalize on your cash flow and decrease the chances of deficit when it comes to profits. Another reason why you have to generate a long term arrangement is because it is not suggested for traders to go for ones that induce small profits like day trading. This is because you will never be able to hide the losses that are expected once you have come into the tough world of trading. You should only ponder on the long term ones since they will assist you in yielding additional production not just in one month but in terms of years..

You need a robust and healthy management system and you should be able to spot the opportunities whenever they appear in front of you. What you should do here is to look for the weekly trends and once you have done so, proceed with the daily charts and lastly to the time entries. For most successful traders, the best way for them when trading currencies is through the breakout method, which occurs in all the forex markets worldwide. You also need forex tools so that it can help you time your entry and eventually take profits. There are a lot of programs that are available for download today and some of them have filter indicators.

Deciding that you want to use the breakout method, expect one of the possible things that can happen. First, one is that everything is in your favor, meaning that you are successful in your venture while the other is that the trend is against your market. If it happens that it is false, you must have the ability to manage money. You can do this by exiting the market and then use the day session monetary stop. - 23211

About the Author:

Mark Thomas, have developed a unique software tool called Trade On Track, which helps the Traders to Trade with Confidence , Security and Accuracy. To know more about Trade and useful tips on Trading, just log on to http://www.tradeontrack.com

Factors That Affect the Forex Markets in the Short Term

By Hass67

There are two types of forex traders. One type of traders depends on fundamental analysis in trading forex. The second type of traders depends on technical analysis in trading forex. Whether you are a fundamental trader or a technical trader, you should not underestimate the importance of economic data in shaping trading strategies.

USD is the most important currency in the world. 90% of currency transactions are done in USD. In almost most of the currency trades, USD is either the base currency or the counter currency.

Since majority of the currency trades involve USD, you as a forex trader will also most probably trade USD most of the time. Release of certain economic data has significant and lasting impact on currencies like USD.

You should know as a forex trader that currency markets reaction to the release of different economic data with time also changes. Some years back, US GDP figures used to be important for US Dollar but dont have much impact in recent years.

EUR/USD is the most liquid pair in the forex markets. The release of Nonfarm Payrolls (NFP) on the first Friday of every month is the most volatile day for this pair and other pairs involving USD as a base or counter currency.

Similarly, a few years back the release of US housing sales number every month was not important for the currency markets. But it has become very significant for USD in the recent years. Currency markets used to give more importance to US Trade Balance in the past but they dont react to these figures much now.

If you depend on range trading as a trading strategy, you should avoid the day NFP data is released for trading. This is a highly volatile and jittery day for the forex market.

However, as a breakout trader, understanding of which economic data is expected to be released can help you in your trading. You should plan your trades in accordance with the importance of the economic data to be released.

In brief, knowledge that certain economic indicators make the forex markets move most is important for you as a trader. It is also important for you to know that particular economic data, the market considers most important at any point in time.

You should also understand which economic data causes knee jerk reaction in the currency markets and which pieces of economic data will have lasting reaction in the currency markets. - 23211

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading; stocks and forex. Read about Trend Forex System. Best Forex Signal Service. Learn Forex Trading.

Option Trading Gives You Better Returns

By Dr. Asoka Selvarajah

Option trading demystified

You can enter the stock market with a minimum of investment and still get a bigger return on your investment if you go in for option trading. In option trading you pay a premium to give you the right to buy or sell some shares in the future. You can then buy or sell those shares within the time specified at the price decided. You are obliged to make the purchase or sale within the specified time or risk the forfeiture of the premium paid.

During that time you are free to complete the purchase or sale at the price decided initially. If you do not honor the contract the premium that you pay can be lost. Time period in option trading contracts are generally about a month and are settled at dates that are fixed by the stock exchanges that could be the third Saturday of the month. Once this period is over, as an option trader you have lost all rights to make the trade and your premium remains forfeit.

Concepts

You would have to be deeply involved in stock market trade to understand the difference between stock trading and option trading. If you as a newcomer still want to be involved in option trading you must make an effort to understand terminology used and the ideas behind the concept. The terms by used by traders in option trading are quite specific and have their own meanings. When you go in for option trading you would have to decide a price for the stock you want to trade in , the number of shares, and the time period in which you would make such a trade.

The option trader who buys options has no obligation to act whatsoever, and is only obligated to pay the premium to buy the option in the first place. He retains the right to exercise his options in the future, should the opportunity arise and should he wish to do so. The option "exercise price" locks in the specified price at which the underlying stock can be bought or sold for the lifetime of the option. If you are the owner of a call option, giving you the right to buy stock at the exercise price, and the stock price rises above the exercise price during the lifetime of your call option, you can exercise your option to acquire the stock at that exercise price instead of the prevailing price in the market, which may be far higher. In other words, you are buying stock cheaper than the market value.

The stock price may drop or just remain lower the exercise price, the buyer of call option cannot use at all, but can also sell the option and in that way exit the position at a loss or breakeven. Instead, he can hold onto it with the hope that there will be rise in the option of the market value, by depending upon factors such as volatility, expiry time and much more.

Usually, the options of leverage can control a bulk amount of the original stock for relatively small capital expenditure compared with buying or selling the underlying tool. This makes options more attractive because there exists higher profits on investment than just trading the original instrument. There are also far more trading opportunities with lower risks that can be known only when you know what you are doing?

What do the words mean?

Blocks of 100 shares are considered for option trading.

The buying option of the underlying instrument at the strike price is referred to as a call option.

The selling option the underlying instrument at the strike price is referred to as a put option.

Strike price: This is the price of the stocks for agreed on when the option trading contract is made.

In the money: When the strike price is below the existing price of the stock and you exercise a call option, and when the strike price is above the existing price of the stock and you exercise a put option.

Similarly, if while option trading, you own calls and the strike price is higher than the current market price, your call options are said to be "out of the money". With put options, you are "out of the money" if your strike price is lower than the current price. - 23211

About the Author:

Which Of These 7 Deadly Mistakes of Online Trading Are You Making Right Now? Get Dr. Asoka Selvarajah's critical Free Report, The 7 Deadly Mistakes Of Online Trading and surge your trading profits, starting today. Visit His Online Trading Site OnlineTradingRebel.Com Right Now!

June of 2010 is the Date for Changes in Medicare Supplement Insurance

By Derrick Johnson

Medicare Supplement Insurance is sometimes referred to as Medigap or Medigap Insurance. Medicare Supplement or Medigap plans fill the gaps in Original Medicare program. Medigap Insurance should not be confused with Medicare Advantage because that is a separate program.

Medigap plans will be affected by the changes taking place in June of 2010 so you should learn about these changes now.

The new changes in Medigap or Medicare Supplement Insurance were put forth by the National Association of Insurance Commissioners. The purpose of these new rules was to protect consumers. The new Medicare Supplement changes remove duplicative benefits and add additional coverage.

The current supplemental Medicare plans have been in existence since the early 1990s and have become outdated. Many of the existing plans offered coverage from which the consumer received no benefit. The National Association of Insurance Commissioners NAIC felt that it was time for change.

Changes taking Place on June 1, 2010 are as follows:

1. Plan E, Plan I and Plan J are being eliminated.

2. Plan G currently covers 80% of doctors overcharges and will change to cover 100%. Benefits for Home Confinement will be eliminated.

3. Co-payments will be required in two new lower cost plans. They will be called Plan M and Plan N.

4. Plans A and Plans C and F must be sold by all insurers offering Plan A.

5. A hospice benefit will be included in all new plans being released.

The new changes do not affect only a certain number of plans. The situation is not what was originally thought. The old plans will no longer be available for sale in addition to the new plans being created.

All companies will be allowed to reset rates with the introduction of the new plans. This means companies that are no longer competitive will be able to reset pricing. This will create a more competitive marketplace. The reason that they are able to do this is that all new plans must include a Hospice benefit.

The proposed changes are good for consumers aging into Medicare and healthy people already protected by Medicare Supplemental Insurance. What about those unhealthy seniors stuck in the old plans? Because no more of the old plans are being offered, premiums in these plans may greatly increase and unhealthy seniors cant change plans.

Availble options should be investigated by all retirees as soon as possible. The existing Medicare agent would be a good place to start or they could try to find a new agent. The Internet is a great place to research Medicare Supplement Insurance. - 23211

About the Author:

DJ and his company are experts on Mutual of Omaha Medicare Supplement Insurance and AARP Medicare Supplement Insurance and can be reached on his company website.