Technical Charts – Secrets of the Pros

Technical charts are among the best tools used by professional traders to make a good profit out of their investments. These charts help the trader recognize some patterns and trends in the prices so they can make wise predictions based on technical analysis. It is not just a beginner’s way of getting a feel for the market; even professional or experienced traders refer to their charts before making a major trading decision.

What are these charts like?

A technical chart is basically a graphical representation of how a security or commodity is doing in the market for a certain period of time. A trader may refer to existing charts that are based on recent trading history of the currency of interest. Fortunately, the Internet offers some of these technical charts. If the trader keeps close watch of the market, he or she can plot the points himself or herself. Of course, the trader can make use of a special software that can generate the graphs on the computer. The trader only needs to supply the data needed and pick what type of technical chart he or she prefers.

What can technical price charts do? Continue reading “Technical Charts – Secrets of the Pros”

Three Ways to Invest in Gold and Silver

Making the decision to start investing in precious metals is a smart one, but it is only the first step. The next decision you will need to make is how to purchase your gold and silver. You have more than one option, each with its own advantages and disadvantages. In this article I’ll cover the three basic ways you can start adding gold and silver to your investment portfolio.

Mining Stocks. The first way is the simplest and the most common. This is how your investment advisor would probably advise you to invest in gold and silver, by buying the stock of companies that explore and mine precious metals. When most people think of investing they think of buying stocks, bonds and mutual funds through either their 401K or Individual Retirement Accounts (IRA’s), which makes this option seem like an easy choice. There are several gold and silver mining companies whose stocks are traded on one of the stock exchanges. There are also mutual funds that specialize in various segments of the mining industry – gold, silver, platinum and even the more exotic metals. Buying gold by investing in mining stocks is an indirect way of diversifying into the precious metal field and it has the advantage of being easy and familiar – buying one stock is just like buying any other.

As the demand for hard assets increases this can be a very profitable way to diversify your investment portfolio and take advantage of the relative strengths of the precious metals market. The chief disadvantage is that individual mining stocks often move with the general stock market which might not correspond with the price of the metal. The situation might arise where gold and silver are rising in price while the mining stocks are going down. Continue reading “Three Ways to Invest in Gold and Silver”

A Beginners Guide to the Gold Market

Throughout the human history, gold was considered to be one of the most reliable and valuable currency. It clearly established its domination over other currencies irrespective of the cultures and empires that prevailed. Gold was often referred to as an international currency and it still remains that way even today. This wide popularity has turned the gold market into a very lucrative investment sector for people across the world. They have made direct and indirect investments into this sector. This has also caused the entry of a large number of online websites and established companies into the gold market.

A general fact to note here is that the gold price is not determined by a single nation or community. Therefore, gold was able to put up a consistent performance throughout these years. Consistency is one factor that has always been a trade mark of gold currency. So, many international traders use gold as their currency. All these unique advantages that gold possess has made people to make decisions in favor of gold investment. Since, this is a highly complicated market one would require the assistance of experts.

Even though, investment in gold is relatively safe, it is not free from all potential dangers and risks. One should be well prepared and informed before setting out to invest in this market. There are various forums and discussion boards on the internet where one can obtain a lot of vital information on the trends and throbs of the gold market. People who have prior experience with other investment markets would soon discover that the gold market is entirely different from the others. Continue reading “A Beginners Guide to the Gold Market”

The Limit and Stop-Loss Orders – Making Good Use of Market Orders

Are you planning to invest your money in trade? You might be considering futures trading as one of the options for your business venture. However, before fully participating into the futures trading system, it is important to read and search through information that can be useful once you start your trade. Specifically, in the futures market, two major concepts about orders have to be understood by traders. These two concepts include limit and stop-loss orders.

How Does Limit and Stop-Loss Orders Work?

Stop-loss orders are used at a certain price and if the market price amounts to the order price, the order will be considered as a limit order. Hence, stop-loss orders are intended to limit or regulate the amount that a specific trade can lose, which is usually done by making a trade exit if the target price is reached. For instance, an investor may enter a long trade of $4,000 and would place a stop-loss order on $3,950. From this price range, the trader will make a risk in speculating the commodity in fifty points less. If the price will be less that $4,000, the trader will exit in the trade and limits the loss. Stop-loss orders are generally used in futures trading to regulate the loss and manage risks if the trader is in doubt of his price speculation. Continue reading “The Limit and Stop-Loss Orders – Making Good Use of Market Orders”

Why Macro Trading?

Like most investors we started out as plain vanilla stock traders. Initially we did value investing and then over time gravitated more over to momentum/CANSLIM investing with a twist. We wanted higher and more consistent returns so we kind of blended some value principles into the momentum investing and ended up with a GARP-growth at a reasonable price methodology. By demanding at least some value we were able to lower our risk profile quite a bit and didn’t really give up any of our gains. In fact the equity curve was very smooth for some time.

Of course most good things come to an end and we found that in the summer of 2000 we were getting tired of being almost entirely out of the market and not being able to make money. So we started doing a lot more work into who and what was making money. In the stock arena some of the value guys were starting to do well and the short sellers of course did great. But what really got our attention was when we looked at different markets and hedge fund performance tables. The number one strategy was global macro trading and we saw several well known names on the list. Bruce Kovner at Caxton, Paul Tudor Jones at Tudor, and Louis Bacon at Moore were all doing well with smooth equity curves. Continue reading “Why Macro Trading?”

Using Macro Trader Themes in Your Investments

The average investor suffers from many problems. They pay higher fees, they get less information, they aren’t as educated in regards to investments, etc. Basically they are for the most part at a huge disadvantage to the professional investor. One of the great issues is that of not having and sticking to a vision. Most investors think that their portfolio is structured well and that they are in a good position to profit from their long term views. The truth is that most of the time the portfolio has drifted so far away from the original idea that an outsider looking in would have no idea what the investor is going for.

Say for instance that you have a long term view that emerging markets will continue to grow. How can you assemble a portfolio to take advantage of this? And how do most investors drift from this? Most investors will put together the portfolio and then the moment that one of the positions is down they will sell it and then go find some new stock that they just saw on TV. What happens is that over the span of a few months their portfolio is not represented of their long term views.

So how do you assemble and manage a portfolio to profit from your long term views? Well taking the example of emerging market growth you would look at going long several of the different emerging market country ETFs. You might buy some Brazil, Russia, India, China, Chile, South Korea, etc. Or you might just buy an emerging market ETF and then buy some of the individual country ETFs where you see even more opportunity. Continue reading “Using Macro Trader Themes in Your Investments”

Investing in Gold For Beginners

You want to diversify where your savings are deposited? How much should you invest in gold? Should you buy this and take delivery?

Here I offer 5 tips for the new Investor in this precious metal.

1. How much should I invest?

This is a personal decision, but most commentators would recommend anything from 5 – 25% of your wealth should be in gold. It depends on how ‘bullish’ you are. This metal is an insurance for the bad times and it will never go to zero in value. Many other investments have that possibility.

2. How much bullion should be in my possession and how much in a vault?

It is sensible to have some physical bullion in your possession. The ratio is yours to decide. Small bars and coins are the best option. You can buy small tradable pieces (or coins). Always buy pure 9999 coins.

For bullion storage try some of the better known gold and silver bullion companies. Make sure the company matches your investment with the actual physical gold.

3. Where do I store my physical bullion?

Most people buy a safe and install it in a secure place in their home. Others put it into Bank Deposit boxes. Or you can split between the two. With some companies you can opt to store your pieces in a secure vault in Switzerland. Continue reading “Investing in Gold For Beginners”

Green Investing Strategies

Investing in “green” companies has become popular as people have become more aware of environmental issues such as peak oil and global warming. But just as investing in “dot coms” during the 90s was the trend of the times, “green” is also a trend and should not be taken as an indicator of guaranteed profits. In fact, investing in “green” companies can be quite risky due to under-capitalization and lack of operating history due to their start-up status. But you can reduce the risk by investing in established companies that are strategically adding green methods and systems to their existing business models. Here are a few industries to consider.

Existing energy companies across the globe are researching and developing alternative fuels. All of the major oil companies are expanding into wind, solar and geothermal energy systems. And local utility companies across the United States are already introducing wind and solar power options to their customers. As many states make tax credits available to residents for installing solar panels, local utility companies are creating energy buy-back programs that should be effective in increasing profitability. Continue reading “Green Investing Strategies”

Investing in Gold Coins

In today’s turbulent economy, one thing is for certain, gold coins are a good investment. Since the days of the ancients, gold has been used to bolster economies, and now you can do the same for your coin portfolio. By having gold coins as part of your portfolio, you are assured the overall value of your collection will increase as the price of gold increases. Precious metal coins can be purchased with ease these days, as they are available on the internet. Gone are the days where you would have to find a reputable coin shop.

Simply by going on eBay you can find a vast number of gold coins. Some of the more popular gold coins are American gold quarter eagle, eagles, and double eagles. Of course, the most popular of those is the St. Gauden’s Double Eagle, which depending on the dates, can fetch up anywhere between, $1000-$20000. A St. Gaudens Double Eagle from 1933 sold for a record $7.5 million dollars in 2002, the highest price ever paid for a coin.

Here is a list of the top 10 reasons to invest in gold coins:

1. Coins is Liquid, remember, bullion is Liquid. You can sell you precious metal coins pretty much at any time and anywhere and get cash.

2. You a virtually assured a profit. As an investment, gold continues to increase in value. In January, 2004 your were paying about $400 per ounce, in 2008 your were paying about $900 per ounce, simply a great investment. Furthermore, coins can become scarce, especially older coins from the 18th and 19th centuries. Continue reading “Investing in Gold Coins”

Saving for Retirement

Most of us are looking at the social security system and have been notified already that full benefits will not be available to us until sometime significantly past the 65 years old benchmark. Some of us are looking dubiously at the likelihood of ever getting a social security benefit based on the baby boomer generation reaching retirement age. Remember one thing……it’s never too late to start saving.

Saving for retirement has some tax advantages. In lower income situations, there is a retirement savings credit. For some people they can obtain a “match” of their contributions to a certain % of the monies they save. Look at this “match” as free money. You get it for doing something that you would have done anyway. If you have a matching situation in your 401(k) or profit sharing plan, if you don’t participate, you are passing up this “free money” opportunity. Additionally, you may deduct an IRA contribution to a traditional IRA investment account if certain criteria are met. Continue reading “Saving for Retirement”