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”

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”

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”

Easy Gold Bullion Investing

Right now you’re probably thinking that gold bullion investing is something best left to the pros. Yes, the majority of traders making noise are professional investors. But there are some easy ways to get into the bullion market, and gold could be a good investment for you. Of all things to invest in, gold is probably one of the most liquid investments. And much unlike many of the other commodities, it is literally traded 24 hours a day everywhere in the world. This means you can buy and sell gold in about any country.

Mom always said to not put all your eggs in one basket, and this is why gold should form the foundation in your overall investment portfolio. If you have only paper in your portfolio, know that gold tends to move in the opposite direction of paper investments. It really stands out as a diversifier. With your stocks, bonds and cash, gold can help offset fluctuations in the market. There are a lot of financial advisers that recommend having 5 to 10 percent of gold in their portfolio.

A real good way to get into the gold bullion market is by investing in the American Eagle. This coin is the only bullion coin whose weight, content, and purity are backed by the United States government. Think of the confidence you can have buying them. American Eagle gold coins require no assaying and they can be converted to cash at any moment. Simple to keep track of, American Eagles are tied to the spot gold price, plus a small premium to cover mintage and distribution. Continue reading “Easy Gold Bullion Investing”

FOREX Day Trading – Do it and Lose Your Money Quickly!

Day trading is a mugs game – in FOREX currency markets, traders who make day trades instead of following the long-term trends, are making a serious mistake – risk/reward is terrible by comparison.

The Internet is full of brokers and vendors encouraging traders to day trade – and offering “sure fire” day trading systems – which is no surprise, as they mostly have a vested interest – they are making more commission!

Don’t get sucked in by the hype surrounding currency day trading.

You make the big money from the big trends – it’s the big trends that yield the big profits.

There are several day trading FOREX myths, and here are the most common ones: Continue reading “FOREX Day Trading – Do it and Lose Your Money Quickly!”

The Difference Between Investing and Trading

Investing and Trading are not the same thing. The returns you seek, the length of time it takes to achieve those returns, the amount of risk one is prepared to take, and the commitment one can make to monitor the investments dictate the strategy of whether to invest or trade.

Investing

Investing is holding an asset for a longer term, expecting it to increase in value. The most common example is investing in equity mutual funds through a retirement plan. Many of these funds are held for years and are expected to show a substantial
appreciation over the long term.

You can also invest in individual stocks and hold them for 6 to 18 months or longer, sometimes much longer. This is referred to as the “buy and hold” strategy. Continue reading “The Difference Between Investing and Trading”