Wednesday, 22 July 2015

Mastering Short-Term Trading

Mastering Short-Term Trading

Short-term trading can be very lucrative, but also risky. It can last for as little as a few minutes to as long as several days. To succeed at this strategy, traders must understand the risks and the rewards of each trade. They must not only know how to spot good short-term opportunities, but also must be able to protect themselves from unforeseen events. In this article, we'll examine the basics of spotting good short-term trades and show you how to profit from them.

The Fundamentals of Short-Term Trading
Several basic concepts must be understood and mastered for successful short-term trading. These fundamentals can mean the difference between a loss and a profitable trade. Let's take a look at these vital principles.

Recognizing Potential Candidates 
Recognizing the right possible trade will mean that you know the difference between a good potential situation and the ones to avoid. Too often, investors get caught up in the moment and believe that if they watch the evening news and read the financial pages they will be on top of what's happening in the markets. The truth is, by the time we hear about it, the markets are already reacting. So, some basic steps must be followed to find the right trades at the right times. 

Step 1: Watch the Moving Averages
A moving average is the average price of a stock over a specific period of time. The most common time frames are 15, 20, 30, 50, 100 and 200 days. The overall idea is to show whether a stock is trending upward or downward. Generally, a good candidate will have an increasing moving average that is sloping upward. If you are looking for a good short, you want to find an area where the moving average is flattening out or declining. 

Step 2: Understand Overall Cycles or Patterns
Generally, the markets trade in cycles, which makes it important to watch the calendar at particular times. Since 1950, most of the stock markets gains have occurred in the November to April time frame, while during the May to October period, the averages have been relatively static. Cycles can be used to traders' advantage to determine good times to enter into long or short positions

Step 3: Get a Sense of Market Trends
If the trend is negative, you might consider shorting and do very little buying. If the trend is positive, you may want to consider buying with very little shorting. The reason for this is that when the overall market trend is against you, the odds of having a successful trade drop even more.
Following some of these basic steps will give you an understanding of how and when to spot some of the right potential trades.

Controlling Risk 
Controlling risk is one of the most important aspects of trading successfully. Short-term trading involves risk, so it is essential to minimize risk and maximize return. This requires the use of
 sell stops or buy stops as protection from market reversals. (A sell stop is a sell order to sell a stock once it reaches a predetermined price. Once this price is reached, it becomes an order to sell at the market price. A buy stop is the opposite. It is used in a short when the stock rises to a particular price and it becomes a buy order.
Both of these are designed to limit your downside. As a general rule in short term trading, you want to set your sell stop or buy stop within 10-15% of where you bought the stock or initiated the short. The basic idea here is to keep the losses manageable so that the gains can always be considerably more than any losses you may incur.

Technical Analysis
There is an old saying on Wall Street: "never fight the tape". Whether most admit it or not, the markets are always looking forward and pricing in what is happening. This means that everything we know about earnings, the management and other factors is already priced into the stock. Staying ahead of everyone else requires that you use technical analysis to understand what is going on.
Technical analysis is a process of evaluating and studying the stock or markets using previous prices and patterns to predict what will happen in the future. In short-term trading, this is an important tool to help you understand how to make profits while others are unsure. Below we will uncover some of the various tools and techniques of technical analysis. 

Buy and Sell Indicators 
Several indicators are used to determine the right time to buy and sell. Two of the more popular ones include the
 relative strength index (RSI) and the stochastic oscillator.
The RSI compares the inside strength or weakness of a stock. Generally, a reading of 70 indicates a topping pattern, while a reading below 30 shows that the stock has been oversold.
The stochastic oscillator is used to decide whether a stock is expensive or cheap based on the stock's closing price range over a period of time. You will see a reading of 80 if the stock is overbought(expensive); when the stock is oversold (inexpensive), you will see a reading of 20.
RSI and stochastics can be used as stock-picking tools, but you must use them in conjunction with other tools to spot the best opportunities.

Patterns 
Another tool that can help you find good short-term trading opportunities are patterns. A pattern is a change in direction up or down in the price of stock and reflects changing expectations. Patterns can develop over several days, months or years. While no two patterns are the same, they are very close and can be used to predict price movements.
Several important patterns to watch for include:
  • Head-and-Shoulders PatternsThe head and shoulders is considered one of the most reliable patterns. This is considered to be a reversal pattern when a stock is topping out. (For additional insight
  • TrianglesA triangle is when the range between the highs and lows narrows. These occur when prices are bottoming or topping out. As the prices narrow, this will signify that the stock could break out to the up- or downside in a violent fashion.
  • Double TopsA double top occurs when prices rise to a certain point on heavy volume and then retreat. You will then see a retest of that point on decreased volume. At this point, a decline will take place and the stock will head lower.
  • Double Bottoms: A double bottom is when prices will fall to a certain point on heavy volume. They will then rise and fall back to the original level on lower volume. Unable to break the low point, prices will then start to rise.
Conclusion
Short-term trading uses many methods and tools to make money, however, you must know how to apply the tools to achieve success using this type of strategy. If you can do this, you will be able to make money in both bull and bear markets while keeping your losses at a minimum and your profits at a maximum. This is the key to mastering short-term trading.



Sunday, 19 July 2015

Reasons to Promote Plus500

Main values to promote for the Plus500 Brand

Plus500 affiliates are Brand Ambassadors for the Plus500 Trading Platform. Affiliates represent us and should conform to our policies, values and vision.

A reliable Trading Platform – When it comes to financial products, strength and reliability might be the first values to promote. Always remind customers that Plus500 is authorized and regulated by well-regarded financial regulators: Plus500UK LTD is authorised and regulated by the Financial Conduct Authority. Plus500 CY LTD is authorised and regulated by the Cyprus Securities and Exchange Commission. Plus500 AU LTD is regulated by Australian Securities and investments Commission. Plus500 LTD is also listed on the London Stock Exchange and follows best practice corporate governance.

Suitable for everyone – Plus500 is the most easy to use trading platform out there yet it includes advanced features attractive to experienced traders. CFDs are “complex financial products” so can only be marketed to people with previous experience of financial markets.

Diversification in trading– Plus500 traders can trade CFDs with over 2,000 instruments (Shares, Indices, Commodities, Forex, and ETFs) across over 20 different markets worldwide.

Localization – Let customers know and feel that Plus500 offers a full service in his language and currency (Plus500 is available in 50 markets and 31 different languages) regardless of his location.

Trade on the go – In today’s hectic daily routine, Plus500 traders know they can keep trading wherever they may be. Plus500 offers application platforms for a full range of mobiles and tablets especially for the busy trader.

Try it first – Plus500 offers a free (unlimited by time) demo version.


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Usability5 stars
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Remember that CFDs are a leveraged product and can result in the loss of your entire deposit. Trading CFDs may not be suitable for you. Please ensure you fully understand the risks involved.
Company NamePlus500Cy Ltd.
Websitewww.plus500.com
HeadquartersLimassol, Cyprus
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Instruments available to trade CFD's:Forex, Stocks, Commodities, Indices, ETF's
PlatformsSoftware, Web trader, iPhone app, iPad app, Android app, other mobile versions.
Instruments available to tradeClick here to view
Demo AccountUnlimited time
Welcome bonus (No deposit required)£20
First deposit bonusUp to 30%
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Minimum deposit£100
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Maximum Leverage1:294
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Sunday, 11 November 2012

Have you heard of ETORO

One of the most important aspects of trading forex is to understand the important terminology that is used. When traders learn this terminology, they can better understand what is happening in the market. Basic definitions can be easily found when traders search for them on internet search engines or forex broker and trading websites. When traders have sufficient knowledge of forex terminology, they can begin to learn more advanced topics like forex trading systems. Some of the most common definitions include:

  • Currency Pair: This is the price structure of traded currencies in the forex market. The value of one currency is always compared to the value of another currency.
  • Bid Price: This is the price at which investors trade a currency pair.
  • Ask Price: This is the price at which investors purchase a currency pair.
Trading Logic

The understanding of forex trading systems must be based on the understanding of trading logic. Many professional forex traders use what is called technical analysis to evaluate the market and make decisions about their forex trades. Technical analysis examines the changes in currency exchange rates in order to predict the future direction of those rates. In order to use technical analysis, traders must learn how to use a candlestick chart. Forex trading websites are great resources for new traders to gain important knowledge of technical analysis charts.

Other Forex Trading Site Resources

Traders can easily find a forex trading site using an internet search engine. These websites will provide a variety of forex education materials so traders can learn exactly how to trade. It is important for traders to learn everything they can about forex trading before placing actual trades. Many forex trading sites will provide these education materials at no cost. Traders can even use sites like eToro to sit in on webinars. These webinars feature expert traders who cover a variety of important trading subjects that will take the trader’s knowledge to the next level.

Demo Account
http://www.etoro.com/A40204_TClick.aspx

Once traders have a thorough understanding of trading terms, charts and strategies, they must practice using that knowledge. Traders must know how to properly use their trading platform so they do not make trading software-related mistakes. Even the smallest mistakes can have a profound effect on trades and the profits or losses of those trades. A great way for traders to practice using a trading platform and their newly developed skills is to open a demo or practice account.

At eToro, traders can use the demo account for as long as they need to. Traders are given virtual funds to place trades with and the best part of all is that these trades are placed under real market conditions. With the eToro demo account, traders will not only learn how to use the trading software but they will get to see the real results of their trading system. Furthermore, the trader is at no risk of losing any of their own money.


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