Placing Stop Loss Order

By Ahmad Hassam

If a trader is to maintain a degree of profitability over time, managing risk and using systems that helps evaluate price changes is critical. You should understand how to select stop orders to limit your potential losses and how to let profits ride.

Managing risk should be your number one job and capturing as much profit as possible from winning trades should be your utmost goal. The descriptions of the types of stops and the pros and cons of each should help you make the right decisions for the different market conditions.

You should know the various types of stop loss orders. You should also know where and when to place these stops. Predetermined stop loss orders help you conquer your emotions. Stops should be part of the trading system and included in your trading rules.

Set a stop objective. Weigh the risk/reward ratio before entering each trade. Stop orders can be placed close to the entry level when volatility is low. However, when the volatility is high, stop orders should be placed further from the entry level.

When entering a trade make sure you know where and why to put the stop order. Initially you will form an opinion based on your gut feelings that is substantiated by a trade signal.

However, you will undoubtedly get caught in the news driven price shock events. It makes the markets highly unpredictable in the short run. These news releases create price spikes that may make an adverse move against your position.

Stop orders can also be placed to enter positions. Stop orders that you place online if the market trades at a certain price, then the order is triggered and become a market order to be filled in by the next best price available. Stop orders are placed to protect against losses.

Buy stops are placed above the current market price and sell stops are placed below the current market price. Protective stops are used to offset a position and to protect against losses and against accrued profits.

You can set a daily dollar amount on the loss limit. If you want to risk only $250 per $100,000 standard lot position then your stop loss will be placed 25 pips from your entry point. Stops can be placed on a dollar amount per position.

Traders use 2-5% of the overall account size as their stop loss. Suppose your trading account size is $10,000. You can also use a certain percent of your overall account size as your stop loss. This comes out to be $200-$500.

Swing traders can use the automatic trailing stop. This makes the decision making process fully automated. Many traders tend to turn winners into losers as they get in the let it ride mindset. The trailing stop reduces the chance to let trades ride. - 23305

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading stocks and forex. Develop your own Forex Trading System. Learn Forex Trading .

How To Make Or Lose Money With Penny Stocks

By Simone Bride

As you probably know, penny stocks impart broader risks but might likewise provide broader returns on any investment. This really indicates that you can either lose a great deal of your money by investing in penny stocks (because of the increased risk factor) or make a lot of money (because of the higher prospective returns). If this happens to you will rely on a lot (but not entirely) on how you approach evaluating the investment funds. So before we go further, you should be conscious that regardless how much caution there is a distinct amount of risk connected with penny stocks, that is much bigger than in the case of large capital, stock exchange qualified stocks.

So before you can evaluate whether you can increase your money out of a penny stock, you ought to comprehend how one produces a profit in the stock market. Usually, the returns that a person receives from a stock investment is in the form of dividends. This however, is ordinarily a very small share of the profits that a person gets from stock investment. The major returns come from appreciation in the value of the shares and the prices of shares are evaluated using different yardsticks. The foremost of these is the issue on investment funds, so if the issue on a stock is ten percent and the price earnings ratio is 10, for instance, the stock would be valued at 10 times the earnings or 100 percent of sale price. Put differently this stock would be dealt at its present rate and from this we can observe that the monetary value would count on 2 matters, the total return and the price-earnings proportion.

The second fundamental factor that affects the monetary value is the book cost of the stock, which is fundamentally calculated as a figure that represents the assets available in the company against each stock. So, if a business has net assets of one hundred thousand dollars and has released ten thousand shares, the value of each share under this method would be 10 dollars.

The monetary value of a share is as well evaluated on the base of a few other measures. Nonetheless, the most fundamental factor from the market point of view is the returns that the stock generates. The pricing under this system would rely on the profit and the price/earnings ratio. The latter is a subject of perception that will depend on the chances linked with the stock. This belief undergo adjustments depending on the history of performance of the organization, the available information about the business, its chances, and the market buzz about immediate big events in the company: (for instance a takeover by a major organization).

From these, the most important from the lasting point of view is the consistency and measure of earnings and the path of the price/earnings ratio in the short term. So as a person who wants to invest, the things you need to assess and be aware of are:-

Whether the business is stable enough to sustain its earnings and development by discovering who its promoters are, and how long it has been in business? What's the market perception of the business and is it probably going to change? Do you know if the company has a good foundation and enjoy reliable business?

Ultimately, the old saying "don't put all your eggs in one basket" is true to a greater degree in the case of penny stocks so invest a small amount at a time and do not put all your money on one or just a few stocks. - 23305

About the Author:

For the very best prices and selection of make money with penny stock online, there is no better place you will find than make money with penny stocks

How Commodity Trading and Commodity Markets are Changing

By William Davies

Worldwide we now see commodity trading activity taking place on a range of modern, regulated commodity exchanges. A broad range of commodities are traded between end user buyers and producer sellers within a framework of standard contract rules and commodity trading regulations. In effect world commodity exchanges make buying and selling of raw commodities ranging from crude oil, copper and wheat to platinum and orange juice much easier.

While some of the major commodities like coffee and crude oil have been traded for a number of years, we are now seeing in modern commodity markets the strong innovation theme leading to new futures contracts being traded. One area where new product development has made a notable change is in the trading of carbon emission permits. Given the growing global concern about the serious long term impact to the environment from greenhouse gases, it is likely we will see continued growth in the market for trading carbon emission permits.

Looking ahead we are likely to see further growth in commodity markets which price environmental externalities, with exiting developments in plastics, emissions and water. Commodity trading activity is basically the buying and selling of futures contracts covering an array of commodities. So you may see commercial end users using commodity futures contracts to protect themselves from sudden price spikes, while the palladium or sugar producer will hedge their future sales and avoid losses on dips in the price.

The commodity markets rely on their liquidity from the speculators who are the major players, while commodity end users and primary producers are relatively minor actors who are hedging their operations. What are the key requirements of a futures contract? That it allows a trader to buy or sell a specified amount of a given commodity in the future, at a price fixed when the contract is exchanged and based on the demand and supply at that time.

Across the world time zones commodity traders are active in the markets either on the floor of the exchange, called open outcry, or using an electronic trading platform. Over recent years the volume of electronically traded futures contracts has increased markedly, as a number of exchanges have combined to form mega commodity exchanges.

Small retail speculators are now able to commit small amounts of capital to these global commodity markets due to ease of online access and use of real time data and online trading software availability. Some traders will prefer to focus on fundamentals like demand and supply of basic commodities to decide when to trade, while others tend to follow the price action of a commodity irrespective of sector, on the basis that technically analysis suggests it is offering significant opportunities for making profits.

The BRIC economies refer to China, Brazil, India and Russia and these emerging countries look set to continue growing over the long term and with them the growth in regional commodity markets should continue. In the Middle East we see how Dubai is rapidly emerging as an important financial centre, where one can trade WTI light, sweet crude oil, gold and silver, steel, plastics and Indian Rupee at Dubai Gold and Commodities Exchange. In China, Dalian Commodity Exchange has plans to expand beyond its traditional area of agriculture commodities and move into industrial metals and other areas.

We can all see how the global credit crunch had such a profound effect on economic growth, with significant corrections in rates of growth and sharp falls in demand for commodities, as major economies and companies were seriously affected, but despite this commodities as an asset class are not seriously affected. Looking ahead to the future, as economic growth picks up there will be a resumption in demand for key commodities like crude oil, aluminium, copper, iron ore and demand for softs like sugar and wheat will be buoyant with competing food and biodiesel demands. Going forward, the outlook for commodity trading will be positive and as an activity it will again be at the centre of world finance. - 23305

About the Author:

William Davies writes for Commodity Trading Today, an informational and educational resource on commodities markets. You can get free Commodity Trading Alerts and news from the Commodity Universe Newsletter here.

Tips To Follow When Getting A Managed Forex Account

By Bart Icles

Managed Forex Accounts involve the handling of a trader/client's investment by a duly licensed company or its designated representative/s to do Forex trading in their behalf. This can be an ideal alternative for any trader who deems it necessary to do Forex trading with defined and limited risks involved. The managing company constantly monitors market activities trends in a 24 hour basis, and then recommends to the client what to do when the need arises. Once the client is informed of the latest updates, they will then decide themselves on what possible actions to take.

Picking the right Forex company to manage your account is crucial to keeping your investments in the money making zone. Only hire a reputable and certified Forex management firm who has a good track record, and genuine references to offer. Before deciding to set yourself up with a Forex account with any company or individual, be sure to cover all the bases first by doing extensive research on them, and by contacting other Forex brokers for any valuable information that might otherwise be hidden or excluded by the firm in question.

Make sure you also understand the cost and fees involved the company charges for setting up an account with them. It pays to read the small print thoroughly before affixing your signature to the contract, otherwise you might end up on the losing side of the deal even just you're still just at the initial period.

Forex accounts offer the advantage of taking out most of the complex and crucial decisions concerning the market conditions and trends from an otherwise inexperienced trader, who would lose their precious investments if left to their own inadequate faculties. Forex management firms are in the know of most important inside information, access to real-time currency exchange rates, and crucial market indicators that can be used to help clients turn a tidy profit.

The downside to investing in a managed Forex account is their rather high investment requirements that may range anywhere from $10,000 to $20,000. Some management firms may offer staggered payment schemes or the like to fit some client's allocated budgets, but could still prove to be a disadvantage once the management firm makes bad investment decisions and loses a clients investment.

Forex trading is exciting and profitable once you know how it works and with a good managed Forex account. Invest in one now to see the desired results you've been missing before its too late - 23305

About the Author:

Is automated forex trading misleading? What is forex trading? Come visit our blog to find out the answers to these questions and more.

Forex Trading Made EZ - My Experience With It

By Micheal Bates

When I first started trading and investing in the currency markets, I had a bit of beginner's luck. This initial success caused me to think I understood more than I actually did, so I continued to try to make money on my own.

I would soon find out that this was not the most intelligent approach. I began researching Forex training courses online. The first one that caught my eye was Forex Trading Made E Z. Immediately I was drawn to the kind of potential that could be made.

After completing this course, my financial situation changed dramatically for the better. Without this course, I can only imagine in what tough money situation I would be in right now. There are many other graduates of the program that have expressed similar beliefs about the effect of the program.

This program is optimal for use by the new, beginning trader. It makes trading easy to understand and use. If you can apply yourself by participating in the class, watching all the videos, and reading the material, in just one week you will be ready to begin!

Second, this program produces high rewards with very low risk. The third and final reason it is great for new investors is that losing trades are rare and typically small. This is pivotal to having any kind of success to trading in the market.

This is based on a market strategy called Forex Scalping. Forex Scalping allows you to get in and out of the market quickly and easily.

This is not 5 percent per year, but in one day! This method can easily double your account in less than one month.

Forex Trading Made E Z has changed my life forever. I get to be my own boss and make more money now than I could have possibly imagined. Review it for yourself and see if making money with low risk and high reward is something you want in your life. You'll be kicking yourself about another missed opportunity if you don't even take a chance to read a little about this life changing currency training program. - 23305

About the Author:

If you want to find out more about Forex Trading Made EZ Course, then you need to check out this website: Easy Forex Broker.