SlingShot Options Blog» Options Trading Tips

Teach Me to Trade, Option Stock Trading

admin — Mon, 26 Sep 2011 21:27:39 +0000

Countless people are zealous to invest in the stock market, jumping straight in without much training and knowledge. Lots of people are taking tips from colleagues or associates for their investing and trade. If you are really earnest to make extortionate returns from stock market, you should learn from investors who make a full time livelihood trading and investing in the market. Finding someone to teach option stock trading was a defining main ingredient in trading market for me.

Option stock trading and stock trading can bear a big returns quickly it can also bring losses to the agressive enthusiastic and undisciplined trader or investor. Knowing what to look for and be patient with shares and options are two of the main rules of trading. For the inexperienced and undisciplined trader and investor Too often, these errors spell monetary losses, and certain financial devastation.

7 – Steps to Profitable Trading

1. Key comprehension in trading – treat your trades like a business. To be a profitable trader it will entail some time learning the fundamentals and advance analysis as well as a earnest mind-set from you. The best way to say it is, really treating this as a business. Be intelligent in your decisions and bear in mind the first rule is – do not lose money – and the other is to keep the money you generate. Companies that lose money over and over in time will someday be insolvent.

2. Psychology – the winning characteristics of a successful trader. Lots of people do not talk about this vey regularly. To truly master trading you need to tame your feelings of fear and greed. Be very careful with these two, fears and greed they show up in countless behavior such as, fear of not striking the right trade (chasing the trade), losing a profit. Greed in wanting more out of the trade when up and not take profits trying to squeeze more money from trading, putting excessive money in a trade or trades and do not use money management rules and last over trading.

3. Fundamental Analysis – To choose stocks to trade can be a big stopper, if you do not have a strategy for how to select a stock. Awareness how to choose high quality stocks to trade is a integral skill. Using a tool like IBD investors business daily- earnings per share, relative strength and industry group’s relative strength, sales and profits and accumulation and distribution is a beneficial tool for important investigation.

4. Technical Analysis – This is a skill to examine and interpret graphs of stocks. Indicators can give you a clue about what happens to a stock. Use indicators that will notify you to a trade and indicators which will affirm the trade to enter and exit your positions.

5; Trading Plan – Having a plan is key to success, how to pick out the position to trade, when to enter and exit the trade. How much money to invest and having money management rules. What percentage is a losing trade and a winning trade. What are my time requirements of the trade. These are all aspects of a trading plan and should be take into account by all traders.

6. Tools of the Trade – All top traders use technology to help them trade the best they can. Depending on how you learn to trade stock and options determines the tools you will use. For equity and options using a platform or a software program to assist you with your trades will be one of your basic tools.

7 Mentoring – For all the above steps this may be the most important. You can take the path of brutal knocks to learn, or follow in the foot steps of others and be taught from their successes and mistakes. If you decide the first one you may have a long way and need a lot of capital to carry you through your learning curve and with any luck survive to trade another day. Another route is to find a mentor who trades for a living and be taught from them and how they have succeeded. Your probability of success will be much better. Certainly there is always the ability that you can still lose money since you have still to master the trade-in strategy, discipline and execution. The key is to find a successful trader, and ask them can you teach me to trade. They either will or will direct you to somebody who will. Thousands of books and courses have been in print and some helpful to great, but nothing replaces a mentor that you can watchh over their shoulder and gain knowledge of their system that created accomplishment for them.

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The Rise and Rise of Global Food Consumption and the Possible Effect on Markets

admin — Sun, 25 Sep 2011 18:20:57 +0000

Since June last year, we have seen some amazing runs in both the soft commodity and grain markets, with many reaching multi-year highs. So what has lead to these intense price rises and are they able to be sustained? Or are we seeing a ‘bubble’ that could prove to be a particularly lucrative short trade?

The meteoric rise in food costs

We recently heard from Roman Hohl, Head of Agriculture at Swiss Re, who advised soft commodity prices will rise 40% over the next decade. BHP Billiton possibly shares an identical view, given its bid last year for PotashCorp, which in effect is a bet on rising food costs. With the world population envisioned to grow to 8.3 bill by 2030, world food demand is anticipated to extend by Fifty percent. So if we’re looking at the basics, they support a sustained move higher over the long run.

Let’s take a look at the moves from June, where charts for most commodities start at the bottom left and are now near the top right :

Wheat has been a clear fave, having rallied over Fifty percent from June to highs of $9.25 per bushel on Nine Feb. Recent volatility has been driven by the spate of worldwide calamities ( the extreme flooding in Australia and parts of Canada as well as droughts in China, Russia and Ukraine ) that have wiped out giant portions of crops.
Cotton traded above $2.00lb for the first time ever. Increasing world expansion boosted requirement for garments, as China’s apparel exports lifted 34% in January. Cotton’s rise of over 140% from June has been intense and on a bunch of occasions, it has reached its daily exchange limit.
Coffee rallied to the highest level since 1997, to be up around One hundred percent from June.
Sugar increased 111% to a high of $33.11lb, even though it has pulled back on speculation that global output will exceed demand.
Cocoa jumped to a 32-year high reaching $3511m / t as political disturbance in the Ivory Coast caused traders to believe production would be influenced.
Are the moves sustainable?

Whilst the above commodities have all had impressive rises, they’ve been for many different reasons, so the short and long term price action could have varying outcomes.

Demand and supply

One commodity that stands out is cotton. Prices are already up over 40 percent this year and it’s trading above most analysts’ 12-month price objectives. Elementals support costs with China expected to buy 47 million bales, exceeding output by 17,000,000, which should push stockpiles to their lowest level since 1996. Like wheat, output has been reduced due to flooding in Australia and other bits of the planet. However, one can not help but wonder how much hopeful cash has already gone into these commodities. In the short term, they became extremely ‘over crowded’ trades. This can see costs stabilize or even head strictly lower, particularly with record crops expected to be planted this year.

Sugar has just lately had a pullback from its February highs. There is a strong deflection in views with Queensland Sugar Ltd suggesting that sugar exports from Australia could be less than outlook given the floods and cyclone that hit the east coast. Having a look at a rather more world stance, increases in acreage in Brazil and India could see a surplus of sugar this year, which may be negative for prices.

Will central banking organizations and govts intervene?

The fact is, regimes ( in both emerging and developed economies ) have begun to pay attention to the higher food costs. They will not sit by and watch them cause inflation or perhaps social unrest. Central banks and states may interrupt and look to keep these commodities stable – perhaps by getting farmers to increase output. The different weather patterns, which have caused the spikes, would possibly not be around next year, so we could easily see any increase in production having a genuine effect on pushing prices down. What is certain though is that there’s both a powerful demand from China and the global population is growing. These elements could push costs higher over the long term. In the short term nevertheless prices have had a robust run and net long positions have been stretched.

Tensions in the Middle East

Both soft commodities and grains are reacting not solely to weather-related supply issues, but also to the generally accepted effect on demand caused by the tensions in the Middle East. It has been, and may continue to be, a unstable ride with increased levels of speculative funds exaggerating moves on each headline.

To take advantage of all of these potential financial market opportunities why not start CFD trading. CFD trading allows you to trade a huge variety of instruments including global shares, stock indices, options, commodities, binaries and more. CFDs also let you to back yourself in the currency markets with access to all major forex trading pairs at tight spreads.

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