The Law of Demand

The law of demand and it’s application The law of demand and it’s application to fundamental analysis of commodities rests upon an understanding of consumer behavior. The factors which characterize consumer choice and how the market place reflects individual consumer responses are key components of this economic theory. Understanding what factors have affected demand in the past will help to develop expectations about demand in the future and its impact on market price. Demand for a particular product or service represents how much people are willing to purchase at various prices.…

What Is An Option?

For Options Beginners, What Is An Option? You heard the hype on TV infomercials. You may have seen full page advertisements in the newspaper or received mail filled with get-rich-quick promises. All you have to do is pay a few thousand dollars and attend some seminars. Forget it. That’s not a sound method for learning about the advantages of using options. But, what is an option? Options allow an investor to reduce risk and provide an improved chance to profit from stock market investments. But first, it’s necessary to understand the basic…

Market Speculator’s Knowhow

Market Speculator’s Knowhow: Process, Discipline and Focus Ever wonder what it takes to be a successful market speculator? The first answer that usually comes up is the mastery of chart reading, or another common perception is that one needs to gain lots of information about the companies or markets that he or she chooses to trade. The former is known as technical analysis, while the latter is referencing fundamentals. While it doesn’t hurt to understand both ways of looking at the markets, what I  most commonly see that poses the biggest challenge…

Best Kept Secret

Know the Best Kept Secret Having been in the trading and investing business for more than 20 years now, I have seen arbitrage opportunities come and go, a real strong edge or two fade away, rules or regulations close a loop hole to some free money and so on. Like anything in life, strong and easy opportunities to profit financially typically don’t last because enough people find out and compete for that opportunity, and it’s that competition that eliminates the opportunity. Today, the biggest edge that offers real strong consistent…

ETF Trends in Q1 2016

3 ETF Trends in Q1 2016 (XLU, VNQ) Three trends in exchange traded funds (ETF) in Q1 2016 are a recovery in rate-sensitive funds, strength in emerging market ETFs and strong flows into precious metal ETFs. Gains in these ETFs are reversals of major trends from the previous year, when low inflation and increases in short-term interest rates combined to put downward pressure on these groups. One major development crucial to the first quarter of 2016 was the Federal Reserve’s shift to a more dovish policy in response to financial market volatility…

When Not to Trade

Knowing When Not to Trade is Important In my experience, one of the toughest challenges you may face as a trader grapple with is knowing when to keep your powder dry, a Wall Street maxim for staying out of the market – knowing when not to trade.  Essentially, keeping your powder dry means saving one’s resources, and being prepared for when they will be used in the most effective manner. In trading, this translates into only putting capital at risk when the opportunity offers the lowest risk and highest probability.…

How Futures Market Works

How does the Futures market works? The futures market is a centralized marketplace for buyers and sellers from around the world who meet and enter into futures contracts. Pricing can be based on an open cry system, or bids and offers can be matched electronically. The futures contract will state the price that will be paid and the date of delivery. But don’t worry, as we mentioned earlier, almost all futures contracts end without the actual physical delivery of the commodity. What Exactly Is a Futures Contract? Let’s say, for…

How to trade futures

How to trade futures? Here is some advice. The oldest form of trading gets a technology facelift. The concept of futures trading is as timeless as the marketplace itself. As long as people have been selling such tangible assets as oil, wheat or gold, there have been hedgers who want to protect against the possibility of a future price change and speculators who hope to profit if the hedgers are wrong. So, let’s talk about how to trade futures. A producer of wheat, oil or another commodity, rather than simply bringing his…