Online Trading Blog

As you may know, Forex Currency trading market made it foundation in 1971. From there the market had undergone many changes and expansions. In 1980s the increase of money movement across the country borders made forex currency trading more popular. In 1990s, with the introduction of computers, internet and trading/monitoring systems the market have become an enormous one with traders all over the world, form Metro cities to small villages.

Today, forex currency market is the biggest financial market on our planet. The daily trading market volume of currency trading is over 2,000,000,000,000.00 (2 trillion) U S dollars. This is around 30 times the daily trading volume of NYSE and Nasdaq together. The five most trading currencies are U.S Dollar, British Pound, Japanese Yen, Swiss Franc and Euro. Together these five currencies constitute more than 70% of forex trades done in North America.

The main beneficiaries of forex currency trading are banks. Most banks involved in forex trading deposits 30% to 35% of their capital as an average in this market and makes 40% to 50% profit from it. Of the total currency trades around 73% are done by 10 major international banks.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

The Week Ahead: An economic report card of data are due out starting with Tuesday's durable goods orders for January and an important existing home sales figure. The consumer confidence index for February will also be released. Wednesday brings the 4th quarter GDP and January new home sales as well as the crude oil and gasoline inventories. Thursday continues with personal income and spending for January along with construction spending. The ISM manufacturing index and auto sales numbers for February also come out. Finally, Friday has the University of Michigan consumer sentiment reading.

Stocks to Watch: Profits at Lowes Cos. (LOW) came in better than estimates sending the stock to new highs but are speculative here because of the housing slump. Chesapeake Energy (CHK) came in with better than expected earnings and the stock strengthened crossing the 200 day moving average. American Reprographics (ARP) stock looks poised for further gains as the company reported excellent earnings and gave a strong outlook for fiscal 2007. Roper Industries (ROP) continues to show good long term performance with solid 4th quarter earnings and 1st quarter outlook.

Special Note: Year to date the mid-cap stocks are outperforming with a 7.5% return verses 5% for small cap and 2.2% for large cap stocks. Mid-cap indexes like the S&P 400 are seen to provide growth because they are still small enough in size relative to big blue chip stocks but beyond the speculative phase of smaller companies. One note of caution is the yield curve which has been negative for 6 months where short term rates exceed long term rates. This duration historically precedes a top in the market. Perhaps defensive stocks should be the focus going forward.


Commentary provided by Barry Ward, Registered Principal, NobleTrading.com, Inc.

To view all of NobleTrading's historical newsletters, click here.

Click here to open an account.

NobleTrading Direct Access Trading

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email: info@nobletrading.com
phone: 877.872.3311
web: http://www.nobletrading.com

Over the counter stocks are stocks which are traded outside major stock exchanges like NYSE and Nasdaq. The two major types of over the counter stocks are Pink Sheet securities and Over-The-Counter Bulletin Board (OTCBB) stocks.

The term over-the-counter means that the stocks are traded through dealer network, not through a centralized stock exchange. Mostly the stocks traded through over-the-counter are stocks of small companies, delisted companies or mysterious companies having no sound financial history. The instruments such as bonds are also traded over-the-counter as their moving usually requires a phone call.

Over-the-counter stock trades are done through direct interaction between broker-dealers either by phone or through computer networks. The trader must first open an account from a broker allowing OTC trades. When you place an order the broker contacts with an appropriate market maker. And after the process of bid and ask the money and stocks are exchanged. Today there are some companies, like NobleTrading, offering online OTC trading facility allowing traders to directly contact major market makers.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

Short selling is another stock trading strategy that some traders follow. A short seller makes profit from the fall in the price of stocks. Short selling is a complex process and requires precise market timing.

A short selling trader trades stocks of companies, of which he/she expects a price fall. They usually burrow stocks of these companies from others through their brokers on contract that they will return them later. The trader trades the stocks instantly for the present market value and later when the price drops, he buys the shares for lesser amount and returns to the original holder. So the profit is the commission and burrowing fee deducted difference between the prices of individual stocks multiplied by the number of stocks traded.

Short selling is only for experienced traders having the ability to find overpriced stocks and dooming companies. Short selling involves higher level of risks. If the prices of stocks increase, rather than decrease, the trader can face unlimited loss. Many times bad stocks in a bullish market show long-term price improvement, which even diminishes the traders effort to profit.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

Arbitrage means trading of same product in different markets. The traders practicing arbitrage are known as arbitrators. They buy a product at low price from one market and simultaneous sell the same in other market at high price.

The practice of arbitrage differs with the type of product trading. The product can be stocks, currencies or commodities. In forex currency market an arbitrator usually buys currencies from one country and sells them in another count with slight difference in exchange rate. In futures market arbitrators usually buy short-term delivery contracts and sell longer term delivery contracts. Some arbitrators buy certificate of deposits from one country/institution at lower value and invest the same in other country/institution for higher face value.

The term “risk arbitrage” came in to form in 1980s. In risk arbitrage the arbitrators find companies going to proposed takeovers (merges/acquisitions) and buys large amounts of its stocks in believe that the takeover will certainly raise the stock price. Riskless arbitrage is the usual one described in beginning.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

Countertrend trading simply means trading against the trend. This is a trading strategy followed by many traders for small gains by doing a series of trades against the trend. This includes buying of shares/products when market is on a downward trend and selling them when market is on an upward trend.

Countertrend traders trade all products like stocks, options, futures and currencies. They do so usually for small gains as holding there position for more time can harm them hugely. Countertrend traders use countertrend trading systems or momentum indicators to locate suitable trading opportunities.

Certainly, countertrend trading is not for novice traders. A countertrend trader must be well experienced to control his feelings, and courage and confidence to trade against the market, often by ignoring advices from other traders. Never match up countertrend trading with range trading, as range trading is the strategy to profit from oscillations in product price.


This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

The Week Ahead: The housing sector of the economy continues its post bubble weakness with the smallest number of new home starts in a decade as a glut of unsold properties saturates the market. This news should keep the Fed on hold with interest rates but watch the January minutes release by the FOMC on Tuesday as well as the Consumer Price Index for further clues. The holiday shortened week will produce only one other important report as it pertains to energy which is the weekly oil and gas distillate stocks on Wednesday.

Stock to Watch: Watch General Motors (GM) stock as reported talks to buy the Chrysler division from parent company Daimler/Chrysler (DCX) heats up. Harley Davidson (HOG) could get a lift as a tentative agreement with labor unions on strike since February 2 was reached. Campbell Soup (CPB) is breaking higher on news of strong earnings and an expanding earnings outlook for 2007. XM Satellite Radio (XMSR) is rebounding after a Bear Stearns report on the benefits of a merger with Sirius Satellite Radio (SIRI). Finally Cascade Corp. (CAE) is being added to the Small Cap 600 Index replacing Elk Corp.

Special Note: The current momentum streak of the market has now reached 30 weeks without as little as a 2% correction for the blue chips. Very near term indicators point higher but keep in mind that the S&P 500 is now in its 9th consecutive month higher, and the DOW its 8th. This rare formation combined with an end to the influx of above average retirement contributions this quarter do to strong corporate profits should give pause to investors as March approaches. Stay diversified with a mixture of longs and shorts in different sectors.

Commentary provided by Barry Ward, Registered Principal, NobleTrading.com, Inc.

To view all of NobleTrading's historical newsletters, click here.

Click here to open an account.
NobleTrading Direct Access Trading

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email: info@nobletrading.com
phone: 877.872.3311

web: http://www.nobletrading.com

Futures trading brokers are the intermediate between a futures market and a public futures trader. They collect a margin from traders and deposit it on a future market to make a futures trader qualified to trade on that market. There are two types of futures trading brokers as full-service brokers and discount brokers.

Full-service brokers, in addition to futures trading service, provides a array of services like researches for trades, tax tips, retirement planning etc., the fee rate is usually high with them. Discount brokers on the other hand allow you to trade freely and provide real-time quotes from futures markets. They have discount commission structures as they provide limited services.

Regardless the type, all futures traders are obligated to record and maintain accounts details such as margin deposits of the traders, money balances, open futures, transaction completed etc. For providing these services the futures brokers impose a fee on traders, which differ from broker to broker and mostly depends on the trader’s trading activity and trading volume.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

The online trading of currency have given rise to the demand of more and more advanced forex currency trading systems. Today, almost all forex trading brokers maintains one or more forex currency trading system which help traders to trade currencies more easily and freely. New and new features are added to existing one virtually in every day.

The two fundamental types of online currency trading systems are web based currency trading system and client based currency trading system. A web based trading system is a software platform situated on the forex trading broker’s server and is accessed by traders for trading. Thus there is no need of installation of the software to trader’s computer. The client based forex trading systems are also provided by brokers, but are downloaded and installed by traders. They are usually more versatile offering faster execution rate.

Regardless the type, a forex currency trading system must provide real-time market news and updates. They must be accurate to deliver the entry and exit points and is secured enough to protect clients data from intruders.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

There are mainly two basic styles of options available as American style options and European style options. They are differentiated according to the trades possible against expiration date. Although named by regions they have nothing to do with them.

American style options can be exercised for underlying product at any time between the date of purchase and expiration date. They are the common options traded through exchanges. All the stock options available come within this category. American options are considered more valuable than European options.

European style of options can only be exercised at the expiration date. They are mainly index options and are less popular and valuable. A trader holding European options cannot exercise the option for cash even if he can get huge profit at any time between purchasing date and expiring date.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

As we discussed in previous posts, trading each product have its own advantages and disadvantages. Today we will look on those of trading futures contracts. In several ways, online futures trading holds advantages over other trading fields, some of them are,

• Simplicity – Virtually anyone irrespective of age, experience or education can trade future commodities.
• High liquidity – the massive amounts of trades done every day makes online futures trading market liquid and efficient to trade whenever you want.
• Less volatility of market – the extremely fast communication tools now used made global futures market more transparent.
• Efficient buying – it is always safe and better to buy futures of an underlying commodity rather than buying shares of the company producing/providing it.
• Low transaction costs when compared to transacting costs of underlying product in stock markets.
• A variety of contracts to trade – can trade energy futures, agricultural commodities, money bonds, etc.
• Can trade from your own home – reduced your overall trading costs.

The major drawback of trading futures is its sudden falls, due to global/regional news and reports, it often occurs faster than stock or forex market. One another drawback is the trader must have an insight/knowledge to take right decisions.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

All online futures and commodity traders use trading softwares to facilitate their trading experience. Although most ignore, a good futures trading system is a must for online futures trader, as it reduces the tension of trading and presents profit making opportunities.

A good trading system must offer at least 50% profit making trades. The trading systems, according to their performances can be classified in to robust and different trading systems. Robust trading systems provide some what same performance in both bull and bear markets, where as in different type of trading system it is different.

The best way to evaluate a system is by paper trading on it. Never come to a quick decision, as most advanced systems with lot of trading features requires more your time to study and familiarize with them. Evaluate that you get same frequency on paper trades and past trades. If it is different; simply look for another one.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

As you all know there is only a few things which differentiate a stock trader from a good stock trader. Some of these things come with experience others you have to develop. Here are some tips to become a good stock trader.

1. Try to be open-minded as much as possible.
2. Adhere to laws of trading; ignoring them completely will eliminate you from the business.
3. Never trade for huge profits, consistency of good trades is the key.
4. Stay always focused, loosing of focusing means loosing of money.
5. Control your emotions, never get too happy or dump with your win or loss; you are there to control/change your future.
6. Study the markets realistically.
7. Know your merits and your limits, especially those concerned to your trading account.
8. Always keep a back-up plan for reacting to sudden market changes.
9. And at he close of the day try to evaluate the merits and demerits and consequences of each step you have taken that day.

Believe that your trading ability will improve with each day. The only thing you have to ensure that you have got enough money for the next day.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

By just searching on internet you can find a number of online currency trading brokers claiming highest quality online forex day trading services. But finding a good forex broker is not an easy task because you have to do so much comparison and finding unique features.

Comparing FX trading brokers is a tough asks. Although you can find a number of comparisons on internet, they are mostly done by forex brokers themselves highlighting their merits. So be more innovative, gather as much as data possible, then start comparing. You can compare forex brokers with many things like maximum leverage offered, minimum deposit required, amount/type of commissions charged, spreads for major currencies, availability of mini forex accounts, availability and quality of demo currency trading account, number of currency pairs offered etc.

Sign-Up for demo currency trading accounts, and experience the quality of service each forex currency trading broker provides. Talking directly on phone with the broker and demanding more information about them will also helpful. It is your money on risk why increase the risk by choosing wrong forex broker.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

Charts are important for all types of traders, day traders, swing traders or position trades, trading stocks, options, futures commodities or currencies. But the use of charting information may vary according to the style of trading.

The daily charts are very very important to day traders, who have to execute trades with respect to the slightest up/down in prices. That is why day traders use the best sophisticated day trading platforms available today, offering customizable and versatile charts for the products they are trading.

The historical charts, weekly and monthly charts are important to swing traders and position traders. These charts can be used to find our resistances and implementing stop losses. When combined with other major software features like market depth, lop sales, time & sales, etc these charts can give you an approximate idea about the cycle of events happening in a market.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

Today more and more online traders, especially beginners, want to trade mini future contracts. Today above 1,000,000 e-mini futures contracts, as an average, are traded in S&P and Nasdaq markets together per day. There are many things that make online mini contracts trading popular to day traders and swing traders. Some of them are,

• Liquid market – the high volumes of e-mini futures trades make the market much stable.
• Narrow spreads – the bid and ask spreads of S&P e-mini market is 0.25 points, Nasdaq e-mini market is 0.50 points and of Dow e-mini market is usually between 1 and 5 points.
• Leverage – most e-mini trading brokers allow day mini futures traders to have as much as the exchange required margin to trade.

In addition to these the very low margin requirements, the ability to go short at any time, and ability to trade an index because of the leverage you get make online e-mini futures trading more attractive to all sorts of day traders.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

As you know penny stocks are stocks traded at very low cost, under $5. The trading of penny stocks involves high risk as the market is highly fluctuating and volatile. But like all other trading forms, penny stocks also provide profits. So here are some tips for trading penny stocks.

• Investigate thoroughly about the companies whose shares you want to trade.
• Avoid newly formed companies with unknown financial history.
• If possible, try to contract persons related to these companies, and drive information about the financial background of the company.
• Never give you ears to rumors, as most of them are created by traders having penny stocks in their hands to increase their profit.
• Try to invest in companies which meet SEC reporting guidelines.
• Never be attracted by high liquidity of low stocks.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

The Week Ahead: A slowdown in hiring has the unemployment rate at its highest level in 4 months and suggests inflation is under control. Listen for comments from Fed chairman Ben Bernanke regarding recent economic data when he speaks in Omaha on Tuesday. Before that the ISM non-manufacturing survey is released on Monday. On Wednesday, the 4th Q productivity and labor cost numbers are due along with oil and gasoline inventories. Thursday brings 3 reports: December wholesale trade, January chain store sales, and weekly jobless claims.

Stocks to Watch: Important earnings reports continue to stream in this week. On Tuesday Cisco (CSCO) reports along with VF Corp.(VFC) a company in the branded clothing market. Wednesday, Whirlpool (WHR) and Disney (DIS) announce. A busy Thursday brings releases from Aetna (AET), Pepsico (PEP), Bunge Limited (BG) A global agribusiness and food company, and Curtiss-Wright (CW) a diversified company. Finally, Friday Hasbro (HAS) and Weyerhauser (WY) both report.

Special Note: As the earnings season winds down this week and next and the heavy new monies entering the market from retirement accounts in the first quarter ends, the markets will have to contend with a continued imbalance of technical and fundamental factors. Some of these include the negative savings rate, relatively high oil prices, an increasingly hostile geopolitical environment, low presidential approval ratings not seen since the Nixon years, a persistent flow of stock option backdating scandals, and now declining new high/ new low ratios. A selective, balanced, and hedged portfolio is increasingly important.


Commentary provided by Barry Ward, Registered Principal, NobleTrading.com, Inc.

To view all of NobleTrading's historical newsletters, click here.

Click here to open an account.
NobleTrading Direct Access Trading

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email: info@nobletrading.com
phone: 877.872.3311
web: http://www.nobletrading.com

Simply speaking Paper Trading or Simulated Trading is the trading from a demo account using standard trading platforms. It does not involve the investing of real-money. This is why paper trading is important for beginners want to trade stocks, option, futures or forex.

There are many sites; usually those of online discount brokers, which provide you paper trading account, usually known as demo trading account together with a trading software, may be of your choice. You can trade from these accounts as normal traders do. Thus paper trading help a trader to get familiar with things such as entry & exit points, profit targets, stop loss limits, position sizing, risk/reward profiles, level 2 market access, limit orders, etc.

The things to be noted when signing up for a paper trading accounts are:

• Learn about the frequency in which stock prices updated.
• The software they provide is one used for real-time trading.
• Access to all essential tools like stock charts, level II, etc.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

Many times finding a right forex currency trading system can more frustrating than trading in a fluctuating market. But there are many quality forex currency trading systems available in the market. The only thing you have to is to find one right for you.

Today, the fastest, easiest and most affordable way to find a good forex currency trading software is to search on internet. We recommend you to find a good quality currency brokerage company first, and then go through the software platforms they offer. Most online forex currency trading companies offer their systems free of cost. Many of these companies offer demo account and free trail (usually for 30 days) of their systems.

The key features to be noted when finding right forex trading systems are – the variety of order entry methods it offer, potential of providing real time market news and dealer to client chat, the currency charting ability, and the number of currency pairs you can trade on.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

Position sizing is one of the trading strategies that all traders can follow. Simply speaking, position sizing is the determination of the amount you can put on a trade. The major factors which determine a profitable position size are:

• The size of the trading account
• The product(s) trading (stocks, options, future commodities or forex)
• The expected chance of profit/loss
• The maximum expected profit/loss
• The style of trading

Position sizing is considered as one of the major trading strategy because if you trade with higher amounts from your trading account (eg: 25% or 30% of trading account), your account may wipeout with in 5 trades or so. On the other hand if you trades with smaller amounts (eg: 2% or 3% of your trading account) you are destroying your chance of getting quickly profited.

Today there are many calculators are available to determine your account position size. There are also some trading softwares available which are integrated with these calculators.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.

Stock options are options which have stocks as the underlying instrument. Like all options, stock options will have a strike price, the price in which the underlying stocks can be purchased (call option) or sold (put option).

The trading of stock options through exchanges started in 1970’s and became popular in 1980’s. But the market losses of 1990 have caused a halt in stock option trades. Recently the introduction of electronic stock option methods resulted in re-introduction of options to public.

Online stock options trading are comparatively safer to other online trading types. But the initial capital investment needed is often some what higher than others. The major risk involved in stock option trading is you are obligated to trade in the strike price. That is if you want to buy the underlying stocks you have to do it on the strike price even if the actual market stock price is lesser than that. In same way you have to sell a stock at strike price even if the actual stock market price is far higher.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.