Online Trading Blog

The online trading has revolutionized the whole process of trading and is responsible for the popularity of trading today. So it would be worth to look upon a comparison between an online broker and traditional brokers.

Traditional brokers are experts in giving trading advices and guiding you in choosing right market, asset to trade and market marker. They collect information from lot of sources and use that for the benefit of their clients. They are humans interacting with their clients by taking consideration of their emotions, financial backgrounds and urge to profit. But they charge hugely, and the trading also a slow process taking usually hours. Their services are more favorable for long-term investors and established investing firms.

On the other hand online brokers greatly depend on computer programs and communication networks. The trading costs are usually very low compared to traditional brokers. Trades are completed within seconds and real-time market information and technical analysis are provided in graphs or alerts. They provide access to many markets and easiness in placing you orders. The trader gets more control over his money and purchased assets. But as told earlier, online trading lot more depends on computers, so any mechanical error can result in mighty losses.

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.

Single stock futures or SSF are the futures contracts for a single company stock. They are standardized futures contracts usually for 100 stocks, with basic specifications like contract size, expiration cycle, tick size, market trading hours, last trading day, and margin requirement. The valuation of single stock futures are simpler than that of stock options, this make SSF a good option to all types of traders.

Trading single stock futures has many advantages over trading stock themselves such as more leverage, easy to go short (no waiting for uptick), and flexibility to speculates, spread, or hedge. But there is also some disadvantages like more risk, no stock right or dividends, higher chance for margin calls. Unlike stock options, single stock futures contracts have to be settled at the proposed time, and contract prices deviates largely with the underlying product. For stock options the only money you lose is that paid as option premium.

In United States, after the ban from 1982, the trading of single stock futures started in November 2000. The trades are done electronically in OneChicago market (CBOE, CME and CBOT markets together) and Nasdaq Liffe markets. Simple stock futures are not yet a favorite trading item for most traders. The daily trading volume is over 25,000 contracts per 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.

Passive investing and active investing are considered as the two forms of investing with respect to the approach of the investor. Both investing strategies have advantages and disadvantages. One have to choose a form of investing based on many things like the time and money he/she have, his investing experience, self discipline, decision making ability and tolerance for risk.

Passive investing, is the investing to an asset through some one else. The classical example is the mutual funds. The investor invests his/her money to the market through mutual funds. Others include government bonds, savings accounts, etc. The advantages of passive investing are minimum need of time and attention, requires not much experience, exemption from taxes, and relative sure profit. The disadvantages are lesser control over your money and very small profits.

Active investing is the direct investing of your money to assets like stocks, options, futures or currencies to make long-term or short term profits. This form of investing requires extensive knowledge and experience with time. Active investing holds no space for emotions. The advantages include better control over money, higher profits, etc. The disadvantages of active investing are the need of investing knowledge and skill, higher chance of loss 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.

Like all of you may know options trading is itself an advantage over the direct trading of the underlying products, that’s why its existence. This blog will cover the advantages you get by trading options online compared to direct floor trading of options.

1. You can virtually trade from anywhere, your home or office, where you installed the trading platform.
2. No face to face interaction needed with broker or other traders.
3. Speedy execution of trades, just by clicking on some buttons.
4. Ability to trade from many options markets offering different types of options.
5. Easy access to market data. Getting live data was never been so easy.
6. Eye caching charts providing complex data in simple lines.
7. Built-in technical analysis tools making the process of options picking easier to every one.
8. Triggers and alerts making your trading process automatic.
9. Ability to trade stock and futures with options; depends on the broker to which the trader affiliated.
10. Easy in monitoring your trades and trading account.
11. Paper trading accounts providing you the actual options trading experience with zero money investing.

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.

Moving average is a common technical analysis tool which provides a somewhat smooth graph about the price trend of a stock. They are average value for a specified time period, commonly for 50 days. In a classical 50 day moving average the opening or closing price of a stock for 50 days are added and then divided by 50. Then after/on on each trading day the days value are inserted to the average and the oldest ones are deleted, making the graph lengthier with days.

Moving averages are of 4 types as simple or arithmetic, exponential or weighted, smoothed and linear weighted. Each average differs from another in the weight provided to the new days’ data. Simple moving average (SMA) treats all data with same value, but linear weighted (LWMA) and exponential moving average (EMA) provide increased values to newer information.

Moving averages are simple yet most used type of technical analysis tools, useful to figure out support and resistance levels. The trading systems following moving averages generates alerts and triggers each time the stock price cross a moving average. The using of the moving average type depends on your trading strategy, SMA is more suitable for long term traders and EMA is more suitable for short term 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.

The Week Ahead: A strong batch of earnings reports has investors feeling good again as the major indexes resumed there move to new highs for the year. Whether this rally has legs or not could depend on how much the weak housing sector has spread in the economy. To that end, watch Tuesday's March Existing home sales and Wednesday's new home sales figures for further evidence. Also crude oil and gasoline inventories will provide clues to energy prices near term. The jobless claims numbers on Thursday will shed light on unemployment.

Stocks to Watch: On the heels of last week's good earnings from American Express, Caterpillar, Honeywell, and McDonald's are this week's Dow components of Exxon Mobile (XOM), AT&T (T ), Boeing (BA), 3M (MMM), and Microsoft (MSFT). Shares of Oakley Inc. (OO) broke out to near record territory after announcing that sales rose by 31% and boosting 07' guidance. On the downside Capital Bancorp (CBC), Mentor Corp. (MNT), and Robert Half Int'l (RHI) all came in weak on earnings and/or sales as there stocks corrected accordingly.

Special Note: On a weekly and monthly chart the current rally appears to be a continuation of the rally that started last summer and therefore more likely an ending rally versus the start of a new move higher. Evidence suggests that the late February and early March sell-off did not become sufficiently oversold to mark a major bottom. Although earnings have been strong, this is more of a lagging indicator and not indicative of future results. Many leading indicators by the same token are blinking caution signs directly ahead.

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

Pivot points are technical indicators used to calculate support and resistance levels for that trading day. The major application of them is in forex market, but also available for stocks and derivatives. They are pretty easy to derive and follow, and can be used as a resistance or support level simultaneously according to market trends.

Pivot point calculating methods vary considerably. The standard formula uses yesterdays high (H), low (L) and closing (C) prices to calculate pivot point (PP).

• PP = (H + L + C / 3)

Some other methods uses additional price information, like yesterday’s opening price, for calculation.

Pivot points include pivot point and two or three supporting and resistance levels. The supporting and resisting levels are calculated by the following formulas.

• Resistance1 or R1 = (PP x 2) – L
• Support 1 or S1 = (PP x 2) – H
• Resistance2 or R2 = PP + (H - L) or PP + (R1 – S1)
• Support 2 or S2 = PP - (H - L) or PP - (R1 – S1)

Pivot point itself is the proposed price range for highest trade activity, other points like R1 and S1 are proposed moderate trade activity ranges. If the market goes upwards, the pivot point can be used as a support level if the market goes downwards then as resistance level.

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.

Day trading is the most sophisticated trading method demanding advanced trading systems and intraday charts. An intraday stock chart provides graphical representation (as bars, lines or candlesticks) of market conditions like stock price, trade volume, number of trades etc. There are a number of kinds of stock charts available of which the three, time charts, tick charts and volume charts are very popular.

Time charts are the graphical representation according to time intervals. A new graphic makes its appearance after a predetermined time interval; of 1m, 5m, 15m, 1hour etc, so as the charts named – 1 minute chart, 5 minute charts etc. Tick charts are charts drawn against the trades completed. A new graphic makes its appearance after the completion of a certain number of trades, denoted in ticks like 33, 133 or 233 ticks. They are good indicators of market activity; the greater the number of bars the grater the number of trades.

Volume charts are charts drawn against the number of contracts traded. Remember a single trade can involve any number of contracts. A new graphics makes its appearance when a certain number of contracts are traded (500 or 1000). Like tick charts, they also shows market activity.

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.

Income investing is just one another stock investing strategy. If practiced properly, it can be considered as a low risk investment strategy. Income investors are like bond investors, invest in stocks of companies which provide consistent good dividends. Usually these companies are old well established companies with limited need to invest large sums for their growth. They are well managed and are usually the leaders of their fields.

The main stock market indicator available for income investing is the dividend yield. Dividend yield tells the ratio of the dividend provided by the company to its present share price, denoted in percentage. Income investors select companies with high dividend yield, usually over 5%, to invest. But the whole process may get complicated in many scenarios like weak companies offering high dividend yield, which can adversely affect their future growing capabilities and future dividends.

To find a right income investing stock, the investor must look in the past history and dividend policy of the company. Any company with years of history in providing good dividends consistently can be a good option. Although income investing can be safe and can provide consistent earnings, it also can have drawbacks like the need of high initial investment and the taxing of earnings.

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.

Over the decades precious metals like gold and silver has been remained as a good alternative investment product. People still believes that investing in gold, silver and platinum are good way to secure ones futures. In countries like India, because of the traditional important, these precious metals and stones have remained as the primary investment option for most families.

Standardized gold and silver futures are a good way to own gold and silver. For gold and silver hedgers, like jewelry owners, these futures provides a good option to secure their position against future price changes and to offer ornaments for a relative constant price. On the other hand for speculators a good opportunity to profit from price changes in the underlying products.

There are many advantages of trading gold and silver futures contracts than trading those commodities. They include

1. Cover from price uncertainties.
2. Increased financial leverage providing control over products of higher value with low actual investment.
3. Easy to go short or long providing high flexibility to protect your money. And
4. No counter party risks as the futures are insured by clearing firms.

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: Takeovers on Wall Street continue to spark rallies in the market with the latest buyout of Double Click by Google Inc. Consumer sentiment and expectations on the other hand continue to slide. Watch March retail sales and February business inventories on Monday. The CPI, housing starts, and industrial production numbers will be closely watched on Tuesday. Crude oil and gasoline inventories are delivered on Wednesday while the jobless claims figures and March leading economic indicators are due out on Thursday.

Stocks to Watch: Shares of SLM Corp. (SLM) jumped after reported talks with private equity firms regarding its acquisition and possible suitor with the Blackstone Group. Cott Corp. (COT) is weighing business options with interested parties possibly joining operations with Cadbury-Schwepps. Dyax Corp. (DYAX) broke through the $5 level after positive late stage trials of a drug to treat genetic disease. Shares of Medis Technology (MDTL)surged after it stated it began shipping its 24/7 Power Pack fuel cell product to Microsoft.

Special Note: The downside gaps from late February on the three major indexes have now been filled and makes the markets vulnerable to a sell off of significance. The upside strength was accompanied by 8 consecutive closing up days in a row on the DOW an unusual occurrence. Consecutive long strings of up days in a row tend to happen coming off major lows and tops. The last time was the major low of March 11, 2003 when 8 up days in a row occurred. A continued defensive investment strategy seems prudent for investors.

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

As you all may know forex market is the largest financial market in the world with highest volatility. Thus a small mistake in executing your trades may cost you great money. Below are some popular reasons for loss in forex trading, especially for novice traders.

• Following a fraud book or course – most of the online courses and books educating you for forex trading are just made for profiting from your greed.
• Day trading by novice traders – day forex currency trading is a practice only for experienced traders, not for novice traders.
• Following false news stories and predictions – believing all news, especially from unpopular sources, can lead you to destruction.
• Trading on others trading system – each trader has unique requirements; following other’s system means following others requirements.
• Refusal of using stop loss principles – optimism is a good character but not in serious situations.
• Laziness – Any type of money investment needs constant monitoring.
• Over confidence – You may be a good trader, but believe that there may be better ones in the 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.

Vanilla and exotic options are the two major classes of options. They are available for all types of options products such as stock options, futures options and forex options. Plain vanilla and exotic options differs greatly from one another very widely.

Vanilla options are the regular options with traditional/standard features like expiratory rate, strike price etc. They include both Buy and Sell options of American and European styles. Vanilla options are traded through centralized markets. Exotic options are options which differ from this standard make up. These are complex options which contain some trading specifications. Exotic options are traded over the counter. There are many types of exotic options as

• Choose Options – options that can be exercised both as put and call options at specific points.
• Barrier Options - payoff depends on the crossing or predetermined barriers.
• Asian or Average Options – payoff depends on the average price of underlying product.
• Compound Options – Options having options as underlying property.
• Digital Options – Determination of payoff is done after the underlying product crosses a pre-determined limit.

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 quotes provides details about the price and price changes of a stock at a time. They are recognized as the primary tool for any stock traders and valuable for technical analysis and stock picking.

Stock quotes from different portals/sources can be displayed differently. They can be just simple last price of trade or be details having data about price change, daily trading range, yearly trading range, daily and average traded volume, dividend yielded, EPS, P/E ratio, market capitalization, closing price, and highest and lowest traded price etc. Each stock quote have two values the bid and ask price, the difference between them is the spread.

Stock quotes can be historical, delayed and real-time. Historical stock quotes provide valuable information about the position of the stock in the past history, which is useful to determine the stock market cycles and periodical trends. Delayed stock quotes are the common free stock quotes provided by a variety of financial portals, market websites, and journals and papers. They are so called because there is a delay of 15 to 20 minutes in getting the quotes - useful for small scale traders and position traders. Real-time or live or streaming stock quotes are stock quotes with less than a minute delay. They are provided by special quote sites or through trading systems as free or for fee and are important for 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.

Order entry is regarded as the practice of brokerage firms to direct orders from their traders to other brokers or market makers. This is practiced by small brokers, usually deep discount brokers, who get less than some thousands of orders a day. Today, all the order routing process is done through computer networks, reducing manual intervention.

The order entry practice enables a small brokerage firm to act as a large one. More over this reduces their working cost and also enables them to earn more as Payment for Order Flow (PFOF). Market makers or brokers pay PFOF to brokers, as a compensation for the constant orders coming from these firms. The PFOF rate differs with markets and market makers, from 1 to 5 pennies per share.

Order routing occurs in markets like NYSE, NASDAQ and AMEX, where NYSE and AMEX order routing is know as ‘third market’. Today, order routing is the main factor responsible for the liquidity in lower tier issues. According to SEC rules, the brokerage firm must give its order routing, if any, in its disclosure and also have to inform the same to the trader annually.

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 stock market will have a delayed reaction to the stronger than expected employment report which was released on Friday when the markets were closed. With unemployment now at 4.4%, indications are now that the fed will hold interest rates at least steady if not one more increase going forward. Therefore, future economic reports will bear increasing sensitivity to stock prices. Watch for wholesale trade numbers and the trade deficit for February later this week as well as retail sales and business inventories.

Stocks to Watch: Shares of Johnson and Johnson (JNJ) are rebounding from oversold levels as a court ruling said that their drug coated stent did not infringe on Boston Scientific's (BSX) patent. The Tracinda Group is bidding $4.5 billion for the Chrysler division of Daimler (DCX) but is considered a low offer to buy. Cutera (CUTR) collapsed on a lower than expected earnings outlook for this quarter. Speculators can look for an oversold bounce possibly in the low 20's. Finally, Jarden Corp. (JAH) received an upgrade and price target of 45 by Goldman Sachs.

Special Note: From at technical standpoint, the major indexes are at least near term overbought as most stochastic indicators are stretched. What's interesting is the lower highs versus February when similar overbought levels occurred. Another indicator coming off a record extreme is the 15 day average of the OEX put/call ratio which hit 1.91. This is the highest ratio in the 24 year history of the OEX options market. The 3 previous highs all preceded significant market tops. Use protective measures to avoid a possible shakeout such as selling recent gainers, hedging, buying defensive or special situation stocks, and put insurance.

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, overnight trading can be defined as the trading in night hours. The trades take place local time between 9pm and 8am. In an another way overnight trading is the trades which are not liquidated in the same trading session. Overnight trading can be considered as the offspring of direct access trading.

Overnight trading can be done for stock, futures or forex currencies. The major application is in forex market. Because of the access to all international markets, a forex trader can trade around the clock, even his/her local currency market is closed. These overnight currency trades are executed on early morning of next day or evening of same day.

Overnight trading of stocks and futures also follows the same process. Here overnight trading is available for international traders, usually trading with international trading account and international trading system. These trading systems can provide charts, news, indicators and alerts as a normal trading system. Like day trading, overnight trading is only for dedicated traders, who are willing to take risk, as things can change drastically with the opening of market in 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.

Gap trading is one another trading strategy, in which the trader trades stocks (or other product) according to the gap. A gap defined as the difference between the closing price of the previous day and the opening price of the day. The gaps can be of 4 types, each have a long and short strategy making the total number of strategies 8.

The types of Gaps are

1. Full Gap Down – Opening price is lower than the previous day’s lowest price.
2. Full Gap Up – Opening price is higher than the previous day’s highest price.
3. Partial Gap Down – Opening price is between the previous day’s close and lowest price.
4. Partial Gap Up – Opening price is between the previous day’s close and highest price.

Normally, gap trading starts an hour after the opening of market, for giving the stock price time to settle down. The trading systems with intraday charting capabilities can easily be used to find suitable gap stocks. Although gap trading is practiced mostly for day trading, it can also be used for swing and position trading by taking weekly or monthly gaps. The main factor which determines the profit/loss in gap trading is news from various economic/political fields.

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 a number and types of technical indicators used by stock market traders to find suitable stocks. Of them, some very popular stock market indicators are given below

• Breakout – Move above or below the resistance level
• Correction – The reverse movement in the stock price, may be upwards or downwards.
• Ascending Tops - Charts showing stock price peaks higher than one before.
• Descending Tops – Charts showing stock peaks lower than one before.
• Rising Bottoms – The upper limit in which the pressure for selling causes decline in stock price.
• Support Level – Just reversal of rising bottoms causing increase in stock price.
• Head & Shoulders – First a plateau, then an upward movement and lastly the return to the plateau.
• Double Bottom – an inverse ‘V’ shaped chart showing downward, then upward and them downward price change.
• Double Top – A ‘V’ shaped chart just opposite to the one above.
• ROE (Return on Equity) – The profitability of a company compared to others of the same sector.
• P/E (Price/Earnings) Ratio - comparison of current stock price with per-stock earnings.
• P to B (Price to Book) Ratio – The ratio of the market value of the stock with the book value.
• Dividend Yield – Income provided by equity.

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.

In previous posts, we have discussed many popular stock trading strategies and tips for being a successful trader. Today we will discuss some more tips.

• Look for and watch low priced stocks, which are occasionally/rarely traded in massive quantities. Try to know more about the companies that issued the stock and the brokers and traders dealing with the stock.
• Evaluate your resources and strategies, and calculate how much loss you can afford. And also quite your trade on reaching this mark.
• Try to develop some backup plans on losses and other emergencies.
• Try to invest in both safe low-yield stock and risky high-return stock in reasonable ratio to prevent you washing off from the market.
• Configure, write down and modify your trading plan(s). Go through the plan(s) at the beginning of your trading day.
• Before buying the stock calculate and determine the entry and exist points.
• Diversify your investments in different types of stocks.
• When buying replay quickly to rumors, but when selling replay to news not rumor.

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.

Day trading and swing trading are the two popular short-trading methods. So which one is beneficial for you? It depends on your style of trading, number of trading and amount & leverage with which you trade. Below is a general comparative study between day trading and swing trading.

As day trading requires the closing of positions by end of the day, the traders are relaxed from overnight risk. This can increase your chance to profit. Day trading also offers higher leverage (up to 4:1) offering a trader more freedom and advantages in executing trades. But day trading requires sufficient concentration and the trader usually do not can maintain more than one or two open positions. Day trading also gives you only a little time to react to the market.

On the other hand swing trading involves overnight risk, which can cost you high. Although here the leverage is more than that of position trading (up to 2:1), the trader cannot make that much use of it compared to day trading. A swing trader gets more time to execute a trade and can maintain two or more positions; but making swing trading a position trading can eat up the margin.

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.

Forex options are options in which the underlying product is a currency pair. They are traded over-the-counter and are call/put type. That is call 1currency/put 2currency. There are mainly two types of forex options available for traders to trade as traditional forex options and SPOT options.

Traditional forex options may be American or European type. They are standard options, which carry the right, not the obligation, to buy or sell specified currencies at set time and price. In case you buy AUD / USD options at 0.7500 in 2 month and the rate is above 0.7500 after one month you can buy AUD by putting USD for just 0.7500. Traditional options have premiums lower than SPOT options but are hard to set and execute.

SPOT (Single Payment Options Trading) options give you choice of selecting/predicting scenarios. If your predictions are right, your option is automatically exercised and you get profit, other wise you loss your premium. The additional choices that SPOT options offer include standard options, one-touch SPOT, no-touch SPOT, digital SPOT, double one-touch SPOT and double no-touch SPOT. But SPOT options have higher option premiums than traditional ones.

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.