Online Trading Blog

Most option traders does not trade simple call and put options, but they trade a combination of them in a single option order. This type of trading strategy is known as multi-legged options trading. A multi-leg option order will allow the trader to buy and sell a number of different options simultaneously without placing separate orders.

The basic components of a multi leg options order are the call and put options, which are available for stocks and futures. Multi-legged trading includes a variety of trading strategies such as straddle trading, strangle trading, ratio spread and butterfly spread etc. These strategies can be used to profit from a variety of market condition, bullish, bearish or neutral. Multi-legged options trading require complex analyses with high accuracy. There are lots of options trading systems which enable traders to finding out suitable trading opportunities.

The main advantages of multi-legged options trading strategies include profit from any market condition, requirement to place only one order to buy or sell a number of options, ability to perform advanced options trading strategies, etc. But as told earlier the trading requires substantial market analysis and also involves considerable risks.

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: With more evidence mounting that the housing sector is deteriorating; weaker sales, 8 month supply, and prices down from a year ago, it would be difficult for the Federal Reserve to raise rates any time soon. Watch the May consumer confidence report on Tuesday, and the 1st quarter GDP on Wednesday. Also the jobless claims figures and crude oil and gasoline inventories are due mid week. Finally the week ends with May auto sales and an important May employment report on Friday June 1.

Stocks to Watch: Coca-Cola (KO) turned up after announcing it is buying vitamin water maker Glaceau for $4 billion in cash to enhance its appeal to a market of increasingly health conscious consumers. Cleveland Cliffs (CLF)) continues to ride higher on takeover speculation from a Brazilian firm. Verigy Ltd. (VRGY) broke out of a tight trading range on solid 2nd quarter earnings and a good 3rd quarter outlook for its semi-conductor test equipment. CDI Corp. (CDI) pushed through a recent trading range after a Goldman Sachs upgrade.

Special Note: Look for volume to gradually increase as the week progresses following the holiday break. Price volatility also looks increasingly likely as the calendar shifts from May to June. Momentum may carry the major indexes to higher highs but then suddenly shift gears in reverse because of technical sell signals like the near term stochastic measure which has turned down. As the rally shows signs of tiring, a strategy of diversification is now key. Profits should be taken to provide cash for a coming correction and potential trading opportunities.

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

Swing trading is the intermediate way between day trading and trend or position trading. Swing traders hold stocks for comparatively longer period of time than day trading; from hours to weeks. Simply saying swing traders are not worried about time limits, they only look for opportunities for more profit.

Swing trading can be profitable for all types of stock traders. It is practiced mainly for large-cap and mid-cap stocks – as they are most actively traded and has swings between precise up and low prices. Swing trading can be practiced for both bull and bear markets if the trader is sure about the direct of market trend. Like trend trading the most difficult things in stock swing trading are finding suitable stocks and determining market direction. Most swing traders use EMA (exponential moving average) to figure out the baselines for trading.

Stock swing trading allows traders to maximize their profit by adjusting the time to go short. It enables a trader to take short-term profits in a market with frequent ups and downs and long-term profit in a market with stabilized trend. But swing trading can be also risky if the trader misunderstands the market. Trading on leverage also can cause problems.

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.

Managed accounts forex trading is some what similar to investing in mutual funds. As the mutual fund firms trades stocks or other instruments with your money managed forex account providers trades currencies for you. But unlike mutual fund investments, managed account forex trading providers you control over your money.

Managed forex accounts are maintained by professionals having substantial knowledge of forex market. This service is for forex traders who either are less experienced in trading or have less time to spend for monitoring the market and executing trades. Forex trading through managed accounts are so useful to novice traders to get an idea about the market and trading. This service is provided by many financial institutions. Automated managed forex systems are also available for trading. The usual capital needed for opening an account is over $5,000; there are also many institutions which let you to trade with lesser account balance.

Forex trading through managed accounts are also involves risk for loss. Although there are firms offering multiplication of your capital in a few days, the maximum growth-rate of your investment for a well managed account is around 20% per month in usual market conditions; most users get it around 5% to 10%. Managed account forex trading is not advocated for active 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 futures trading systems provide a great edge to online traders over floor traders. They make the trading procedure easy for even novice traders and help even very-small scale traders to make profit. Futures trading systems were these for decades and with time they improved substantially.

The first type of futures trading systems was the “analysis systems”, which enables traders to use a range of technical indicators to analysis the market. But these systems did not help trades to build a good trading strategy as it was the trader who have to make all the decisions interpreting analyses. The next level was the black box systems which generated trading signals for traders by evaluating the market logically at specific prices. But the logic, the entry and exit rules, were kept in secret making traders completely blind to follow signals. These systems had poor customization capabilities and also did not helped traders to design a strategy.

The new generation of futures trading systems was developed in around 1985, which enabled traders to test their trading ability with historical market data. These systems provided traders full access to entry and exit rules. Today’s futures trading systems are integrated with excellent technical indicators, trading models and strategies to keep the trader live in any market condition. But today also many futures trading systems, grey box systems, hide some entry and exit rules from traders. They have integrated with copy protection methods, which some times causes crashing of these systems.

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.

Deep value investing strategy is an extreme value investing strategy, in which the investors invest in very low priced stocks. Usually these stocks are of sunset companies, the companies on which other traders show a little or no interest.

Deep value investors find suitable companies using complex analysis which include price to book ratios and price to earnings ratios. Usually the price to book ratio of these companies will be below 1.0 and price to earnings ratio will be seven or less. Deep value investors invest in these companies simply because they trust those companies. They believes/knows that these companies have a brighter future and the stock price will certainly go up.

Deep value investing includes substantial risks. The advantages of deep value investing strategy include buying of good company stocks at low prices, chance for more profit, etc. The downsides include loss from price falling, difficulty in selling stocks, etc. Deep value investors must be extreme careful with their investing strategy and money management. It is always good to diversify your investments either in different value stocks or in value stocks and stable frequently traded stocks (growth stocks). Deep value strategy can also be used for short-term profits, not day trading or swing trading profits; if the stock is a some what frequently traded 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.

Straddle trading strategy is one of the multi-legged options trading strategies in which an option trader buys both call and put options of same expiry date for options of same underlying product. Options straddle trading can provide unlimited profits, but is also riskier. Straddle trading includes mainly two strategies as long straddle and short straddle trading.

Long straddle strategy is suitable for options, in which the underlying product is expected to show great movements and the trader is unable to predict the direction of market. If the stock goes upward the trader can profit from exercising call options, if in the opposite way then from exercising put options. The deviation from the strike price is directly proportional to the profit. Short straddle strategy is suitable for writing put and call options in which the underlying product is expected to show minimal movement. The trader can profit premium amount by expiration of the options.

Both type of options straddle trading include substantial risk. Long straddle practice can result in loss of premium if the stock remains close to the strike price resulting expiration of options without exercise. Short straddles can cause loss if the underlying stock price moves away from strike price. In fact, short straddles are riskier than long straddle and are recommended only to practice by sophisticated and experienced 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.

Bucket shop and boiler room brokers are fake brokers who profit from the loss of their clients. Most often they squeeze out money from the customer traders and vanish before getting noticed. Bucket shop brokers also known as bucketeers, practice may illegal methods for profiting such as

• Not executing a trade even after the trader placed the order. The bucket shops eat this money.
• Delaying execution of trades, so that it can make profit from price difference between actual time price and execution time price.
• Executing trades so that the client traders are always have loss in his sheet.
• Following boiler room method - extensive promotion of certain non-profitable stocks, mostly those they own, on telephone. The victims are usually less experienced traders.
• Keeping the clients unaware of daily stock market trends.

Bucket shops were popular in 1920s. The name came as a result of false brokers, not authenticated to stock trading, direct the orders from clients to “buckets” rather than “markets”. Today bucket shops are an extended community, although some can be found in penny stock markets. The SEC regulations such as the need of instant order routing restricts bucket shops from trading.
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 recent report showed wholesale inflation recently moderated but was overshadowed by weak retail sales. Although this increases the chance of lower interest rates later this year or next, the April CPI release on Tuesday will provide further clues. Also, listen to Ben Bernanke's speech in Georgia regarding credit derivatives. Wednesday has an important housing starts number for April as well as industrial production figures. Watch for jobless claims on Thursday, and the consumer confidence report for May on Friday.

Stocks to Watch: Shares of Foot Locker (FL) dropped substantially on an earnings forecast below previous expectations although a bounce could be in the offing. Alcatel-Lucent (ALU) shares pushed higher as Q1 profits exceeded expectations and was upgraded based on a cost cutting plan. Lyondell Chemical (LYO) broke-out of a price consolidation upward when Occidental Petroleum (OXY) announced plans to sell its entire 8% stake in LYO for $32.11. World Fuel Services (INT) gapped substantially lower when earnings fell short of estimates.

Special Note: The DOW and S&P 500 continue to spiral north finishing up 6 straight weeks, but underlying indicators such as lagging breadth and extreme high readings of 90%+ on the 10 day daily sentiment index continue to flash cautionary signs of a reversal. Investors and traders can use the current rally to raise cash in winnings stocks and use funds to hedge against other positions. Inverse funds from Rydex Funds or Pro-Funds are a good way to balance risk.

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

Today many traders, especially novice traders, are entering to the forex market to make their future bright. Many of these traders have no previous trading experiences, while some others have experience of trading stocks and futures. So what are the things that attract traders towards forex market.

Advantages of Forex Trading

1. Simplicity in understanding and executing trades.
2. Ability to trade internationally, rather than limiting your trades to local/limited exchanges.
3. Direct control over your money.
4. Liquidity than any other financial market in this world.
5. Ability to trade whenever you want. There is no time limitations, and thus can be practiced as a side business. Ability to trade from the comfort of home.
6. Ability to go short at any time you want.
7. No/less commission fees.
8. Advanced trading platforms free of cost.
9. Change in the price of individual financial product not so affect the trader; as the profit/loss depends only on the exchange rates.
10. A variety of currency pairs to choose from.
11. Can be traded for short-term long-term profits.
12. Elevated leverages for trading on margin.
13. Added advantage of online trading making trades automated.

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.

Small or Mini or Micro cap stocks are so popular in these days. They are stocks from companies which hold very small part of their respective markets. The term Small cap stocks is often misused with penny stocks, one of the riskier equities to trade. According to experts, there are both advantages and disadvantages of trading small cap stocks over trading large and mid cap stocks.

Advantages of Small Cap Stock Trading

• Small cap stocks are much less priced than large and mid cap stocks. So trader can trade more number of stocks with less money.
• Small cap companies show faster growth rates than well-established large companies.
• Offers more return on investment than large companies.
• Good for day trading if trading volumes are sufficient.
• Good for novice traders to sharp their abilities.
• Small cap companies are keener in their business areas and future developments with minimum wastage of resources.

Disadvantages of Small Cap Stock Trading

• Riskier than mid and large cap stocks, which have fairly stable prices.
• Markets are highly volatile with news and disasters.
• Small cap stock trading yields lesser dividends, as most companies invest their earnings to grow more.
• There may be lack of sufficient company information.
• The trader himself has to execute the trades as there will be lesser support from brokers and advisors.

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.

Fade or fading is a stock trading strategy followed by traders who are willing to take more risk than other traders. This is a trading strategy which simply means “trading against the market”. Fading involves the buying of stocks when market in on down stream and buying of stocks when market is moving high.

The traders following fading strategy do so because of many reasons. When market goes and reaches a certain position they short their position because they believe that the stocks are overvalued, other traders will soon short their position and the price will fall down or the buyers may be seldom ready to buy those stocks. Similarly they buys stocks on bearish markets because they believe that the stocks are became cheaper, the increasing demand will soon rise the price or more traders will soon rush in.

As told, fading involves a considerable amount of risk. But it is also more profitable; and can be work well for novice traders following short-trading strategy. Fading does not involve extensive technical analysis and often the trading demands extreme market conditions to begin trades. Although a less followed strategy, fading the market increase the liquidity of the market and contributes to its stability.

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.

Spread options are the most basic derivative of option contracts. They are option contracts which are created on the difference between two underlying financial products. Simply spread options are options which enable the holder to buy sell two related options simultaneously. These options usually will have dissimilar strike prices and expiration rates.

Spread options are available for stocks, currencies and bonds. They are mostly traded over the counter (OTC), but also available in large markets. The most popular use of spread options are in commodity and forex currency markets. There are many types of spreads available as spread options as crack spread – in which one commodity is for crude oil, crush spread – in which one commodity is soybean, spark spread – for electricity commodities, calendar spread, dual spread, etc.

Spread options are simple contracts and are simple to trade. Their increased popularity has contributed to the stability of all major financial markets. Spread options provide both American and European style of exercises. They may be two asset options or three asset options.

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.

Spread betting is a strategy to profit from the market by predicting the market. As you may know spread is the difference between the bid and offer price. Spread trading is a type of speculation in which the trader bet against a spread betting company that a particular stock will falls below its bid price or will rise above its offer price.

Spread betting does not involve owing the underlying equity, and have resemblance with options and futures trading. The general procedure of spread betting is as follows. Imagine a stock with bid price of $100 and offer price of $102. If you feel the price will be down you can bet for a certain money, say $3, with every decrease in $1 or one point. If the market follows your thoughts and the price is decreased to $95, then you will receive $3x 5=$15. If market goes against you and the price be $105 you will lose $15.

Spread betting is also riskier strategy. Traders can implement stop loss and stop win options with the bookmaker. The main advantages of spread betting includes tax exemption on profits (in UK), freedom to trade wide range of markets, chance to profit in both market direction, no commissions, etc. The main practice of spread betting is in UK, American stocks are also available for spread betting.

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 recent report showed wholesale inflation recently moderated but was overshadowed by weak retail sales. Although this increases the chance of lower interest rates later this year or next, the April CPI release on Tuesday will provide further clues. Also, listen to Ben Bernanke's speech in Georgia regarding credit derivatives. Wednesday has an important housing starts number for April as well as industrial production figures. Watch for jobless claims on Thursday, and the consumer confidence report for May on Friday.

Stocks to Watch: Shares of Foot Locker (FL) dropped substantially on an earnings forecast below previous expectations although a bounce could be in the offing. Alcatel-Lucent (ALU) shares pushed higher as Q1 profits exceeded expectations and was upgraded based on a cost cutting plan. Lyondell Chemical (LYO) broke-out of a price consolidation upward when Occidental Petroleum (OXY) announced plans to sell its entire 8% stake in LYO for $32.11. World Fuel Services (INT) gapped substantially lower when earnings fell short of estimates.

Special Note: The DOW and S&P 500 continue to spiral north finishing up 6 straight weeks, but underlying indicators such as lagging breadth and extreme high readings of 90%+ on the 10 day daily sentiment index continue to flash cautionary signs of a reversal. Investors and traders can use the current rally to raise cash in winnings stocks and use funds to hedge against other positions. Inverse funds from Rydex Funds or Pro-Funds are a good way to balance risk.

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

---

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

Currency exchange rate denote the rate at which one currency can be converted or exchanged to another. Different nations adopt different types of strategies to regulate the exchange rate of their currencies. There were many changes in the regulation of exchange rate in last century, from gold standard to free floating and the involvement of IMF.

There are mainly two types of currency exchange rates as fixed exchange rate and floating exchange rate. In fixed or pegged exchange rate, the government of one nation through the central bank maintains a steady exchange rate of its own currency with others. The central bank buys and sells foreign currencies in forex markets to maintain the steady exchange rate. Although fixed exchange rate is very good to maintain inflation/deflation levels, it may also lead to development of black-market in the country and devaluation of the currency.

On the other hand in floating or self-correcting exchange rate the rates are ever changing with supply and demand of currencies, global and local news, government policies etc. The central bank and the government usually not have any active part in change in exchange rate of currencies but may have to perform substantial tasks to maintain inflation or deflation levels.

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.

Seasonal futures spread trading or seasonal trading is a futures trading strategy used to profit from seasonal variations in futures price changes. In this trading strategy, the traders are only concerned with the price changes between two futures contracts, the spread; one contract that he buys and the other he sells. Seasonal futures spread trading utilizes periodical trends in contract prices to execute trades.

An seasonal spread trader can profit in 4 different situations. If he thinks that the difference in prices will increase. He can profit

• If the buying contract price goes up than the sold contract.
• If the sold contract price goes down than the one brought.

If he thinks that the difference in prices will decrease. He can profit

• If the buying contract goes less up than he sold.
• If the sold contract goes less down than one brought.

Seasonal futures spread trading can be done for a variety of types of futures like for grains, metals and financial instruments. The two futures contracts can be same with different delivery months or different with different underlying commodities. Seasonal spread trading also includes risks and the trader must combine fundamental, technical and historical analysis to find suitable futures contracts. The spread charts showing the price difference of two selected contracts for a period of time are also available with some trading systems, which can guide you in seasonal spread trading.

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.

Penny stock market is considered as the most volatile stock market. According to SEC, trading penny stock includes substantial risks and the traders must be well aware of them. Like with stocks, penny stocks also have the option of trading or investing. Each of these strategies holds merits and demerits. Here are some tips for better execute these procedures.

Penny Stock Trading

• Because of less liquidity in market, the trader must find stock which are comparatively popular.
• Trade with lesser amount of money than on stock markets.
• Choose one or two company stocks for a day and concentrate on them.
• Limit/avoid trading on margin.
• Always be active to exploit occasional situations.
• Always look for a good penny stock broker offering occasional tips and helps.

Penny Stock Investing

• Investing in penny stocks is comparatively less riskier than trading.
• Diversify your invest in various companies and sectors.
• Hold stocks of good stable companies and trade off that of doubtful companies.
• Always stay with the market.
• Always look for a good penny stock broker offering occasional tips and helps.

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.

Direct access trading or DAT (also known as EDAT) have revolutionized the way of trading. Today there are many traders who solely depend on DAT systems to execute their traders. Direct access trading has both advantages and disadvantages over online trading and traditional trading. They are discussed below.

Advantages of DAT

1. The process is fully automated.
2. Direct control over investments.
3. Fastest trade execution with less than a second delay.
4. Access to Level 2 or level 3 (real-time) market data.
5. Broker independent, needs no assistance to execute trades.
6. Most advanced trading system.
7. Cheaper commission rates.
8. Choice to route orders to market maker or specialist.
9. Choice of ECN (Electronic Communication Network).
10. Enhanced slippage control.
11. Excellent for day traders and other active traders.
12. Usually high leverages.

Disadvantages of DAT

1. Traders have to fulfill activity and account minimums.
2. Involves monthly platform usage fee.
3. May involve inactivity fee, not suitable for part-time traders.
4. Margin trading using high leverages can magnify your loss.
5. Not suitable for position traders or long-term investors.
6. Traders are fully responsible for their decisions; not suitable for novice traders.
7. The trading systems, charges and the service vary greatly with brokers and account sizes.

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.

Being the largest market with ever changing exchange rates and high profit making possibility forex market attracts more and more novice traders every day. But not all these novice traders, as well as some existing traders, have enough time and also the knowledge to make all there trades a profitable one. This is where forex trading signals help them.

Forex signals are provided by specific firms, who do extensive research and analysis to figure out entry and exit points for traders with the stop-loss values and profit limit targets. Forex trading signal providers make predictions and offer trading tips. They send these signals to the traders via e-mail, SMS or specialized software once or twice a day. Usually forex trading signals are not free, but many providers offer free trails for a limited time period. Most signal providers specialize on a limited number of currency pairs (usually around 5).

Trading according to the forex signals does not ensure profit; in fact the existence of these signals is debatable. What ever will be the signal, it is last the forex trader, who has to make the decision. It is advised to sign-up for signals from reputed providers only with a good history of providing accurate and genuine signals. Always choose a forex signal provider who offer you free trail for a substantial period.

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: Job growth has now slowed to the lowest level in 2 years with only 88,000 jobs created. This weakness is expected to keep the Federal Reserve on hold with interest rates this Wednesday. Reports to watch this week are Tuesday's wholesale inventories, Thursday's international trade numbers, import prices, and jobless claims, and Friday's PPI, retail sales, and business inventories. With gas prices now near record levels at the pump, watch this Wednesday's crude oil and gasoline report for clues of potential relief or not.

Stocks to Watch: Mastercard (MA) earnings surged 70% as credit dependent consumers charged more and more purchases. Sears Holdings (SHLD) gapped lower after it estimated earnings to be less than the street expected. Crocs Inc. (CROX) maker of unusual shoes soared on much better than expected profits and declared a 2 for 1 stock split. Eastman Kodak (EK) reported a greater than expected loss and cut there 07' forecast as the stock continues to underperform. Electronic Data Systems (EDS) sold off hard on weaker than anticipated sales.

Special Note: A further note to last weeks special alert regarding the DOW's historic surge without a 10% correction. Of the last 7 periods of time greater than 30 months before a correction unfolded, the smallest correction was 14% starting in 1953 while the largest was 50% starting in 1937. Incidentally, the 1987 crash preceded a 37 month stretch of time. The current 50 month period is unprecedented. Potentially, the volatility (VIX) options offer a way to profit from or hedge away portfolio risk while shorting or purchasing puts as insurance on long positions are others.

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

Trading on margin greatly increases a traders buying power. It provides him an opportunity to make enormous profits using lesser money. Margin trading is a very common trading strategy that has both merits and demerits; and the success depends on many factors, both manageable and unmanageable.

Advantages of Margin Trading

• Increased buying power with less money.
• More profit with less investment.
• A trader can burrow up to half of his purchasing price as initial margin.
• Greatly suitable for day traders, who need to complete more number of trades with higher volume stocks.
• Suitable for experienced traders, having knowledge of stock market trend patterns.

Disadvantages of Margin Trading

• Add more burdens on traders’ shoulders in losing trades.
• Have to payoff interest on margin.
• Cannot trade all stocks - like OTC stocks, penny stocks, IPOs etc.
• Your account balance and buying power changes with changes in stock prices.
• The chance of margin call is always prevailing.
• You are always obligated to keep a minimum account – the maintenance margin.
• With falling stock prices the traders have much less control.
• Not advocated for novice 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.

Trend lines are simple and one of the widely used methods of figuring out the trend in a stock market or any other financial market. They are straight lines drawn of a trading chart by joining two or more top or bottom positions and extending to the future. Trend lines are extensively used for determining support and resistant levels to execute trades – both by trend and range traders.

There are mainly two types of trend lines as uptrend lines and downtrend lines. Uptrend lines are used to figure out resistance levels and are drawn by joining two lower most points in a bullish chart, i.e., the second point is higher than the first one. The downtrend lines are for support levels, drawn by joining two upper most points in a bearish chart, i.e, the second point is lower than the first one. There are arithmetic trend lines – in which the axis are plotted according to arithmetic difference, log trend lines – which follow percentage difference, and semi-log trend lines.

The accuracy of trend line depends on the number of points that touches it and the steep of the line. Often a trend is confirmed when the third high/low point touches the line; the more touching points the more accurate the trend. With the increase in steep, the accuracy decreases. Trend lines can be drawn with any desired time interval; short-term traders prefer short intervals and long-term traders long intervals.

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.

Range trading is one another trading strategy followed by traders trading stock, futures and forex currencies to profit from market. Range trading is predominant in forex market, where the high liquidity, as a result of its trading volume, in the market helps range traders to better execute trades. Range trading is different from trend trading and the traders trade irrespective of the trend believing that the price will always return to a trading range.

Range trading is an easy to follow strategy, that requires a different money-management style. The range traders do not look for precise entry and exit points, but they get in the market and try to profit from what ever situation may be. They do not over relay on leverages, as utilizing high leverages can cause margin calls, especially when the price is moving away from the range.

Range traders buy financial instruments when their prices drop to lower supporting levels and sell them on approaching higher resistance levels. Thus the most wanted feature that one range trader’s trading software is the signal generating ability on approaching supporting and resistance levels. The advantages of range trading involve simplicity and non-directional behavior. The disadvantages include the need of more money, need of liquidity in market and trading discipline.

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 markets continue to shrug off bad economic news as GDP growth slowed to 1.3% in the first quarter led by weak housing and inflation hitting 4% annualized with higher energy prices. Investors should take caution (see special alert below) and stay as liquid as possible. Reports to watch are Monday's personal income and construction spending for March, Tuesday's auto sales, and Wednesday's March factory orders. Thursday brings 1st quarter productivity and jobless claims. Friday, another big employment report for April.

Stocks to Watch: Shares of Merck (MRK) look top heavy and fell after the FDA rejected its Arcoxia drug for the same concerns posed by the withdrawn Vioxx drug. Persistently high oil prices benefited Chevron (CVX) as it beat estimates for their bottom line. The airline sector took a hit as UAL Corp. (UAUA) was downgraded by a major brokerage firm based on a soft revenue outlook. Building Materials Holding Corporation (BLG) lost money and revenue dropped 36% as it continues to feel the negative effects of the weak homebuilding market.

Special Alert! The 111 year history of the DOW has now produced the longest stretch of time 50 months without a 10% correction. This little known and misunderstood fact has increased the probability of a steep pullback substantially as the previous 9 past durations of time without a correction have preceded declines averaging 26%. In fact the DOW looks to be completing a parabolic rise on a monthly chart into a dramatic crest in the months of May or June as evidenced by a string of 19 up days out of 21. History of this caliber is best heeded rather than ignored. Look for another period of increased downside volatility directly ahead.


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

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