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Non Transaction Fee or NTF funds, also known as No Transaction Fee Mutual Funds, are no-load mutual funds without any commission charges. Like no-load mutual funds which are usually offered directly through the investment company without any commission charges, NTF funds are offered through a brokerage firm without any transaction fee.

Non transaction fee funds are advantageous for investors who wish to reduce the commission charges and have long-term profit goals. Often there is not much performance difference between NTF funds (or no-load funds) and funds with transaction fees (load funds). So it is always a good option to reduce trading costs. Brokers offering NTF funds are benefited by 1) attracting more customers by providing a range of low/no fee products, and 2) by getting compensation from mutual fund issuing firms – usually as marketing firms.

Not all brokers offer no transaction fee funds; and also the number and type of funds available differ considerably between brokers. At times the trader/investor needs to meet certain conditions/terms for getting no transaction fee. Usually there are restrictions in short-term fund redemptions. Some brokerage firms charge price for Broker assisted trading of NTF funds.

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Stop entry orders are market entry orders placed at set price levels. These orders utilize stops as a way to enter into a trade rather than exit a trade by locking profit or minimizing risk (stop-loss orders). Stop entry orders work just opposite to limit entry orders. They are of two types.

1. Buy at Stop Orders: Here the buy orders are placed at set prices above the current market price. Buy at stop orders are executed when the price reach/break the set price (often a resistance level).
2. Sell at Stop Orders: Here the sell orders are placed at set prices below the current market price. Sell at stop orders are executed when the price reach/cross the set price (often a support level).

Stop entry orders are practiced by traders following breakout strategies. Usually the orders are placed when the market is close to a breaking; and the price is expected to go up/down once it breaks a resistance/support level. Stop entry orders are widely used by forex traders, but also can be used to trade stocks and futures. Remember, stop-entry orders usually have greater risk associated with them than limit entry and stop-loss orders and the trader should be good in technical analysis to predict the trend changes and to set the stops.

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Tomorrow Next or Tom Next or T/N is a common trading procedure in forex market; practiced solely for the purpose of avoiding taking delivery of currencies. Tom Next is a simple procedure which includes closing of open position on market daily close rate and opening a new position on the new market opening rate on next trading day.

In forex trading,

• Delivery of currencies occurs two days after the transaction date.
• Most forex traders are speculators who want to avoid taking of delivery.
• If you buy and sell same lots of a currency pair in same day (or you open and close a position in one day), there is no need of taking delivery. Then it is only about taking profit or paying loss.

Tomorrow Next procedure comes in to play for traders who want to keep their open positions to next trading day and not want to take delivery. All open positions are closed at market closing and (almost simultaneously) are re-opened at opening of next trading day. Now by law you are opened and closed a position in same trading day and there is no issue of taking delivery.

Forex roll over fees is also associated with Tom Next practice. The trader will receive rollover payments if he is buying a high-interest rate currency and or have to pay rollover payments if he is buying a low-interest rate currency.

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Downside Tasuki Gap is a bearish trend-continuation candlestick pattern which indicates continuation of an existing downtrend, even after a bullish day. Bearish Tasuki gap is a rare pattern which usually favors short-sellers to profit from market. It is a three candlestick pattern which includes two bearish candlesticks and one bullish candlestick.

The requirements of bearish downside Tasuki gap include

• The pattern should be formed in a significant downtrend.
• The first day should be a bearish day.
• The second day also should be a bearish day, where the price should open after a noticeable gap.
• The third day should also be a bullish day, of which the real-body should open within the second day candlestick body and should close within the gap between first and second candlestick.

Bearish downside Tasuki gap candlesticks form when there is strong bearish trend. The bullish candlestick on the third day is a temporary halt of the trend, as a result of short-covering or buying at low prices. The partial filling of the gap indicate that the buyers not yet got control of market.

Bearish downside Tasuki gap is a moderately reliable pattern. The reliability increases with increase in gap, decrease and similarity in real-body size of second and third candlesticks, and with the lesser the gap is filled. Confirmation of trend continuation is strongly recommended, which can be a bearish candlestick or a lower gap on following day.

Remember: if the third day candlestick’s real body completely fills the gap, or exceeds the gap, then it is considered a weak indication of trend continuation, and there is a strong possibility of trend reversal or sidewise movements.

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Ultra ETFs or Leveraged ETFs are exchange traded funds which use leverage and derivative trading for double/triple the return. There are now a number of Ultra ETFs available for trading from ProShares, Rydex, ProFunds, etc. There are both advantages and disadvantages of trading these funds.

Advantages of Ultra ETFs

1. Ultra ETFs tend to offer more return than normal ETFs.
2. Ultra ETFs are good for fulfilling short-term profit goals.
3. There are a broad range of Ultra ETFs to choose from index-specific, sector-specific and market-specific.
4. Ultra ETFs are good for traders who are short on their capital but wants a increased market exposure.
5. Ultra ETFs are good option in trendy markets where there is sufficient price volatility.

Disadvantages of Ultra ETFs

1. There is not much long-term performance history available for Ultra ETFs.
2. As Ultra ETFs are managed on a daily basis there is no surety of double/triple returns over long-term.
3. Ultra ETFs have high expense rations (close to 1%) compared to normal ETFs (often below 0.2%).
4. Ultra ETFs offer poor returns when the market is flat or moving sidewise.
5. Ultra ETFs may involve counterparty risk, because of derivatives trading.

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The Week Ahead: The markets finished mixed last week despite a government bailout of two of the three auto giants. With a short trading week ahead, all relevant data will be released inside of two days. Tuesday brings the final Q3 GDP report, new and existing home sales, and the Consumer Sentiment from the University of Michigan. Wednesday is a shortened trading day ahead of the holiday as personal income numbers, durable goods, and a jobless claims report are to be contended with.

Stocks to Watch: Weyerhaeuser Co. (WY) shares dropped abruptly as the company warned that Q4 will be 58% below Q3 levels do to the weak housing market. It also cut its quarterly dividend but will repurchase up to $250 million of its stock. Gardner Denver (GDI), maker of compressors etc. sees reduced Q4 earnings and plans a workforce cut of 9%, but the stock recovered strongly off its low. Darden Restaurants (DRI) has now more than doubled since November 21 as there sales rose 9.6% in Q2 but was also downgraded by S&P.

Special Note: As 2008 comes to a close, an interesting note from Bloomberg shows that dividends are being cut at the fastest rate in over fifty years because of the worsening recession. Conserving cash is becoming a broader theme by dividend paying companies. With the US T-bill yield and fed funds rate near zero, it would seem that interest rates are at very long term lows relative to the 10 year T-Bond. The dollars recent sudden downspout may be hinting that all the government bailouts is making some bond investors nervous.

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

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Spread trading is one of the most popular currency trading strategies to profit from the rollover fee differences of different currency pairs. Here the trader buys a high interest currency pair (buys a high interest currency like GBP, NZD and AUD against a low interest currency like JPY or CHF). The trader then, for hedging the position holding risk, shorts a low interest currency pair (e.g.: CHF/JPY) having great correlation with the first currency pair.

Fore example a trader buys 1,000,000 GBP/JPY for getting a rollover interest (daily interest credit of $200 - 250). But the exchange rate fluctuations of the currency pair and market movements can greatly alter the profit making opportunities. So for hedging the risk the trader shorts 1,000,000 CHF/JPY (daily interest payment of $20 - $40).

Shorting 1,000,000 CHF/JPY only equals around 542,000 pounds and thus the long position is only covered to that amount. But if the trader short equal Swiss Franc to over his open position (he need around 1,840,000 francs), that will be theoretically equal to opening a GBP/CHF position but at a higher cost (as the trader opened the position using JPY paying extra spreads). If the long and short currency pairs have reduced correlation, the scenario is even worsened. Thus thorough analysis of currency pairs and systematic mathematical modeling is greatly advised in forex spread trading.

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Day trading of futures contracts is a trading strategy which need discipline, knowledge and experience. There are many liquid futures contracts and markets which can be day traded. Increased margin available for futures contracts make them perfect for day traders. But, to profit from day trading, the trader should have a good day trading plan, day trading software.

Good market and contracts for day trading: Most futures day traders prefer E-mini S&P market for day trading because of its high liquidity and quick order executions via electronic trading. Liquid futures contracts like E-mini Nasdaq and E-mini Russell futures, Dow futures, 10 year T-Notes, Crude oil futures, Soybean futures, and futures contracts on currencies like Japanese Yen and Euro are most often day traded.

Advantages of Day Trading of Futures Contracts

• No overnight position holding risk.
• Increased margin allowing traders to control contracts that worth many times the account size.
• Quick learning, as traders need to watch the market as closely as they can.

Disadvantages of Day Trading of Futures Contracts

• Not suitable at all for novice traders.
• Increased commission charges, because of rapid buying and selling, can eat up the profit.
• Small mistakes can cost high.

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Long shadow and Marubozo are single candlesticks which carry important trading information. Long shadows, as the name suggests, are candlesticks which have long shadows, which extend to the highest and lowest price of the day. They usually have small real-body which indicates opening and closing prices.

A long-shadow candlestick with long upper shadow and small lower shadow (or whose real-body is close to its bottom) indicates that buyers have dominated the day. A long-shadow candlestick with small upper shadow and long lower shadow (or whose real-body is close to its top) indicates that the sellers have dominated the day. The color of the long-shadow candlestick is not so important, but will be better reliable if it is black (bearish or colored) on a seller dominated day and white (clear or bullish) on a buyer dominated day.

Marubozo, which means bald or shaven head, is a candlestick with no/very small shadow; showing that no price movement occurred outside opening and closing prices. Marubozo can be bullish or bearish. On a bullish marubozo day, the opening price will be the lowest price and closing price will be the highest of the day indicating that traders are more willing to buy than sell. On a bearish marubozo day, the opening price will be the highest price and closing price will be the lowest of the day indicating that traders are more willing to sell.

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Range trading is on of the most simple and widely followed trading strategies for trading different instruments including forex currencies. Ranging trading does not demand too much fundamental or technical analysis, it does not demand following/predicting trends and does not require to quickly responding to news.

Forex range trading strategy is simple. Range traders believe that the market often trades with in levels/channels; or simply, with in support and resistance levels. These support and resistance levels can easily be defined. Range traders buy currencies when the price is on support level and sell currencies when the price is on resistance level. Or range traders short positions whenever the price moves up and long positions whenever the price moves down from a level.

Forex range trading strategy requires good planning. The trader should identify good range trading currency pairs (e.g.: EUR/AUD, EUR/GBP, CHF/JPY, and EUR/CHF) and he should be good with his money management. Range trading of mini forex contracts is a good choice at it offers better flexibility for going long and short. Position sizing is also very important. Remember: range trading is not a foolproof strategy, often currency pairs can cross support/resistance levels and this can cause problems for range traders. It is advised to use different indicators and tools to analyze price movements.

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The Week Ahead: Markets open this week with two important expectations. One is a resolution to the bailout of the major auto companies by a Bush White House plan. Two, the lowering again of the Fed Funds interest rate by the Federal Reserve by Tuesday after the initial meeting on Monday. Tuesday also brings the Consumer Price Index and the housing starts number. With oil having rebounded 14% an important OPEC meeting will be held on Wednesday. The jobless claims report and leading economic indicators arrive on Thursday.

Stocks to Watch: Shares of Exelixis, Inc. (EXEL) rose substantially when Bristol-Myers Squibb agreed to pay $195 million upfront for development rights and licensing of two cancer drugs. Waters Corp. (WAT) cut there Q4 earnings target and was then downgraded as the stock reached a five year low on this news. Several noteworthy Wall Street downgrades recently include Chicago Bridge and Iron (CBI), Perkinelmer Inc. (PKI) which supplies medical instruments, and Varian Inc. (VARI).

Special Note: Currently the S&P 500 and the Nasdaq Composite are below there respective 20 year moving averages while the Dow Industrials at 8629 is still above this average which is approximately 7705. This is telling with only 11 1/2 trading days left in 2008 and may be a clue for what may turn out to be a year end sell off putting the three major indexes in sinc to the downside. It would also be the worst year for the DOW since 1931 and the worst year ever for the Nasdaq AND S&P 500.

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

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There are many different types of preferred stocks, classified according to the type of preference they carry. Know more about preferred stocks. Some companies may issue more than one type of preferred stocks; usually named as group 1, group2 … stocks.

According to the term of maturity there are 3 types of preferred stocks.

1. Straight or Perpetual preferred stocks: They have no maturity date, they offer lifetime dividend payments.
2. Term or Retractable preferred stocks: They have set maturity date, e.g. five years.
3. Soft-retractable preferred stocks: Offer the issuer the power to cash (or to converted to equities) the stock after a specific date but with certain limitations.

According to preferences, there are many types of preferred stocks.

1. Cumulative Preferred stock: Gives the holder the right to accumulate missed dividend payments (which are skipped by companies due to financial problems).
2. Participation Preferred stock: Gives the holder the right to receive higher than normal (fixed) dividend when the company makes larger profits.
3. Convertible Preferred stock: Gives the holder the right to convert it into a fixed number of common stocks irrespective of market price.
4. Adjustable rate Preferred stock: the dividend is not fixed; it is tied to Treasury bill rate or other rates. Payments are calculated based on an established formula.
5. Exchangeable Preferred stock: Gives the holder an option for exchange the stock for some other security (need to satisfy certain conditions).

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Harami cross is a moderately reliable candlestick pattern which indicate the reversal of existing trend. Harami cross resembles harami, the only difference is that in harami cross the second day candlestick is a doji (in harami, it is a small bodied candlestick). The doji candlestick is completely lies inside the real-body of first day candlestick. There are both bullish and bearish versions of harami cross candlestick pattern.

Bullish harami cross formation occurs at the bottom of a downtrend and indicate the beginning of an uptrend. This formation includes a long bearish (black or colored) candlestick on first day and a doji on second day.

Bearish harami cross formation occurs at the top of an uptrend and indicate the beginning of a downtrend. This formation includes a long bullish (white/colorless) candle on first day followed by a doji on second day.

The formations of doji candlestick in both patterns indicate market uncertainty resulting in low trading volumes. Harami cross pattern is considered more reliable than harami pattern. The reliability increases with decrease in trading volume and shortening of shadows. For both bullish and bearish harami cross confirmation is suggested which can be a bullish candlestick or a large upward gap or higher close on third day for bullish harami cross; and a bearish candlestick or large downside gap or lower close on third day for bearish harami cross.

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Inverse Exchange Traded Funds (ETFs), also known as Short ETFs and Bear ETFs, are exchange traded funds which moves just against the index it is tracking. These ETFs are carefully constructed using derivatives or they follow complex advanced trading strategies to profit from the declining of falling markets. There are also ultra invest ETFs which offer double (or more than that) return.

Short ETFs are newer to the markets. Now there are more than 35 inverse ETFs available for trading, which track indexes (e.g.: Short QQQ, Short Dow, UltraShort S&P), market sectors (e.g.: UltraShort Industrials, UltraShort Financials), and international/foreign markets (e.g.: Short MSCI Emerging Markets, UltraShort MSCI Japan). There are both advantages and disadvantages of trading invest ETFs over other instruments and over short trading.

Advantages of Short ETF

• Inverse ETF allow traders to profit from falling markets.
• Inverse ETF allow traders to go short without a margin account.
• Inverse ETF allow investors to hedge their portfolio against market falls.

Disadvantages of Short ETFs

• Short ETF is not a good choice in rising markets; and they tend to offer lesser return in long-term as most indexes tend to rise in long-term.
• Profiting from short ETF require market timing, and are not so suitable for novice investors/traders.
• The active management costs of short ETFs make them more expensive; especially for Ultra shots.
• Short ETFs are newer instruments, and no sufficient performance history is available.

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Trading currencies require more fundamental analysis knowledge than trading any other financial instrument; for profiting one should be aware of macro and micro economic changes. Rise and fall in commodity prices also plays a role in increasing and decreasing of currency pair prices. There are many currencies which show greater correlation (either positive or negative) with commodity prices.

One very good example for this is the oil price changes. Generally, increase in crude oil prices will boost up the economies of oil exporting countries like Canada and middle-east counties and slow down the economies of oil importing countries like Japan, USA and others. Any fall in crude oil prices will produce an opposite effect. The same phenomenon is evident with gas exporting and importing nations.

The price changes of agricultural and metal commodities also produce some effects. For example the rise of gold prices will increase the value of currencies which are backed up with gold (eg: Swiss franc) and currencies of countries which exports gold (eg: Australian Dollar). Similarly good agricultural growth will greatly enhance a countries total economic growth.

The smaller the economy of a country the greater will be the effect of related commodity price changes. More important thing to note is as the economies of nations are inter-related any change of one countries economy will produce a positive or negative effect on other country. One very good example of this high correlation is Australian Dollar and New Zealand Dollar.

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The Week Ahead: The worst monthly job loss since 1974 in November left over a 1/2 million people without work accelerating the already grim numbers for 2008 and signaling the worst recession in the post World War II era. Look for Congress to craft and vote on an auto bailout package this week. Watch the pending home sales number on Tuesday. Wholesale trade and import prices are due Wednesday and Thursday respectively. Friday brings retail sales and November's Producer Price Index.

Stocks to Watch: Sonoco (SON) the paper products company cut there Q4 EPS target and broke briefly below support near 20 before rebounding. Brown Forman (BF.B), the liqueur distiller, beat Q2 EPS handily and set in motion a $250 million stock buyback plan. DineEquity Inc. (DIN) has been rallying as Southeastern Asset Management now holds an 18.4% stake in the company. Finally, Gilead Sciences (GILD) rallied strongly again within its recent uptrend on word that Baird research is predicting a strong rally in large Biotech stocks.

Special Note: The technical rally that began from the November lows should be nearing an end for the major indices between 20 and 25%. A move above the November highs this week could complete the first multi-week rally of the fourth quarter. The rest of the year could be dominated by tax loss selling, hedge fund selling, and overall rebalancing of portfolios as a new year approaches. The key price level for the Dow Industrials to close this year is the 9600 area. A close below this level could usher in even greater bearish forces in 2009.

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

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Both common and preferred stocks are stocks issued by companies. Most company stocks which are publicly traded in an exchange are common stock. There are some key differences between common and preferred stocks.

Common Stocks

• They give partial ownership of the company.
• They offer special voting rights, usually one vote per share.
• Share holders have preemptive rights (right to maintain their proportional ownership).
• Share holders receive dividends after preferred share holders.
• They may or may not receive dividends (subjected to director board decisions), and usually get lesser and variable dividend amounts.
• In case of liquidation they are the last in line to receive payments.

Preferred Stocks

• They also give partial ownership of company.
• They do not get any voting rights.
• They guaranteed fixed dividend payments, and thus are often considered as a fixed-income security.
• Their price is less fluctuating with market movements; usually they fluctuate with interest rate changes.
• Stock holders receive priority over common stock holders to receive dividends.
• In case of liquidation, they are the first in line to receive payments.
• There are four different types of preferred stocks which have different features.

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Abandoned baby is a rare but reliable candlestick pattern which indicates a trend reversal. This is a three candlestick pattern formed of three different candlesticks, a bearish candlestick, a bullish candlestick and a doji candlestick; the shadow of doji candlestick is gapped away from other two. There are two types of abandoned baby candlestick patters, bullish abandoned baby candlestick pattern and bearish abandoned baby candlestick pattern.

Bullish abandoned baby candlestick formation occurs after a significant downtrend and indicates the beginning of an uptrend. On first day there is a black (colored/bearish) candlestick maintaining the bearish trend. On second day there is a doji star which gap bottom to first day candlestick indicating high uncertainty in market. On third day there is a white (colorless/bullish) candlestick indicating the beginning of an uptrend.

Bearish abandoned baby candlestick formation occurs after a significant uptrend and it indicates the beginning of a downtrend. First day is a bullish day characterized by a colorless candlestick. On second day there is a doji star which gap above to the first day candlestick indicating high uncertainty. Third day is a bearish day characterized by a colored candlestick which indicates the beginning of a downtrend.

Abandoned baby candlestick patters are considered as a highly reliable trading pattern. Reliability increases with increase in gapping and trading volume. Confirmation is suggested, which can be bullish (for bullish abandoned baby) or bearish (for bearish abandoned baby) candlestick on fourth day.

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Capital preservation strategy is a portfolio management and investing strategy which aims at preservation of capital over maximization of return. The strategy is widely followed by many investors especially by persons nearing retirement.

Capital preservation strategy is a long-term strategy which includes investing in low-risk low-profit instruments like bonds, certificate of deposits, money market funds and other fixed-income instruments. Although extreme capital preservation strategies do not include investing in stocks or similar risky investments, most allocate a fixed portion of their portfolio (usually no more than 40%) to invest in stocks, preferably blue-chips, similar large-cap stocks and ETFs.

The advantages of capital preservation strategy include

1. Lower risk of capital loss.
2. Steady increase in portfolio value.
3. More capital to re-invest.
4. Suitable for long-term capital growth.
5. Less-active monitoring of portfolio demanding lesser time for investment management.

The disadvantages of capital preservation strategy include

1. Less return compared to capital growth strategies.
2. Not so suitable for traders/investors having good investment knowledge.
3. Demand strict use of stop-losses and similar risk-minimizing tools.
4. Not suitable for achieving short-term profit goals.

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Dollar cost averaging (DCA) or systematic investment plan is one of the most popular investing strategies followed by many investors, especially small-scale investors who frequently invest small amounts. Know more about dollar cost averaging. Exchange traded funds (ETFs) are also good instruments to DCA but there are two factors to be concerned, expense ratio and trading costs.

Low expense ratios make ETFs suitable for dollar cost averaging; even the low-cost mutual funds (which are considered ideal for DCA) have high expense ratios than most ETFs. The expense ratio is a fixed-rate percentage. For example if the expense ratio of an ETF is 10 basic points, the expense ratio cost will be $0.1 for $100 investment and $1 for $1000 investment. Also ETFs do not have any sales charges, low-balance fee or purchase fees, which some mutual funds include.

As ETFs are traded just like stocks, they include trading brokerage fees, which can be of per trade or per share basis. For keeping the effect of trading costs minimum, the investor should trade ETFs in larger amounts less frequently preferably through a discount broker offering low charges. For example, if the flat fee of trading is $10 per trade, investing $100 in ETF monthly will result in 10% disappearance of money ($100 - $10) and after a year the portfolio value should be $1080 (90%); if the value of ETF stays same. But if the investment is done tri-monthly basis ($300 per trade) then the portfolio value after a year should be $1160 ($290 x 4).

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The Week Ahead: The volatility pendulum has swung to the positive side as a five day winning streak left equities with the best week in 34 years and an 18.5% gain since November 21. Reports to watch include: construction spending and ISM Manufacturing on Monday, auto sales on Tuesday, Q3 productivity along with the Fed's Beige Book of economic activity on Wednesday, factory orders, chain store sales, and jobless claims on Thursday, and finally the all important November Employment Report on Friday.

Stocks to Watch: Retail stocks are showing mixed results heading into the Christmas season with Family Dollar Stores (FDO) outperforming most on a relative basis. Panasonic Corp. (PC) cut its fiscal year 09' earnings and sales forecast as the stock sunk to levels not seen since 03'. Frontline Limited (FRO), the Norwegian shipping company, cut its quarterly dividend to .50 from 1.50 but the stock recovered from its low despite this news. Dun & Bradstreet (DNB) will be added to the S&P 500 and Thoratec Corp. (THOR) to the Mid-Cap 400 on Monday.

Special Note: Despite the markets recent sprint, November ended its worst month in 8 years led by financials and information technology. The last time the market closed higher 5 straight days with white candlesticks was July 2007 which incidentally marked a top and a month long swoon in stocks. The way the 4th quarter has gone so far a continuation of the worst quarter in recent memory should not surprise investors. Near term resistance remains near 9000 on the Dow Industrials with strong resistance at 9600.

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

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