Phillip Fisher once said: “The stock market is filled with individuals who know the price of everything, but the value of nothing”. Actually, this is true, but is the real value what drives the stock markets today? Since the introduction of the derivatives market back in 1987 nothing is the same regarding the financial markets activity. Due to the domination of the Derivatives, the financial markets today have turned to 'shorterism' and thus they are trading the news more than they are trading real value.
A smart investor is an investor and a trader at the same time. So when the time is right he must trade the news and other times he must trade real value. We could say that the news-trading is more suitable in short-term periods while real-value trading is more important in long-term periods.
Trading Stocks Strategy
In this article, it is presented a strategy to trade stocks focusing on real value. This strategy is clearly investing-oriented and involves long-term thinking.
4 Simple Steps to Choose and to Trade Stocks
Here are the four (4) steps:
Step-1: Define your Investing Profile and Choose a Market
In order to define your investing profile, you must answer the first three key questions. Here are three questions:
1) What is your available capital and for how long it will be available?
2) How many total losses can you suffer?
3) What annual returns can make you happy?
If you hold a medium capital and choose to invest seeking high returns you will probably choose aggressive stocks within aggressive industries (for example technology stocks on Nasdaq). On the other hand, if you are risk-averse you will probably choose the safety of the blue chips listed for example on Dow Jones Industrial. If you are trading CFDs or Binary Options or any other Derivatives you can adjust your risk exposure by altering the rate of leverage you are trading. The stop-loss orders can narrow your risk exposure furthermore, especially if you trade derivatives.
Forex Trading Tips
Seven Essential Tips to Trade Forex Effectivelly
TIP (1): Understand What you are Trading
First of all, you need to understand what you are trading. Many investors believe that trading Forex currencies is the same as trading stocks or indices. They are 100% wrong. Trading Forex is a completely different story than trading any other financial market. The Forex market is characterized by 24/5 operation, enormous liquidity, extremely tight spreads, and almost perfect information. The combination of these four factors creates an ideal framework for competitive trading.
Forex is the Most Competitive Market Worldwide
The Forex Market is the most competitive financial market in the world, and this is due to several reasons:
There are millions of real currency buyers and sellers every single day (banks, importers/exporters, tourists, etc.)
There are millions of active Forex traders, and a great number of them trades currencies as a day job. Forex traders contribute about 95% of the aggregate market volumes
There are also thousands of arbitrageurs operating on a daily basis and enhancing further the liquidity of the market
There are many hundreds of retail and institutional Forex Brokers, NDD (Non-Dealing Desk) or DD (Dealing-Desk)
The aggregate market volume exceeds 4 trillion US Dollars on a daily basis
The Foreign Exchange Market enjoys almost perfect information (24/7 basis)
The Forex majors (EURUSD, USDJPY, GBPUSD, USDCHF) are offered in tiny spreads. It is cheaper to trade these four pairs than anything else in our financial world.
A commodity is a raw material used to produce a final product. A commodity may be a metal, an agricultural commodity, or an energy commodity. Commodities usually meet three important criteria:
All commodities are divided into 3 major categories:
1.1 Precious Metals
Gold, Silver, Platinum, Palladium,
1.2 Industrial Metals
Copper, Steel, Aluminium, Cobalt, Nickel
1.3 Rare metals
Rhodium, Titanium, Indium, Germanium, Cadmium, Magnesium, Chromium, Beryllium, Niobium, Manganese, Silicon, Selenium, Lithium, Vanadium, Wolframite, Tantalum, Gallium, Tellurium.
2.1 Agricultural Commodities
Corn, Oats, Rice, Soybeans, Soybean Oil, Wheat, Milk, Cocoa, Coffee, Cotton, Sugar, Orange Juice
2.2 Livestock Commodities
Lean Hogs, Frozen Pork, Live Cattle
There are several different energy commodities such as Brent Crude Oil, WTI Crude Oil, Natural Gas, Heating Oil, Ethanol, Propane, and Purified Terephthalic Acid.
Introduction to The Foreign Exchange Market
The Foreign Exchange Market (Forex) is a global decentralized Financial market where currencies are traded one against the other. The Forex market is a vast financial market, the largest in the world, with daily volumes of more than $5 trillion.
What is the Forex Market?
Forex is an acronym for FOReign EXchange and it is a global market where currencies are traded one against the other, forming currency pairs (EUR/USD, USD/JPY, etc.). The Foreign Exchange market is not situated at a specific physical location, it is operating without a central service in the same way as the worldwide web. Forex transactions are placed and executed via the Electronic Network of Banks (ECN) through phone or via the Internet.
The Forex Currencies are traded in pairs and are divided into Majors, Minors, and Exotic Forex pairs. The Forex market is the largest and the most liquid financial market in the whole world. The daily turnover activity in the Forex market is estimated at more than 4 trillion USD.
Forex Market Participants
The Forex market includes many different types of participants like:
1) Banks (Central, Retail, or Investment banks)
2) Retail and Institutional investors
3) Day-Trade speculators
4) International and National Firms
5) Forex Brokers (ECN, STP, and Dealing-Desk Forex Brokers)
The Forex market operates like the World Wide Web (internet) does, as it is not centralized and gives access to anyone who has a PC terminal and can meet some basic requirements. Forex trading is conducted electronically OTC (over-the-counter), meaning that all trades are executed via computer networks between currency buyers and sellers. The Forex market is open five days a week, 24 hours a day. The world’s major Forex marketplaces include New York, London, Zurich, Tokyo, Frankfurt, Paris, Hong Kong, Sydney, and Singapore. This means that when Forex trading ends in one place starts in another.
Fibonacci mathematics aims to reveal the hidden proportionality of market behavior. Find Fibonacci trading tools and tutorials:
eBOOK: TRADING WORLD MARKETS USING PHI AND THE FIBONACCI NUMBERS (2018)
Complete Guide to Fibonacci Trading with Reference to Elliott Waves, Gann Numbers, and Harmonic Patterns
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