An investor might have to wait for a long time before realizing a return on his or her investment. Many investors can learn a few tricks from day traders that can help them make a quick profit in a matter of days orn weeks instead of months or years. Now a company’s stock may have a good long term prospects supported by strong fundamentals. But the stock may stay still for a long time before it catches the attention of the media and the investing public before it’s price get’s bid up.

Many investors when they fall in love with their investments on the long run forget this cardinal rule of trading that you have to cut your losses. Market least care who you are and how long you have been in it.There is a general problem with so many investors. They fall in love with their investment after doing so much research and committing so much time for the position to work. Now, day traders are always hit and run types. They have developed an innate sense of discipline among themselves that teaches them when to commit money to a trade and when to cut and run.

When, there is momentum behind a security, it means that it’s price will continue to icnrease as long as it has got momentum. This way by investing in stocks having momentum behind them, you avoid the risk of getting stuck in stocks that might not move for months and months.

When investing, you try to buy low and sell high. In momentum investing, you buy high and sell even higher! One of the tricks that you can learn from day traders is momentum investing. In momentum investing, you look for securities that are expected to go up in prices accompanied by the underlying momentum. Now, when the price of a stock or security increases because of strong demand, it is said to have momentum behind it.

How to you find that a security has got momentum behind it? You can use these technical indicators like the MACD ( Moving Average Convergence and Divergence), RSI (Relative Strength Index) or the Stochastic. A swing trader is also looking to ride a trend as long as it lasts. A trend lasts as long as it has got momentum behind it. Momentum investing is similar to swing trading.

Momentum investing can also lead to bubbles like that happened in the dot com bubble in the last few years of 1990s. It is always a good idea to do some fundamental research on the companies before doing momentum investing.

Mr. Ahmad Hassam has done Masters from Harvard. Read this shocking 40 page PDF FREE FRWC Brutal Truth Report on trading robots!Turn $200 into $100K in just 3 months with this FREE Penny Stock Report.

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Commodity traders are not a bunch of overpaid taxi drivers. Instead they are a very sophisticated group of investors looking to gauge the supply and demand characteristics of both global demand and the specific demand for each and every commodity that they trade, and some that they don’t. In addition there are more then one type of trader.

The largest group of traders are definitely the upstairs trader, or traders that are not on the floor of the exchange. Some have floor experience while others do not. The largest group of these are systematic long term trend followers while there are smaller subsets that do purely fundamental and others a hybrid model.

Next up are the global macro traders. They are probably the second largest group of commodity traders as they look to trade disparate and uncorrelated asset classes, as well as get a better picture of global imbalances.

In 2008 for example we saw oil climb to record highs. During this time the macro trader was busy looking for what companies will benefit and what companies will get hurt by this. Yes, oil companies made out well but so did companies like MLP’s and railroads. On the other hand airlines and fleet services got absolutely hammered as their fuel costs started to cut heavily into their sales.

One area that also gets a ton of attention is that of precious metals. Precious metals have a small piece of the industrial machine but mostly are used as an inflation hedge and as an asset backed alternative currency as more and more of the fiat currencies look long term bankrupt.

After the shiny stuff we have the industrial metals. Things like copper, nickel, tin, iron, aluminum, zinc, and lead are all in this group. Cars, trucks, phones, computers, etc all have large amounts of industrial metals and are vital to the worlds economy. If you are not tracking industrial metals then you are missing out on one of the largest parts of the commodity complex and a vital part of the economy.

While many investors gloss over the agricultural commodities they shouldn’t. In the future agricultural commodities will only be increasing in importance as the worlds water supplies continue to diminish. If you are already monitoring demographic trends and overall supply demand you should also be following agricultural commodities.

Obviously commodities are huge part of the global economy. If you are not using and monitoring them you are missing out on some of the biggest puzzle pieces out there. If you are a global macro trader you need to be monitoring all the commodity complexes.

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You only have to think back to major stock market scams like Enron to know that it is almost impossible for the average, and even very sophisticated fund manager or hedge fund trader to really know what the real financial state of a company is.

Just by reading the balance sheet and other quaterly reports they release gives you a very poor insight into the real health of the company. Whereas the technical charts of the company tend to give the real picture of what the market thinks of the value of the company. In the case of Enron even simple technical analysis told you to SELL when the stock was in the $80-90 range, this is why technical analysis of stocks is so popular.

So what are the secrets to technical analysis?, I’m about to tell you, here are my golden rules:

* Only use 3-5 simple technical analysis indicators

* Make sure that you understand how the indicators that you have selected work, what the parameter settings are and in what market conditions they are effective

* After selecting your indicators and parameter settings don’t mess with them.

The real secret to technical analysis is to get VERY familiar with your choosen indicators, and really this can only be done by watching and studying the market, so that you get to the point that you TRUST them.

The fact is that in any market, for each bar period, there are only 5 pieces of information, the open, close, high, low and volume, yet there are now hundreds of indicators. Most of these indicators are displaying the same information and so are redundant.

For the record my set of indicators are:

* 4 Simple Moving Averages

* Bollinger Bands

* MACD

* Stochastics

But the way I use them is quite special, to learn more about how to become an expert at technical analysis visit:

Top Dog Trading Review

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If you are into global macro you trade everything. You trade stocks, bonds, commodities, and even currencies. Essentially you are looking to trade anything that presents a great risk to reward opportunity that is not correlated with your other trades.

They trade not only different asset classes but multiple strategies within each asset class. For instance in stocks they will trade outright long and short positions, merger arbitrage deals, asset class arbitrage where you trade the equity against debt, and even pairs trading. They do much of the same in commodities and currencies as well. Essentially they are looking for sources of return wherever they can find it.

One area that is particularly suited to the macro trader is that of the currency markets. Yes, they trade currency crosses and build their own cross baskets but macro funds are also known to trade one strategy called the carry trade quite frequently.

To utilize the carry trade you go long a high yielding currency and go short the lower yielding currency. You can make money in one or two of two different ways. If the currencies remain flat you will earn the interest rate differential. You can also make money by being right on the directional part of the trade, that being if they move in your direction.

To really juice the returns available from the carry trade you can and probably should use some degree of leverage. Some traders are modest and only use two to four times leverage while others are aggressive and use up to fifty times leverage. While high leverage is great when you are right they can be disaster when you are wrong as the losses are magnified on the way down just like they are on the way up. Of course is it that easy?

Nope, simply put juicing things on the way up will kill you on the way down. If volatility is anything but low you will get killed with excessive leverage. Instead you need a good way to track volatility and measure when is a good and a bad time to be in the carry trade.

There are a gazillion ways to measure volatility but some of the best ones are by using an actual volatility index. We have the VIX on the SP500 which is a surprisingly good measure of financial volatility and is suitable for currencies as well. But these days we have some volatility indexes from many of the investment banks which make it far easier to measure currency volatility and back test ideas.

If you are global macro trader trading the currency carry trade then you need to be paying attention to volatility or eventually you will lose a lot of money. By focusing on the risk you will be in a far better position for the rewards.

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Like all investments it is important to learn about what you are investing in, and certainly don’t just take the advice given to you by a bond seller without checking it out first yourself. The three most important things that must be considered when purchasing a bond include the par value, the maturity date, and the coupon rate.

The par value of a bond refers to the amount of money you will receive when the bond reaches its maturity date. In other words, you will receive your initial investment cash back when the bond reaches maturity.

The maturity date is the date that the bond will reach its full value. On this date, you will receive your initial investment, plus the interest that your money has earned.

Corporate and State and Local Government bonds can be ‘called’ before they reach their maturity, at which time the corporation or issuing Government will return your initial investment, along with the interest that it has earned thus far. Federal bonds cannot be “called”.

The coupon rate is the interest rate that you will receive when the bond reaches maturity. This number is written as a percentage, and you must use other information to find out what the interest will be. A bond that has a par value of $2000, with a coupon rate of 5% would earn $100 per year until it reaches maturity.

Because bonds are not issued by banks, many people don’t understand how to go about buying one. There are 2 ways this can be done.

You can use a broker or brokerage firm to buy them for you or you can go directly to the Government. If you use a broker, you will more than likely be charged a commission fee. If you want to use a broker, shop around for the lowest commissions!

Purchasing directly through the Government is not nearly as hard as it once was. There is a program called Treasury Direct which will allow you to purchase bonds and all of your bonds will be held in one account, that you will have easy access to. This will allow you to avoid using a broker or brokerage firm.

More advanced traders may try to buy and sell bonds to take advantage of the price movements, you can even swing trade them. But this is a very risky business if you don’t know what you are doing, you will need to take a swing trading course if this was something that wanted to, but again most people just buy and hold.

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1. Scalping Trader, if you scalp the market this means that you are only looking for a few ticks profit per trade and you may only be in the trade for a few seconds or a minute at most. trading. Some people will also call this day trading but it’s really micro day trading, buying the bid and selling the offer, it’s high speed trading and you might end up doing 10-50 trades a day. This is a very stressful way of trading for many people.

2. Day Trader, the true day trader opens and closes their trade within the same trading session, usually this mean the same day, but unlike a scalper the trade may be held for a few minutes up to several hours. Usually day traders make about 2-6 trades a day and most of them will be in the 5-30 minutes range. This is a less stressful way of trading than scalping but it still requires a lot of attention and quick decision making.

3. Swing Traders, swing trading usually means that a position is held for between 1 to 5-10 days, although some swing traders may keep a trade on for longer most are within this time period. For many this is the perfect way to trade because it allows you to review your trade overnight, at the very least you have several hours to make your trading decisions.

4. Position Traders, this just means that you are going to hold onto your trade for longer than a few days, maybe even as long as 1 to 2 months.

If you are still working out how to day trade then it may be better to go with the longer time frames as it gives you more time to think.

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BRICs are the nations of Brazil, Russia, India, and China. In 2003 Jim Oneil at Goldman came out with the paper entitled Dreaming with BRICs the Path to 2050 where he laid out a thesis showing why the BRIC nations would likely become the dominant economic forces in the world by 2050.

Basically these nations: Brazil, Russia, India, and China have several different and large economic forces working in their favor. Traditionally the problem with growth in these countries has been rampant corruption and bad government policies. Well the last ten years has seen some huge inroads into fixing all of these and their economies have taken note growing at very fast paces and already starting to gain on their developed brethren.

Brazil has grown up a lot over the last 20 years. Having been called the next growth engine since the seventies it appears as though Brazil has finally figured it out and is building a legitimate economy that has a solid banking system, several industries, and a huge oil industry. Having gotten rid of the majority of its Latin American corruption Brazil is well on its way to becoming a major force in the world economy.

Russia is probably the biggest wildcard in this group as they are still trying to figure out how to fully embrace capitalism. Russia has solid hard working people, with many being very educated and competent engineers, computer programmers, etc. Their remaining major issue is that of their leadership. With a leader who is an ex KBG agent things run but do not always run well. If the leadership can figure a few things out then Russia will be able to become very strong in the coming years.

The great nation of outsourcing is up next. India long known for things like the Taj Mahal is now known for its large educated and English speaking population. Probably the number one country in the world for tech support outsourcing India is now becoming a legitimate hot bed of technology in its own right. But the thing that really sets India apart is the fact that it has such a large educated population.

China is last but not least having recently passed up Japan as having the second largest stock market in the world behind the United States. Long a communist nation China now takes the soft line in politics and instead is focused on improving their economy and the standard of living for its citizens. There are obviously still may challenges that lay ahead of China and the rest of the BRIC nations but they appear to be overcoming them and getting rid of the old guard of corruption and instead becoming huge economic powerhouses.

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Because of how they invest macro traders trade everything including stocks, bonds, commodities, and currencies. In fact the larger funds even trade real estate. They do this in the hopes of finding the best risk to reward situations on the planet and not just in one area.

An area of the financial markets where macro traders tend to do really well is that of fixed income and interest rates. Both academia and practitioners of global macro have found this to be the case over the years. This is not a fluke as the basic trend of interest rates essentially screams profit opportunity.

Why does this happen? Well if you look at how interest rates change you will see that the typical trend goes like this up, up, up, up, up, flat, flat, flat, down, down, down, down. And not like this up, down, up, down, etc.

Central banks such as the Fed or the ECB rarely raise rates at one meeting and then lower them at the next. Instead they typically will raise, raise, raise, raise, hold, hold, hold, lower, lower, lower, etc. They move rates gradually because they are driving the equivalent of an aircraft carrier and not a jet ski, in other words they are trying to steer an entire economy and not a one man shop. Entire economies take time to move, and this is where a large part of the macro traders edge comes in.

By looking at the economy and reading the meeting notes of central banks, macro traders can better figure out what is likely to happen in regards to interest rates and position themselves accordingly. Sometimes the trend will only last a few meetings but most of the time it will last several months and maybe even a few years which of course magnifies the potential opportunities.

Since interest rates effect every segment of the financial markets traders can make money in stocks, bonds, commodities, and currencies. Typically when rates go down stocks go up and vice versa. When rates go down bonds go up and vice versa.

One of the classic trades is to go long zero coupon Treasury bonds when rates are to be cut and to short them when rates are headed back up. By doing this a macro trader can earn substantial profits and if they use leverage they can make even more. While there are several potential risks involved in the trade the primary one, especially in a easing cycle, is simply that of interest rates.

If you want to trade using global macro then start learning about how interest rates effect different asset classes and how to read the notes of central banks. In recent years they have been giving increasing transparency which makes it easier to decide what you as an investor must do.

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As the name implies the global macro trader focuses on everything on the globe. This might be a bog statement but it is basically true. Macro traders have to look at stocks, bonds, commodities, currencies, and the G-10 nations at the very least. Most of course look at all these asset classes across twenty to forty countries. They do this so that they have more trading opportunities and can find the best risk reward situations possible.

So if the global macro trader focuses on all of these asset classes and countries what does he or she need to know? Not only do you need to know individual market dynamics but you must understand each nations macroeconomic situation.

Possibly the best example of a country where you need to understand the economic situation is that of Japan. Their stock market is essentially flat from 1982 all the way to 2009. During that time it has gone up ten times and then fallen back and then climbed and fallen again and again. This was not a random occurrence and if you understood the economic dynamics at play it would have made sense to you. Essentially once their bubble burst in the early nineties they entered a period of stagflation and occasionally deflation and they have not had asset growth for thirty years.

If you had bought that great value stock you would be back where you started. Unless of course you had taken the time to understand the macro economic picture before and during the investment. Stocks for the long run works except when it fails disastrously.

Our next great example of a successful macroeconomic based trade was that of buying commodities in 2002. We had just had a global tech bust and commodities had been underinvested for several years.

If you were tuned into the macro economy you would have noticed the BRIC nations picking up considerably and gone long. You would have bought Brazil, oil, base metals, etc. as the emerging markets expanded at a very fast pace for a while.

Value investors and supposed pure stock pickers are notorious for claiming to not need economics. We only buy stocks they say. Well the truth is that all stocks are part of and are affected by the economy. You can lose fifty percent of your money when a supposed surprise economic disaster happens or look at the signs, see it coming, and profit.

Global macro trading and macroeconomics are very much intertwined and are excellent disciplines for all investors to learn. Don’t be close minded and instead broaden your horizon and you will find a lot of money out there.

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You only have to think back to major stock market scams like Enron to know that it is almost impossible for the average, and even very sophisticated fund manager or hedge fund trader to really know what the real financial state of a company is.

Just by reading the balance sheet and other quaterly reports they release gives you a very poor insight into the real health of the company. Whereas the technical charts of the company tend to give the real picture of what the market thinks of the value of the company. In the case of Enron even simple technical analysis told you to SELL when the stock was in the $80-90 range, this is why technical analysis of stocks is so popular.

So what is the secret to technical analysis?, I’m about to tell you, here are my golden rules:

* Only use 3-5 simple technical analysis indicators

* Make sure that you understand how the indicators that you have selected work, what the parameter settings are and in what market conditions they are effective

* After selecting your indicators and parameter settings don’t mess with them.

The real secret to technical analysis is to become VERY familiar with your choosen indicators, and really this can only be done by watching and studying the market, so that you get to the point that you TRUST them.

The fact is that in any market, for each bar, there are only 5 pieces of information, the open, close, high, low and volume, yet there are now hundreds of indicators. Most of these indicators are displaying much the same information and so are redundant.

For the record my set of indicators are:

* 4 Simple Moving Averages

* Bollinger Bands

* MACD

* Stochastics

But the way I use them is quite special, to learn more about how to become an expert at technical analysis visit:

Top Dog Trading Review

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