So now we are left with the question of: If 5% of futures traders do make money than how are they doing it. Simple, they are utilizing back tested systems usually ran by computers (these days), for consistent execution of entering and exiting the market. Automated Trading systems have gotten very popular over the last 8 years with the bulk of the market no longer phoning in orders but placing them on a PC whether that be manual or automated. Now knowing this is half the battle. You still need to find a trading system that can withstand the test of time and not just work for a short period of time until the market conditions change. This is one of the largest flaws of most computer-generated systems; they aren’t people so they can’t use reason to change their pattern. They tend to operate based on some kind of trend trading contrary to the market direction. Then once the trend dries up the system operates in direct conflict with the markets pattern. I like using an automated system that is based on directional movement not fighting the flow of the market. When the system sees that the market is trending for a hard move in one direction or the other that’s the way it trades. The beauty of trading futures is that it has nothing to do with recessions, or whether the market moves up or down. You are able to profit from it moving in both directions (long: profiting going up) or (short: profiting going down)

A general misunderstanding about futures is that you’re not actually investing in anything. A futures strategy is basically just an equity machine that’s not committed to any long-term stay in the market. You don’t have to wait more than a day to get your capital out and your able to leverage a large volume commodity or currency to your advantage. For example: When you trade futures your using a small amount of money to control something that has much more value than you are using to control it. The money that’s in your trading account is margin or the equivalent of earnest money on a house. The earnest money doesn’t obligate you to buy the house but allows you to control if for a period of time. When you enter into the futures market you are hoping to take advantage of a price difference just like the way you would with equity in a home, then turning around and selling the rights to the contract for a profit. But what separates futures from a home or any other asset class is the fact that you can quickly take advantage of the loss in value of the commodity. The value change and turn around time will also occur much much faster in the commodity market unlike with real-estate and the Futures market is many times more liquid with plenty of buyers and sellers at any given moment.

This is the reason why good futures traders and Commodity trading advisers tend to make high returns because your not holding onto something that takes for ever to rise in value over time, you’re simply taking advantage of prices up or down multiple times per day or per month. A good trading strategy will lose once in a while there’s no way to combat that, but if it is a good strategy it should return you 2 or 3 times what it loses on average. When viewing the long term performance of a system don’t pay so much attention to how much it gains but how consistently it gains. I would rather have a system that earns small amounts steadily than one making insane profits only to keep you up at night because it yo yo’s back and forth so much. So you can see how you’re not really investing in anything just a way of quickly extracting money from the market and pulling out again.

I recommend that if you’re beginning in futures that you start by finding a good CTA (commodity trading adviser) and have him manage your futures account. There are several CTA’s with excellent track records out there. Most CTA’s will use an automated strategy that they watch continuously through out the day. If you have a good CTA he will pay close attention to market trends and adjust the strategy for loss as conditions change. He should also ask you about your risk tolerance and adjust your trading accordingly. The CTA has only power of attorney to trade your account he doesn’t have any access to your funds. A third party clearing firm that’s connected with the brokerage house the CTA is using handles your funds. Usually you can access your funds within one business day.

So……. Trading Futures Risky or Profitable? You be the judge. Many financial advisers will tell you that Futures are risky and believe me they have every reason to think this. But if you find a good system using the common sense I just explained above you will have the best high yield investment available that will most likely outperform ten fold what any mutual fund or other asset can do and with performance that isn’t related to how good the economy is doing.

Learn more about the best high yield investments. Stop by Eric Christensen’s site where you can find out all about high yield investment accounts and the difference it can make in your portfolio..

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Investment differs from savings in that the latter sets aside a certain amount of the income. On the other hand, investing may be regarded as a long-term activity which involves having an entity’s money earn more. There are considerable advantages which are associated with investing. Investing outpaces inflation so that financial goals can be attained.

There is a variety of investment types. These alternatives are sometimes called investment vehicles. Benefits and risks vary with each type of investment. To invest effectively, investors have to evaluate their objectives and resources. Regardless of the chosen investment vehicle, its aim is profit accumulation.

Stocks are among the most preferred investment tools. Stocks are a form of investment in publicly traded corporations. These businesses issue shares or stakes of ownership to the public. Purchasing and selling of these stocks is carried out through the stock market exchanges located almost everywhere in the globe.

Individuals who trade stocks with success have good knowledge of market tendencies and the various factors that determine stock prices. The prices of stock can increase or go down based on developments within the entity, its earnings, and other factors.

Bonds are investments which are essentially loans made to corporations or governments by investors. In return, governments and corporations pay fixed interest rate to the investors over an agreed period or term. At the end of the period, the lender recovers the principal amount.

The bond investment carries medium risk to the investor. It is more secure relative to other types of investment in that its returns are almost always guaranteed. However, the returns are less in comparison to individual stocks. The value of bonds is assessed by third parties. Investors make decisions to purchase bonds depending on the trustworthiness and reputation of the corporate entities or governments that issue bonds.

The mutual funds are another investment tool that combines special types of bonds and stocks. Mutual funds are further categorized into different subtypes, allowing investors to specialize in a sector of their choice.

Investing is preferred alternative by those who lack time or expertise to perform daily research and assess the stocks on the market. It provides access to experts who can handle selling and buying of issues for the investors. Mutual funds can range from medium low to high-risk types of investments depending on the sector the investor commits his resources to.

Real estate investment commits funds to a property to generate income through lease or rental. Real estate investment focuses on immovable property such as permanent assets and land. The value of a real estate investment is determined by the acquisition of real estate which involves the bestowment of rights such as possession and control.

Investment banks represent financial structures that aid authorities and corporations in raising funding. It is their responsibility to insure stocks. Investment banks also assist companies that deal with derivatives, mergers and acquisitions, etc. Ancillary activities are trading of derivatives, market making, equity security, and fixed income instruments. Unlike commercial banks, clients of investment banks are not required to make deposits.

What do you need to know before investing? Learn more at Finance Dictionary.

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1.Gold is incredibly heavy. One cubic ft . of gold weighs more than half a ton.

2.In comparison to other metals, pure gold’s luster won’t tarnish and corrode; it looks vivid and new all the time.

3.One ounce of gold may be pounded into very lean sheets. If one thousand of these kinds of sheets are actually stacked on top of each other, it will only end up being as thick as a page of magazine. One ounce of gold may be hammered to about 5 millionths of an inch thick, measuring just about 100 square ft ..

4.Gold is wonderful to look at- it is as simple as that.

The price tag on gold has shown no signs of going down, even after all of this time because of the above mentioned attributes and also due to the very high demand for it. However, if you really want to go into the business of dealing gold, one thing that you ought to be most in tune with can be today’s gold prices.

There is so much that you need to know about scrap gold, gold bullion, gold coins, and gold generally speaking. So prior to deciding to enter this business, below are a few things that you should know:

* Always be current with the correct price of gold. You may very easily obtain these from magazines, television and the Internet. A business person should know his product or service adequately therefore you should have all the important tools and data to operate this kind of business.

* Standard bullion coins vary in values however hard to find collectible coins may be sold or bought for a lot more. Numismatic or collectibles are tempting to sell but it is not prudent for novices to take this on, right away.

* Make certain to provide a good storage place for your gold. It is usually better to keep your gold inside a safety deposit box but if you wish to keep it in a home safe, it is ok as well, just be sure to have it certified by an expert gold dealer.

* Before you finalize any kind of exchange, ensure that you have shopped around first. Do not make your decisions in haste because there are many buyers and sellers in the market and many are able to offer better deals for their clients. Your goal is to be able to make deals with such businesses.

* Be patient. Sell your gold when it’s at its maximum value so you can get a higher price from it. Ditto goes with purchasing. Make sure to buy when it is most affordable. In no way be in a hurry to buy or sell. Examine the market first.

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Where can you get the most cash for your gold?

I know that you have seen the local commercials in your area where pawn shops and jewelry stores are literally begging for you to come in their store and sell your unwanted gold jewelry. And you have probably seen one of the national commercials like the popular gold buyer runs on the super bowl every year.

The pawn shops and jewelry stores simply don’t offer you very much money for your gold. And neither does the giant online gold buyer.

They simply are not going to offer you very much for your gold jewelry because these types of operations are just a go between, between you and the gold refineries. They turn huge profits on your gold after you sell it to them.

Here is how you avoid the cash for gold rip off when selling your gold jewelry.

Small, online buyers have become a very popular choice since the price of gold on the open market has sky rocketed over the last year.

The small online gold buyers can offer you more money for your gold jewelry because they do not have the huge overheads of running commercials like their larger competition does.

Yep, cash for gold really works, but if you are going to get the most cash possible for your gold, you need to do your research so that you can be sure that you don’t get caught in the cash for gold scam.

Here is the big secret. You have to sell your gold straight to a gold refinery so you can maximize your profits.

Go to Cash for Gold Review and take a closer look at the top online gold buyer. Visit Gold Party Scam to make sure that you don’t get caught in the Gold Party Rip Off.

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The price of a barrel of crude for April delivery reached as high as $83.03 early Wednesday morning as speculators applauded the new data that showed a 1.4 million barrel increase in crude last week for a 343 million barrel total inventory level.

According to the Platts survey of analysts, the expectation had been for 2.1 million barrels. The much lower than anticipated level of inventory triggered an immediate upward reaction in trade as investors saw the lower than expected number as a sign of increased demand.

Many analysts quickly pointed out that despite the smaller than expected inventory, on the whole, crude levels are still extremely high for the current oil price point. Speculators apparently agreed as after the immediate run up to $82, oil prices pulled back in the later morning of New York trade to draw near Tuesday’s settle price near $81.50.

OPEC, an amalgamation of the world’s largest oil producing and exporting nations, says a stable global economy for the remainder of the year should see an increase in demand of over 900,000 barrels of crude oil per day.

OPEC would prefer oil prices to remain at todays levels, or to go even higher. However, data continues to suggest modest demand in oil products in the US. Business and consumers are still reluctant to begin transporting at pre-recession levels. Without increased gains in US oil demand, it is hard to imagine OPEC’s forecast can hold true.

Leading analysts have continued to call the price levels, currently 17 per cent greater over this last month, far too high based on supply and demand economics. Inventory levels remained near historic highs and OPEC has not intervened greatly by significantly cutting its production to try and drive oil prices higher.

Still a major catalyst for the firmness in oil prices seems to be its strong correlation with US stocks and the general feeling of economic recovery. Investors are bullishly confident that at some point, an improved economy will generate more oil consumption by businesses and consumers.

To view live Oil prices, then visit LiveCharts.Co.Uk where you can find live prices for commodities including spot Gold price and more.

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There are two 3 types of trading that can be done:  short term (minutes to days), swing trade (days to weeks) and long term investing (weeks to years).  Just identifying which one is appropriate for you can seem easy, but in reality it is probably one of the most important decisions you will make.  You have to match up the trading style with your personality and your level of risk

Short term trading is also synonymous with day trading, although positions can be held overnight and still be considered a day trade for the most part.  This is probably the riskiest type of trading for most people and requires the most amount of time.  For those who have a full time job when the markets are open, this type of trading is not appropriate other than in rare circumstances.   While some people do day trading manually, others prefer the help of a day trading robot to automate things.

As opposed to trying to learn day trading, swing trading is a great alternative for most people.  With swing trading the amount of time and concentration required is far less than with day trading, but it will still require you to monitor your positions each evening, and if something is close to a price target or stop area, monitor during the day as well.  The goal of swing trading is to capture a much larger move than with day trading, often targeting a 5%, 10% or even higher move in price.  Since swing trading entails holding for bigger gains and for longer periods of time, the actual trading activity of buys and sells is far less than with day trading.  One should keep in mind that while it is less risky than trying to day trade, it is still betting on the short term direction of a stock and by nature is risky in itself.

Long term investing is what a majority of the population is comfortable with – buying stocks and holding them.  The only thing that has changed in recent years is the economic climate has changed so that you no longer can just hold something indefinitely and figure you have very little risk.  Countless people have made this mistake only to have stocks with significant gains turn into a major loss.  Every investor these days needs a fixed plan to exit a position rather than hold and hope.

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The most important difference is that Index Options are cash settled on expiry while the ETF Options are settled with the underlying instruments that is shares of that ETF. Since with an ETF Options, you can also own the underlying security, you can use various combination strategies.

Stocks have dividends that are paid out periodically to the stock holders. Dividends are an important part of the return that a stock gives over a certain period of time. Now when you are trading index options or ETF options both of them get affected by the dividend payments on the underlying stocks. You need to take this fact into account when calculating the values of puts and calls with an Options Calculator otherwise your investment returns may not be what you have been anticipating.

If you have traded stock options before, trading ETF Options should not be difficult for you. As said before, since ETF Options get settled with ETF shares, you can use the different options trading strategies on them unlike the Index Options that get settled in cash. This makes ETF Options a much superior instrument as compared to Index Options.

Now when trading ETF Options, you can use the famous Protective Put Strategy by combining long ETF with a long put. This way you can hedge against the downside risk with a small increased cost to the ETF. A Protective Put will limit the downside risk to the put strike price.

Similarly, you can use a Covered Call on ETF. A Covered Call is formed by taking combining long ETF with a short call on that ETF. The short call will give you some income in the shape of a premium and reduce the cost of the position. This will also slightly reduce the risk of the position. But on the other hand, a covered call will limit the upside profit potential. Your max profit now will only be limited to the call strike price.

Now, you can also use a Collared Position as well by combining a long ETF with a long put and a short call. This combination limits the downside risk to the put strike price with a slight increase in the cost of the ETF. This net increase in cost by taking a long put is offset with the premium brought in by the short call. On the other hand, the limited but high risk is turned into limited risk only.

What you need to do is first paper trade these strategies and master them. This way you will learn how to deal with unexpected risk. Options trading is risky in the sense that it has both time volatility as well as price volatility. Now, many traders trade options without getting good options trading education.

ETF options are always American Style meaning you can exercise them any time before the expiry. You can even use LEAP Options on ETFs. LEAP Options are long term options having expiry ranging from nine months to 21/2 years. Now just like stocks, not all ETF have options available for trading.

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Futures market is a highly regulated market with the CFTC responsible for its regulation. Buyers and sellers don’t come in direct contact with each other. In between is the Central Clearing House that enforces the contract reducing the risk of party default! Futures contract as the name implies is a binding contract between two parties for the delivery of a commodity or an asset or even a financial instrument at some future date between the buyer and seller of that contract.

Futures market is the backbone of the whole sale and retail commodity market ranging from oil, wheat, corn, heating oil, meat, cattle, soybeans and other foodstuff. So you can well imagine the importance of the futures market. Futures market serves the purpose of hedging and speculation.

These contracts get regulated through a central clearing hours so the risk of one party backing out of the contract is minimal. This limits the time and risk exposure experienced by hedgers and speculators. Now, futures contracts are by design time bound and expire at a fixed date.

In the last decades, electronic trading has become highly popular among the traders. This includes futures as well. So, now you can easily trade these contracts by opening an account with a FCM brokerage and deposit an amount to start trading these contracts on margin. The minimum amount with most of the brokers is something like $5,000 but it can less too! Brokers allow leverage upto 10:1 when you trade on margin. Compare this to the leverage of 2:1 allowed by stock brokers.

In US, open outcry trading still takes place during the official hours at the different futures exchanges. However, most of these futures contracts also get traded electronically. GLOBEX allows electronic trading of most of these futures contracts 23 hours each day. Electronic trading provides a more level playing field, more price transparency and lower transaction costs.

The popular contracts that get traded on GLOBEX are the E-minis like the S&P 500, NASDAQ 100 and Dow. You can also trade E-mini gold futures as well as crude oil futures on GLOBEX. CME, NYMEX and CBOT are the three most important Futures Exchanges. GLOBEX allows you to trade most of the contracts that get traded on these exchanges.

Now, GLOBEX trading continues during the night after the official close of CME, CBOT and NYMEX at 4:15 PM EST. However, overnight trading can be thin and highly volatile as compared to the official hours. You can find GLOBEX quotes on CNBC and Bloomberg!

These quotes are real time. Futures trading can be highly profitable but risky as well. Before you dabble in them, you should paper trade these contracts for at least a month just to get a feel of how to do it. There are many contracts that you can trade and the possibilities of making money in futures trading are immense. Imagine the prices of crude oil going up again just like what happened in the summer of 2008!

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Precious metals have gained tremendous value over the last few decades – but it has not been in a straight line.

The cost of living coupled with low inflation over the same time period has resulted in gold being a poor investment. The investment would have been like treading water. The investment in gold would have essentially stagnated over the past 30 years compared to your average stock gains. Precious metals investing over the past 30 years has not yielded returns anywhere near those returned by the stock market.

Over the centuries gold and silver have served as a basis of exchange because they have intrinsic value. Gold and silver represent commodities whose value can stand the test of time.

People tend to fall back into gold and silver investments during times of economic crisis.For example, from 1972 to 1980, when inflation peaked in the double-digit range stocks and bonds plummeted while gold and silver prices exploded by more than 500 percent. As you may have well noticed gold has skyrocketed again during this latest economic crisis.But with the economic collapse the recently surging prices seem to be driven fear, not inflation, which is not a good basis for investment.

Investing in gold and silver, over the long term, has not produced any significant benefit.Over the decades, gold and silver investments hardly match the cost of living increases.On the other hand, investing in precious metals is better than keeping cash under a mattress. The best returns come not from gold and silver but stocks, bonds and real estate. If you truly want to invest in gold and silver, then you can earn a better long-term return by investing in a mutual fund of stocks of gold and precious metals companies.

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Someplace You Must Never Put A Stop

Precisely above past highs or just below former lows is a dangerous place for stops. An equally risky place for stops is at the 50 and 200 day MAs. This is for the reason that a lot of stops are repeatedly lodged together at these prices, welcoming institutional stop-runners to snipe the stops. Previous intraday highs and lows are also areas where stops will mount up.

The Major Error You Have To Avoid When Placing A Trailing Stop

When placing a trailing stop, you have got to move the stop in a positive direction only. If the market is moving higher and you are long, your trailing sell stop must be moved higher. On the other hand, if you are short and the market is moving lower, you must move your buy stop down-never higher-as the position gains profits.

How To Bring Into Play Fibonacci Retracement Levels As Places To Situate Your Stops

The greatest amount you want the market to retrace is .618 (61.8%) of the initial move. You don’t want the stop placed exactly at the .618 point, but slightly underneath or higher than that level, depending upon whether you are buying or selling. The wisdom is, institutional stop-runners will often target the stops at that level. As soon as the market has retraced more than .618, chances are the market is going to continue to trend in its present direction.

How You Can Identify If Institutional and Professional Traders Are Stop-Running

Stop-running is characterized by what is known as price rejection. The market in the blink of an eye moves lower, only to put on a swift recovery. This chart pattern typically appears as a ‘v’ bottom. At highs, the market will often rise up on short covering, go dead at the top, and rapidly go lower. This chart pattern usually appears as a ‘v’ top. As soon as the stops are run, the market usually moves in the opposite direction.

How Market Volatility Can Help You Place Your Stops

As market volatility increases, the stops have to be moved further away from the existing market price. Keep an eyeball on the Volatility Index ($VIX). The higher the $VIX, the further away from the present market price you ought to set your stops. This only makes sense, as otherwise random moves will cause the stops to be hit. Try to stay away from placing your stop where other traders have placed theirs. An abundance of stops at one price will trigger panic buying or selling and you will receive a appalling fill as a result.

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