Two Key Forex Strategies That Will Bring You Income
December 2, 2009 by Forex Guide
Filed under Forex Strategies
It is not easy to trade on foreign exchange trading without losing a lot of money. You learn, train, buy automated Forex trading systems and still don’t seem to make a lot of profit. What you need is the good strategies you can use to trade successfully. There are many strategies you can apply, but some of them are some of the most effective and a lot of people have made good money using them. Take a look at the following two strategies, which you can use or incorporate into your strategy and even a beginner trader can learn from them.
The first Forex trading strategy is the 4 week rule. This strategy was developed by one of the most successful and influential traders Richard Donchian. This strategy is a one rule system, which works by spotting and then holding on to long-term trends. The only rule this strategy has is to buy a 4 week high and hold on to it. Then you should look for 4 week low, get rid of the long and go short. It is very simple and still it works. This strategy requires a trader to be disciplined but it is been effectively making profit for traders for about 30 years now and it will be effective as long as there are trends in market. You may also use the exit filter to reduce the equity curve, but it still works. You will see it works, if you test it for yourself.
Second strategy is the turtle trading rules. It was developed by another great trader and a follower of the 4 week rule as well, Richard Dennis. He discovered a new breakout trading methodology which brings high profits. And even new traders, after learning this strategy, ended up making huge gains just after few years using it. This strategy is a little more complicated than 4 week rule method, even though it is not as effective, but it still helps traders make lots of money. This strategy is good for any trader to learn even just for learning the rules of money management. It has good basics and you should look it up, if you plan on trading Forex seriously.
These both trading strategies are good to know for a new trader. They have a lot of advantages. These systems are free and still effective. Many traders, who used these strategies, managed to make huge profits in Forex trading. So, just studying them, you lose nothing, but get new Forex trading knowledge, which will help you anyway. Even if you don’t necessarily use these exact strategies, you will be able to incorporate some parts of the strategies into your own trading system and make huge gains out of it.
For the realistic info about forex strategies – please visit this site.
Those who need forex investment opportunities – visit this managed forex trading site.
Options Trading Strategies – Why Trade Options?
October 23, 2009 by Forex Guide
Filed under Trading in the Market
Options trading strategies. Conventional wisdom tells us to place our money on an investment vehicle we are most familiar with and on investment vehicle we can benefit most. Since understanding the rise and fall of stocks is much easier than knowing the basics of options trading, it is a more popular choice for the many. But the fact is options trading provide several advantages than any other investment vehicles, including the stock market or even the Forex. Let us look at some:
Leverage
Buying a call option gives the investor a good option position that is similar to stock position. For example, if an investor would by 300 stocks selling at $50 per share, he would have to pay $15,000. But if he would choose to purchase three $20 calls (each contract representing 100 lots or shares), he will only have to pay $6,000 (3 contracts X 100 shares/contract X $20 market price). The investor would then have an extra $9,000 to spend or invest on his or her discretion. The process is obviously not as simple as that. The investor would have to know which call to buy to have a good option position, similar to stock position. However, if you are looking for a good investment without risking large sum of money at once, option trading is the better choice.
Limited Risk
Investment is said to be for the risk takers. This is good if your risk automatically yields to profit. But that is not always the case. In options trading, however, you can have unlimited profit potential and at the same time have limited risk. This is because options trading only give you the right to buy or sell underlying asset, and not the obligation. Meaning, if the price is not right at the end of the contract, you can just ignore and let the contract expire. If, however, you can profit for the change in shares prices, you can assert your right and pursue the contract.
For example, you buy a certain call option for $20 (strike price) that will end on the third Friday of March. On the expiry date, shares you bought are trading at $25. Definitely, you can instantly earn $5 per share and would have to pursue with the contract.
What if the at the expiry date is lower than the strike price?
Let us imagine that the shares you have bought went down to $15 or even $5 at the end of the contract, do you have to pursue the contract? No!
You just have to let the contract expire.
What have you lost then?
The option premium you paid the seller. Nothing more.
Unlimited Profit Potential
Say a certain call option you have bought is now trading at $38 per share. You can exercise your right to buy it for the strike price of $20 and earn $18 minus the Option Premium you have paid. This is just an example. The price of shares can go higher than that. And if you have carefully chosen your call, you can get the best profit without breaking your bank. Note: if you are planning to pursue the contract and buy the shares, remember that you have to pay the full amount. So at the expiry date, make sure that you have you the cash.
I’d much rather prefer to save some money by using an iherb coupon code and be happy and healthy… more information over here: http://iherbcouponcode.wordpress.com/
For important advice in the sphere of forex investment and option trading strategies – study this site. The times have come when proper info is really at your fingertips, use this chance.
