Derivatives Options

Review

“An excellent guide for learning how to trade option spreads. Saliba offers in-depth discussions on how and when to employ these advanced strategies and to manage the risk of each position.” Peter LipskyTrader, Pan Capital

Review

Hands down the definitive guide on spread trading. Must reading for any professional who wants to learn directly from one of the top leaders in the options industry.” —Larry Connors, CEO TradingMarkets.com “An excellent guide for learning how to trade option spreads. Saliba offers in-depth discussions on how and when to employ these advanced strategies and how to manage the risk of each position.” —Peter Lipski, trader Pan Capital “Option Spread Strategies: Trading Up, Down, and Sideways Markets is an invaluable addition to any market resource collection. The book concisely walks through the dynamics of spread strategies and guides the reader though the return and risk metrics of the t (more…)

What is a Trade Show?

A definition of a trade show would be that it is a popular specialized marketplace event that gathers together companies in a specific industry to simultaneously display their products or promote their services for the purpose of getting new clients, widen their market reach, generate sales, establish industry contacts and business networks, and get a glimpse of what other similar companies are doing in terms of their products, services, and marketing strategies. Unfortunately, that definition barely covers what a trade show truly is. There are four main areas that help define what a trade show is.

The first thing a trade show does is allow businesses to demonstrate and display their products and services to potential buyers who have a special interest in buying these items. It allows attendees and exhibitors to get into the details of a project a company may currently have or be projected to have in the near future.

The second aspect of a trade show is that it allows exhibiting companies to meet face-to-face with potential buyers of their products and services. It is the quickest, most effective way to get your business in front of multiple potential buyers concentrated in one place. The meetings become opportunities for business matching, where buyers can meet with multiple suppliers and sellers to find the right company to purchase from. Companies are able to demonstrate products and services, then interact with customers to get immediate responses and feedback to their items. These face-to-face opportunities accelerate the selling cycle by matching the buyer’s needs with a seller’s ability to fill those needs. It also provides an experience for the buyers. Most people make their purchasing decisions from the experiences they encounter, and these experiences cannot be replicated through any other venue. Trade shows help turn a company’s position of mind into position of market, which builds and secures a share of market for the exhibitor. Meeting with attendees and other exhibitors offers the opportunity to network and make additional contacts. Lastly, it allows you to show attendees who your organization is, what it stands for, and how it values the human side of business.

The third aspect of a trade show is that it is a major marketing tool. They are one of the best marketing tools available for businesses today as it incorporates the product, people, promotions, and placement of those products together at one time and place. It incorporates almost every marketing medium in reaching the targeted selling environment. Trade shows are also a vehicle for advertising and publicity. Each booth is a three-dimensional ad for the exhibitor. Each item from the booth back wall and electronic visual equipment to the giveaway items and flyers are advertising for the company, products, and services.

Lastly, the core value of exhibiting at trade shows is their efficiency as marketplaces for matching buyers who have a demand for a product with sellers who can fulfill those needs. The compacted time frame and concentrated location are cost effective and convenient for both exhibitors and attendees. In this tough, competitive business environment, exhibiting at trade shows has become essential for every business sector. In these down times, exhibitors are able to meet with buyers who have real needs and budgets, but still have less competition for their attention.

Why is it important to exhibit?

What are the two main things that drive sales? Marketing and promotions, and trade shows are one of the best marketing tools available. Overall, trade shows are incredibly valuable in gaining knowledge about yourself and your competition, interfacing with vendors, suppliers, and customers, and developing new clients and sales opportunities.

When the economy suffers, marketing is one of the first areas cut. Businesses consistently follow this protocol even though most respected marketing experts recommend putting money where the return is. Cancelling your marketing efforts in bad times can only hurt sales. Many small and medium-sized businesses believe that exhibiting at a tradeshow is out of their league because of misconceptions about how only large companies have large enough marketing departments with large budgets, the trade show booth is not affordable, they don’t know how to design a booth, they don’t know how to transport and assemble a booth, or they don’t know how to work a show. The only real considerations that companies should analyze are the budgetary impact of booth space rental and the correlation of the focus of the show to their company.

Most markets and businesses are having tough times in this down economy, but the companies that continue to market themselves are the ones who capture the largest share of mind when the economy turns around. Buyers best remember the companies and products who continue to stay visible, and those buyers are more likely to remain loyal purchasers in the future. In a study by Yankelovich/Harris, researchers found that most executives acknowledge the importance of keeping abreast of new products and services in their industry, and continuing to invest for the future. They also found that advertising during these tough times creates a competitive advantage. Their study revealed that 86% of executives polled stated that seeing a company’s advertising during down times made them feel more positive about the company’s commitment to its products and services. Most importantly, it also keeps those companies top-of-mind when purchasing decisions are made. The Harvard Business Review states, “Advertising is an anti-recession tool. It should be regarded not as a drain on profits but as a contributor to profits, not as an unavoidable expense but as a means of achieving objectives.” With trade shows being such an impactful, concentrated form of advertising, companies are finding a high return of investment by exhibiting.

There are multiple advantages to be gained from exhibiting including gaining competitive intelligence, meeting buyers and generating leads, meeting the press and other members of the distribution channel, and most importantly, to sell. Gaining competitive knowledge by visiting competitors’ booths can help you learn about both other companies and yourself. You are able to gain knowledge on how you compare to the competition, how they do things, what makes them more or less successful, and what the competition thinks about your product. By visiting other booths you can get literature on suppliers and distributors in your field, see new market concepts, and have yourself put on mailing lists to continue to get information. Meeting buyers and generating leads is one of the most important advantages to exhibiting. It allows you to talk face-to-face with prospects, current customers, and even past customers. Exhibitors often invite current customers to visit the booth to revitalize relationships and to show them the newest products. Exhibitors are also able to generate leads quickly. They can meet with 100’s to 1000’s of prospective clients and display their goods in the span of just a few days. Leads from trade shows cost 50% less than those from field calls due to travel costs, fewer numbers of contact points, and less time to reach the lead. Another advantage of attending shows is the ability to meet the press and other members of the distribution channel. Trade shows are the greatest opportunity for companies to get press coverage. The payoff of the articles written in trade publications is the possibility of thousands of information requests and future orders. Lastly, the most important advantage to exhibiting is sales! In a recent study, 90% of respondents indicated that they found trade shows to be a very useful form of gathering purchasing information. Almost 50% actually made purchases or signed contracts while attending the show. Most attendees plan to buy one or more products, and those purchases are influenced by the companies and products they see at the show.

Essentially, if you aren’t at the show, do they know you offer the product or service they need?

How to make the show successful?

To make the most of exhibiting at trade shows, you must plan for the show and set goals and objectives. The stronger your plan, the more goals you are likely to achieve with a higher return. Four areas that serve as cornerstones for setting show objectives are increasing sales and reinforcing market share, increasing the share of customer, introducing new or updated products, and positioning or repositioning your organization, brand, and products.

Before the show, you must set measureable goals and a quantitative method of measuring those goals. Four areas that can be measured to analyze the success of a trade show are the revenue generated, the cost savings, the customer-relationship management, and the promotion impact at the show. Determining the areas that are important and the target outcome in those areas can help you evaluate the true return on investment.

Although every show in your field is significant, choosing the right shows are important to yielding the highest return on the investment. To save travel costs, stay close to home. For many companies, local and regional shows offer the best results for the time and money invested. Another option is “online trade shows” where you are able to “virtually” display your goods or services to the online visitors. This allows you to still openly talk with visitors to your booth and set up virtual meetings and demonstrations. By using this form of trade show exhibiting, the initial labor output is slightly more to set up your “booth”, but you save tremendous time and money by not having to travel or ship items to a location.

Trade shows are an important and vital part of every company’s marketing plan. They allow the exhibiting company to present their product, service, and company to a captive audience in a compact area and time frame. By continuing to be visible to current and potential customers during these down economic times, it projects your company to the forefront of those buyers’ minds now and as the economy improves.

FreightCenter knows how important it is that your exhibit gets to your trade show on time and intact. Let the shipping experts at FreightCenter.com help you get your booth and materials there quickly and affordably. FreightCenter contracts with trucking companies that are trade show endorsed and experienced in the pickup and delivery of exhibit materials. Some of the benefits of shipping through FreightCenter are discounted rates, no waiting time charges, knowledgeable service professionals, and time specific guarantee options.

Make your trade show appearance the success that you deserve at the low rate your budget demands. FreightCenter’s experienced staff is dedicated to taking care of all your shipping needs so you can focus on the show, not getting there. Visit FreightCenter or call 800-716-7608 for more information about their trade show and exhibit transportation services and to get a free quote.

Stock trading is complex and risky. There is much information to digest. Sometimes the information can present conflicting conclusions. There is much need to make the right decisions.

It is a daunting task to wade through the myriad of strategies and methods associated with stock trading. There is fundamental and technical analysis to consider. There is much to research in terms of company news and performance. There is a variety of technical trading techniques to investigate.

There are various timeframes for stock trading. Some employ a buy-and-hold strategy spanning years. Some engage in day-trading. And there are many who select trading timeframes between those two options.

Why do people participate in such a challenging endeavour with such high risks? One answer may be that the rewards can be high. With the appropriate level of research along with practice and experience over time, stock trading can be rewarding. However, each person has to evaluate the risk level to achieve a particular reward, commonly referred to as the risk-reward ratio.

How do people proceed to be successful with stock trading? The basic prescription for success involves preparation, practice and execution along with management of risks and expectations. Consult the wealth of information that is available on the web and in printed material.

Let’s consider a technical analysis technique as guidance for trading decisions. With no intention to trivialize the complexities of trading, it can seen that if a trader gets the direction of the stock right, the trade will be successful in yielding a profit.

Candlestick technical analysis provides a good method for following the trend. If the trend or direction of the stock movement can be followed, then that should lead to profit producing trades.

Whether you are a beginner in stock trading or an experienced trader, engaged in short-term or longer-term trading, the trend following method based on candlestick technical analysis available at StockTradersPlace (http://stocktradersplace.com) can provide you with a powerful tool to make the correct decisions to execute winning trades on a consistent basis.

We often hear people saying that trading or investing in options is very risky. Yes, it is certainly no mean feat to trade or invest, using options as your investment vehicle. But is it really that risky in the first place? If trading or investing in options is really risky, then why are there so many individual traders or investors who make money from it? The only possible explanation is that those people had spent a lot of time and effort to study, understand and learn all they can about options in addition to the basic technical knowledge of how the market functions. They would have learnt how to increase their probabilities in making a profit and also reduce their risk to the minimum.So what actually are stock option greeks? Why is it important to understand how they can affect the profitability of your trade or investment? Stock option greeks are actually sensitivities of the stock option to risks characteristics. These risks are actually factors that affects the pricing of the option. By learning how the stock option greeks relate to risk characteristics in addition to other basic technical analysis skills such as identifying the market trend, knowing when to and not to trade or invest according to timing ( Eg. Not to trade during lunch hours ), interpreting technical indicators correctly, have a risk and money management system to assist in making decisions when trading or investing ( This helps to eliminate and not involve your emotions that affect your trading decisions ) …etc We are able to have certain control over our risk exposures to leverage, time decay, volatility and interest rate risks. Each option risk characteristics, is represented by a greek word and they affect the option pricing differently. It is important to know whether you are purchasing a stock option at a under or over priced value as this can be another factor that will affect profitability of your trade or investment. You do not want to be in a disadvantage position at all times when trading or investing as the majority of the factors are against you and you have absolutely no control over them. ( Eg. Interest rates )Mastering each risk characteristics will certainly help to reduce risk tremendously when trading or investing in stock options, what’s more, there are lots of stock option strategies that can be utilized once you understand the mechanics of the stock option greeks and make them work for your trade or investment.

Forex is an abbreviated name for foreign exchange. The Forex market is a non-stop cash market where the currencies of nations are bought and sold, typically via brokers. For example, you buy Euros, paying with U.S. Dollars, or you sell Euros for Japanese Yen. The value of your Forex investment increases or decreases because of changes in the currency exchange rate or Forex rate. These changes can occur at any time, and often result from economic and political factors, such as the price of oil or political unrest. This article discusses the various steps in making a Forex trade.
Before we proceed, let us review the basics of Forex analysis. Currency market players typically use Forex analysis as a means of predicting currency price movements. Forex analysis is divided into two types: fundamental and technical. A fundamental analysis uses economic and political factors as a means of predicting currency movements. A technical analysis uses reliable historical data as a means of forecasting these movements. The technical analyst believes that history repeats itself over and over again. Some Forex traders depend on fundamental analysis while others depend on technical analysis. However, many successful Forex traders use a combination of both strategies. The important point to remember here is that no one strategy or combination of strategies is ever 100% certain.
Now we can proceed to discussing the various steps in making a Forex trade.
Through a combination of fundamental and technical analysis, you believe that the Euro will go up against the U.S. Dollar because of economic events. To activate the Forex deal, you need to buy Euros with U.S. Dollars. Therefore, your pair of currencies in this Forex transaction are the Euro and the U.S. Dollar.
Next, you determine the volume or the amount of the Forex deal you wish to make. You decide to buy 1 lot of Euros with U.S. Dollars. 1 lot is equal to 100,000 units of the base. Likewise, 2 lots are equal to 200,000 units of the base, 3 lots are equal to 300,000 units of the base, and so on.
You then check the bid price and ask price of EUR/USD. Like the stock market, the Forex market has a bid price and ask price. The bid is the price you can sell at. The ask is the price you can buy at. The bid/ask spread or simply spread is the distance between the bid and ask prices. In Forex trading, this spread is usually expressed in pips.
For this Forex trade, let’s suppose that the bid price is 1.2362 and that the ask price is 1.2365. This means that you can you can sell 1 lot (100,000 units) of Euros for $123,620 or you can buy 1 lot of Euros for $123,650. In this example, the spread between the bid and ask prices is 3 pips wide (1.2365 – 1.2362 = 3 pips).
As stated above, you have decided to buy 1 lot of Euros for $123,650. However, you don’t have to come up with $123,650 in order to buy 100,000 Euros. You can buy 1 lot of Euros with a 1% margin at the price of 1.2365 and wait for the price to increase.
Margin is referred to as the collateral needed to facilitate the Forex deal. Usually, this is a very small portion of the entire deal, say 1% or 1:100. For this example, your margin would be $1,236.50. Please note that margin is a double-edged sword. Without the proper use of risk management tools that are discussed below, you can experience substantial losses as well as gains.
You determine stop-loss and take-profit rates. A stop-loss order is a market order to close a Forex position if or when losses reach a pre-set threshold. A take-profit order is a market order to close a Forex position if or when profits reach a pre-set threshold. We strongly suggest that you take advantage of stop-loss and take-profit options in your Forex trading. By using the take-profit and stop-loss options, your deal closes automatically, when and if such rates occur in the market.
Let’s suppose that you have a pre-set take-profit rate of 1.3575. Three days later, the Euro rises in relation to the U.S. Dollar. Your deal closes automatically when profits reach your pre-set threshold. You now have $135,750, which is $12,100 more than what you started out with three days earlier.
Let’s look at another scenario as well. Suppose that you have a pre-set stop-loss rate of 1.2165. Two days later, the Euro falls in relation to the U.S. Dollar. Your deal closes automatically when losses reach your pre-set threshold. In this example, you now have $121,650, which is $2,000 less than what you started out with two days earlier.
Trading Forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.

I wanted to make a few comments today on the comparisons between different stock market strategies. First, let me say I am yet to come across a strategy that doesn’t work, given the right circumstances. They can all make money, some just require more skill, more time, or more luck than others. Everyone has their preferences, and I thought we’d compare a couple today.
I’m constantly intrigued by people who decide on an investment strategy without the faintest idea of ‘why’ they use that particular strategy, or without having a look at an alternative strategy, with other possible advantages, that achieves the same (or similar) thing.
Of course everyone invests to ‘make money’. The question of ‘why’ goes to the specific intention of a particular strategy – “why do you use one form of investing over another?”
The only way to answer that question is to first ask yourself another – “What am I trying to achieve?”
Are you hoping to get the maximum benefit out of the movement in the share price – to get the most profit from a stock rising (or falling) quickly? Are you willing to try and capture these profits on the big winners, knowing that most of the time you may pick losers, but keeping your losses small and your winners big (hopefully)? If so, are you happy to continue trading when you know you may only get 30, 40 or (if you are one of the brilliant few) 50% correct?
Or, are you trying to make money ‘regardless’ of the share price movement? Are you happy with steady and very high (if not spectacular) returns on a regular basis.
The question I will address in this article is simple: Would you prefer to be in a position where the share price MUST go up to make money, or would you prefer it if the share price doesn’t need to go up (it can stay the same, or even go down a little), yet you still make 100% of your profits?
I’d like to take this opportunity to explain the ‘rationale’ behind one particular investment strategy – the Credit Put Spread strategy (sometimes called “Selling Insurance”).
This article is an attempt to explain exactly WHY you may trade the Selling Insurance strategy, rather than any of the dozens (hundreds?) of other option strategies available.
This article does not attempt to explain the intricacies of any particular strategy, nor the various options available to the trader throughout the trade (rolling out/down, closing early etc), rather to explain in simple terms the ‘principles’ behind why you may choose this particular strategy over a multitude of other strategies.
Please be aware I have either traded or investigated just about every strategy using options that I know of, and the Selling Insurance strategy certainly has its place in a diversified portfolio, with many advantages over other strategies. More importantly, it satisfies several criteria that we look for in our trading.
Let’s look at why. As mentioned, we first need to understand the reasons why we would use a particular strategy, and determine what it is we are trying to achieve. Without that goal, finding the correct strategy for YOU is impossible.
When we first started out, we detailed 5 specific criteria that needed to be met with any investment strategy we use. All of these conditions had to be met, otherwise that type of investing was not appropriate for us.
Now, your criteria may be completely different to ours, and that’s fine. Only YOU can choose what is right for you. You may have a completely different set of criteria, but the point is the same: Before choosing any investment strategy, make sure you lay out what you want, then choose the strategy that suits your criteria.
Here’s the criteria we settled on, and how the Selling Insurance strategy fits the bill…
1) Trading doesn’t take up too much TIME.
Any investment must NOT consume too much of our time. The entire purpose in making money is not for money itself, but to create a lifestyle. Therefore as little time as possible must be spent on any strategy.
The time it takes you to read this article will be greater than the time we have spent in the last 2 months implementing this strategy, and was still able to earn some considerable profit.
Most other type of trading, especially any form of ‘directional’ trading, requires a considerably more active mindset, with positions being monitored consistently, stop-losses enforced etc. For the most part, they are not ’set and forget’ investments, and require considerably more time to apply, monitor and manage.
The Selling Insurance strategy enables us to live the lifestyle we want, without the need to be watching the market every second.
2) It must have a High Probability of Success.
There must be a high chance that our investment will return as expected, most of the time.
With the Stock Market, the way we view it is there are essentially 5 things that can happen in respect to the price of the stock…
1) The price can go up a lot
2) The price can go up a little
3) The price can stay the same
4) The price can go down a little
5) The price can go down a lot
With our Selling Insurance strategy, we format our investments so we make 100% of our expected profit if 1) to 4) above occur.
So that’s an 80% chance of success – without applying any skill at all!
It is only if 5) occurs that we need to take any action, and we then have several choices to either retain our profits or slightly reduce them. We can only lose a maximum set amount if we choose to close our position entirely.
With most other types of trading, you are essentially making a ‘bet’ as to which way the stock will go – commonly known as ‘directional trading’. Therefore, a profit is only realised when the share price goes up a lot if you are long (no 1), or down a lot (no 5) if you are short, giving a substantially less likelihood of a profit on any and every trade.
The flipside to this is that while there is much less chance of making a profit with directional trading, the profit achieved can be considerably higher if the price does go your way, as opposed to the Selling Insurance strategy where profits are capped.
That’s fine with us – we’re not trying to make millions with one trade – that is not our goal. We’re trying to earn a steady, consistent and recurring income on a monthly basis.
This is a point I can’t stress strongly enough, and is the reason for this entire strategy! We do NOT require the stock to move in a specific direction to make money. That means we make money more often than any other strategy I know of.
3) We are always PROTECTED on the downside.
With our Selling Insurance strategy, our losses are capped, and if a ‘worse case’ scenario happens, I am not wiped out. We know exactly what our possible losses are BEFORE entering the trade, and these are managed to be minimised as much as possible.
With good money management this can be comfortably achieved with most strategies, so while I can’t stress enough the importance of ‘loss prevention’ and ‘risk management’, because it can be achieved with most investment strategies it’s not really a deciding factor on choosing one strategy over another.
4) We make a ‘regular’ INCOME so we don’t have to work.
We need to be able to live our lives the way we want – day in and day out. That means we need income. I’ve got bills to pay. I’ve got a wife with a penchant for Italian shoes. Hell, I’ve got a penchant for Italian shoes!.
The whole point of being wealthy is to live a certain lifestyle, and that lifestyle costs money. So we need an ‘income’ to fund that lifestyle.
Investing just for ‘capital gains’ or ‘long term growth’ is all well and good, but in the meantime any investment strategy must supply enough income to live on, and live well!
The Selling Insurance strategy has only one goal – to provide income on a regular basis (generally monthly). That’s it. It’s important to understand this strategy is NOT for long term capital growth – although it can be achieved if you re-invest the profits – but was designed purely to replace income. Not too many other strategies can do that as effectively.
5) LOCATION is not important.
We need to be able to manage my investment from anywhere in the world.
Again, most strategies can be done with a laptop and an internet connection or a phone from anywhere in the world, but this point goes hand in hand with the ‘time’ factor.
The Selling Insurance has the advantage of being less time consuming, therefore if I’m travelling the world or relaxing somewhere, I don’t need to spend hours in front of my computer managing my trades. A few minutes a day is all I need, so this is a big advantage over most types of directional trading.
So, all in all, the main criteria that indicate a better investment strategy for us would be Selling Insurance over most other ‘active’ types of investment is 1) Time, 2) Income and 3) Probability of Success and 4) the fact it can be done easily no matter where I am or what I’m doing.
What I consider to be the biggest advantage, and the most important reason I use this particular strategy, is the high probability of success. That’s the clincher for me, and the deciding factor that means the Selling Insurance strategy is one strategy I put my money into time and time again.
In Part 2 of this article, we’ll examine this part of it in more detail, and compare the results of different strategies to highlight why this point is so important. Understanding that may help to ensure you make money from the markets over the long term. Until then…

Do you know about swing trading? Swing trading is about a trader taking advantage of the swings in price or oscillations of price as it moves up and down over time. Swing trading is a style of trading that can be used on any market. The three most popular trading styles are day trading, swing trading and trend or buy and hold trading. Swing trading sits in the middle of these styles and I personally recommend this as the absolute best style of trading, no matter what you trade. Let’s take a look at the other styles.If you open and close all of your trades within a single day, you are known as a day trader. This style of trading also encompasses scalping, which is very popular amongst some traders. Scalping typically involves high risk but in turn offers potentially high profits. Buy and hold traders take the extreme of trading and commonly hold trades for several weeks to months. A trader typically needs substantial trading capital to be able to make any decent profit from buy and hold trading.Swing trading is medium term focused and usually has traders holding trades for several days, but less than a week. Do traders hold trades for longer periods? Of course, but this is just a general rule of thumb. Swing trading is a style that can be applied to any market, but some markets may be more suitable and as a result more profitable. Swing traders benefit from having low risk with high rewards. This is the perfect balance for trading profitably.Scalping and buy and hold trading styles are either extremely high risk or the returns on your investment are too low. If you want a high rate of return with the lowest levels of risk, swing trading is right for you. This style of trading can be applied to forex, options, futures and many more markets.

Today, with online futures trading, we have instantaneous results which provide greater benefits for the trader. This of course results in worldwide access. Before we address possible methods, we must first recognize the players in this high stakes game of commodities.Since most individual traders are speculators, here is a list of some of the advantages and disadvantages of the futures market over other investment possibilities. 1. The possibilities exist that a person can make more money faster in the futures market, because  the speed of prices tends to change faster than stocks. Conversely, bad judgment can cause one to suffer greater losses than traditional investments.2. Futures are highly leveraged investments. The trader only puts up about 15-20% as a margin, yet still being able to ride the full amount of the contract. Unlike stocks where at least 50% of its value has to be put up, and the investor pays interest on the difference between the margin and the full contract value. 3. For the most part there is no inside trading. Everyone has the same insider’s information on the weather, for example. This is an open outcry market, very public, which insures a fair outcome.4. Commission charges on futures trades are small compared to other investments, and the investor pays them after the position is liquidated.5. Most commodity markets are very broad and liquid. Transactions can be completed quickly, lowering the risk of adverse market moves between the time of the decision to trade and the trade’s execution. Most traders that fail do so because they  don’t have a realistic plan. Hopefully by the end of this article you will have the knowledge to be able to devise a program that will reap huge profits, by trading futures correctly. As the market rebounds from crash in ‘08 and the early decline of 2009, more and more online investors are once again turning their sights to day trading. Many so-called experts lump all online traders into the bag of day trading. For the sophisticated observer it is plain to see the obvious differences. A day trader rides the rush of the asset, while a swing trader diagnosis the trends and holds onto it as long as the momentum  last. I don’t know if the term “day trading” ever existed before we had access to the internet. If it did, I some how would picture a broker becoming a bit frazzled, trying to keep up with this mad client who is buying and selling at the speed of light. Because this, is the life of the day trader. They do not care about fundamentals or even for that matter what the company does. They are riding the trend, up or down it doesn’t matter, as long as the asset is behaving the way they have projected it would. Day traders don’t care what markets they are in, be it stocks, options, currencies, or futures, they get in and out with a fast profit. A transaction may last a few minutes, an hour or so, but never more than that day.So it is online trading, which includes day trading, that is regaining momentum. All part time traders are swing traders, because you simply can’t monitor an asset that you might want to transact at any second, on a part time basis. These rebels of tradition are literally traders, rather than investors, but can reap huge rewards in a relatively short period of time. Of course, day trading for a living does carry some fairly large monetary risks, so you must know exactly what you are doing from the time the markets open to when they close. This is the itinerary of a day trader. If you can’t commit or don’t have the time to pursue this strategy properly, I suggest you look into swing trading.So now you have some idea of the type of futures trader you plan to be. It makes no difference what commodity you choose (most novice traders tend to lean toward Forex) you’re going to need the right tools to go with your knowledge. Any training you receive should be for technical analysis, or you are just wasting time and money. As far as software platforms, the following suggestions I strongly feel are necessary for any software to be useful.1. It must be able to offer live streaming technical data.    (Otherwise the program is merely educational)   2. The platform should defiantly include candlestick charting.3. Visually it has to be large enough for all the data to be seen easily. (Many of the online brokerage’s technical data are too small to be useful) 4. It must be cost effective. (Most good systems can be purchased for between one and two hundred dollars)These are just a few ideas that you can utilize to increase your chances for success. I don’t profess to being an expert, but I do know of some. I obviously don’t have the time to go into all the details now, but at my site  Market Mentalist you will find all you need to know about investing online. There is access to some of the top trading systems available including state of the art  software, books, newsletters, and Forums. Also you will find the most up to date articles on Online Trading, including additional information on How to Trade Online Futures…Day or Swing Trading . Whether you are an inquisitive novice or a seasoned pro Market Mentalist offers the online investment resource you just might be seeking

“Learn and profit from Jeff Augen’s book: It clearly explains how to take advantage of market inefficiencies in collapsing implied volatility, effects of strike price, and time decay. A must-read for individuals who are options oriented.” –Ralph J. Acampora, CMT, Director of Technical Analysis Studies, New York Institute of Finance   “A fantastic, insightful book full of meticulously compiled statistics about anomalies that surround option expiration. Not only does Augen present a set of effective trading strategies to capitalize on these anomalies, he walks through the performance of each across several expirations. His advice is practical and readily applicable: He outlines common pitfalls, gives guidance on timing your executions, and even includes code that can be used to perform the same calculations he does in the text. A thoroughly enjoyable read that will give you a true edge in your option trading.” –Alexis Goldstein, Vice President, Equity De (more…)

To be sure, there are advantages and disadvantages of trading the various asset classes. As we said, stocks are great, especially for beginners, because they’re easy to understand and they are the most followed of all asset classes by the media. Traders can always get their hands on information about stocks due to increased technology. The bad part about stocks is the limited market hours (just 7.5 hours a day in the U.S.) and the ability of large banks and hedge funds to manipulate prices, adversely impacting smaller traders in the process. Those are just a couple of the issues you’ll have to contend with in stocks, so let’s take a deeper look at futures compared to stocks and why futures trading may be the place to be.

One of the great things about futures trading is that you trade 24 hours a day. Compare that to stocks and you’ll see just how limiting stock trading can be, especially if you’re a night owl living in the U.S. Futures can’t be traded 24 hours a day, but if you trade index futures such as Dow, S&P 500 and Nasdaq contracts, the trading day is far more extensive than that of stocks. Futures trade electronically so there is no need for humans to be awake or present to ensure the market is operating smoothly. And since US stocks are so widely followed on a global basis, even when US markets close, traders in Asia and then in Europe “pick up the slack” and trade US index futures, so the market is moving, even after the sun goes down in New York. In addition, traders that like to stay up late can trade DAX and FTSE index futures to profit from moves in the German and British markets. Try doing that with regular US equities.

The fact of the matter is that trading futures can result in bigger profits faster than trading stocks. Look at the comparison like this. If you’re a retail day-trader, the SEC requires you to have $25,000 in your brokerage and your broker extends you $100,000 in buying power. The amount of leverage you get as a retail day-trader will always be four times your initial capital deposit. Now $100,000 may sound like a lot of money, and it is, but it’s not a lot of money to trade stocks with. If you’re trading a $50 stock, the most shares you could trade at any time is 2,000. So if you wanted to make $2,000, you would need that stock to move $1 and that could take a while. Seasoned futures can make $2,000 in the blink of an eye with just a couple of ticks. See, that’s the beauty of leverage. When you know how to properly harness and exploit leverage the way good futures traders do, you stand to make more money faster than you would with stocks.

When you’re an active trader of stocks, all you can trade is common stock. Yes, there are choices regarding what sector you focus on, but switching from tech stocks to energy stocks just isn’t the same as being able to go from index futures to crude oil or gold futures. Not to mention, there is no “mini” alternative with stocks. If you want to trade smaller, you simply lower the amount of shares you trade. Doing this obviously lowers your profit horizons, which happens with the Eminis as well, but even the Emini futures pack a bigger profit punch than traditional stocks. At the end of the day, we’re not going to malign stocks and if that’s where you’re comfortable, stick with it. Chances are, though, as you learn more about the advantages of futures, you’ll want to learn more about this alluring asset class and get into the game yourself.