Speculation Investments

By Samatha East

In some ways, high-end investments are not much different than traditional investments: You invest your money in stocks or bonds or mutual funds or ETFs and make all the same decisions that an average investor does. The difference is the amount of capital in play (typically a lot) or the risk exposure (typically high).

In other ways, high-end investments are almost a completely different beast. Its not so much of the buy and hold investing as it is trading or speculating assuming a business risk with the chance of profiting from the market fluctuations.

Successful speculating requires analyzing situations, predicting outcomes, and putting your money on one side of a trade based on those predictions. Speculating also involves an appreciation of the fact that you can be wrong 80 percent of the time and still be successful if you apply the correct techniques for analyzing trades, managing your money, and protecting your account. Basically, high-end investing means you have to chuck all your preconceptions about buy-and-hold investing and asset allocation, and essentially all the strategies that stock brokerages put out for public consumption. The following sections outline the high-end investment vehicles you can find out about in this book.

Futures and options

Futures and options, by their very nature, are complex financial instruments. Its not like investing in a mutual fund, where you mail your check and wait for quarterly statements and dividends. If you invest in futures and options contracts, you need to monitor your positions on a daily basis, often even on an hourly basis. You have to keep track many details: the expiration date, the premium paid, the strike price, margin requirements, and a number of other shifting variables.

That being said, understanding futures and options can be very beneficial because they are powerful tools. They provide you with leverage and risk management opportunities that your average financial instruments dont offer. You can dramatically increase your leverage and performance in the markets.

Commodities

Commodities are the raw materials humans use to create a livable world: the agricultural products, mineral ore, and energy that are the essential building blocks of the global economy. The commodities markets are broad and deep, presenting both challenges and opportunities. For example, how do you decide whether to trade crude oil or gold, sugar or palladium, natural gas or frozen concentrated orange juice, soybeans or aluminum? What about corn, feeder cattle, and silver should you trade these commodities as well? And if you do, what is the best way to invest in them? Should you go through the futures markets, through the equity markets, or buy the physical stuff (such as silver coins or gold bullion)? And do all commodities move in tandem, or do they perform independently of each other?

A lot of folks equate (incorrectly) commodities exclusively with the futures markets. There is no doubt that the two are inextricably linked: The futures markets offer a way for commercial users to hedge against commodity price risks and a means for investors and traders to profit from this price risk. But equity markets are also deeply involved in commodities, as are a number of investment vehicles, such as master limited partnerships (MLPs), exchange traded funds (ETFs), and commodity mutual funds.

Foreign currency trading

When you get involved in foreign currency trading (sometimes called forex trading), youre essentially speculating on the value of one currency versus another. You buy a currency just as youd buy an individual stock, or any other financial security, in the hope that it will make a profitable return. But the value of your security is particularly volatile because of the many factors that can affect a currencys value and the amazingly quick timeframe in which these values can change. Nevertheless, if youre an active trader looking for alternatives to trading stocks or futures, the forex market is hard to beat. Online trading innovations over the past decade have made it accessible, both technologically and financially.

Trading foreign currencies is a challenging and potentially profitable opportunity for educated and experienced investors. Before deciding to participate in the forex market, carefully consider your investment objectives, level of experience, and risk appetite. Most important, dont invest money you cant afford to lose. The leveraged nature of forex trading means that any market movement will have an equally proportional effect on your deposited funds; this may work against you as well as for you.

Hedge funds

Hedge funds are lightly regulated private partnerships that pursue high returns through multiple strategies. A hedge fund manager may invest in almost any opportunity in the market where he or she foresees favorable risk to reward. Through hedge funds, you can get some high returns for your portfolio, if you dont mind the risk and have a lot of money to invest.

Because of the risk and the investment criteria, hedge funds arent open to most investors. In fact, to participate, you have to meet strict limits put in place by the Securities and Exchange Commission regarding your worth (a net worth of at least $1 million and/or an annual income exceeding $200,000 in each of the two most recent years).

A hedge fund differs from so-called real money traditional investment accounts like mutual funds, pensions, and endowments because it has more freedom to pursue aggressive investment strategies, which can lead to huge gains or huge losses. - 23199

About the Author:

How to Invest Today is a free site dedicated to helping investors from beginners to advance investors in today's market. Free Financial Today is a free site dedicated to helping with personal finances and retirement.

Store Credit Cards and You

By Samatha Ferguson

If you can comfortably clear the outstanding amount on your store card when the bill arrives and are a regular customer of that particular retailer, it may be worth using a store card, as there could be plenty of benefits in doing so. Not only do you get a discount on your first purchase, there are usually other perks, such as bonus reward schemes, free catalogs or magazines, and special shopping days, where you can avoid the crowds and shop in peace. Jim Black gives customers 1% of what they spend in store back in the form of vouchers, for example, so if you are a regular customer this could be worth having.

Some retailers have launched credit cards alongside their store cards so you get the usual rewards of a store card for spending on the retailer-branded credit card. The danger is that while the APR tends to be lower than on a store card, it isnt as cheap as some of the best credit cards. And as you arent restricted to one store but can use it in whatever outlets you like, you could run up more debt on it than you were able to before. Check the APR before spending " and if it isnt that competitive (and you dont clear your balance every month) dont use it at all.

Set up a direct debit to pay the full amount due on your store card each month. Then, if you forget to pay one month " perhaps because youre on holiday " it will be paid regardless so you wont run up any interest.

As well as persuading you to take out a store card, many retailers will try to force you to buy card protection and, just for good measure, card payment protection as well:

Card protection: Covers you if your card is lost or stolen. A single call from you can cancel all your plastic and usually costs around $7 a month.

Card payment protection covers your store card repayments if you lose your job or become ill and cant work.

You would want to avoid both types of cover, as they are expensive and usually a waste of money. Dont be talked into signing up, no matter how persuasive the salesperson is. If you really want some card or payment protection, shop around for a good deal rather than automatically taking out the policy the store card provider offers: There is no obligation to do so and you will find a better deal elsewhere. Make sure you read the small print before signing anything. - 23199

About the Author:

How to Invest Today is dedicated in teaching everyone how to invest from beginner to advanced. Learn How to Invest Today and become independent.

Forex Courses - What's Important to You?

By John Templeton

If you are thinking about purchasing a forex trading course, you definitely have a seemingly infinite amount of choices to pick from. The are tons of courses from every particular kind of trader. It doesnt matter if you like to scalp the market, and buy or sell several times a day, or are a more long term position trader.

The real important thing you should be asking is what am I actually going to learn if I were to purchase this course? Are you just going to get the same generic rhetoric that you normally get in more forex communities or is this course really going to help me to accomplish my dream of making a living in the forex market by having a deeper understanding of it.

The problem nowadays is that the vast majority of forex trading courses just don't do a good job of explaining why the markets move the way that they do. Instead most just give you some kind of generic system where you throw a bunch of indicators on your charts just to see what sticks.

There are so many things wrong with this that I don't even know where to begin.

How about we start with the obvious, which is indicators are all lagging. If you don't know what this means, all you are doing is trading off of what has already happened to the market, now what will happen to the market.

Another thing is what exactly are these indicators telling you? For example, lets take a look at stochastics. They are supposed to tell a trader when a currency is either overbought or oversold.

The question I want to ask you is do you really think that the majority of traders even have the slightest idea what it would mean in order for a currency to be overbought or oversold? I really don't think so. In fact, most just see a bunch of colors and lines.

All of this goes to the original question I asked in this article. What is it that you are learning? - 23199

About the Author:

If you want to know more about a forex trading course, then you definitely want to check out millionaires trading forex.

Specialize In Trading US Dollar (Part I)

By Ahmad Hassam

You want to become a currency trader. The most important question that you will ask is which currency pairs are the best for trading? You should focus on the four major currency pairs EUR/USD, GBP/USD, USD/CHF and USD/JPY in the beginning. You should consider becoming a specialist in US Dollar. Yes, its true; you should become a specialist in understanding and trading the greenback.

Each currency pair actually comprises two currencies. So if you are long in GBP/USD then you are in fact buying the GBP and selling the USD. In each of the major currency pairs, USD is part of the equation.

This means that you should study and understand the fundamentals that drive the US Dollar and the US economy. You should also understand the workings of the Federal Reserve System (FED). Then you have done your homework. Now you can trade any one of the four major currency pairs as all of them depend on USD.

These four major currency pairs are the most liquid pairs in the forex markets. They involve the vast majority of the currency trading. You should think like this. Majors are the most heavily traded pairs and US Dollar is half of each major pair. So if you can understand what drives the USD, it will have a huge impact on your trading plans.

The only thing you need to determine is your bias for USD. What do you think; USD will weaken or strengthen in the near and medium term. Then apply that bias to the major currency pairs.

Just to remind you, suppose you buy a currency pair. You are buying the first currency and selling the second currency in the pair! Suppose your form a bias that USD is going to strengthen. With this bias, you can go long on USD/CHF and USD/JPY. Similarly, you can go short on GBP/USD and EUR/USD.

With one bias, you have the potential of entering into four possible trades. However, each currency pair will react differently to US Dollar strengthening or weakening. Suppose Euro is also strengthening. Both Euro and US Dollar are strengthening at the same time. The currency pair EUR/USD will move less. USD/JPY will move more if JPY is weakening and USD is strengthening.

Lets say you can only afford to trade one standard lot. You have a bearish bias for USD. You can consider going long on either GBP/USD or EUR/USD. What pair you should trade? Which one!

Take a look at GBP and the Euro both at the same time. Find out which of the two currencies is stronger right now. You should trade the stronger currency. You can find that by taking a look at the cross EUR/GBP. If the EUR/GBP cross is down, it means EUR is weakening and GBP is getting stronger. You should trade GBP/USD!

Always include an evaluation of the currency correlations for the major pairs in every trading plan that you make. The correlations between the currency pairs can change any time. So you need to calculate the correlations on weekly basis at least to give you a fair idea. Correlation is determined by what is known as the correlation coefficient which always ranges between +1 and -1. - 23199

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading and swing trading stocks and currencies. Discover A Revolutionary New Forex Robot. Develop your own Forex Trading System.

The ABCs of Learning Forex

By John Templeton

If you want to learn forex the right way, you are going to have a make a decision as to how you want to properly analyze the market. You need to choose between technical analysis and fundamental analysis.

I'm sure you can find a few traders who are equally great in both categories but for the most part, traders usually stick to only one form of analysis as their MO.

But unfortunately, there are plenty of traders who have made a conscious decision not to learn either method. Trust me, I know this sounds crazy, but many traders would rather trade from the heart, instead of taking the time to learn how to properly analyze the market, so you can trade it successfully.

You may laugh, but there are many traders who dont really grasp just some of the basic fundamentals that come with news events. To give you an example, there are many traders who couldnt even tell you the significance of NFP numbers or unemployment numbers. Its sad but true.

There are a ton of traders who still don't know if a rise or fall in interest rates is good or bad for the value of their currency.

What makes this even worse is the fact that many traders never really learn about the trading the forex market from a technical perspective. To some of these traders, the entire idea of using technical analysis is to put every single indicator on your chart, and somehow hope that your indicators are pointing you in the right direction.

The reality is that indicators don't provide anything of value to a technical analyst. Can you think of why that is? It's really simple. It's because all of them are completely 100% lagging. The truth is that an indicator is really only good for telling you something that has already happened, not what will happen, which is what you need to know.

If you are truly serious in learning more about technical analysis, then do yourself a favor and get rid of your indicators, and educate yourself on price action. - 23199

About the Author:

To learn forex, make sure to check out this website on trading with the trend.