Profitable CFD Trading Strategies

By Jeff Cartridge

The two critical numbers to know when you are trading is the risk reward ratio and the winning percentage or hit rate. Understanding these numbers will go a long way to improving your trading.

The risk reward can be calculated by averaging all the wins and dividing by an average of all the losses. The risk reward clearly displays how large your profits are when compared to your losses. The hit rate is simply how often you win and is a count of the winning trades divided by a count of all the trades.

Is Trading CFDs Like Winning Lotto?

Judging by the number of people that play lotto this is the way to generate wealth, but is it really?

The attraction of lotto is the low outlay or risk. If you lose it only costs you $10 and if you win the returns are potentially enormous, maybe $10 million. The risk reward of Lotto is 1 million:1. This is an excellent risk reward ratio and one you are very unlikely to find anywhere else.

But it is not how much you win that is important when playing lotto it is how often do you win. An awesome risk reward is coupled with an awful hit rate. To win lotto if you require 6 from 40 balls then your probability of success is 1:3,838,380.

If you bought 3,838,380 tickets on average one ticket would win and the rest (3,838,379) would lose. This means on average you would have to spend $38,383,790 to win $10 million. Overall playing Lotto would cost you $28,383,790.

Overall, buying Lotto tickets is not a profitable strategy. Luck will favour some people in Lotto, but successful CFD trading is not about luck, it is about exploiting profitable opportunities.

Can Betting On Rugby Improve Your Trading?

In the Super 14 rugby series in New Zealand the Crusaders has been a dominant team over the last ten years winning 7 of the 10 series.

A large bet of $100,000 was made that the Crusaders would win a particular game. The payoff if the Crusaders won was $108,000 so the gambler would receive a profit of just $8,000. With a downside of $100,000 the risk reward is very poor at 8:100 or 0.08.

However when you consider the odds of a Crusaders win they were very high. If the probability is high enough, more than 90%, then this could actually be a profitable strategy.

Calculating the probability of a team winning a game is not an easy task, but assuming the odds were 95%, then the gambler would win 19 times $8,000 and lose $100,000 just once. It could be that our gambler had a profitable strategy despite the lousy risk reward.

To trade CFDs successfully it is vitally important to have a strategy that overall you expect to win because the combination of risk reward and hit rate are in your favour. - 23199

About the Author:

Jeff Cartridge is the author of Supercharge Your Trading with CFDs and created the website LearnCFDs.com Find the Best CFD Trading Books

Banking, Money, Taxation And Becoming Your Own Banker With The Infinite Banking Concept

By Tomas McFie

Money is an asset! Try living a week to 10 days without it and you will appreciate just what an asset it really is. But most people do not treat money like an asset and therefore they destroy moneys best quality. You see money treated as an asset multiplies exponentially.

It has been written that "The value of an asset increases exponentially while the value of your labor only increases incrementally."

The Rate of return on their money, for many, seems to be more important than the return of their money. But the real value of money is destroyed when rate of return is the focus. This is because someone else is in control of the actual money.

Think about this:

Where does all your money go when you get a paycheck?

Your bank or a third party's bank?

Do you or someone else profit the most from this way of doing business?

The late Adrian Rogers argued that you cannot multiply wealth by dividing it. Ritually, putting your money into a Bank owned by someone else gives someone else control of your money--- not you. This simple process--- the separation of you and your money--- can be very costly. Remember, every time you lose control of your money, you lose money! Once you give the control of your money to others they can assess fees and service charges, use your money to make themselves money, or lose your money and pay you little or nothing for compensation.

That is why everyone needs to read about the Infinite Banking Concept in the book Becoming Your Own Banker by R. Nelson Nash. Nash explains how, you can take control of your money, which is the asset that can build real riches and lasting wealth. This process is called the Infinite Banking Concept or IBC. IBC allows those who utilize Becoming Your Own Banker, aka BYOB, to recover the costs associated with the banking equation. What is the banking equation you might ask? The banking equation is simply this:

You finance everything that you purchase in life. You either pay someone interest to use their money to make a purchase, or you give up the interest you could have made on your money when you make a purchase with your own money. Either way you lose.

When you Become Your Own Banker, you recover the cost of interest you pay out when you borrow from your own banking system and pay yourself back. You are now using your own money as an asset and it will multiply. - 23199

About the Author:

Tom McFie PhDis a professional financial coach and is nationaly known for helping people recover the money they currentley spend. Don't Make another payment until you have viewed his Infinite Banking Video Then Contact him he can help you

Knowing Major Stock Indexes (Part I)

By Ahmad Hassam

There are 100s of ETFs and HOLDRS covering key industry benchmarks such as the various Standard & Poor Indexes, Russell Indexes or the Dow Jones Averages. There are ETFs that cover the other less well known narrow based sectors.

You should know the major indexes that are either key benchmarks or have ETFs tied to them. For example SPY tracks the Standard & Poors 500 Composite Index and is the largest of the ETFs.

Standard & Poor: Standard & Poor (S&P) has been providing independent and objective financial information, analysis and research for nearly 140 years. It is the financial services segment of the McGraw Hill companies.

It is also the provider of equity indexes. These indexes are also used as the basis for wide variety of financial instruments such as Index Funds, Futures, Options and ETFs. Investors around the globe use S&P Indexes for investment performance measurement.

S&P 500 Composite is one of the most popular indexes in the global financial markets. Hundreds of companies around the world have licenses with the Standards & Poors for their index products. The influence and name recognition of S&P 500 is unparalleled. It is also used as a key benchmark for money manager performance.

The S&P 500 is a capitalization weighted index that tracks the performance of 500 large capitalization issues. S&P 500 represents more than 75% of the capitalization of the entire US Stock Market. Each year thousands of money managers have the single minded goal of outperforming the S&P 500.

30 years back most of the stocks in S&P 500 were from the Industrial Sector. By 1970s, six of the top companies were from the Oil Sector. Over the years, the complexion of S&P 500 has changed. In 2000s, technology composed about one third of the capitalization of the index. The stocks in the S&P 500 are determined by a nine member committee in accordance with the general guidelines.

The other Standard & Poors indexes are the S&P Midcap 400 Index. It is based on 400 chosen domestic stocks and is also capitalization based. It measures the performance of the midsize companies of the US economy.

The S&P SmallCap 600 Index consists of 600 domestic stocks. These stocks are chosen for market size and liquidity. S&P SmallCap 600 is also capitalization weighted index and is of interest to institutional and retail investors. There are also sub-indexes based on these S&P Indexes.

NASDAQ: You will often hear the Nasdaq market being up or down on a given day in the media. NASDAQ Composite Index contains more than 4500+ companies representing a market capitalization of trillions of dollars.

There is another Nasdaq Index called the Nasdaq-100. NASDAQ-100 is composed of the top 100 nonfinancial companies in the Nasdaq Stock Market like Microsoft etc. It is a modified capitalization weighted index. The QQQ is based on the Nasdaq-100 Index. - 23199

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and forex. Know Candlestick Charting. Learn Forex Trading!

Different Stock Brokerage Firm in The Industry

By Daniel Crislow

Many mistakes, many years later and stand before you is a man who knows about stock brokers. I've almost tried them all so I can quickly tell whether the interface is good or not, without making a single trade. Here's what I think about the different brokers.

Zecco still advertises stock trading at no cost, but the package it offers is a far cry from the unlimited free trades that it used to promote. Nonetheless, 10 free trades per month (for those that qualify) is still quite good.

OptionsHouse's pricing is only $2.95 per trade. Yup. Less than three dollars. I know. It's cheap, and their competitors know this. It will be interesting to see how everyone else response once the word is out.

TradeKing was one of the first stock brokers who invented the area of discount brokerage firms. It's good customer support, fair pricing and good tools ranks high in my book of stock brokers.

OptionsXpress is cool because it focuses on options but they have since expanded into the arena of stocks. They do a fine job on the educational front as well.

Scottrade is not really promoting its business like it should but it does offer a solid platform for traders. At $7 a trade, it is middle of the pack in terms of price and middle of the pack in terms of features.

TD Ameritrade has good person support because you can walk into a branch and talk to someone. However, its website is lacking and looks like something from the 80s. I wouldn't touch it with a ten foot pole but you may like it.

Etrade, despite its troubles with the mortgage industry is still one of the best stock brokers out there. It has a banking side where you can get high rates, it has a checking account where you can get free ATM withdraws anywhere and you can also trade stocks. - 23199

About the Author:

There are many stock brokers so how do you know which ones are the best? The only way is to try them and here's an optionsxpress promotion code if you are interested.

Why Every Trader Should Get A Forex Trading Education

By John Oswalt

The Forex education is the key to discovering the real success formula for currency trading. This exciting, rich system can enhance the skillsets of motivated and determined traders, from beginners to experienced professionals. The exhilarating, rewarding career of investment trading can become yours with the right plan"a plan that begins with a Forex education.

In order truly excel in Forex trading, it must be your passion. This is not a get-rich-quick scheme. This is a lifelong pursuit of knowledge and experience that can make you a lot of money. A doctor does not earn his degree overnight. You will not learn Forex overnight.

Forex training provides a diverse collection of technical studies which may be utilized to forecast future market trends and to guide the investor to buy or sell.

Good education and good training are a must for good performance in Forex trading. Forex education will be vital to molding your career and future earnings. Professional traders strongly recommend training in the Forex system, and your investment in this education is the best you can make.

You must be able to bring information together to become a successful and profitable trader. Your self-education must include currency simulation training to thoroughly explain the process and show you how to minimize mistakes. Many Forex training sites are available on the Web, but not many are free and not many are worth your time.

Like all investments, Forex trading has a certain element of risk to it. Although Forex trading involves substantial risks of loss, you can minimize those risks through proper education. Make sure that you are fully confident in your risk tolerance before making a trade. If you would like more information or advice, please contact a local independent financial advisor. Just realize that many will try to steer you away from this type of investing (because theyve never tried it, at least not with a sufficient education).

Just like the market in general, Forex follows some very distinct patterns over the long-run. You can greatly reduce your risk just by getting the proper information in your hands. If you would like to find this kind of education, you will need to find materials on all aspects of Forex trading including technical techniques as well as the fundamentals of the market in general.

This fundamental education will include basic trading techniques, technical and fundamental analysis, and a complete overview of the types of risk and money management skills required to attain success as a trader. - 23199

About the Author:

If you want to find out more about a forex education, then you need to check out learning day trading.