Interest Rates and The Macro Trader

By Michael Druckenmiller

Macro traders via their mandate are able to trade any and all liquid asset classes. Whether they be stocks, bonds, commodities, or currencies macro traders look for the best risk to reward opportunities on the planet.

An area of the financial markets where macro traders tend to do really well is that of fixed income and interest rates. Both academia and practitioners of global macro have found this to be the case over the years. This is not a fluke as the basic trend of interest rates essentially screams profit opportunity.

Interest rates to go up one month, down one month, and then back up the next month. No, instead they tend to move in relatively smooth trends with the very rare blip where a central bank quickly reverses course.

Basically once rates start moving they typically keep going in the same direction for months if not years. Central banks are trying to manage economies and not a lemonade stand. In addition to the fact that rate cycles are a slow and methodological, central banks also let us see inside the machine by issuing periodic reports as to what is happening in their minds and in the economy.

If you take the time to track the economy and to read the central banks meeting notes you will have a very good chance at predicting what the bank will do. In fact even if you wait for the first easing or tightening announcement you will typically have ample time to out on some good trades to take advantage of it. This is because in a few months they will likely do the same thing again and again. These trends are real and they last for a while.

Since interest rates effect every segment of the financial markets traders can make money in stocks, bonds, commodities, and currencies. Typically when rates go down stocks go up and vice versa. When rates go down bonds go up and vice versa.

One of the classic trades is to go long zero coupon Treasury bonds when rates are to be cut and to short them when rates are headed back up. By doing this a macro trader can earn substantial profits and if they use leverage they can make even more. While there are several potential risks involved in the trade the primary one, especially in a easing cycle, is simply that of interest rates.

If you want to trade using global macro then start learning about how interest rates effect different asset classes and how to read the notes of central banks. In recent years they have been giving increasing transparency which makes it easier to decide what you as an investor must do. - 23159

About the Author:

If you need actionable trading ideas then check out The Macro Trader It is a weekly global macro trader advisory publication with frequent intra-week updates for time-critical analysis and actionable trading ideas.

Are Penny Stocks Too Risky For You?

By Marco Davies

The expression 'high-risk investment' often sounds alarming, and frequently this phrase on its own is sufficient enough to put a good many investors off - because at the end of the day few savers wish to take the risk. The concern with purchasing any form of stock (high-risk or not) is that it is invariably a gamble.

On that point is a lot of info swimming around on the World Wide Web about penny stocks. Nearly everybody with e-mail has gotten junk e-mail at some time, boasting about them as the next fantastic investment funds. Unfortunately, much of this information is geared toward scamming you in some sort or another, and it is in all likelihood that you will lose your money that you put into the stocks advertised in this manner. This doesn't necessarily follow that every penny stocks will be poor deals, or that every individual investment fund is a scam, as a matter of fact, far from it because some could be very profitable.

Penny stocks are reasonably valued shares in companies or commercial enterprises that are thought of "small," as opposed to big corporations. Fortunately, there aren't large numbers of share owner engaged, making them less "liquid" than many other kinds of stock. The goal of speculating in penny stocks it to spend only a tiny amount of money in the beginning to enjoy a big return afterwards, but does it happen as easily as this? It does, now and again, just not regularly but for people who are aware what they are doing when they speculate, they can be a fantastic investment tool. Mastering the art of dealing in penny stocks can be delicate, however.

Basically, penny stocks do not deal on the major stock markets, instead, they are referred to as "over the counter" investments, listed on Pink Sheets and the OTCBB. This makes them rather unique, and frequently more difficult to locate for a good many speculators. Penny shares also don't trade very regularly, so now and again investors have very little time to to do something. As trading does not happen frequently, there is always the fear of being incapable to sell one's shares and winding up with a bad investment. This is all part of the risk of dealing in penny stocks, and a good many investors think this makes the game all the more intriguing. When you commit, you should receive monthly updates that make you aware how your stock is doing.

Many investors consider penny stocks too unsafe but the only individual who can determine that is you. It's all down to how much gambling with your funds you wish to do, just how much you are aware penny stocks, and how fortunate you feel. If you imagine speculating your money in penny stocks is a good idea, then it probably is but everyone has a different thought so study them, and form your own views. - 23159

About the Author:

For the most up to date information about buy penny stocks, This is the only resource you will ever need Penny Stocks

Different Types Of Stop Loss Orders

By Ahmad Hassam

You should understand how to select stop orders to limit your potential losses and how to let profits ride. Managing risk and using systems that helps evaluate price changes is critical for a trader if he/she is to maintain a degree of profitability over time.

The descriptions of the types of stops and the pros and cons of each should help you make the right decisions for the different market conditions. Capturing as much profit as possible from winning trades should be your utmost goal. Managing risk should be your number one job.

Predetermined stop loss orders help you conquer your emotions. Stops should be part of the trading system. They should be included in your trading rules. You should also know where and when to place these stops. You should know the various types of stop loss orders.

Set a stop objective and weigh the risk/reward ratio before entering each trade. When volatility is low, stop orders can be placed close to the entry level. However, when the volatility is high, stop orders should be placed further from the entry level.

Initially you will form an opinion based on your gut feelings that is substantiated by a trade signal. When entering a trade make sure you know where and why to put the stop order.

However, you will undoubtedly get caught in the news driven price shock events. It makes the markets highly unpredictable in the short run. These news releases create price spikes that may make an adverse move against your position.

Stop orders can also be placed to enter positions. Stop orders that you place online if the market trades at a certain price, then the order is triggered and become a market order to be filled in by the next best price available. Stop orders are placed to protect against losses.

Sell stops are placed below the current market price and buy stops are placed above the current market price. Protective stops are used to offset a position and to protect against losses and against accrued profits.

You can set a daily dollar amount on the loss limit. If you want to risk only $250 per $100,000 standard lot position then your stop loss will be placed 25 pips from your entry point. Stops can be placed on a dollar amount per position.

You can also use a certain percent of your overall account size as your stop loss. Traders use 2-5% of the overall account size as their stop loss. If your trading account size is $10,000, this comes out to be $200-$500.

Many traders tend to turn winners into losers as they get in the let it ride mindset. The trailing stop reduces the chance to let trades ride. Swing traders can use the automatic trailing stop. This makes the decision making process fully automated. - 23159

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and forex. Develop your own Forex Trading System. Learn Forex Trading .

How To Choose A Managed Forex Account

By Bart Icles

Managed Forex Accounts involve the handling of a trader/client's investment by a duly licensed company or its designated representative/s to do Forex trading in their behalf. This can be an ideal alternative for any trader who deems it necessary to do Forex trading with defined and limited risks involved. The managing company constantly monitors market activities trends in a 24 hour basis, and then recommends to the client what to do when the need arises. Once the client is informed of the latest updates, they will then decide themselves on what possible actions to take.

Picking the right Forex company to manage your account is crucial to keeping your investments in the money making zone. Only hire a reputable and certified Forex management firm who has a good track record, and genuine references to offer. Before deciding to set yourself up with a Forex account with any company or individual, be sure to cover all the bases first by doing extensive research on them, and by contacting other Forex brokers for any valuable information that might otherwise be hidden or excluded by the firm in question.

Make sure you also understand the cost and fees involved the company charges for setting up an account with them. It pays to read the small print thoroughly before affixing your signature to the contract, otherwise you might end up on the losing side of the deal even just you're still just at the initial period.

Forex accounts offer the advantage of taking out most of the complex and crucial decisions concerning the market conditions and trends from an otherwise inexperienced trader, who would lose their precious investments if left to their own inadequate faculties. Forex management firms are in the know of most important inside information, access to real-time currency exchange rates, and crucial market indicators that can be used to help clients turn a tidy profit.

The downside to investing in a managed Forex account is their rather high investment requirements that may range anywhere from $10,000 to $20,000. Some management firms may offer staggered payment schemes or the like to fit some client's allocated budgets, but could still prove to be a disadvantage once the management firm makes bad investment decisions and loses a clients investment.

Forex trading is exciting and profitable once you know how it works and with a good managed Forex account. Invest in one now to see the desired results you've been missing before its too late - 23159

About the Author:

Forex trade starts with a desire to learn and a drive to become a great trader. Learning to trade forex takes dedication and a good teacher. But once you learn how to trade and do so successfully your life will change and you have options and financial resources you never had before.

Saving Time and Money Via the Video Business Production

By Chuck R Stewart

The IPO presentation is a fact of life. Companies need it to raise capital when private placement capital may not be enough. It can be either live, face to face or live, via the Internet. While there are many good reasons for giving a live demo, there are also many disadvantages. These disadvantages can be eliminated through the business video production.

Lets talk about the types of presentations given today, starting with the live demo. The most obvious good reason is personal interaction and goodwill. This is a strong advantage, but the drawbacks are just as important. The most obvious is the cost and hassle of travel. And the cost of airline tickets, hotels, and rental cars is only increasing. In addition, the modern parent is less willing to be away from the family for days at a time. For these reasons, staying in town is growing in popularity.

Which leads us to the webinar. A webinar is a meeting over the Internet. In a webinar, the audience can see the computer of the presenter, and they can speak to each other over the phone or VOIP (voice over Internet protocol). A video camera improves the process by making the presenter visible to the audience and, with a second camera, can even make the viewer visible to the presenter. Under this optimal setup, the presenter has all of the advantages of an in-person visit (the interpersonal interaction) without the disadvantages (cost and time away from home).

Which brings up the webinar. A webinar is a meeting via the Internet. In a webinar, the viewer can see the computer of the presenter, and they can speak to each other over the phone or VOIP (voice over Internet protocol). A web cam improves the process by making the presenter visible to the audience and, with a second camera, can even make the viewer visible to the presenter. Under this optimal setup, the presenter has all of the advantages of the personal visit (the interpersonal interaction) without the disadvantages (cost and time away from home).

The second disadvantage of the live presentation is the quirks and imperfections of all humans that emerge as stumbles and fumbles. regardless of how much we practice, we are doomed to imperfection, and the level of our professional mien is determined by the number of our "ers" and "ums" and slips of the tongue.

Once again,we are rescued by the developing technology of the high-definition video presentation. While this variety of presentation has the disadvantage of the absence of direct human interaction, it overcomes the disadvantages of the live presentation and the webinar. Most obviously, it eliminates the need for the presenter to travel to the audiences location. Second, it saves the presenters valuable time. Once the kinks are worked out of the video presentation, it can be viewed an uncountable number of times by an uncountable number of people. Third, the step of coordinating two or more schedules is gone. The video presentation can be viewed by each individual at whatever time is convenient, and the viewing can even be split into shorter segments that fit into the busy schedule. Finally, the perfected video has none of the slips of the tongue that are inevitable in any live presentation. - 23159

About the Author:

Chuck R Stewart recently reviewed the most effective methods to deliver an raise capital for a company looking to obtain financing. Chuck found that using a private placement company was one of the most proficient ways to develop the presentation.