Global Macro and Commodity Trading

By George Kovner

Commodity traders are not a bunch of overpaid taxi drivers. Instead they are a very sophisticated group of investors looking to gauge the supply and demand characteristics of both global demand and the specific demand for each and every commodity that they trade, and some that they don't. In addition there are more then one type of trader.

The largest group of traders are definitely the upstairs trader, or traders that are not on the floor of the exchange. Some have floor experience while others do not. The largest group of these are systematic long term trend followers while there are smaller subsets that do purely fundamental and others a hybrid model.

Global macro traders are the next major group of players in the commodity markets. Some are heavily involved and some barely trade them but all macro traders track the commodity markets to give them a better look into the worlds macro economic situation.

In 2008 for example we saw oil climb to record highs. During this time the macro trader was busy looking for what companies will benefit and what companies will get hurt by this. Yes, oil companies made out well but so did companies like MLP's and railroads. On the other hand airlines and fleet services got absolutely hammered as their fuel costs started to cut heavily into their sales.

Precious metals are another area of great concern. Long looked as a fantastic inflation gauge gold and silver are also looked upon more and more as alternative currencies since most fiat currencies are looking like junk these days. As you can see precious metals are very useful to key in on currencies and inflation.

After the shiny stuff we have the industrial metals. Things like copper, nickel, tin, iron, aluminum, zinc, and lead are all in this group. Cars, trucks, phones, computers, etc all have large amounts of industrial metals and are vital to the worlds economy. If you are not tracking industrial metals then you are missing out on one of the largest parts of the commodity complex and a vital part of the economy.

While many investors gloss over the agricultural commodities they shouldn't. In the future agricultural commodities will only be increasing in importance as the worlds water supplies continue to diminish. If you are already monitoring demographic trends and overall supply demand you should also be following agricultural commodities.

As you can see commodities can be a very useful and profitable asset class. With several sub sectors as well as the fact that most commodities are so universal that they only trade in one currency and it should be obvious that you need to track if not trade commodities. - 23309

About the Author:

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

Trading System - Are you A System Trader?

By Maclin Vestor

A trading system is a methodology of trading. An investor who uses one system and follows a specific set of guidelines when making a decision, follows system trading, and will usually never deviate. A trading system is only one method of trading, and usual requires no thinking. It is possible to have one system that is governed by multiple system.

For example, to have 10 different systems, and select only one stock from each system every month according to the main system's qualifications.

Someone that uses several Trading Systems is a multiple system trader. They have to either have an overall system that encompasses all of them, or make their own decision on which to follow. Doing so can be dangerous, as the purpose of system is to prevent human error. It is advised to be a system trader who trades one system at a time, or trade multiple systems within a larger core system, and avoid being a multiple systems trader.

Trading System - Trading can be awfully hectic without some kind of methodology. You can't expect to take on the best traders in the world who have teams and resources at their disposal just by throwing around money at will hoping that it works. You need an actually defined system in order to be able to trade effectively.

Many successful systems are based on earnings and high potential for growth. Stockbee's trading system often swings for the fences. As a result, it requires a solid degree of protection. Obviously you shouldn't limit yourself to someone else's system, you need to find one that is right for you.

There are two kinds of traders, technical traders, and fundamental traders, each has their own system. Of course there are some who use both.

Technical traders

Some system traders, are day traders. Others are swing traders. Still other people are more of a trend trader. Each will have it's unique system. The system will be based on the technicals. Is it volume that triggers the buy? Is it price movement? A combination of both? Or perhaps it's pattern trading.

Some people even have trading machines or robots that do the work for them. Others rely on pattern recognition done by a system. The method is to sign up for email alerts, or some form of alerts, then make a purchase based on the software's recommendation. There are some people that screen down a stock based on strong fundamentals, and only trade those stocks, but trade them based on the technical chart patterns and volume.

They will sell based on a trend break, or rules on when to take gains such as 20% gain according to their system. They will set a stop loss based on their system as well. It might be 4%, or 8%, or it may be a trailing stop.

Fundamental traders

Fundamental traders might do things a little differently. They are looking for improving fundamentals, or stocks that pass through a certain screener. Zacks.com is a great resource if you want to rely on fundamentals. Earnings is always a big part of a system, and the Zacks' ranking uses earnings revision to get in early when the earnings and company internals appear to be improving. Zacks' has several screens, and their software allows you to screen stocks according to many different options.

Regardless of your trading system, one thing remains important in every single system. Money Management and loss protection.

It doesn't matter what the upside is or win rate is, if you can't protect yourself from major declines, you shouldn't be trading. I don't care if your system is 90% effective (no system is and if they say they are, they're lying), and if the gain is 1,000%. If you put all your money on it repeatedly, eventually you will suffer a loss so catastrophic you will never be able to recover without borrowing money. By taking one loss, you hinder your ability to make money. That is more costly then the potential for greater gains that you would gain by taking additional risk.

Just to illustrate if your system causes you to take a 95% loss, you need a 2000% return just to make up for that loss. You cannot trade like this. No system is better then it's weakest link. That weak link unfortunately for many people is the ability to manage money. Fortunately, it is a skill that can be learned, and doing so will make you a better trader. Better yet, if you do not wish to be a better trader, you can simply follow the rules of a system that contains a methodology on how to manage money and how much to invest before placing a trade.

I recommend that you either have a trailing stop or a hard stop. You can also buy a protective put if you are afraid of a stock bottoming out overnight and plummeting through the stop. Protective puts are like owning insurance. Unfortunately, you have to continue to buy the insurance as it eventually expires if you don't use it. Don't trade options without learning everything about them.

Some puts are not good for some strategies. Longer term trades and Investments will require long-term equity anticipation securities, or LEAPs, where as you may not need to risk as much capital for short term protective puts. A trailing stop should be usually 20%, where a hard stop should be more like 7%. Different systems will require different stops so take this with a grain of salt.

A good investor or trader actually will rarely need to ever be fully invested. There are people that trade on complete margin for a few times the entire year, and the rest of the year they're on the sideline, but generally the best traders that have a career that lasts have lots of money on the side, even more so if they use options and are unhedged. If you are unhedged, that is only playing one side of the market, (all buys, or only playing one theme such as only playing inflation or only playing deflation), you need to have even more cash on the side.

The lower the win rate, the more money on the side you need, and the smaller your positions should be. Any good system won't require you to analyze. Having to do a lot of the thinking can cause you to panic and make incorrect decisions. Most people aren't cut out for that, and that's why it is a smart thing for many to use a trading system.

If you trade within a system, you have a much better chance at placing winning trades. A trading system will have a solid record of success, evidence that it works and has been working, an understanding of the decline and proper money management planning. If you trade within a system, you can estimate your results, and by doing so attain measurable success consistently with a trading system. - 23309

About the Author:

Maclin Vestor teaches about a few examples of an online trading system and teaches you to find an options trading system that works for you.

Explore Ways to Learn Forex Online

By Jane MacRae

Forex (or foreign exchange) trading presents small, independent investors with an exciting opportunity to make money. However, before you dive into this type of investing, it is important to learn as much about the forex market as possible. Fortunately, there are plenty of ways to learn forex online.

* Know About the Jargon

To play in any financial market, you will first need to speak the language in that particular field. To do so, you can simply go to your favorite search engine and type in "forex terms" or "forex jargon". You will then be taken to a list of relevant pages. Select a good jargon list, and commit some of your time to get yourself with these terms. This will definitely give you some advantage, especially if you are beginner investor.

* Take Online Courses For Free

If you are new to Forex market, it is a good idea to start with some free online courses. Again, you can do so by searching for "free online forex course" on the like with your favorite search engine. Alternatively, you can go to a message board frequented by investors and ask if anyone there knows of any good, free courses you should try.

* Learn from a Professional

If you are already an advanced player in the field but like to learn more, you can also consider the paid options. Many experts, with years of experience in forex trading, are now offering their teaching services online. Although you will have to pay for such courses, the upside is that taking such a course is almost like having a personal tutor, or a mentor who will be there to answer any of your questions, and help clear up anything you find confusing.

You can simply ask around to find a good, reputable paid online course. In the Forex market, those who were once in the same boat as you are in now will usually be more than happy to help steer you in the right direction.

* Sign Up For a Free Account

Once you have begun to learn about forex trading (whether on your own, or with the help of a professional "teacher") you will want to put your knowledge to the test, but without financial risk. There are many sites where you can sign up for a free demo or test account. For about thirty days, in most cases, you can actually try your hands at forex trading for free. These demo accounts will not only let you know whether you are ready to risk your money on the real thing, they will also help you gain hands-on experience.

As you can see, there are a number of ways you can learn Forex online. It is true that Forex trading has opened up a whole world of possibilities to average Joe investors, but you should stay calm. There is no short cut to success in any market, and your investment in education can pave the road for you. - 23309

About the Author:

Click here for our review of one of the leading forex trading tool in the market, which will grant you an unfair advantage over your competitors. You may also like to check out this related article about forex trading broker.

How To Pick Out A Property Management Company For Your Investment

By Layla Vanderbilt

Managing investment property is not simple. You worry concerning the maintenance, and receiving rent payments. The broken appliances happen at odd hours and solving occupant complaints takes up valuable time. It takes additional of their time and currency to maintain. Unluckily, investors quick become weighed behind as the investment maintenance is additional work than predictable. The solution for a lot of investors, then, is to hire a reputable property management company to take above managing the property.

A proficient property management company always reduces the investor?s burden by repairing the problems in the property and also by maintaining very good records. Your business will be streamlined if the company agrees to execute all the services upon the agreed fee.Hence, what are criteria upon which we can consider in hiring a manager for your property?

One important fact you want to know is how much the company fees are. The national average is around 4 percent on the income from a large rental property, while single homes are often over 12 percent. Be aware of the fees charged, the necessary cost schedule and what services are included before you sign an agreement and exchange some cash. Do they deduct their cost from the monthly rent collected? Spend several times finding out how they deal with additional expenses as fine. Will they send invoices to you to be paid and other expenses in their fee?

Request them concerning additional properties they have managed. Get the addresses of a couple and check them out. Drive by them to see the type of outside work they do. The management you hire should be recognizable with the type of investment you own. In more words, a manager educated in apartment buildings probably wouldn?t be an excellent match for a single family home property.

Speak with the real person who will be handling the property whenever probable. Good contact with those you hire must start early in the relationship. Get references from their preceding skill. The property management company will be clever to show you the types of advertising they do. It will be not comparable for all media. Do they have a web presence? Is it easy to navigate?

Other questions to be enquired are of hiring cleaning contractors for preparing vacancies and can the cleaning be done quickly to ensure you are not losing valuable time and money while the place is prepared for tenants?,do they have contractors for repair and landscaping needs?,what are the hours the property management company is available and if they are available after working hours for emergencies?,how close is the management office located to the investment property?.Also their viability of approach.Another aspect that should be kept in mind is their proximity to the investment property to solve the problems as they occur.

Hiring a property management company to oversee a real estate investment frees up the time an investor spends on the every day operations. The company hired to manage the investment allows the proprietor to feel less overwhelmed. The proprietor can spend further time finding more advantage deals that can be passed onto the company to manage. - 23309

About the Author:

Layla Vanderbilt is the content coordinator for a leading property management software review website which connects people with the leading property management tools.

Stock Market Billion Dollar Trader Reveals His Favorite Indicator

By Shawn Tilman

Are you ready to learn a sure-fire system for generating quick and easy cash flow from the stock market?

This money pulling indicator is used by billion dollar hedge fund traders like Steve Cohen who's firm has average over 40% a year!

He has some 60 traders working for him. He is a master of watching a stock's volume.

Most non-professional traders either overlook volume, or simply do not know how to use it correctly.

Even if you think you understand volume, you owe it to yourself to read this article to make sure you understand how to correctly interpret volume for massive profits.

Each measured unit of volume represents the meeting of minds between two individuals: a buyer and a seller. Volume measures shares or contracts that have changed hands. Volume is most commonly shown as a histogram bar below the stock price. Volume reveals clues about the psychology of bulls and bears. Rising volume confirms trends while falling volume means you should question the longevity of the existing trend.

In a downtrend, rising volume shows that panic is setting in as people run for the exists. It also shows the foolish buyers stepping in to buy betting that the market is going to turn around. Remember, in order for a sell order to execute, there has to be a buyer somewhere. Buying into a downtrend is also known as trying to catch a falling knife. It is usually a bad idea to bet that the current trend is going to change. Don't bet against the wisdom of the crowd. Let some other fool do that. When all the sellers get out, the volume on the downside falls as the downtrend runs out of steam.

When a stock is trending higher, watch the volume. If the volume is increasing into the upward trend, it means that greed is causing more and more traders to take notice of a particular stock and to dog pile into that stock. As the stock continues to trend higher, the volume will continue to build which tells you that more and more traders are piling into the stock and that extreme greed has firmly gripped the market participants. Now keep an eye on the volume. Fear will slowly begin to replace greed as the volume begins to fall off and the uptrend starts to run out of steam.

Volume goes beyond just telling the conviction of a current trend, it gives you several clues.

A spike in volume on 1 day often signals the beginning of a new trend when it occurs on a breakout from a trading range. A spike in volume like this can also signal the ending of a trend. Very high volume that is 300% or more of the average volume signals market hysteria. This is when fearful bulls finally decide that this uptrend is for real and rush in to buy or it is when fearful bears become convinced that a decline has no bottom and rush in to sell short.

Divergences between price and volume tend to occur at turning points.

If price rises while volume falls, it is a signal that the uptrend is not attracting very much interest. If price falls to a new low and volume falls at the same time, it is a signal that the downtrend is not attracting very much interest and an upside reversal is likely. Price is more important than volume but a master traders knows how to analyze volume in order to gauge the psychology of market participants. - 23309

About the Author:

By Shawn Tilman. I hope this article helps you better your trading and make a lot of cash. For more FREE master stock trading secrets and advice see stock market