Futures commodity trading and what it entails

By Mark Andrews

Many people see pictures of the large crowd of traders standing in a crowd yelling and signaling with their hands, holding pieces of paper, and writing frantically. To the outsider, it looks like chaos. But do you really think that there's chaos going on in the world's futures pits?

However, those who work in that environment know exactly what's going on, and they're very organized. In this article, you'll learn a bit about the trading of futures, so that you will know how the process works.

How does this differ from the way things operated in the 'old days'? Before there were organized grain and commodity markets, farmers would bring their harvested crops to major population centers. There they would search for buyers. There were no storage facilities; and many times the harvest would rot before buyers were found.

Because a lot of farmers had the same idea, at the same time, demand and the average price would be a lot lower. Demand would be lacking, and supply would be too high. Conversely, in the spring demand would be raised, and commodities and crops would be in very low supply.

Many farmers would do the same thing, and as a result demand and prices would be driven lower. The opposite occurred in the spring time- supplies would decrease and demand would spike drastically. Until recently, the world didn't have a method by which to shop for commodities at a competitive price. The advent of "forward contracts", progenitors of the current futures markets, signaled a new era in trading.

Futures prices and the bid and asked price are continuously transmitted throughout the world electronically. Regardless of what geographic location the speculator or hedger is located in, he has the same access to price information as everyone else.

Regardless of the speculator's location, the playing field is leveled because everyone has access to the exact same information. It could be one of your competitors who takes your trade, or another speculator. - 23212

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Forex Investment - Where to Start

By Bart Icles

The FOREX market ( foreign currency market, FX ) is a currency market where the trading or buying and selling of foreign currencies takes place. It is where bank and other financial institutions facilitate this type of trading. Transactions are done where involved parties purchase a sum of one currency in exchange for paying the sum of another. The FX market is presently the world's largest and most liquid of financial markets, which includes trading between banks, central banks, corporation, governments, currency investors, and other institutions. The market's average daily volume in the world foreign exchange and related markets is continually growing with a turnover amounting to over 3 trillion US dollars - and still rising. Investing in FOREX can be done through Investment Management Firms, Retail Forex traders, banks, central banks, and hedge funds.

FX market's purpose is to facilitate investment and trade the world over. It's a very unique market because of the sheer size of its trading volume, its being extremely liquid, its geographical spread, its long trading hours, has exchange rates that can be influenced by various factors, and lets investors gain high profits even with low margins due to the nature of its large trading volumes.

FOREX Investment management firms use the FOREX market to facilitate transactions from managed accounts on behalf of clients like endowments and pension funds. For example, invest managers who have international equity portfolios can buy and sell currency majors to pay for purchases of foreign equities.

Retail FOREX traders compose a small fraction of the trade market that participate indirectly through banks and brokers.

Interbank market caters mostly to the majority of daily commercial traders and of the speculative investment traders. On occasion a bank will do trading at the request of a valued client, but much of its trading is for its own account.

Central banks play a vital role in the foreign exchange markets as it possesses a vast financial reserves and can influence the supply of money, inflation and interest rates. With substantial foreign exchange reserves, they can stabilize the market wherein they can buy currencies which are at a low and sell these when at a high based on their more precise trade information.

Hedge funds are FOREX investment funds open to a limited range of wealthy and professional investors and are able to undertake a wider range of investment and trading activities than regular investment funds. They pay a performance fee, and in return are exempted from regulations governing short selling and leveraging. They compose part of the speculative market that can take control of billions of dollars in equity if economic factors are in their favor. - 23212

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To trade forex starts with a desire to learn and a drive to become a great trader. Learning how 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.

A Beginners Guide to the Stock Market

By Carrie Sommer

The stock market is simply, just that --a marketplace for buying and selling shares of stock in companies. Similar to the grocery store, price and value is most important. However, unlike the grocery store, the buyer can immediately turn around and become the seller of the very same shares of stock he or she just bought. Here are some basic concepts of how the stock market works.

Buying Shares of Stock

When you purchase a stock, you are taking on risk. You think that the stock you buy today will be worth more in the future, at which point you will sell it and make a profit. Buying stock on this premise is often called a long position, and is the simplest way to invest. However, you can also sell stock you dont even own yet--this is called a short position, and is considered much more risky.

Stock Prices

There are some terms you should be familiar with before buying or selling stock, that relate to the pricing structure.

Opening Price. This is the price of a share of stock when the market opens on any given day of business. Closing Price. The last price of the stock when the market closes. Bid. The bid is what a broker pays for your stock, and excludes the brokers commission. Ask. Your price for the stock, including the brokers commission. Spread. The difference between the bid price and ask price, which amounts to determining the brokers commission.

What Should I Buy?

This question is the most difficult of any you can ask. There are books written about this question, and none have answered it completely. However, there are some things you can study to help you make the best decisions when purchasing stock.

Technical Analysis.

When studying technical analysis, you are learning about the trends of a particular stock, its trading history, and various charts to learn about what the trading future might look like.

Fundamental Analysis.

This type of analysis looks at the company itself. By delving into the financial operations and decisions of the company--such as earnings, growth, sales, assets, debt, etc.--a follower of fundamental analysis believes he or she can predict the companys future which will affect the stock price.

While fundamental and technical analysts often disagree, a new student of the stock market would do well to understand both and perhaps consider both when making trades.

This indicates the importance of understanding the market before you buy or sell. Therefore, your first investment should not be in a stock, it should be in your education. Read all you can, then make your decisions. - 23212

About the Author:

Carrie Sommer is a frequent contributor to WallStreetSWAT.com, your "special weapons and tactics" against a troubled economic market. At http://www.wallstreetswat.com you can learn more about the stock market for beginners.

Learning about the Forex from the Ground up

By Alex Miller

Since we are dealing with a difficult time economically, many individuals are looking for a way to diversify and to make sure that their money is as safe as possible. Although there are a number of different ways that you can do this, one way that you may want to look into is trading on the Forex market. Not only is it possible for you to make money trading on Forex, it is possible for you to prosper if you do it properly.

It does take a little bit of learning, however, to get on the right path whenever you first begin trading on Forex. I'm not going to tell you that this article is going to give you all of the information that you need but I am going to say that it will help you to have an overview of some very specific things that need to be done in order to get started. This can help you to take the fast track to success.

The first thing that you need to understand is that it is impossible to trade directly on the Forex market. In order for you to trade, you're going to need to go through a qualified broker who will place the trades for you. Although it is possible for you to call a broker on the phone in order to do this, it is a much more common practice to have an Internet account which allows you to trade online and gives you access to one of these brokers.

Something else that you may have a difficult time understanding is the fact that the Forex differs from the commodities market in the fact that it is a zero-sum market. On the stock market, it seems that people were able to pull money out of thin air but this is not the case whenever you are trading in Forex. Regardless of which trade you are placing, there is going to be an equal winner and an equal loser and it will always be balanced.

You are also going to hear a number of different terms whenever you begin trading on Forex, such as pips. Many people have a difficult time understanding this concept but in reality, it is a very simple thing. Since you are trading in two different currencies, buying one while using the other, there needs to be a means of measuring these currencies. A pip is the smallest unit of measurement for these currencies, typically taken out to four decimal places.

There are also a number of different systems on the Forex market which will help to make your trading easier and perhaps even more successful. The problem with these systems is that not all of them are going to be worth anything at all and as a matter of fact, some of them can hurt your trading if you use them. Make sure that you research these well in advance so that you understand what you're getting into.

Trading on the Forex market is an excellent way to build up your portfolio but you need to take my word on one thing that you probably heard more times than what you would like to hear it. The fact of the matter is, however, it's the best advice that I can give you. Never trade any more on the Forex market than what you can afford to lose and you will do just fine. - 23212

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Trading In The Buff - Is It A Scam

By Mike Reed

There is a new course called Trading In The Buff. It was developed by a man named John Templeton. The concept behind the course is to the educate people on how to trade the forex market just by using price action concepts. This is done by getting rid of all the indicators that most people are used to using on their charts.

Templeton uses price action as a way to identify the trend of the market, so you can be sure that you are trading with the trend, and not against it. He also teaches you how to spot the countertrend so you know when the market is making a u-turn. He also talks about how to enter the market at its safest place, and how you can use this information to predict future price movement. There was a fountain of original information in the course, which makes it a great departure from a lot of the stuff that is being sold online. Most of those courses just give you the same generic information you are used to.

Thankfully this is not the case with the Trading In The Buff Course. Quite frankly, everything that I was taught was completely new to me. You can really tell that John Templeton really took the time to create something all of his own, instead of just stealing some generic trading system. He really took his time to provide an in-depth analysis of price action, as he goes through the course with incredible detail. He wants to make sure that his customers really understand every point that he is trying to teach.

The material in Trading In The Buff is presented in steps. The way it works is you read each chapter in the book, and after you are done, there is a corresponding video which reaffirms what you have just learned in the chapter. It's also extremely unique in that you are able to understand the reasons why price action works. With most price action techniques that isn't the case. For example, look at traders who use candlestick formations. Most don't really understand the underlying reasons why those formations work. All they do is memorize them.

However, you don't have to worry about that with Trading In The Buff. The course does an excellent job explaining the fundamental reasons why these price action patterns work, and most importantly why they work. It's explained in such a way that anybody can follow along. It doesn't matter if you are a newbie or a veteran trader.

Another thing I like about the course is how simple it is. I find that many forex trading methods are almost purposely complicated. For example, take a look at Eliot Waves. On the other hand, though there are many trading methods that are so simple, it's almost insulting, like moving average crossovers. Trading In The Buff fall somewhere right in the middle. It's simple, but it also provide a lot of depth, which is a lot more than I can say for most courses.

They also have excellent customer service. I had a problem grasping one of the concepts of the course and I emailed support about it, and as a surprise to me, I got a reply within the hour with a very well detailed answer to my question. What was even more impressive was that it came from John Templeton, himself. He actually answers his own emails. It's nice to see that, nowadays.

But when it comes down to it, what's the most important thing? Does it work? I can safely say that it does. As someone who has spent most of his trading career fiddling with indicators, I was amazed to what can be seen by just looking at price action and movement. The only kind of patterns I was familiar with were the same generic patterns that we all know like double tops, double bottoms, etc.... But price action is much more than that. Now, I can't look at a chart without noticing that. - 23212

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To get a forex education, make sure to check out Trading In The Buff.