The Safer Way to Play a Rebound

fter enjoying the year-long rally, investors are now once again dealing with the painful side of the risk-reward equation. The dire combination of European problems and the Gulf oil spill, added to the background noise of general economic concerns, pushed the stock market to its lowest closing level since last November. Even more worrisome is the fact that as the bearish move gains steam, short-term traders who use technical analysis and momentum-based indicators may well add fuel to the downturn by dumping remaining stocks and adding short positions.

Even if you're a long-term investor, it can still be hard to commit your hard-earned money to the stock market when things look dire. Instead of taking on the full risk of stocks, you might prefer some sort of compromise that would give you at least some profits from a market rebound while protecting you from the full brunt of a possible collapse. Fortunately, there's a way you can dial your risk to your exact comfort level.

Give yourself the option
To many, options are intimidating. While you may feel completely comfortable investing thousands of dollars in a stock, spending a smaller amount to implement an options strategy can still give some the heebie-jeebies.

The reason for this anxiety comes from the high-octane methods that some traders use with options to speculate on stocks and the overall market. Options can give you immense leverage over your portfolio, giving gamblers a prime way to shoot for the moon -- or go bust trying.

But just because some people use options as a way to maximize their leverage doesn't mean you have to. One simple strategy can provide a way for you to invest in stocks while taking on less risk than you would by simply buying the shares.

Managed Futures and Managed Forex

Forex Futures Trader's managed futures and forex divisions can help in structuring multi-manager commodity and or Forex portfolios for high net-worth individuals and institutions.

Forex Futures Trader also finds, analyzes and monitors emerging managers who have demonstrated an ability to generate absolute returns (performance without regard to the performance of equities or futures markets) trading futures contracts and other financial instruments for investors with as little as $5,000 to invest. Forex Futures Trader can also assist emerging managers in the areas of asset raising, marketing, and operations.a

Foreign exchange market

The foreign exchange market (forex, FX, or currency market) is a worldwide decentralized over-the-counter financial market for the trading of currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends.

The purpose of the foreign exchange market 'Forex' is to assist international trade and investment. The foreign exchange market allows businesses to convert one currency to another foreign currency. For example, it permits a U.S. business to import European goods and pay Euros, even though the business's income is in U.S. dollars. This carry trade may also lead to loss of competitiveness in some countries.^[1]

In a typical foreign exchange transaction a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market started forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.

The foreign exchange market is unique because of

• trading volume results in market liquidity
• geographical dispersion
• continuous operation: 24 hours a day except weekends, i.e. trading from 20:15 UTC on Sunday until 22:00 UTC Friday
• the variety of factors that affect exchange rates
• the low margins of relative profit compared with other markets of fixed income
• the use of leverage to enhance profit margins with respect to account size.

Forex Software Robot Versus Human In The Ultimate Trading War

The battle has begun on the Forex trading marketplace and in one corner we have the Forex Software Robot and in the other corner is the human trader. From the very beginning of this contest it looks like the human trader is in deep trouble and does not belong in the ring with the Forex Robot. Throughout this article I will show you why the Forex Software Robot is dominating every battle and winning the war in the Forex trading marketplace.

The Human Condition - Unfortunately for us humans there are a number of factors surrounding the human condition puts us at a complete disadvantage when going up against the Forex robot. Humans need to eat and sleep just to operate and while we are completing these daily tasks the Forex Robot continues to operate and only stops when the Forex marketplace closes.

Emotion - Emotion and the Forex trading marketplace do not belong in the same sentence for when it happens chances are someone is losing money. A quick surge of adrenaline or a blanket of anxiety are two of the worst things that can happen to a day trader for they stop thinking with their brain which is an expensive lesson. The Forex Robot on the other hand does not have to worry about emotions heck a Forex Robot does not even know what worry is.

Consistency - To be successful in Forex trading there needs to be a great deal of consistency in order to truly make real money. Making the right trading decisions time after time is what separates the great traders from the guys who use to trade. With the Forex marketplace being open for six days a week and twenty four hours a day a human may be able to perform at his peak a few hours per day where as the Forex Robot once it is turned on will continue to make the same sound trading decision until you turn it off.

Remember when people talked about the rise of the robots and how some day we would be governed by a set of robots built to such high standards that us humans could not compete and would end up serving them? Well that day is today and at least on the Forex trading floor robots are here and they are not going away anytime soon. In the fight between the Forex Robot and the human day trader it took longer to announce the combatants.

Effective Search Engine Marketing Tips

To be successful on the Internet, people have to know that your website exists so it is vital that you execute what is known as search engine marketing. Why? There is no better way to accomplish your goal of online domination than to get ranked high in the search engines. That is easier said than done though and you have to perform effective search engine marketing if you want to be found and stay found.

Search engine marketing differs a bit from search engine optimization in that when you are performing search engine marketing it is often with Google Absence or some other form of paid inclusion. Search engine optimization is actually a part of search engine marketing so really the two go hand in hand.

Here are some tips to make sure you get the most out of your search engine marketing:

Optimize you ads: Just because you are buying visitors with pay-per-clicks doesn’t mean that you shouldn’t optimize your ads. Whenever you get the opportunity to provide the text, make sure that you use search engine optimization techniques and incorporate your keywords in without committing keyword spam.

Add anchor text links: Whenever you get the opportunity to place your URL link anywhere, be sure to anchor it with http:// as this will automatically make it a hot link to your website.

Use relevancy: When you are advertising on your website, be sure that the ads that are being posted are relevant to your website. Google and the other major search engines love good relevant content and by pairing things that aren’t relevant you could actually find yourself being penalized.

Research your keywords: If you are planning on doing a Pay-Per-Click or PPC campaign you need to do your research on your keywords first. This can be done by going to Google and typing in ‘keyword tool’ into the search bar and then selecting Google’s keyword tool and actually using it. This is important because you have to pay for every click whether the visitor buys or simply goes away. If you effectively research your keywords, you will not only realize the cost of each keyword but you will be able to look at some possible alternatives to those more expensive keywords.

Localize your ads: When you decide on a PPC campaign you can localize your keywords and this will serve two purposes. One is that anyone in your area searching for what you have to offer will find you and two, the cost of the keyword ‘Chicago surgeon’ is probably much cheaper that ‘surgeon’ itself.

The Power of Higher Time Frames

Many novice traders get caught up with looking at 1hr charts or lower because they think they are going to become rich “day traders”. The statistics on consistently profitable traders all point to one thing; they trade using larger time frames. By larger time frames I am referring to preferably daily, weekly, or monthly time frames. You can implement a 4hr chart into your trading, however you really should develop a trading strategy that only uses daily and weekly charts when first starting out.

The power of higher time frames lies in their ability to give you the most meaningful view of the market as well as their ability to act as a filter. Much of the movement that occurs in the market is just random noise that does not really tell you anything meaningful. This noise phenomenon gets amplified as you move down in time frame. For example, a monthly chart has less noise than a weekly, a weekly less than a daily, a daily less than a 4hr, and a 4hr less than a 1hr. It is the opinion of most successful traders that any chart less than a 1hr chart is essentially going to hurt your trading much more than help it and is essentially useless.

Beginning traders especially need to be concentrating on daily and weekly charts. You can consistently profit off of daily and weekly charts alone. I personally use daily and weekly charts for the majority of my trading decisions, occasionally I will use a 4hr or 1hr chart, more on that later. The problem with trading is that you have to set your own rules and it really is a world where you can do an unlimited amount of damage to yourself, or an unlimited amount of good. By focusing on daily and weekly charts especially in the beginning of your trading career, you will be providing yourself with a learning opportunity into the intricacies of market movement and what works and what does not work.

No matter what your trading strategy is, when you get an entry signal in the market the higher the time frame it occurs on the more reliable the signal will be. A weekly or daily signal is significantly more reliable than a 4hr or 1hr signal, and as stated before once you go below a 1hr time frame you might as well just be flipping a coin for your trading decisions. Once you gain experience as to what works and what doesn’t work and you develop a trading plan with specific entry and exit rules based on daily and weekly charts, then you can look at 4hr charts or even 1hr charts to fine tune you entry or exit. However, that being said, it is entirely possible to only look at daily charts or above and consistently profit in the markets. Taking that route will probably also be much less stressful and also allows people with full-time jobs to trade after work and not worry about the minute to minute market fluctuations.

In closing, beginning traders need only concern themselves with daily chart time frames and higher. If you can profit consistently off of these higher time charts in the forex market, than you are well on your way to becoming a professional trader. However, I can not reiterate enough, that once you drop below a daily chart your entry and exit signals lose a significant amount of reliability.

Currency Correlation- How to Use It

Currencies are priced in pairs, no single pair trades completely independently of the others. This makes the understanding of correlation very important.

For example, currency pair "A" moves in the same direction as pair "B" and we have been following up pair A's move very closely. We expect it to go up and we buy. We have not been following up pair "B" so closely and suddenly we look into that and the fundamentals or technical analysis suggests us that this pair may go down. We short sell. What eventually would happen that we would end up having profit on one pair and loss on the other as they moved in same direction. Similar case would happen if we simultaneously go long or short on two pairs which move in opposite directions.

Once we know about these correlations and their changes with time, we can take advantage of them to control our portfolio's exposure.
The correlation coefficient ranges between -1 and +1.

A correlation of +1 implies that the two currency pairs will move in the same direction 100% of the time. A correlation of -1 implies the two currency pairs will move in the opposite direction 100% of the time. A correlation of zero implies that the relationship between the currency pairs is completely random.

Positive Correlation:

A positive figure but less than +1 means that the currency pairs generally move in same direction but not always. A value closer to +1 means that most of the time they move in the same direction

Negative Correlation:

A negative figure but more than -1 means that the currency pairs generally move in opposite direction but not always. A value closer to -1 means that most of the time they move in opposite directions.

For calculating currency correlation and having a graphical representation, please visit http://www.forexabode.com/trading-tools

How to use currency correlation when you are trading Forex? Well, your slow speed because of an occasional traffic jam on the expressway does not really indicate that the average speed you would end up on the road will be same. The correlation is dynamic and change every moment. Take a note of the correlation of the past few days and compare it with the correlation value in the long term, say past one year. If the short term value is far different from the long term value, may be it's offering you a chance to place a trade... but how? Let's say that currency pairs A and B has a correlation value of 0.98 during past one year. It means that they both move in almost the same direction. When currency pair A moves up, currency pair B also moves up with the same speed. Suddenly you notice that during the past one month or one week the correlation value of the currency pairs A and B is 0.10 i.e. moving in the same direction but with a different speed. To clarify as an example let's say two cars are moving towards the same destination, one is moving at 100 miles/hr and another at 10 miles/hour. But we can assume that ultimately both may have to catch up on the speed (similar speeds). So what do we do? Well, we find out which one is slow and ride that.

When we convert this car example to currency trading, suppose two currency pairs move in the same direction and have been moving up with a correlation over 0.60 in the long-term and we find that suddenly the correlation value in during the past few days has become 0.20, we just see which currency pair's movement (increase is slow) and we could buy that. On the other hand we could short-see another currency pair.

Disclaimer: Trading has it's own risks and no analysis can assure you that it would prove to be correct 100%. We need to work innovatively to make strategies which have less risks and more gains.