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Most Forex traders are taught to trade Forex the same way … with a trading system that uses the free indicators that comes with most trading platforms.   As a result, the chart is usually so full of indicators you can hardly see what price is doing.   And these indicators are there to try help you make trading decisions.   Come on, be honest … your chart is full of these indicators right now, aren’t they?

Well, mine were too.   Like many of you, I thought I could come up with some magic combination that would make Forex trading simple.   But one of the biggest problems I faced was the indicators I was using were all “lagging” indicators.   They tell you were price has been.   But what I learned from Tom Strignano recently, a retired Bank trader of over 25 years, was that to be successful in Forex, you need to focus on forward indicators.   Here are some important lessons I’ve learned…

#1 Get Rid Of All Your Lagging Indicators

Tom Strignano makes it clear he is no fan of “public” indicators.   They are “public” indicators because they come with just about every trading platform.   (Your chart is probably full of them right now… Moving Averages, MACD, Stochastics, etc.). The basic reason Tom hates these indicators is because they are LAGGING indicators.

A lagging indicator is good at telling you what price has done in the past… but not necessarily accurate at helping you predict what is going to happen in the future.   And since past movement does not guarantee price will move in the same direction, these indicators have limited value.   And I know, this might be a tough pill for some of you to swallow.

Tom Strignano believes success in Forex comes more from reading PRICE ACTION than anything an indicator can tell you. Price Action, or what price is doing right now, is the best way to look at the market.  But the really cool thing is Tom can predict where price is most likely to go with some proprietary calculations he uses.   These are “forward” indicators that can be an edge over other traders.   (You know?  The ones losing money!)

#2 Start Using Forward Indicators

Let’s talk a little more about forward indicators…

Forward indicators are levels where price is most likely to go. It looks into the future and predicts levels where price is drawn to or rejected from.   Do you think you would be a better Forex trader basing your trading decisions off this valuable information?

You might be familiar with some of these like Pivot Points and Support & Resistance Levels.   But the difference with the levels you are probably used to and the ones Tom uses is that his are calculated from a proprietary formula he created while working as a Bank Trader.  Tom uses his knowledge from professional trading to determine the important levels the big traders are going to be looking at.

#2A Market Exhaustion Points

Market exhaustion levels are another calculation Tom uses.   These levels you should watch closely because price could lose momentum and stall.   This is a KEY area to pay attention to price action.   If price starts to stall, you might want to exit the trade, move your stop loss up, take partial profit, etc.  But the point is, without these calculations… you wouldn’t know you were supposed to pay attention.

How many time have you placed a trade only to see momentum die out shortly after? You probably just traded into one of these exhaustion levels.   Wouldn’t your trading be better if you knew these levels in advance? You see… Forward Indicators!

#2B Trend Reactionary Numbers (TRN)

Trend Reactionary Numbers are the most important price levels Tom calculates.   If price approaches one of these levels and bounces off … you can be pretty sure it is heading for the Trend Reactionary Number below.  If price breaks through and stays above … you can be pretty sure price is going to move to the next one.  These major targets can tell you where price is most likely to go… hundreds of pips in advance! And when you see these placed on a chart, it is amazing how price reacts at these areas!

Final thoughts…

The point is, if you want to make consistent profits as a Forex trader, you need to start looking at the market like a professional trader.  This means paying attention to key areas provided by forward indicators.   Other traders are only looking at what price has done in the past … and this is why most fail.   What I learned from Tom Strignano is you need to use forward indicators to plan your trades and make decisions based on what price action does at these areas.   Successful traders don’t look into the past, they look forward and therefore make higher profits.

So, based on what Tom taught me, I’ve stripped my charts naked.   They are now much cleaner and easier to read price action.   Now they just have forward indicators as to where price might go … which has effectively become a map to higher profits.  In the end, forward indicators and price action are the real edge of a successful Forex trader.

Many modern financial experts have an understanding of options trading, however in the last few years millions of common investors have wanted to understand exactly how to control risk in their own portfolios as well, and have wanted out an options trading education and learning. They have performed this so that they can discover the smartest and most reliable procedures as well as techniques, and to build a way in order to strengthen their holdings in financial markets in which have appeared chaotic and unpredictable like never before.

Exactly how could an option trading education and learning benefit someone to strengthen their own portfolio? It will help to know that an option trading is just that - it really is a market which utilizes agreements or “choices” to offer an investor with the way to make money regardless of whether markets are decreasing (bearish) or increasing (bullish). The options can drop under two different types the “put” and “call” options which will probably offer the investor together with a way in order to lock straight into specific pricing on a certain investment vehicle.

For instance, let us say that an investor believes that a certain stock is likely to rise in value and price within a set period of time. Rather than buying the stock and also risking their capital, the investor can ask for a call option that would probably provide them the contractual right in order to purchase that stock at an agreed on price until a set point in time. Interestingly enough, the investor wouldn’t have to even train the proper in order to buy if the stock did perform as expected and could simply market their option for revenue instead.

Definitely, this means which is a considerably difficult way in order to make profits and also is best completed just after acquiring a essential trading education and learning. While you can find several various locations as well as courses offered, the potential student ought to comprehend what kind of training is provided, and whether it performs into their objectives.

As an example, one course or program may be targeted towards an individual already operating within the financial world, and also this may be an unacceptable option for the individual investor just starting to make a plan of their own. Daytrading techniques are different as well.

Another place to start searching is with your brokerage, and here presently there will be plenty of materials available. This might lead to confusion and also burned time or even resources, and it can be best to first have a point of understanding the fundamentals, examining the capital available, as well as producing a very basic set of objectives. Only then will a potential student have the ability to comprehend which programs offer them the details as well as resources they will need in order to succeed.

I am a fairly opinionated invester and to date I have purposely strayed away from unpopular topics and scripted some fairly plain “how to” articles on investing discussions .  But I just read an essay that made my head spin : the article concerned Penny Stocks.

As a 25 year veteran of daytrading on both the CME and CBOT and the Chicago Mercantile Exchange there are very few areas of investing that are infested with more vice, scammers and sheer(a) cheating than the penny stock pink sheets .

I know , that is a very bold declaration to voice ….but I will back up my statement with hard facts and experience, and not all Penny Stocks are infected …but the overwhelming majority of Penny Stocks are simply fronts for firms that may/or may not exist .

Here is how the life of a Penny Stock developes .  As you may have taken notice , many penny stocks are popularized through newsletters and advertising.  There an insidious reason for this, as the penny stock companies can often predict the newsletter advertisers a block of stock in exchange for getting the stock price to rise .  The newsletter frequently touts the “potential” for the stock to appreciate based upon certain factors coming to bear and usually pontificates on the less-than-believable potential the stock has should these “certain” factors occur.

I oftent recommend that potential investors in penny stocks call the c business itself and quiz them about capitalization and revenues.  Without exception, these stocksoften are severely undercapitalized and have no revenue flow to to discuss .  frequently , an investor quizzing the company will be passed on to an answering machine or the newsletter promoting the penny stock.  The SEC has estimated that the majority of penny stocks fall into the “pump and dump” category. And with good reason.

A normal stock, traded on an exchange, usually has a firm chosen as a market maker in that stock , along with a floor specialist who is responsible for the trading of that stock.  This system allows transparency in the orderly operation of any equity issue and allows an i trader to see the audited and confirmable volume and price movement of the security.

This well-establsiehd procedure is absent in the Penny Stock market, and the penny stock issues are often without a recognizable market maker.  Frequently , the market maker in a penny stock organization is the actual business itself.  The fox is in the henhouse, so to speak.  What this means is that the Penny Stock company is setting both the bid and ask prices on its own stock.  As is often case , many Penny stocks are traded on the ‘Pink Sheets” which puts it into the category of trading in the wild west.

Many experts have estimated that 9 out 10 Penny Stocks go under inside the first year of their offering.  I have heard numbers as low as 7 out of 10 talked  about, but the point is not overly complicated .  When you are day trading Penny Stocks you are playing in a non-transparent, non-exchanged orientated market, and this is the pre-reqeuisite conditions for disaster.  It is often just a matter of time.

For the record, I am not saying that every single one in  penny stocks are devious or dangerous , just the majority of them, and odds do not favor permanent success.  Listen to my my warning and avoid disastern , there are simply too many exchange traded stocks that will earn you ample money than risking sums of your hard earned money in the Penny Stock Market.

One of the most popular ways to earn money with Fx day trading is trading the news. This means opening short term trades based on upcoming forex news reports. However, as most traders know, this is a very risky trading method and it is easy to get trapped into a losing position. In this article we look at 3 vital factors that you must take into account if you want to profit from day trading based around forex news.

1. Market Expectations

Not taking market expectations into account is a very common error in news based day trades. We will explain this with an example. Let’s say there is an upcoming announcement of US trade figures. You are expecting this report to be positive for the dollar, so you open a trade right before the announcement is due.

But you failed to take into account the fact that the market generally was expecting this report to strengthen the dollar, so in fact, the price movement has already been happening gradually in the days or even weeks leading up to the announcement. When the announcement is made, there will only be a big price movement if the announcement is significantly different from expectations.

This means that your trade will only pay you well if the report is much more positive than anybody expected. If it turns out that the figures are good but not as good as expected, the dollar might fall because the market expectations ahead of the announcement were too high. So you could actually lose out.

2. Spread

During news releases the spread tends to increase. This is because trading volume tends to be low, which can put brokers in a difficult position. In fact, some brokers will not even execute trades at that time. You can help yourself out by finding a broker who guarantees execution of your trade but you will not find one who will guarantee to keep the spread at normal levels.

Spread can be anything from 2 to 5 times higher than normal. If you do not take this into account you can find yourself losing out on what should have been a profitable trade.

3. Slippage

Slippage is the difference between the price you thought you were getting (the price you clicked on) and the price that your order gets filled at. Slippage depends on the broker to some extent, but at the time of a news release everyone can be affected solely because the price jumps so suddenly.

For example if you are not sure of how a news release will go but you are involved in forex day trading and you are expecting a breakout one way or the other, you might put in an order to open a long trade if the price goes up to a certain point, say 1.2000, along with a corresponding order for a short trade if the price falls.

However, you could be in trouble if the price suddenly jumps beyond your trigger. Say it shoots up to 1.2050. In that situation you will in all probability find that your order has been filled at a higher price than you planned, say 1.2025. If the price then drops, as it often does after a spike, it might settle back at 1.2020. If your order had been filled at 1.2000 that would be fine, but at 1.2025 it is not. So slippage is another factor that can make a loser out of a winner in forex day trading if you are not careful.

Virtually every stock market trader speaks on “recognizing value.” I have set up that interest in value investment ebbs and flows according to the market. No one desires to overpay for the stock, or keep holding one if the cost gets nutty.

Which results in ask a important question: How do you discover value in the stock market?

It relies upon whom you ask…

The fathers of value investing, of course, were Ben Graham and David Dodd, two professors at Columbia Business School who wrote the investment classic, Security Analysis.

Both argued that value investing is about buying companies that are selling below their intrinsic price.

Just how do you establish that? As per Graham & Dodd, meaning buying firms that…

Deal at significant discounts to book value. Get high dividend yields. Have low price-to-earnings (P/E) ratios.

Trade using this method is not only speculated to result in higher profits. It is also designed to offer a big “margin of safety.” The thought is that if you buy a security right, your downside is limited.

A number of academic experiments has shown that when you follow the ideology of Graham and Dodd, you must do well on the long period.

However there is potential problems with this method…

First of all, stocks are not often so inexpensive as they used to be back in 1930s when Security Analysis was printed. Or even as cheap as they were back in 1982 while the typical stock sold for lower than book value and 8 times earnings as well as yielded greater than 6%.

And if you sat out the previous 28 years out because stocks had been too expensive, you missed an awful lot of opportunities.

When you do find a stock that will meets Graham and Dodd’s stringent requirements, you also must be patient. Why? Since companies which are the lowest are from favor for a purpose. Sales are often level or down. Earnings are weak. Profit margins are small.

You can’t achieve something just by buying a company that’s low-priced. (It will always turn out to be more affordable.) You need to purchase a firm that could in the future – and perhaps not very distant – be dear to others. Otherwise, when will you are taking gains?

Thus maybe Graham and Dodd’s idea needs modifying. (Warren Buffett, Graham’s most recognized student, has certainly found ways to modify it.)

I have found the definition of value and the options to achieve a margin of security are flexible. And The Oxford Club has found lucrative ways of bend them.

To my intelligence, any stock that goes from $10 to $50 was a “value” at $10. I do not mind what the P/E or price-to-book was at the time. By the luxury of hindsight, it was clearly a discount. Why quibble?

But die-hard value investors will say that if the stock was “overvalued” at $10, it’s only more grossly so at $50 – and so, you’re on big risk holding it.

I oppose. If you employ trailing stops your upside is unlimited plus your gains fully protected. As long as a stock continues trending up, we’re satisfied to hold on – no matter what the valuation. As the stock sooner or later turns, as all do eventually, our stops will remain the gains from slipping through our fingers.

As for value analysis, quite frankly, we do not pay out a lot of time poring over P/Es and book values. We’re now curious about identifying firms which are more likely to prove dramatic, better-than-expected growth in the quarters to come. These stocks are usually more costly than normal, just as companies that may show little or no progress are usually less costly than regular.

Growth stocks typically sprint. Profits regularly come faster instead later. Generally investors don’t have the patience being good value investors. John Templeton, for example, held companies in the flagship Templeton Growth Fund an average of 7.5 years.

But clients will start to grouse if a stock does not move for 6 months. They term it “dead money” and start itching to move it away.

I know this instinct. But deep value investing and rapid trading do not mix.

If you’re a patient, truly long-term oriented investor, value investment be able to work wonders. If you’re not, you will be happier looking for companies which are set to smash estimates.

When it doubles or triples – or go up 50-fold or else more like Apple (Nasdaq: AAPL) and Amazon (Nasdaq: AMZN) – never worry, other people will concede it was “value” before.

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