Gold Prices Finish Slightly Higher
Gold turned modestly higher on Friday, gaining for a sixth straight session, as the U.S. dollar gave back some gains versus the euro.
December gold rose to $1,146.80, up $4.90 on the session. The metal hit as low as $1,132.50 in the early going, but later reached as high as $1,150.80.
The dollar rose to a 16-day high near 1.4800 against the euro before giving back some of its gains. the greenback also moved to a 17-day best against the sterling.
There was no major economic news out of the U.S. on Friday. Across the ocean, the Bank of Japan decided to hold the overnight lending rate at 0.1%.
Existing home sales data for October is due at 10 a.m. ET on Monday. Sales are expected to rise to $5.65 million, compared to $5.57 million in September.
Sunday, November 22, 2009
Oil Drops Below $77 On Stronger Dollar, Demand Worries
Crude oil continued to decline on Friday on demand concerns and finished below $77 per barrel.
Light sweet crude for December dropped to $76.72, down 74 cents on the session. Prices hit as low as $76.20 after briefly challenging $78.
For the week, oil finished up 37 cents. Crude finished last Friday's session at a monthly low.
The dollar hit 2 1/2-week highs against the euro and sterling before easing back. A weaker dollar reduces oil's value as a hedge investment.
Meanwhile, Macquarie Group oil economist Jan Stuart said could fall to $60 per barrel in this quarter and the next one, according to reports. Speaking at a conference in Hong Kong, Stuart also said prices will average near $80 by the end of next year.
There was no major economic news on Friday. Next week's calendar is highlighted by the GDP report on Tuesday.
Crude oil continued to decline on Friday on demand concerns and finished below $77 per barrel.
Light sweet crude for December dropped to $76.72, down 74 cents on the session. Prices hit as low as $76.20 after briefly challenging $78.
For the week, oil finished up 37 cents. Crude finished last Friday's session at a monthly low.
The dollar hit 2 1/2-week highs against the euro and sterling before easing back. A weaker dollar reduces oil's value as a hedge investment.
Meanwhile, Macquarie Group oil economist Jan Stuart said could fall to $60 per barrel in this quarter and the next one, according to reports. Speaking at a conference in Hong Kong, Stuart also said prices will average near $80 by the end of next year.
There was no major economic news on Friday. Next week's calendar is highlighted by the GDP report on Tuesday.
Saturday, November 21, 2009
About Forex market
Forex market- is an international foreign exchange market. It gets its name from English shortening FOReign Exchange- foreign exchange operations. Forex market is one of the youngest financial markets (Forex has existed since the 70th of the last century). However, it is the largest in volume and fastest-growing market. The daily trading turnover at Forex constitutes to 4 trillions dollars, which in 30 times exceeds the combined volume of all stock markets in the USA.
Like any other market, Forex trades certain goods. In case of foreign exchange market these goods are national currencies of different countries.
The key factor of currency rate movement is the need of state bodies as well as commercial companies to convert profits from the sale of goods and services abroad into its national currency. It accounts for 5% of the foreign exchange market turnover. The remaining 95% provides currency traders speculative capital aiming at extracting profit from currencies rate movement.
Distinctive feature of the foreign exchange market is its stability. It is a well-known fact that the main threat for any financial market is its meltdown, the fall of the stock index. However, unlike other markets (stock and commodity markets) Forex is defended owing to the specific of its commodity - currency. If shares devalue it is a financial collapse. If the dollar falls, this means that another currency has become stronger, market movement becomes more active. This is a good chance to generate additional profit for a trader. Unique stability of the Forex market lies in this Forex peculiarity: currency is one of the most liquid and reliable trading instrument among all existing.
The greatest interest for speculators is the most common (most liquid) currencies that are “basic”. At the moment more than 85% of all deals constitute to deals with basic currencies, which include: US dollar (USD), Japanese yen (JPY), Euro (EUR), British pound (GBP), Swiss franc (CHF), Canadian dollar (CAD) and the Australian dollar (AUD).
Forex is available everywhere. Due to the Internet, you may conclude deals with the clients who are in the other part of the world. As it was mentioned above, exchange market always gives you an opportunity to make profit, i.e. rates fluctuations of this or that size take place several times a day. Fluctuations of the currency rates, your intellectual potential, and new technologies allow to build high profitable business right now.
One more indisputable plus of the Forex market – is easiness of market entrance. It is not difficult to find a reliable Broker – there is a great supply at this market. The rest depends only on the person who decides to enter Forex.
* In 70s the world familiarized with Forex when president of the USA Richard Nixon announced about the decision to reject the gold standard on 15 August, 1971. This report ruins the system of the stable currency rates and commemorated as culmination of the postwar Bretton Woods system crises.
Forex market- is an international foreign exchange market. It gets its name from English shortening FOReign Exchange- foreign exchange operations. Forex market is one of the youngest financial markets (Forex has existed since the 70th of the last century). However, it is the largest in volume and fastest-growing market. The daily trading turnover at Forex constitutes to 4 trillions dollars, which in 30 times exceeds the combined volume of all stock markets in the USA.
Like any other market, Forex trades certain goods. In case of foreign exchange market these goods are national currencies of different countries.
The key factor of currency rate movement is the need of state bodies as well as commercial companies to convert profits from the sale of goods and services abroad into its national currency. It accounts for 5% of the foreign exchange market turnover. The remaining 95% provides currency traders speculative capital aiming at extracting profit from currencies rate movement.
Distinctive feature of the foreign exchange market is its stability. It is a well-known fact that the main threat for any financial market is its meltdown, the fall of the stock index. However, unlike other markets (stock and commodity markets) Forex is defended owing to the specific of its commodity - currency. If shares devalue it is a financial collapse. If the dollar falls, this means that another currency has become stronger, market movement becomes more active. This is a good chance to generate additional profit for a trader. Unique stability of the Forex market lies in this Forex peculiarity: currency is one of the most liquid and reliable trading instrument among all existing.
The greatest interest for speculators is the most common (most liquid) currencies that are “basic”. At the moment more than 85% of all deals constitute to deals with basic currencies, which include: US dollar (USD), Japanese yen (JPY), Euro (EUR), British pound (GBP), Swiss franc (CHF), Canadian dollar (CAD) and the Australian dollar (AUD).
Forex is available everywhere. Due to the Internet, you may conclude deals with the clients who are in the other part of the world. As it was mentioned above, exchange market always gives you an opportunity to make profit, i.e. rates fluctuations of this or that size take place several times a day. Fluctuations of the currency rates, your intellectual potential, and new technologies allow to build high profitable business right now.
One more indisputable plus of the Forex market – is easiness of market entrance. It is not difficult to find a reliable Broker – there is a great supply at this market. The rest depends only on the person who decides to enter Forex.
* In 70s the world familiarized with Forex when president of the USA Richard Nixon announced about the decision to reject the gold standard on 15 August, 1971. This report ruins the system of the stable currency rates and commemorated as culmination of the postwar Bretton Woods system crises.
Develop Your Own Trading Plan
Trading is about probabilities, not certainties. A Trading Plan establishes a series of steps that ensure a higher probability of success.
The Plan will set certain guidelines for:
What stocks to buy
When to buy
When to sell
The Structure of Your Trading Plan
A Strong Market:
Before deciding what to buy, first establish if the market is in a positive phase. If the KL Composite Market has been negative over recent weeks (or longer), it is not a good time to enter the market. If the majority of stocks are going down or sideways, the probability of you buying a share that is going to rise in the immediate future is slim.
A Strong Sector:
Having waited until the market is in a growth phase, determine if there are any sectors showing strong growth in the past few weeks. These are the sectors that have stocks performing well and are increasing in price.
Examine stocks in these strong sectors and determine those that are on an uptrend, meaning the price of the stock has been steadily going up for at least 3 months.
These stocks will qualify as having potential for ongoing growth as they are generating positive market sentiment. If they have adequate liquidity on top of that, you could add any of these to your portfolio knowing that you could exit quickly at any point in time.
Exit Strategy:
Having selected shares to include in your portfolio you must then have an Exit Strategy in the event that these shares show signs of reversing. Simply set an Early Exit price to ensure that the stocks you buy never generate losses.
This is a simple description of a Trading Plan. It holds the basics for selecting stocks that have a good probability of increasing in price and risk management to protect your capital. These three ingredients are the key to success in stock trading.
Trading is about probabilities, not certainties. A Trading Plan establishes a series of steps that ensure a higher probability of success.
The Plan will set certain guidelines for:
What stocks to buy
When to buy
When to sell
The Structure of Your Trading Plan
A Strong Market:
Before deciding what to buy, first establish if the market is in a positive phase. If the KL Composite Market has been negative over recent weeks (or longer), it is not a good time to enter the market. If the majority of stocks are going down or sideways, the probability of you buying a share that is going to rise in the immediate future is slim.
A Strong Sector:
Having waited until the market is in a growth phase, determine if there are any sectors showing strong growth in the past few weeks. These are the sectors that have stocks performing well and are increasing in price.
Examine stocks in these strong sectors and determine those that are on an uptrend, meaning the price of the stock has been steadily going up for at least 3 months.
These stocks will qualify as having potential for ongoing growth as they are generating positive market sentiment. If they have adequate liquidity on top of that, you could add any of these to your portfolio knowing that you could exit quickly at any point in time.
Exit Strategy:
Having selected shares to include in your portfolio you must then have an Exit Strategy in the event that these shares show signs of reversing. Simply set an Early Exit price to ensure that the stocks you buy never generate losses.
This is a simple description of a Trading Plan. It holds the basics for selecting stocks that have a good probability of increasing in price and risk management to protect your capital. These three ingredients are the key to success in stock trading.
Trade Only Liquid Stocks
Look at the column called Lots Done in your market report. This is the amount of stocks that were traded on the day. If you multiply this by the price of the stock, you can see how much money actually changed hands on that day. If this amount is high, then the stock is very liquid, meaning it is easy to buy and more importantly, easy to sell. The last thing you want once you've bought a stock is to be stuck with it because you can't find a buyer.
For example, if a company has traded 100,000 stocks today and the closing price was RM2.42, we can estimate that RM242,000 worth of that stock changed hands today.
For example:
Innovics' last price was RM 0.30 and Lots Done were 1000. This means that an average of RM 3,000 worth of stock changed hands today. In other words, Innovics is only trading an average of RM3,000 of shares each day.
Now, you own RM10,000 worth of Innovonics and you want to sell. If you enter your sell order on the market, you will inject 3 days worth of turnover onto the market. There will not be enough buyers for you to immediately sell the stock at your chosen exit price.
To ensure you invest in liquid shares, only trade stocks that show a daily turnover of at least ten times what you are planning to invest. If you are investing RM10,000 in a stock, look for an average daily turnover minimum of RM 100,000.
Look at the column called Lots Done in your market report. This is the amount of stocks that were traded on the day. If you multiply this by the price of the stock, you can see how much money actually changed hands on that day. If this amount is high, then the stock is very liquid, meaning it is easy to buy and more importantly, easy to sell. The last thing you want once you've bought a stock is to be stuck with it because you can't find a buyer.
For example, if a company has traded 100,000 stocks today and the closing price was RM2.42, we can estimate that RM242,000 worth of that stock changed hands today.
For example:
Innovics' last price was RM 0.30 and Lots Done were 1000. This means that an average of RM 3,000 worth of stock changed hands today. In other words, Innovics is only trading an average of RM3,000 of shares each day.
Now, you own RM10,000 worth of Innovonics and you want to sell. If you enter your sell order on the market, you will inject 3 days worth of turnover onto the market. There will not be enough buyers for you to immediately sell the stock at your chosen exit price.
To ensure you invest in liquid shares, only trade stocks that show a daily turnover of at least ten times what you are planning to invest. If you are investing RM10,000 in a stock, look for an average daily turnover minimum of RM 100,000.
Don’t Buy And Hold
The Malaysian stock market is one of the strongest and sometimes most dynamic markets in the world.
While the market has always recovered from falls, the same cannot be said for individual companies. Even during a booming market, some companies can suffer significant losses.
Trade only on an uptrend and sell the poor performers, this will make it impossible to experience a large loss. This is the secret to outperforming the market and achieving a consistently superior return.
Undertake some research on the Bursa Malaysia or in a local investment paper. List three shares that have showed decreased performance recently and three shares that have showed increased performance recently.
The Malaysian stock market is one of the strongest and sometimes most dynamic markets in the world.
While the market has always recovered from falls, the same cannot be said for individual companies. Even during a booming market, some companies can suffer significant losses.
Trade only on an uptrend and sell the poor performers, this will make it impossible to experience a large loss. This is the secret to outperforming the market and achieving a consistently superior return.
Undertake some research on the Bursa Malaysia or in a local investment paper. List three shares that have showed decreased performance recently and three shares that have showed increased performance recently.
Always Trade With The Trend
Trends are the cornerstone of trading. If a share price is rising, we can make money by buying that share. If the share price is falling, we need to look for other opportunities. It does not make sense to buy a falling share. Our aim is always simple – find a share in an uptrend and take a large chunk from the middle of the trend.
Overall Market Strength
It is important to look at how the overall market is doing. This can be gauged by looking at the top 500 shares, otherwise known as All Ordinaries. If All Ordinaries go up, it is because stocks in the top 500 have risen and the market is in an uptrend.
There are over 1000 companies listed on the Bursa Malaysia that you can invest in. To examine each one individually would take a great deal of time. Instead, you trade with the trend and find the strong sectors in the market.
Strength of an Industry Sector
What is a Sector?
A sector is a group of companies involved in the same industry. For example, mining companies are grouped together in the Materials sector while banking companies are in the Finance sector. Entire sectors are generally affected by economic conditions so entire sectors tend to trend in the same directions. Trends do not have hard and fast rules, individual stocks within these sectors will perform at different levels.
Strength of Shares in a Sector
Although the general rule of novice investors is to buy on an uptrend, there are people who buy during a downtrend as a strategy. This is a process of buying more shares as the price falls, so the average cost of the share is reduced with every purchase. This kind of bargain hunting is a riskier strategy, as the stock price may never recover. The second downside is that the price may fall and then stabilize, meaning the investor may have to wait for a while before recovering losses or making a profit. In this scenario, capital that could be used for profitable trading would be lying idle.
Resistance to this type of trading is not new. One of the greatest traders of the last century, Jesse Livermore wrote, “Experience has proven to me that the real money made in speculating has been commitments in a stock showing a profit right from the start.”
By now you should understand that trading with the trend is critical to success. Also, our objective is never to buy at the bottom or sell at the top of a trend. We simply want to take a large chunk out of the middle. Let the trend be your friend.
Trends are the cornerstone of trading. If a share price is rising, we can make money by buying that share. If the share price is falling, we need to look for other opportunities. It does not make sense to buy a falling share. Our aim is always simple – find a share in an uptrend and take a large chunk from the middle of the trend.
Overall Market Strength
It is important to look at how the overall market is doing. This can be gauged by looking at the top 500 shares, otherwise known as All Ordinaries. If All Ordinaries go up, it is because stocks in the top 500 have risen and the market is in an uptrend.
There are over 1000 companies listed on the Bursa Malaysia that you can invest in. To examine each one individually would take a great deal of time. Instead, you trade with the trend and find the strong sectors in the market.
Strength of an Industry Sector
What is a Sector?
A sector is a group of companies involved in the same industry. For example, mining companies are grouped together in the Materials sector while banking companies are in the Finance sector. Entire sectors are generally affected by economic conditions so entire sectors tend to trend in the same directions. Trends do not have hard and fast rules, individual stocks within these sectors will perform at different levels.
Strength of Shares in a Sector
Although the general rule of novice investors is to buy on an uptrend, there are people who buy during a downtrend as a strategy. This is a process of buying more shares as the price falls, so the average cost of the share is reduced with every purchase. This kind of bargain hunting is a riskier strategy, as the stock price may never recover. The second downside is that the price may fall and then stabilize, meaning the investor may have to wait for a while before recovering losses or making a profit. In this scenario, capital that could be used for profitable trading would be lying idle.
Resistance to this type of trading is not new. One of the greatest traders of the last century, Jesse Livermore wrote, “Experience has proven to me that the real money made in speculating has been commitments in a stock showing a profit right from the start.”
By now you should understand that trading with the trend is critical to success. Also, our objective is never to buy at the bottom or sell at the top of a trend. We simply want to take a large chunk out of the middle. Let the trend be your friend.
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