What Is Momentum Investing? How It Can Make You Rich?

By Ahmad Hassam

As a trader, you are always looking for short term profit. While as an investor, you are willing to invest long term in a company or a security to make capital gain. In trading, you are always looking for making profit from the volatility in the market. Day trading has a short term time horizon of only one day. A day trader opens a trade and closes that trade in the same day to make a quick profit. Day traders need quick reflexes as well as a keen observation of the market volatility. Many people day trade successfully. However, on the other hand hand, many people have a long term time horizon of many months to years. They have a long term financial goal and this matches with their investment style.

An investor might have to wait for a long time before realizing a return on his or her investment. Many investors can learn a few tricks from day traders that can help them make a quick profit in a matter of days orn weeks instead of months or years. Now a company's stock may have a good long term prospects supported by strong fundamentals. But the stock may stay still for a long time before it catches the attention of the media and the investing public before it's price get's bid up.

Many investors when they fall in love with their investments on the long run forget this cardinal rule of trading that you have to cut your losses. Market least care who you are and how long you have been in it.There is a general problem with so many investors. They fall in love with their investment after doing so much research and committing so much time for the position to work. Now, day traders are always hit and run types. They have developed an innate sense of discipline among themselves that teaches them when to commit money to a trade and when to cut and run.

When, there is momentum behind a security, it means that it's price will continue to icnrease as long as it has got momentum. This way by investing in stocks having momentum behind them, you avoid the risk of getting stuck in stocks that might not move for months and months.

When investing, you try to buy low and sell high. In momentum investing, you buy high and sell even higher! One of the tricks that you can learn from day traders is momentum investing. In momentum investing, you look for securities that are expected to go up in prices accompanied by the underlying momentum. Now, when the price of a stock or security increases because of strong demand, it is said to have momentum behind it.

Now most serious momentum investors are infact swing traders who hold positions for a few weeks or a few months. Most of them employ some sort of momentum indicators to help them identify when it is good time to buy a stock. Some of the indicators that can be used is the Relative Strength Index (RSI), Moving Average Convergence and Divergence (MACD) and the Stochastic Index.

Now, when doing momentum investing, you need to also do some fundamental research behind the company. As most of the momentum investing done during the dot com bubble was on hearsay without being supported by any strong fundamentals! However, if too many investors start practicing momentum investing, it sometimes leads to bubbles like the tech bubble that happened at the end of 1990s. - 32177

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard. Turn $200 into $100K in just 3 months with this FREE Penny Stock Report. Read this shocking 40 page PDF FREE FRWC Brutal Truth Report on trading robots!

How To Back Test Your Trading System? Know These Shocking Limitations!

By Ahmad Hassam

A trading system might consist of a few indicators and a number of rules that tell when to enter the trade and when to exit the trade. Trading system is considered to be proven and tested if there is some date that supports its performance under live market trading conditions. However, it might not be possible to test a trading system quickly under live trading conditions. To overcome such problems, backtesting has been developed. Backtesting is done with the use of a software.

How to do backtesting? Backtesting uses historical data to test the performance of the trading system under the past market conditions. Using a backtesting software makes it very simple and easy.

Now, back testing is done with historical data. What this means is that although your trading system might perform very well with back testing, it may not work in the present market. Market conditions keep on changing and what worked in the past may not work in the present. In the same way, what didn't work in the past may start working now.

So when you look at back testing results, you should look at them with scepticism. But it doesn't mean that backtesting is entirely useless! What we can say is that no two trades are exactly alike.

Back testing can give you a feel how a particular market behaves under certain conditions. Back testing can also spot you certain general characteristics of the market like the seasonal trends and market tendencies.

For example, some markets especially the commodities market is highly seasonal and cyclical in nature. We can take the example of agricultural commodities like wheat, grains,corn, cotton, coffee and stuff like that. In case of the stock market, there is much talk of the January Effect. Well, it is there no doubt about it. Some years, it is highly pronounced and others it is not that pronounced. Similarly stock prices tend to rise at the end of each month and the first few days of the new months. The reason for this is that many institutional investors tend to put the new funds to work at the end of the month and the beginning of the new month! Now in other markets, you might not find any seasonal trends. For example, there is very little seasonality in curreny market or the bond market.

Backtesting can help you figure out how long a trend might last in a particular market. For example, US Dollar Index trendlines might last for months to years. In other markets too backtesting can help you figure out important trends that lasts for last times.

There is no substitute for live trading results! To tell you the truth, backtesting can only give you a rough guess about the performance of the trading system under live trading conditions. - 32177

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. Download these Forex Scalping Cheatsheets FREE! Read this shocking FREE 40 page PDF FRWC Brutal Truth Report that exposes everything about trading robots!

Why ETF Options Are Better Than Index Options?

By Ahmad Hassam

ETF investing has become highly popular in the last two decades. ETFs or what you call Exchange Traded Funds give you the benefits of both mutual funds as well as stocks. Now, ETFs are a basket of securities that are tailored to track a particular index whether it be a stock index, market index, a sector index, a commodity index, a currency index or other. You can trade options on ETFs as well. This makes ETFs a highly powerful addition to your portfolio.

The most important difference is that Index Options are cash settled on expiry while the ETF Options are settled with the underlying instruments that is shares of that ETF. Since with an ETF Options, you can also own the underlying security, you can use various combination strategies.

Index and ETFs both get affected by the dividends paid by the underlying stocks. So if you use options on them, these dividends on the underlying stocks should be incorporated into the puts and calls by using an options calculator.

As said before, since ETF Options get settled with ETF shares, you can use the different options trading strategies on them unlike the Index Options that get settled in cash. This makes ETF Options a much superior instrument as compared to Index Options. If you have traded stock options before, trading ETF Options should not be difficult for you.

Now when trading ETF Options, you can use the famous Protective Put Strategy by combining long ETF with a long put. This way you can hedge against the downside risk with a small increased cost to the ETF. A Protective Put will limit the downside risk to the put strike price.

Similarly, you can use a Covered Call on ETF. A Covered Call is formed by taking combining long ETF with a short call on that ETF. The short call will give you some income in the shape of a premium and reduce the cost of the position. This will also slightly reduce the risk of the position. But on the other hand, a covered call will limit the upside profit potential. Your max profit now will only be limited to the call strike price.

Another combination strategy that you can use with an ETF is forming a Collared Position. A Collared Position is formed with a long ETF and a long put combined with a short call. A Collared Position limits the limited but high risk to a limited risk only. The downside risk is now only limited to the put strike price. The premium paid in taking a long put position is offset somewhat by the premium that you get by writing a call.

Options trading is risky in the sense that it has both time volatility as well as price volatility. Now, many traders trade options without getting good options trading education. What you need to do is first paper trade these strategies and master them. This way you will learn how to deal with unexpected risk.

An important fact that you should know is that ETF Options are always American Style. American Style options can be excercised anytime before expiry. You can even trade LEAP Options on ETFs. LEAP Options are long term options having expiry of more than nine months to less than two and a half years.Another important fact that you need to know is that not all ETFs have options written on them. This should not surprise you as there are many stocks that don't have options written on them. - 32177

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. Read this 49 page Quantum Swing Trading FREE Report. Get this 40 page shocking FRWC Brutal Truth FREE Report that exposed everything about trading robots!

E-Minis, But Not the Cooper

By Nelson Pellew

Stocks are temporary loans, for all intents and purposes. You acquire a certain amount, based upon your wherewithal, and then you take possession of a certain amount of certificates entitling you to the value of your investment. When the market value of these stocks increases, you can sell your stocks for the market value, entitling you to the difference. Hence, when yours stocks "go up" you make a profit. But, when your stocks lose value, you quite clearly lose value as well.

Hard stocks, however, lead to hard losses. You may prefer the softer margins of the futures market. To begin this volatile career as a futurist, you need only pony up to the margins set by each commodity on the market. So, for instance, you like that the margin (think of margins as ante in a poker game) for wheat -- or let's say sugar. The initial investment margin for a commodity, therefore, may be $5,000 or so.

Once you have invested the initial margin amount you may begin to wheel and deal using smaller increments known as e-minis. Now, it may help you to think of this margin in term of your own home. Imagine putting down 20% of your home's value in order to steer its potential open market value. Heady stuff, indeed. But be wary and stay focused or you will suffer the fate of many a day trader in the 1990s.

Now, thanks in part to the Online Trading Academy, let's indulge in a borrowed example. Let us presume that a given e-mini trading price is valued at $980. The market value is computed by taking the dollar value per e-mini point ($50) and multiplying it by the last trading price. Thus, $980 multiplied by $50 equals $49,000. Now, say the initial margin value, as set by the Chicago Mercantile Exchange, is $5,625. This means for $5,625 you can determine a futures contract worth $49,000. This represents a 9:1 leverage ratio.

The leveraging power of futures and e-minis is significant, but futures trading will require easy access to a great amount of liquid capital. Your IRA or trust fund will do you no good. If the market moves against your futures, you will be responsible for meeting your margins should they fall below market value. Failure to do so will handicap your ability to trade as quickly and lucratively as you might like. - 32177

About the Author:

The futures market is a market brimming with e-mini trading potential. To experience the leveraging power of the futures market, one must have the marked skills to make it a profitable endeavor. Best of luck.

Sustainable Living with Greenhouses

By Judy Stevens

In the past greenhouses were used for small gardens and caring for individual horticulturalists prized flowers but commercial greenhouses are in the focus more lately with all of the attention given to green and sustainable living choices.

For example, universities and agricultural departments have built commercial greenhouses for their studies. These were only a larger version of smaller greenhouses made for individuals. Many elementary and pre-schools were also building greenhouses to teach and to educate the generations to come. These children and students were learning about our world, our earth, life, organic growing, eating habits and self-worth.

Hydroponics has been used more and more recently in greenhouse structures to transport the nutrients directly to the plant roots thus saving the earth's soil that is growing increasingly scarce.

Lately, there has been some information out about building acreage vertical instead of horizontal which is termed "eco building". It is the concept of building large high rises or using unused office buildings built in glass to house plantations and generate crops. This would allow cities and countries to grow a wide range of vegetation in places where there were no spaces, or available land. It would also allow crops to grow in countries where at one time they had to ship crops in from other countries. This would allow gaining more economical standards for some countries who at one time could not grow a particular crop, example, tomatoes. Such is true for some of the nations poor populations. If we can supply healthy food through greenhouse growing for those who normally have climates that don't allow healthy growth, we could feed a nation by building these greenhouse structures up.

Organic fertilizing has been an issue we have struggled with over the years. We know chemicals placed on our plants is bad for you and we know that harmones injected into our livestock is also harmful. With organic living we can control the insects by allowing the good insects to kill off the bad and growing indoors allows this cleaner "greener" living. Our world has always had some faction carrying the mantra of "getting back to nature" but now is the time to take action and do this.

The conscientiousness of our economy, green living, and saving the planet are all nice well meaning ideas, but building vertical greenhouses are a great way to conquer all of these giants. - 32177

About the Author:

If you want to Build YOUR Southern Greenhouse or go to http://www.SouthernGreenhouses.com.

How To Maximize Profits From Your FAP Turbo

By Brendan Wilson

The FAP Turbo Forex Robot is without a doubt the most popular forex trading robot on the market. Since its relatively recent release it has gained huge popularity and has caused controversy with some brokers because of some of the methodologies employed. The FAP Turbo uses its own proprietary strategy but it is widely accepted that it trades on price action and looks for short term market moves and a relatively small profit per trade. As any experienced Forex Robot trader will tell you, whether you actually make a profit or not at the end of the day will depend largely on the settings you use. Often these settings have been optimized over a period of months and "tuned" according to the market conditions and the particular currency pairs in use.

Choosing the right broker is also of paramount importance. Despite what you might read, not all forex brokers are the same. Brokers may well hold the key to whether or not your trading is profitable or not. They can and do manipulate the price and data feed and this is how they can effect the operation of your robot. Actual first hand and volumes of anecdotal evidence has told me that these types of broker "tricks" are widespread and far reaching. You need to choose which broker you trade with wisely if you wish to become a profitable trader.

Whilst using one broker with the same robot make a profit, I would often see the same robot on another broker lose money of make significantly less profit. The reality is that this is just a fact of life with forex trading. Many brokers will disallow the use of FAP Turbo or will simply put you on the "slip-o-matic" machine which is a method often employed in the retail forex world. Yes, thats right folks you heard it from me, not all forex brokers are there to help you make money!

That is all good and well but how do you know which broker to choose, or which ones to avoid? There is the old trial and error method that will help you work out eventually which broker to use, if you don't send yourself broke in the meantime. Or alternatively you can check around the myriad of forex forums for some guidance on which brokers to use. Just keep in mind that everyone seems to have an opinion on this subject of what constitutes a fair and honest broker and many also may have a commercial interest in referring you to a particular broker. Keep these factors in mind when you choose a forex broker.

Getting the robot's settings right also poses a challenge. Changes to the robot's numerous variables can also radically change the profitability of the robot. Although demo trading can assist in the process of "tuning" the robot, often the results can vary so much between a demo and a real account that the results in a demo account can be misleading. Often with robots small differences with price feeds can be the difference between a very profitable robot and one that hemorrhages money.

For this and other reasons it is best to take the advice of an expert like FAP Turbo Expert Guide to get the right kind of advice on the setup of the FAP Turbo as well as the choice of broker. The guide was written by Rob Casey who has a degree in applied physics and has been developing automated trading systems for both personal use and commercial use for over 8 years. He spills his guts on the best methods and settings to use with your FAP Turbo to make sure you get the most profitable settings and use the brokers who are best suited to the use of the FAP Turbo Robot, this guide will not only help you make more money it will save you months of stress. So if you already have the FAP Turbo EA or are considering buying it, you need to get this guide. It will literally pay for itself in days.

Another thing to consider when using the FAP Turbo is the recent events with NFA regulations being introduced with U.S. based brokers which has had a dramatic effect on the face of retail forex trading, hence it is essential to stay up with the latest information in regards to the best brokers to use as well as the best settings to use with those specific brokers. So the best idea is to get wise and use the FAP Turbo guide. - 32177

About the Author:

For more articles on FAP Turbo and other great forex robots Learn the FAP Turbo Profit Tricks. Five Free Quality PLR articlesdelivered to your inbox daily at Quality Free PLR Niche Articles.

Trump Network" Is Reviving The Respectability Of An Old Marketing Game Currently In Disrepute.

By Scott Schreiber

You certainly can't blame people for looking for a new way to make a living. Presently unemployment is more than 10% and less new jobs are available than they were in the 1930's.

While most people have dreamed of owning their own business, attaining that dream is often out of reach due to lack of money and the current stricter rules on business loans. Even for people who have the money to start up a business, it can be a fearsome first step to sink your money into an uncertain outcome of beginning your own business.

So for many the options remain few. Start up costs for a new company can scare even the most financially stable individual with; payroll, inventory, equipment purchases space leases, fees and on and on, a person could be invested in a business that hasn't generated a dime to the tune of $100's of thousands of dollars, with only a hope and a prayer of success. In many cases, due to lack of experience, or limited availability of cash, these business's will fail, in fact only 1 out of 5 small businesses survive the first year.

It may seem smarter to buy a business that is already running, but there are risks involved in such an enterprise, too. Unless you investigate very thoroughly, you must depend on the current owners say so as to whether the business has the capacity to do well in the future. So why is he selling it if it is successful? Is their best salesman leaving? Is the equipment out of date and will soon no longer be used by the industry? Is their big contact about to end with no more in sight? You'll be spending a lot of money for an established business, so you have to find out just how well it is established.

A different prospect is buying a franchise of an already existing successful company. But the franchise fees alone can be overwhelming. A franchise has the advantage that someone else has already researched the parts of the business that make it successful - the right product, the right marketing, an already proven customer base, etc. But the expense of the fees, plus the start up costs for such a franchise limits the number of people who can use this route to business ownership.

Another alternative for a person who wants to be self employed is "network marketing" or MLM. MLM has a justifiable bad reputation, because although many people have made plenty of money with this system, some have been less than honest. The advantages are that a MLM industry can provide good on the job training, has low overhead costs, low start up costs and lets the owner work out of his home.

The MLM industry has suffered with credibility problems for many years and in most cases for good reason. There have been many dishonest players in this industry, sometimes they are those within the company offering unrealistic claims about their products or the size of the opportunity and sometimes it is the independent distributors who will make false statements about the company or use unethical practices to coax others on board with unattainable goals, and/or a lack of sufficient training which leaves the new distributor with very limited promise for success and a bad taste in their mouth for this industry.

The reality about MLM is that it is just another method of distribution, that in many cases is more efficient then a traditional business and lends itself well to our current internet age. Making money from the sales of others is really very similar to other industries where sales managers get paid overrides for the success of their sales people, managers get paid bonuses for additional revenue generated and business owners make profits from the sales made by their employees.

So when you have unemployment at such a high level, with no foreseeable change in the near future, traditional business costs and challenges too great for the average American family, the door becomes open to those who may have never considered the MLM option before.

Since there is a need for making a creditable MLM company and using this opportunity in a time of unemployment, the Trump Network has begun. The name itself lends credibility and along with the professionalism that attends the name, success is already associated with it. The name has always been associated with quality and persistence not only for success but for perfection.

The Trump brand will soon be the most quickly expanding network marketing group as "Trump Network." Already famous for real estate and casinos, this new field gains a respectability much needed in the disreputable MLM field.

Many top players from other network marketing companies have left them, even though they were making very good money, for the opportunity to be part of what they consider to be the organization of the future. They have seen since the formal announcement has been made that the "Trump Network" is starting to skyrocket and are seeing an intense enthusiasm from those who understand the value of the Trump name and from getting involved early in an organization like this one.

One of the stated goals of the team is to make more millionaires in the first 24 months of the "Trump Network", then any other network marketing company in history. For those who have been out of work for many month that may be a very lofty position, but making a solid residual income to replace the job they lost is a much more realistic and achievable goal for many. As with situation where a person decides to get into business there is always risk. Getting with the right company and with a brand as strong as the "Trump Network" can help to mitigate that risk. - 32177

About the Author:

Learn how Trump plans to end the recession by going to The Trump Network.