Articles

Success and Failure

September 26, 2010 | scorpion
I think the success to anything does not simply lie on "Failure is okay; just keep doing it till successful." This is wrong. It urges you to blindly risk whatever it takes in hope that success would come at the end. Of course, success will come after a string of failures but at what price you have paid for it? And when? I hope it will come before your life candle runs out. You won't have a clue about the answers because your mantra lies solely on the foundation of hope rather than reality.
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Part 1 - Learn Forex Trading: Forex Market Overview

November 19, 2009 | scorpion
Forex is a loose acronym for Foreign Exchange Market that originated in the 1970s around the time free currency exchange rates were introduced in the world. In forex markets, market participants determine the price of one currency against the other purely from market forces stemming from supply and demand. There are no external controls in a forex market and is perhaps the best example of a perfect market with free competition. Forex is also the biggest liquid financial market in the world, with market volumes ranging in 1-3 trillion US Dollars a day.
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Part 2 - Learn Forex Trading: Currency Pair and Price

November 19, 2009 | scorpion
Currency pairs are financial instruments traded in forex markets. Every pair of currency traded in the forex market is considered as an individual product (or financial instrument). A set of two currencies always constitute a currency pair, of which one currency is being bought by the other. The buying and selling of currencies from around the world constitute currency trading.
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Part 3 - Learn Forex Trading: Margin and Leverage

November 19, 2009 | scorpion
In a forex trade conducted through a trading platform, you are only speculating on the currency exchange rate and not actually buying all that currencies. Therefore if you speculate the movement of currency rates accurately you make a profit, otherwise not. Margin trading and leverage originate from this belief that speculation in currency positions can be met without real money supply.
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Part 4 - Learn Forex Trading: Order Types

November 19, 2009 | scorpion
As a forex trader you have recourse to different types of orders in order to enter and exit the forex markets. These different types of orders allow you to specify precisely as to how your broker should fulfill your forex trades. This article explains the different order types that are possible in forex trading and emphasizes the fact that it is important that you place orders with a forex broker in the right way.
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Part 5 - Learn Forex Trading: How to Read Chart

November 19, 2009 | scorpion
For the newbie trader Forex trading often appears as an esoteric subject. With all the psychedelic colors that appear on the trading screens you would easily start wondering if forex trading can indeed be done by ordinary people. That could well be the case when you open out forex charts as an adjunct to your trading screen, especially as it has a lot to do with lines and colors. But as a matter of fact, forex charts are very easy to learn and doesn’t require any special mathematical skills whatsoever.
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Infotainer Jim Cramer

October 20, 2009 | scorpion
Most people recognize Jim Cramer as a highly opinionated infotainer and host of CNBC’s ‘Mad Money’. But Cramer is more than just this. He is also a best-selling author and former successful hedge fund manager.
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Professional Trading Coach Van K. Tharp

October 20, 2009 | scorpion
Psychologist Van K. Tharp is an internationally acclaimed trading coach and author, focusing on helping traders who want to understand the psychology behind position sizing, systems development and general trader psyche. He is the only trader to ever write book that covers positions trading as a risky proposition in detail and he is also the only coach to be featured in Jack Schwager’s ‘Market Wizards: Interviews With Great Traders’.
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Buffet’s Teacher Benjamin Graham

October 20, 2009 | scorpion
Benjamin Graham is considered a legend in the stock trading and investing industry. He was an excellent financial educator, investment manager and author. Even today, thirty-three years after his death, two of Graham’s investment books are still used at the university level in financial investing classes.
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Jesse Livermore, Self-Made Trader

October 20, 2009 | scorpion

There are very few people in the stock trading and investment industry that are able to make money with little to no formal financial education. Jesse Livermore was one of those few. Before his death he had gained and lost millions of dollars, speculating and trading for more than 50 years. He also developed some financial ideas and principles that are still used by investors.

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Trend Following Richard Donchian

October 20, 2009 | scorpion
Richard Donchian is one of the many stock investors and traders that lived through the Great Depression and stock market crash of 1929. Many of his ideas in trading are still viewed as important today and he was the father of the many trend following trading principles still in use today.
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Warren Buffett - The Oracle Of Omaha

October 20, 2009 | scorpion
"Rule No.1 is never lose money. Rule No.2 is never forget rule number one." The simple rule has been Warren Buffett’s mantra ever since he started out in the investment and trading business. As a student of the great Benjamin Graham, Buffett has taken that mantra to a new level.
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The Mentor Alexander Elder

October 20, 2009 | scorpion
Dr Alexander Elder has made his money through a very unique method: he learned how to get inside the head of stock traders. His background as a successful psychiatrist helped him become well known in the stock trading and investing industry, especially since the only stock he ever purchased when he first started out was for KinderCare.
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Quantum Fund’s George Soros

October 20, 2009 | scorpion
Known as ‘the man that broke the Bank of England’ George Soros has been trading and stock investing since 1952. He is recognized as the man that brought the Quantum Fund to life and is considered one of the wealthiest men in the world today. He is very active today in philanthropic endeavors as well as in human rights, education and politics
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Richard Dennis, Prince Of The Pit

October 20, 2009 | scorpion
Richard Dennis, a onetime follower of Richard Donchian’s trend following technique, used to shoot from the hip when it came from buying and trading stocks and commodities. After taking a huge hit during the 1987 stock market crash, he stopped trading. At least, for a few years.
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NYC Mayor Michael Bloomberg

October 20, 2009 | scorpion
If you are not into financial investing then Michael Bloomberg is simply the current mayor of New York City. However, many others will recognize him as the founder of Bloomberg Media and a financial investor who helped others with a simple computer database.
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Some History of Forex Market

October 16, 2009 | scorpion
The historical evolution of foreign exchange markets can be compartmentalized into 3 distinct phases namely the gold exchange period, followed by the Bretton Woods Agreement, to its current setting. The gold exchange standard ruled over international economic system between 1876 and World War I. This was a fairly stable system wherein currencies were supported by the price of gold.
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Philip A. Fisher, Influential Investor

October 16, 2009 | scorpion
Philip A. Fisher is considered today as one of the ‘most influential investors’ in the history of the industry.  Many of the investment beliefs that he practiced and shared with the rest of the world are still relevant in today’s trading market and they are studied by investors all over the world.  His book ‘Common Stocks and Uncommon Profits’ was the first book of its kind to ever make the New York Times Bestseller list and Fisher was probably the last of his breed to find success after the stock market crash in 1929.
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The Professional’s Professional John Neff

October 16, 2009 | scorpion
John Neff is most well known for his affiliations with National City Bank of Cleveland and Wellington Management Company.  Other traders in the industry look at him as the ‘professional’s professional’ because of his knack in taking their money and investing it safely.  In today’s unsure trading world, it is easy to see how Neff could be looked upon by his peers in such good light.
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Jim Slater, The Capitalist

October 16, 2009 | scorpion
The name Jim Slater is well known in the United Kingdom and among the industry gurus in the United States. While the average person may not recognize his name right off the bat, they are probably familiar with the price earning to growth earnings ratio, a concept this gentleman from England developed. Slater’s strategies, like Philip A. Fisher’s in the United States, were the first to be popularized among investors in the United Kingdom.
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The Redwood Financialist Kenneth L. Fisher

October 16, 2009 | scorpion
American businessman, founder, CEO and Chairman, Fisher Investments, Kenneth L. Fisher is well known for his investment strategies. He is listed in the ‘Forbes 400’ list of the richest Americans and billionaires, and as the youngest son of Philip A. Fisher, a well-known investor, it’s easy to understand why. He is considered one of the most powerful people of the investment industry and has published a wide variety of works on what he does.
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Peter Lynch The Fidelity Wizard

October 16, 2009 | scorpion
Peter Lynch is the mind behind the well known companies Fidelity Investments Inc and Fidelity Management & Research Company.  Both firms are well known across the world and even after his retirement from the investing industry Lynch is making waves with his philanthropic efforts.  Lynch believed that ‘Investing without research is like playing stud poker and never looking at the cards.’  Some of his publications have been considered by industry pundits as must reads if investing and trading is a career choice.
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Sir John Templeton - Mutual Fund Maverick

October 16, 2009 | scorpion
One of the few Americans to ever be knighted by Queen Elizabeth II of England, Sir John Templeton is looked upon today as the inventor of mutual funds. He has been called the ‘greatest global stock picker of the century’ by Money Magazine and while he has retired from active trading, he still is very active in other business ventures.
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CAN SLIM’s William O’Neil

October 16, 2009 | scorpion
If you are an investor using the CAN SLIM strategy of investing then you have heard of its investor William O’Neil. In the highly competitive investment industry, O’Neil is one of the younger traders who have come behind great names like Jim Slater and John Neff. He started a business publication ‘Investor’s Business Daily’ and the brokerage William O’Neil+ Co. Inc. Entrepreneur and stockbroker, O’Neil helped change the face of investing.
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T. Rowe Price

October 16, 2009 | scorpion
Known at the ‘father of growth investing’, Thomas Rowe Price was one of the founding fathers of investing and trading as it is known today.  He was not afraid of change and as an investor who grew up during the Great Depression, he was not afraid to jump into an investment with both feet.
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Whiz Kid Michael Marcus

October 16, 2009 | scorpion
Michael Marcus is an industry whiz kid who having taken his entire fortune and investing it in commodities turned it from $30,000 to $80 million in less than 20 years. He was mentored by investor Ed Seykota while working as an analyst and has passed on what he learned to others ever since.
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Acorn Fund’s Ralph Wanger

October 16, 2009 | scorpion
There is little known about Ralph Wanger other than the fact that he was one of the most successful investment traders in the United States. Wanger is one of the younger investors to be recognized with the likes of T. Rowe Price and Philip A Fisher, but he was excellent with the investments he made. A very private man, Wanger’s career spoke for itself.
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Futures and Forex Glossary Dictionary WXYZ

September 23, 2009 | scorpion
Warehouse Receipt

A document guaranteeing the quality and quantity of the underlying asset in a futures contract.

Warrants

The right to buy stock (usually preferred stock) from the issuer.

Weak Dollar

When the U.S. Dollar weakens against a basket of currencies.
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Futures and Forex Glossary Dictionary V

September 23, 2009 | scorpion
Valuation

Determining the value of a security, commodity or other asset.

Value Date

Same as settlement date. The date at which physical delivery of a forex spot transaction takes place.

Variable Limit

When there are periods of extreme volatility on an exchange this system allows for greater than usual price movements even they are above the daily limits.
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Futures and Forex Glossary Dictionary U

September 23, 2009 | scorpion
Unconvertible Currency

A currency that is not traded on the forex market but used only for domestic purposes.

Uncovered Option

A short call or put option, where the option is not covered by a purchase or sale of the underlying asset.

Underlying Futures Contract

The futures contract which is specified as the underlying asset that an option gives the holder the right to buy or sell.
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Futures and Forex Glossary Dictionary T3

September 23, 2009 | scorpion
Transaction

The buying and selling of a currency pair.

Transaction Cost

The cost associated with buying or selling a currency pair.

Transaction Date

The date on which a position is opened or closed.
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Futures and Forex Glossary Dictionary T2

September 23, 2009 | scorpion
Tier One

The highest possible credit strength rating, give by the Bank of International Settlements.

Time Value

The value that an option has besides intrinsic value. Time value represents the value that an option will have from the possibility of an increase in value of the underlying asset (or decrease in case of a put option). As the option gets closer to expiration date, time value decreases.
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Futures and Forex Glossary Dictionary T1

September 23, 2009 | scorpion
Take Profit Order

A limit order set to close a position if the price reaches a predetermined level in order to realize profits.

Take Profits

Closing a position with unrealized profits.

Take The Offer

A verbal agreement to accept a dealer's offer on the trading floor during open outcry. See Also: Open Outcry
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Futures and Forex Glossary Dictionary S3

September 23, 2009 | scorpion
Squeeze

When the central bank retracts the money supply to increase the price of money. See Also: Monetary Policy

Stable Market

A market that is large enough to accommodate heavy trading without too big swings. An example would be the EUR/USD forex market.

Sterilization

When the central bank makes a foreign exchange intervention but offsets the change to the monetary base by selling or buying domestic assets.
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Futures and Forex Glossary Dictionary S2

September 23, 2009 | scorpion
Short Covering

Closing a short position by buying the exact same amount of a currency pair that was previously sold short.

Short Position

Selling a security. Short selling is selling a borrowed asset with the intent to buy it back at a lower price.
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Futures and Forex Glossary Dictionary S1

September 23, 2009 | scorpion
Same Day Transaction

Opening and closing a position on the same day.

Samurai Market

Slang term for the Japanese stock market.

Scalper

A forex trader that makes many small trades a day. A scalper is a forex trader that chooses to follow a strategy of doing several smaller trades with less risk than fewer but bigger trades.
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Futures and Forex Glossary Dictionary R2

September 23, 2009 | scorpion
Retail FX Market

The part of the forex market aimed at individuals and offered by brokers.

Retail Sales

Sales of retail goods in a country or region. In the United States the retail sales report is released monthly for the previous month by the Census Bureau and the Department of Commerce .

Retail Side

The retail industry that delivers services, goods and commodities directly to the consumer market as opposed to wholesaling.
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Futures and Forex Glossary Dictionary R1

September 23, 2009 | scorpion
Rainbow Option

A type of option where there is more than one underlying asset. For the option to be profitable, all underlying assets must be in the money. See Also: Options

Rally

A period of trading that makes the price surge upwards.

Rate

The price of a currency against another. The rate is measured as how many units of the second currency you get with one unit of the first currency.
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Futures and Forex Glossary Dictionary Q

September 23, 2009 | scorpion
Quantitative analysis

Mathematical analysis of price movements using advanced mathematical and statistical models and tools. See Also: Technical Analysis

Quantitative Easing

Increasing the money supply  (by the central bank) to encourage spending. Well known examples are the Bank of Japan's attempts to curb deflation in the early 2000's and the Federal Reserve's actions since the credit crunch and subsequent housing crisis. See Also: Monetary Easing
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Futures and Forex Glossary Dictionary P3

September 23, 2009 | scorpion
Price gap

When the price of a security jumps to a higher or lower level without any overlapping trading.

Price limit

The high and low prices that an option or commodity is allowed to reach during a trading session. When the price limit is reached, no more trading will take place for the rest of the trading day.
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Futures and Forex Glossary Dictionary P2

September 23, 2009 | scorpion
Point & Figure Chart

A type of chart that does not show the passage of time, but rather shows rising and falling prices as either circles or crosses. This type of chart is used to determine critical support and resistance levels.

Political Risk

Larger changes in a country's or region's politic situation, such as government changes or unrest that may negatively affect the economy.
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Futures and Forex Glossary Dictionary P1

September 23, 2009 | scorpion
Perfect Competition

A hypothetical market situation where the following criteria is met:

1. All firms sell an identical product.
2. All firms are price takers.
3. All firms have a relatively small market share.
4. Buyers know the nature of the product being sold and the prices
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Futures and Forex Glossary Dictionary O2

September 23, 2009 | scorpion
Order

An instruction made to a broker to buy or sell an asset in the market.

Oscillators

Technical analysis tool that is used to determine if a currency pair or other asset is overbought or oversold. See Also: Statistical Oscillators
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Futures and Forex Glossary Dictionary O1

September 23, 2009 | scorpion
Odd Lot

A lot that deviates in size from the standard lot size of 100,000 units. See Also: Lot

Offer

The Ask price. The price at which the holder of a currency is willing to sell.

Off-Shore

A business, often a bank or financial institution, that may or may not have a presence in a country, but who's headquarters are located in another country, typically with lax tax laws and a degree of confidentiality.
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Futures and Forex Glossary Dictionary N2

September 23, 2009 | scorpion
New Zealand Dollar (NZD)

The currency of New Zealand. One NZD is made up of 100 cents.

News trader

A trader who primarily trades on news releases such as economic reports and Federal Reserve announcements. News releases are usually followed by hectic trading times.
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Futures and Forex Glossary Dictionary N1

September 23, 2009 | scorpion
Naked Put

Any kind of put option where the option writer isn't short in the underlying asset. Also referred to as an 'uncovered option’. See Also: Option

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Futures and Forex Glossary Dictionary M3

September 23, 2009 | scorpion
Mediation

If there is a dispute between two parties concerning a futures contract, the national futures association (NFA) can act as a mediator to find a solution. Mediation is the process where the two concerned parties use a third independent party (the mediator) to find a mutually agreeable solution.
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Futures and Forex Glossary Dictionary M2

September 23, 2009 | scorpion
Margin Call

A Margin Call happens when a broker asks for the trader to fund his account with more cash or securities (or sell securities), so the minimum maintenance margin can be met. A margin call will happen once the value of the trading account dips below a predetermined level set by the broker. If the margin call is not met, the account may be liquidated. See Also: Maintenance Margin
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Futures and Forex Glossary Dictionary M1

September 23, 2009 | scorpion
M1

Money supply measurement which includes all cash and liquids in circulation, money in checking accounts and travelers checks.
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Futures and Forex Glossary Dictionary L2

September 23, 2009 | scorpion
Liquidation

An account being closed due to margin calls. The account value cannot sustain a position. This most frequently happens when there is a large amount of leverage used on a losing trade.
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