As many investors may know, Online Investment Programs offered via the internet are mostly end up with losses or scam. Extensive due diligence in credible and worthwhile offshore investment programs is substantially needed prior to invest your monies in. It should be noted that there are major difference between real investment programs and HYIP or High Yield Investment Programs.
The main characteristics of HYIP are define as follow:
High daily rates
Compounding system is allowed
Low minimum initial deposit (principal as minimum as 1 usd)
Long holding periods of principal (usually takes 6 months or 1 year)
Referral commission is available
If you willing to play your monies with fun, HYIP can be a money game you are looking for. You should know when to get in and when to get out of the game, since HYIP adopt a ponzi/pyramid scheme which means the new comers pay the old members.
It just a matter of time when this program will collapse (short period in fact, when the number of new comers is less than or even the same as the old members). Hence the chance to get win as an old members is higher than the new comers.
But if you really are a genuine investor you should be wise enough not to have a look at that one. Here are several indications of real investment:
Reasonable monthly rate (less than 5%), more than that can be categorized as a high risk investments
No compounding
High minimum initial deposit (minimum principal is 50, 100, 1000 or sometimes 5000 usd)
Short holding periods of your principal (usually takes 1 month to 6 months)
No referral commission
Now the question is, if you successfully find an Online Investment Programs that fulfilled all criteria above, are you assured that your monies will be working for you as a clock work without any delay? I would like to point out the difference between an ordinary investor.
Here some Investment Tips I would like to share with you in order not to become an ordinary investor but a smart investor. Some good investment programs indicated by:
They give you ID of traders + fund manager, office location and respective phone number.
They give you proof of their trading.
Due Diligence by third party will be an added value.
Usually they become hot topics on many investment blogs and forums.
Few things need to be highlighted once you willing to get in or already inside the investment program in regards to rules changing (terms and conditions) of each investment.
Adding minimum deposit
Going private
Profit rate or principal withdrawal takes a longer time than it should be.
If you aware, these might be a red flag or a true sign that the investment program you are referring to is experienced problems. Get out quickly because you do not know on the next day they will gone with your monies. Several excuses will be provided by them such as:
Trading loss
Site and payment processor being hacked
fraudulently deceived by a single individual who has full control of assets
At my last Investment Tips, I would like to emphasize NEVER ever double you money in one investment program. Takes your monies once their reach 20 – 30% in profit. Put the maximum 50% in profit if you confidence enough with your investment program and move to another venture. Its better to play safe though and hope stay on the right track making money to fully possible extent.
By Yuliarko Sukardi
Sunday, May 27, 2007
Tips For Investing In An Internet Savings Account
It does not take one having psychic capabilities to see that our global market is progressing towards greater technology. The ease of online banking as well as its low overhead is creating more banking institutional options online. One such option is the internet savings accounts.
Internet savings accounts, available through banking institutions like ING Direct, HSBC Bank, or GMAC Bank, offer an alternative to an instant savings account. These accounts work by linking your checking account to an internet savings account. This creates easy access from your savings account to your checking account. Deposited money can easily be transferred from checking to savings and back again either online or over the phone.
ING Direct and other online financiers can often provide a more aggressive annual percentage yield for their internet savings accounts than many brick and mortar banks due to low overhead costs. These higher interest rates are usually the biggest draw to people interested in opening an internet savings account and who want bigger gains for long term investments.
Online Bankers are now becoming more competitive and it is to a consumer’s advantage to look for perks that make banking easier. Some financial institutions even provide checks or a debit card for accountholders others provide a full-range of products and services ranging from home mortgages or home equity loans to the availability of certificates of deposits (CDs) as well as online bill paying services. Think of your business as a highly marketable commodity and invest the time necessary to ensure that you get the best rates at the best financial institution for you.
Whenever you are doing a research on one subject, try to get to the essence of what you are studying. It is true of mundane areas as well. As you search for information about savings accounts try and reach the best value, definitions and clarity. Read what we have on our site on savings accounts and if you need more material on this you can always go to the world wide web again to finish up on your studies. In this information age, there is a lot of options for increasing your knowledge base.
Check the links below for more information on Internet Savings Accounts and other related information.
For more information on Internet Savings Accounts or visit http://www.easysavingsaccounts.com/Articles/Tips_for_Investing_in_an_Internet_Savings_Account.php, a popular website that offers information on Savings Accounts. Please leave the links intact if you wish to reprint this article. Thanks
By Charley Hwang
Internet savings accounts, available through banking institutions like ING Direct, HSBC Bank, or GMAC Bank, offer an alternative to an instant savings account. These accounts work by linking your checking account to an internet savings account. This creates easy access from your savings account to your checking account. Deposited money can easily be transferred from checking to savings and back again either online or over the phone.
ING Direct and other online financiers can often provide a more aggressive annual percentage yield for their internet savings accounts than many brick and mortar banks due to low overhead costs. These higher interest rates are usually the biggest draw to people interested in opening an internet savings account and who want bigger gains for long term investments.
Online Bankers are now becoming more competitive and it is to a consumer’s advantage to look for perks that make banking easier. Some financial institutions even provide checks or a debit card for accountholders others provide a full-range of products and services ranging from home mortgages or home equity loans to the availability of certificates of deposits (CDs) as well as online bill paying services. Think of your business as a highly marketable commodity and invest the time necessary to ensure that you get the best rates at the best financial institution for you.
Whenever you are doing a research on one subject, try to get to the essence of what you are studying. It is true of mundane areas as well. As you search for information about savings accounts try and reach the best value, definitions and clarity. Read what we have on our site on savings accounts and if you need more material on this you can always go to the world wide web again to finish up on your studies. In this information age, there is a lot of options for increasing your knowledge base.
Check the links below for more information on Internet Savings Accounts and other related information.
For more information on Internet Savings Accounts or visit http://www.easysavingsaccounts.com/Articles/Tips_for_Investing_in_an_Internet_Savings_Account.php, a popular website that offers information on Savings Accounts. Please leave the links intact if you wish to reprint this article. Thanks
By Charley Hwang
How To Invest In Stocks And Get Your Money Working For YOU!
Today, more and more people are striving for financial freedom - they're tired of working FOR their money and they're ready to have their money work for THEM.
Many have heard that the stock market can be an effective way to achieve this kind of financial success, but have no idea how to invest in stocks. It's both an art and a science, that can seem to have a lot of intricacies if you're just getting started. This article will explore some of the basics of how to invest in stocks, so that you can decide where to go from here.
How To Invest In Stock:
A lot of the time when people first learn about the stock exchange, they look at it as an immediate get-rich-quick kind of thing. This also explains why most beginners LOSE money in the stock exchange.
The fact is, stocks are generally not good for the short-term because they are so unpredictable. If you want to make a good return on investment, you need to look at it as a long-term consideration.
The next part of that is, if you don't have money to pay the rent, don't even consider investing.
Really, you should only invest the with savings you've acquired after you've purchased a property. So, those are the initial considerations you should checklist before spending time learning how to invest money - your own at least.
Now if you've got those covered, I'm sure, you're wondering where to begin learning how to invest in the stock market, right?
The easiest way to start is by reading everything you can about investing in the stock market, as well as autobiographies by very successful investors like Warren Buffet.
The absolute best first investment you can make is by investing in some high quality training material.
Once you've done this preparation work, you can then progress to paper trading and taking part in simulated trades.
You can probably tell by now that there's quite a lot of work involved in learning how to invest in the stock market, but like anything else in life, if you want it, you'll do the work. The rewards of your hard work could be the type of financial freedom that most people only ever dream of.
Ed Stevens invests in the stock exchange from the comfort of his own home. If YOU want to achieve financial freedom through investing, learn how to invest in stock (including what pitfalls beginners must avoid), and find information of the highest quality, go to: How To Invest In Stocks right now (http://www.squidoo.com/how-to-invest-in-stocks/).
By Eddy Stevens
Many have heard that the stock market can be an effective way to achieve this kind of financial success, but have no idea how to invest in stocks. It's both an art and a science, that can seem to have a lot of intricacies if you're just getting started. This article will explore some of the basics of how to invest in stocks, so that you can decide where to go from here.
How To Invest In Stock:
A lot of the time when people first learn about the stock exchange, they look at it as an immediate get-rich-quick kind of thing. This also explains why most beginners LOSE money in the stock exchange.
The fact is, stocks are generally not good for the short-term because they are so unpredictable. If you want to make a good return on investment, you need to look at it as a long-term consideration.
The next part of that is, if you don't have money to pay the rent, don't even consider investing.
Really, you should only invest the with savings you've acquired after you've purchased a property. So, those are the initial considerations you should checklist before spending time learning how to invest money - your own at least.
Now if you've got those covered, I'm sure, you're wondering where to begin learning how to invest in the stock market, right?
The easiest way to start is by reading everything you can about investing in the stock market, as well as autobiographies by very successful investors like Warren Buffet.
The absolute best first investment you can make is by investing in some high quality training material.
Once you've done this preparation work, you can then progress to paper trading and taking part in simulated trades.
You can probably tell by now that there's quite a lot of work involved in learning how to invest in the stock market, but like anything else in life, if you want it, you'll do the work. The rewards of your hard work could be the type of financial freedom that most people only ever dream of.
Ed Stevens invests in the stock exchange from the comfort of his own home. If YOU want to achieve financial freedom through investing, learn how to invest in stock (including what pitfalls beginners must avoid), and find information of the highest quality, go to: How To Invest In Stocks right now (http://www.squidoo.com/how-to-invest-in-stocks/).
By Eddy Stevens
How to Minimize Risk for Higher Returns?
The best way to manage your risk is through Smart Diversification. Or what i called Intelligent Risk Taking. The way to do that is to invest your money into an international Portfolio, the trick here or the most important part is to invest in stock that are not correlated.
Wherever there is low correlation between the stocks, then there is a great chance for diversification. When u have 2 stocks are both highly correlated, then there is no reason to diversify , we just go with the stock that has the highest return. So look for stocks that have very small correlation, and in international markets, that way you hedge the currency risk and exposure, being in more than one market and one economy, and pursue higher returns because it has been historically shown that international portfolios have higher returns with lower standard deviation which means lower risk. International Portfolio also capture higher number of stocks where in domestic markets , you are only limited to a certain number.
To make it easier, use asset allocation softwares. those available software will do the allocation part for, the software will test for correlation for you between the stocks you have picked and give u the optimal percentage combination between those stocks. Google " Asset allocation programs" and you will get plenty that will help you do that task.
Remember, International Portfolio, 8 to 10 stocks, low correlation between the stocks though using an asset allocation program to determine the optimal combination between the stocks. it will only make your life easier and your investing more intelligent.
By Yazeed Almobty
Wherever there is low correlation between the stocks, then there is a great chance for diversification. When u have 2 stocks are both highly correlated, then there is no reason to diversify , we just go with the stock that has the highest return. So look for stocks that have very small correlation, and in international markets, that way you hedge the currency risk and exposure, being in more than one market and one economy, and pursue higher returns because it has been historically shown that international portfolios have higher returns with lower standard deviation which means lower risk. International Portfolio also capture higher number of stocks where in domestic markets , you are only limited to a certain number.
To make it easier, use asset allocation softwares. those available software will do the allocation part for, the software will test for correlation for you between the stocks you have picked and give u the optimal percentage combination between those stocks. Google " Asset allocation programs" and you will get plenty that will help you do that task.
Remember, International Portfolio, 8 to 10 stocks, low correlation between the stocks though using an asset allocation program to determine the optimal combination between the stocks. it will only make your life easier and your investing more intelligent.
By Yazeed Almobty
The Dark Side of Prepaid Credit Cards
Prepaid credit cards are becoming increasingly popular. The problem is that greedy financial scoundrels have noticed this popularity increase and are trying to get in on the action. If you're considering getting one or two prepaid credit cards, there are a few things you need to know.
1. They Don't Do Anything For Your Credit
Some people have made the mistake of confusing prepaid credit cards with secured credit cards and then regretting it when the damage was already done. It's important to understand that there is a huge difference between these two financial tools.
The only real similarity between secured credit cards and prepaid credit cards is that both of them require money up front and the amount you supply determines your available credit (or balance). That, however, is where the similarities end.
Unlike secured credit cards, prepaid credit cards do not offer a revolving line of credit, you do not earn interest on the money that was used to establish your initial credit line and your account activity isn't reported to the credit bureaus.
All things considered, prepaid credit cards are not a good idea if you want to re-establish your credit history or establish a revolving line of credit. However, if you want to give someone a gift or put your child's allowance on plastic, prepaid credit cards might be a solution.
2. The Good, The Bad and The Ugly
Like most financial tools, not all prepaid credit cards are equal. Some are good, some aren't so good and some are downright ridiculous.
Before purchasing prepaid credit cards, it's essential that you know the terms of the card you're buying. Believe it or not, some prepaid credit cards not only charge a monthly fee, they actually charge you money every time you use the card.
If you charge your $4 coffee house order with your prepaid credit card, you might actually be paying $5 for that cup of joe after the credit card company tacks on their $1 fee. Then, to add insult to injury, the credit card company may bill you almost $10 a month for the privilege.
Make sure you are familiar with ALL of the fees (including monthly fees, transaction fees, deposit fees, etc.) before committing to any prepaid credit cards.
3. Where'd It All Go?
So you get a prepaid credit card for $50 and you have it in your wallet for a four or five months. Then one day you go to use it on a $30 purchase but the card isn't working. You call to find out your balance and you realize it's less than $20. How did it happen?
Well, if you're not careful, those monthly fees can quickly add up. If you buy a prepaid credit card with a monthly fee of $6.95, after five months that card is going to have incurred charges of $34.75. That means your $50 card now only has an available balance of $15.25 and you haven't even used it yet!
Remember, when dealing with prepaid credit cards, what seems like a nominal fee can really add up over the months and you need to be careful. Not all prepaid credit cards are bad, but if you aren't careful and you don't look at the small print, you may end up with one of the ugly ones.
By Max Anderson
1. They Don't Do Anything For Your Credit
Some people have made the mistake of confusing prepaid credit cards with secured credit cards and then regretting it when the damage was already done. It's important to understand that there is a huge difference between these two financial tools.
The only real similarity between secured credit cards and prepaid credit cards is that both of them require money up front and the amount you supply determines your available credit (or balance). That, however, is where the similarities end.
Unlike secured credit cards, prepaid credit cards do not offer a revolving line of credit, you do not earn interest on the money that was used to establish your initial credit line and your account activity isn't reported to the credit bureaus.
All things considered, prepaid credit cards are not a good idea if you want to re-establish your credit history or establish a revolving line of credit. However, if you want to give someone a gift or put your child's allowance on plastic, prepaid credit cards might be a solution.
2. The Good, The Bad and The Ugly
Like most financial tools, not all prepaid credit cards are equal. Some are good, some aren't so good and some are downright ridiculous.
Before purchasing prepaid credit cards, it's essential that you know the terms of the card you're buying. Believe it or not, some prepaid credit cards not only charge a monthly fee, they actually charge you money every time you use the card.
If you charge your $4 coffee house order with your prepaid credit card, you might actually be paying $5 for that cup of joe after the credit card company tacks on their $1 fee. Then, to add insult to injury, the credit card company may bill you almost $10 a month for the privilege.
Make sure you are familiar with ALL of the fees (including monthly fees, transaction fees, deposit fees, etc.) before committing to any prepaid credit cards.
3. Where'd It All Go?
So you get a prepaid credit card for $50 and you have it in your wallet for a four or five months. Then one day you go to use it on a $30 purchase but the card isn't working. You call to find out your balance and you realize it's less than $20. How did it happen?
Well, if you're not careful, those monthly fees can quickly add up. If you buy a prepaid credit card with a monthly fee of $6.95, after five months that card is going to have incurred charges of $34.75. That means your $50 card now only has an available balance of $15.25 and you haven't even used it yet!
Remember, when dealing with prepaid credit cards, what seems like a nominal fee can really add up over the months and you need to be careful. Not all prepaid credit cards are bad, but if you aren't careful and you don't look at the small print, you may end up with one of the ugly ones.
By Max Anderson
Types and Characteristics of Trading Gaps
Gaps are a common occurance in the markets. Everyday there is always at least one stock that has gapped up or down when the market opens. Why? As long there is some event happening somewhere between the market close of the previous day to the opening of today, there will be gaps. Even if the markets eventually move little by little toward the inevitable 24-hour format, there will always be gaps. After all, somewhere around the world, there is some event happening during the weekends as well. Plus, there is always an excited group of investors who making a big deal out of something or even for no reason unknown to the rest of us. So, gaps are a fact of life and there is no avoiding it. The best thing is to take it in stride and learn how to profit from it.
There are three different types of gaps: Breakaway, Runaway and Exhaustion gaps. Each of these gaps appear at a different cycles of the markets.
Breakaway gaps occur when a stock has been in a consolidation stage; instead of a normal market-session move, it breaks out with an opening gap. Normally, these gap in the same direction before to the consolidation stage. There is one caveat: when the breakout happens, it can be in either direction. This gap is trickier than the others because the intent of direction is unclear.
In the chart example above, the market was going through a correction. When it finally finished consolidating (a symmetrical triangle pattern), it broke out with a gap to the upside to end the correction period.
As for Runaway gaps appear when the stock has been trending for some time. Instead of a normal move up during market hours, they open with a gap in continuation of the dominant trend. It shows there is more interest in the stock, possibly by some positive news to further boost the investors' eagerness to own it. Runaway gaps are also called Measuring gaps because they are often used as a centering point of measurement from the beginning of the trend to the gap, then from the other side of the gap to measure the next likely level where it would reach.
The chart below shows the prevailing trend, moving steadily upward. Along comes the opening gap, pushing in the same direction higher, not even a moment's pause or pullback until much later in the trend.
Below is the example of how a Runaway gap is also used as a Measuring tool. When the gap has been identified, the measurement is taken from the beginning of the trend (61.98) up to the bottom of the gap (87.08). From that distance, it is used to measure how far the prices will likely to continue. So the measured target starts at the upper part of the gap (102.64) to the expected level above it. In this example, the target was 130.27. This is a very powerful and easy-to-apply concept which can be used to find profitable trades.
The last type of gaps is the Exhaustion gaps. These occur when the market has been trending for a long period of time, normally after a bull market or bear market that as been lasting for a few years. When it appears, there is a period of slowing of the trend slowing, or period of consolidation. They usually appear near tops or consolidation areas after strong trends. Many times, the Exhaustion and Breakaway gaps are mistaken for one another. Depending on the location and whether or not it was an up gap or a down gap. The Exhaustion gap is an up gap appearing in the market tops, and a down gap in market bottoms. As for the Breakaway gaps, they are up gaps in market bottoms (and from consolidations) and down gaps on market tops (and from consolidations).
Below is example of each to better identify the difference. The market has been forming what look like a top, with the symmetrical triangle consolidation. Triangles are usually trend continuation patterns, but as the chart shows, the gap was break away from the pattern to the downside. This is a breakaway gap. After that gap, YHOO attempted to push prices up again with an up gap. The prices gapped up to a new high, then turned around immediately the same day. Then the next following days, the prices filled the gap, confirming that the previous gap and the direction of the market (now downtrend) are real. The Exhaustion gap was at last identified as such when considering the surrounding price action. The action created an island reversal.
The example below is the exhaustion gap (down) at market bottom. The market has been trending down with determination. Finally, a blow-off came with a big gap down, but there were no more selling. The next few days show the market stabilizing, even some buying. Finally, more buying pushed the market higher, ending the market bottom.
Knowing where the gap is located in the chart can quickly help identify what type of gap it is. These gaps give clues to the strength or weakness of the stock since they are usually turning points in the market direction. Paying extra attention to them can provide unique opportunities to trade with the right trend (or reversals) and profit from them. The next article will discuss the tactics in entering and exiting in trading these gaps.
By Larry Swing
There are three different types of gaps: Breakaway, Runaway and Exhaustion gaps. Each of these gaps appear at a different cycles of the markets.
Breakaway gaps occur when a stock has been in a consolidation stage; instead of a normal market-session move, it breaks out with an opening gap. Normally, these gap in the same direction before to the consolidation stage. There is one caveat: when the breakout happens, it can be in either direction. This gap is trickier than the others because the intent of direction is unclear.
In the chart example above, the market was going through a correction. When it finally finished consolidating (a symmetrical triangle pattern), it broke out with a gap to the upside to end the correction period.
As for Runaway gaps appear when the stock has been trending for some time. Instead of a normal move up during market hours, they open with a gap in continuation of the dominant trend. It shows there is more interest in the stock, possibly by some positive news to further boost the investors' eagerness to own it. Runaway gaps are also called Measuring gaps because they are often used as a centering point of measurement from the beginning of the trend to the gap, then from the other side of the gap to measure the next likely level where it would reach.
The chart below shows the prevailing trend, moving steadily upward. Along comes the opening gap, pushing in the same direction higher, not even a moment's pause or pullback until much later in the trend.
Below is the example of how a Runaway gap is also used as a Measuring tool. When the gap has been identified, the measurement is taken from the beginning of the trend (61.98) up to the bottom of the gap (87.08). From that distance, it is used to measure how far the prices will likely to continue. So the measured target starts at the upper part of the gap (102.64) to the expected level above it. In this example, the target was 130.27. This is a very powerful and easy-to-apply concept which can be used to find profitable trades.
The last type of gaps is the Exhaustion gaps. These occur when the market has been trending for a long period of time, normally after a bull market or bear market that as been lasting for a few years. When it appears, there is a period of slowing of the trend slowing, or period of consolidation. They usually appear near tops or consolidation areas after strong trends. Many times, the Exhaustion and Breakaway gaps are mistaken for one another. Depending on the location and whether or not it was an up gap or a down gap. The Exhaustion gap is an up gap appearing in the market tops, and a down gap in market bottoms. As for the Breakaway gaps, they are up gaps in market bottoms (and from consolidations) and down gaps on market tops (and from consolidations).
Below is example of each to better identify the difference. The market has been forming what look like a top, with the symmetrical triangle consolidation. Triangles are usually trend continuation patterns, but as the chart shows, the gap was break away from the pattern to the downside. This is a breakaway gap. After that gap, YHOO attempted to push prices up again with an up gap. The prices gapped up to a new high, then turned around immediately the same day. Then the next following days, the prices filled the gap, confirming that the previous gap and the direction of the market (now downtrend) are real. The Exhaustion gap was at last identified as such when considering the surrounding price action. The action created an island reversal.
The example below is the exhaustion gap (down) at market bottom. The market has been trending down with determination. Finally, a blow-off came with a big gap down, but there were no more selling. The next few days show the market stabilizing, even some buying. Finally, more buying pushed the market higher, ending the market bottom.
Knowing where the gap is located in the chart can quickly help identify what type of gap it is. These gaps give clues to the strength or weakness of the stock since they are usually turning points in the market direction. Paying extra attention to them can provide unique opportunities to trade with the right trend (or reversals) and profit from them. The next article will discuss the tactics in entering and exiting in trading these gaps.
By Larry Swing
Futures Contracts - Profitable Investment Alternatives?
With the growing popularity of futures trading, more and more people are jumping into this interesting form of investing. People quickly find out that futures contracts are vastly different than agreements to purchase common stocks; with futures contracts, you are not actually buying a particular commodity, you are obtaining the right to purchase the underlying asset during a particular time period.
Pork Bellies?
Another difference between investing in the stock market and investing in futures contracts is the asset itself. Of course stocks are the assets involved in the stock market, while the commodity assets in futures contracts include:
• Currencies – The currency market is one of the best known commodities, trading the likes of the British pound and the American dollar.
• Interest Rate Futures – T-Bonds represent long-term interest rates and Eurodollars are for short-term interest rates.
• Energy Futures – Natural gas, heating oil and crude oil futures are the most widely known in this sector.
• Food Sector – Coffee, orange juice and sugar are well known commodities in this sector.
• Metals – Gold, silver and copper are traditionally strong commodities.
• Agricultural – Wheat, coffee, cotton, soybeans, pork bellies and corn futures are among those that are best known.
With so many futures contracts available, it can be difficult to decide which commodities interest you, especially if you are new to commodities trading. Sometimes it can be helpful when you start trading to begin with more popular commodities.
Below are five of the most popularly traded futures contracts:
1. S&P 500 E-mini – This is extremely popular for those investing in the futures markets. The E-mini can be traded electronically 24 hours a day, five days a week. In addition, the E-mini has most of the same advantages of the regular S&P 500 commodity but the cost of investment is much less.
2. E-mini NASDAQ 100 – The E-mini NASDAQ 100 follows the movement of the NASDAQ 100. Like the S&P 500 E-mini, this futures contract can be electronically traded and the contract and the amount of margin you have to set aside to trade the contract are smaller than a standard contract. Since most individuals don't have large enough accounts to trade regular contracts for the NASDAQ 100, the E-mini works out great.
3. Light Sweet Crude Oil – Probably the most famous commodity traded is oil futures. When you see the price of oil discussed on the evening news or in an investment newsletter, this is exactly what they are discussing.
4. Gold – If oil isn’t the most famous futures contract, then gold surely is. A gold contract tracks the price variations of one ounce of gold. Gold became an important part of the US economy when the United States went to the Gold Standard in the 1970’s. Since then, the price of gold changes dramatically, almost always in the opposite direction of the US dollar. Gold investments are frequently used as hedge funds because of the relationship with the US dollar.
5. E-mini Euro FX - The E-mini Euro FX contract tracks the movement of the exchange rate between the U.S. dollar and the Euro. The "E-mini" means that the contract and the amount of margin you have to set aside to trade these futures contracts are smaller than regular contracts. Most individuals don't have large enough accounts to trade a regular contract for the Euro, so E-minis are excellent investment strategies.
Conclusion
Futures contracts provide interesting and potentially profitable investment alternatives to many investors. Understanding the investment basics of futures contracts and commodities such as these will help you to be a more successful trader when it comes to futures contracts.
By Stephen Bigalow
Pork Bellies?
Another difference between investing in the stock market and investing in futures contracts is the asset itself. Of course stocks are the assets involved in the stock market, while the commodity assets in futures contracts include:
• Currencies – The currency market is one of the best known commodities, trading the likes of the British pound and the American dollar.
• Interest Rate Futures – T-Bonds represent long-term interest rates and Eurodollars are for short-term interest rates.
• Energy Futures – Natural gas, heating oil and crude oil futures are the most widely known in this sector.
• Food Sector – Coffee, orange juice and sugar are well known commodities in this sector.
• Metals – Gold, silver and copper are traditionally strong commodities.
• Agricultural – Wheat, coffee, cotton, soybeans, pork bellies and corn futures are among those that are best known.
With so many futures contracts available, it can be difficult to decide which commodities interest you, especially if you are new to commodities trading. Sometimes it can be helpful when you start trading to begin with more popular commodities.
Below are five of the most popularly traded futures contracts:
1. S&P 500 E-mini – This is extremely popular for those investing in the futures markets. The E-mini can be traded electronically 24 hours a day, five days a week. In addition, the E-mini has most of the same advantages of the regular S&P 500 commodity but the cost of investment is much less.
2. E-mini NASDAQ 100 – The E-mini NASDAQ 100 follows the movement of the NASDAQ 100. Like the S&P 500 E-mini, this futures contract can be electronically traded and the contract and the amount of margin you have to set aside to trade the contract are smaller than a standard contract. Since most individuals don't have large enough accounts to trade regular contracts for the NASDAQ 100, the E-mini works out great.
3. Light Sweet Crude Oil – Probably the most famous commodity traded is oil futures. When you see the price of oil discussed on the evening news or in an investment newsletter, this is exactly what they are discussing.
4. Gold – If oil isn’t the most famous futures contract, then gold surely is. A gold contract tracks the price variations of one ounce of gold. Gold became an important part of the US economy when the United States went to the Gold Standard in the 1970’s. Since then, the price of gold changes dramatically, almost always in the opposite direction of the US dollar. Gold investments are frequently used as hedge funds because of the relationship with the US dollar.
5. E-mini Euro FX - The E-mini Euro FX contract tracks the movement of the exchange rate between the U.S. dollar and the Euro. The "E-mini" means that the contract and the amount of margin you have to set aside to trade these futures contracts are smaller than regular contracts. Most individuals don't have large enough accounts to trade a regular contract for the Euro, so E-minis are excellent investment strategies.
Conclusion
Futures contracts provide interesting and potentially profitable investment alternatives to many investors. Understanding the investment basics of futures contracts and commodities such as these will help you to be a more successful trader when it comes to futures contracts.
By Stephen Bigalow
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