Archives for Futures

An interview on complete futures trading systems. Stuart McPhee quizzes legendary trader Ray Barros.

Ray Barros: Mark Douglas, the guy that taught me many things about trading said that irrespective of our personality, some traders may be subjective where they have set of rules but also have got intuition to play with.

There are the fully mechanical who will follow our rules no matter what, and a discretionary who has no rules. That’s fine whatever suits, but the point Mark made was everybody should start with a mechanical system just to learn discipline. In that environment I think indicators play a part.

Stuart McPhee: Okay, that’s a good segue with discipline because that was my next question. I mean I always say its the most important attributes successful traders have personality-wise – the ability to do what they have to do whether I want to or not. I have had a couple of clients come to me in the past and said, ‘Stuart I know everything I have to do.

I have a plan that follows the rules. I just can’t follow the plan. I know disciplines are important but I just can’t do it. I just can’t follow the plan.’ If you had people say that to you do you have any advice to people who have discipline as an issue?

Ray Barros: It depends. You know I run mentor classes. Some students I can assist them and some I can’t because some people have a lack of discipline from sheer habit. We can create new habits. You identify the belief system behind their lack of what payoff there is for not following whatever it is they are not following through. You can substitute positive belief for that negative belief and you slowly create new habits. That’s doable. However, there are some people who really have a problem. The best way of doing that is to tell a story. I had a student and no matter what I did we had this major problem. Mike could not trade leveraged instruments; stock markets he was fantastic, he followed the rules.

This is a true story so this is his real name. Mike if you are out there, forgive me. Mike could trade stocks perfectly. He wanted to trade. Honestly I was at wit’s end. Nothing I did worked because I couldn’t understand why he would follow the discipline trading stocks but shifting into leverage instruments, and particularly futures trading systems, and he became the biggest cowboy in the world.

There was a guy called Dave Hunt who used to run seminar classes for me in Sydney and he did an exercise and Mike got brought into this exercise.

Basically it was a regression exercise where we go back to childhood. In the process of that the story came out. Mike’s grandfather lost the entire family fortune trading gold futures so throughout his life he was brought up with the idea trading futures is a sin. It’s gambling; honest people don’t do it.

That’s what I call a fundamental belief that was running through Mike’s head and he was unconscious of that and so whenever he traded futures he was going to sabotage himself. If you have that sort of problem you need someone who is skilled enough to bring it up and you know I mean a psychiatrist or psychologist or someone very well versed in that area.

Stuart McPhee added: To go deep, deep in the mind.

Ray Barros: Bring out an unconscious fundamental belief paradigm. And he wasn’t aware of that. He wasn’t aware. He broke down and then he actually cried. It was enough for Mike. From then on I think he turned the corner. He was able to start trading with the discipline that he needed for futures trading systems. So it’s amazing. You will see in the blog I continued the therapy and the stuff that comes out is unbelievable I would recommend it to any trader.

Article Source: Articles Engine

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There is more to future charts than just patterns on the wall. They can be a crucial aspect in a company’s success. Through these charts, investors can predict the future outcome and trends on the market.

Make sure you are aware of the terms used to describe the graphs to be able to make full use of them.

The first question many would ask is on what a price chart basically is. It is, in fact a lineage of prices that you plot against time intervals. It can therefore be called a time series plot as well.

When we are talking about futures commodity graphs, the y axis would represent price changes and the x axis would represent the time intervals on which the changes are noted.

Analysts use such charts to track the changes or stability of their stocks, and investors use them to predict the future trends in the market. They prove as vital tools to the traders looking to invest in shares that are on their way up, and that is why many a time you will see traders hiring analysts.

The 4 different kinds of charts in use in the trading industry are:
a. Line Charts,
b. Bar Charts,
c. Candle Stick Charts
d. Point and Figure Charts.

1. Line Charts – The line graphs are generally the simplest to make, and to interpret as well. They are made by connecting price points of the shares over a time periods on the other axis as mentioned earlier. The price points are normally selected from closing prices of the stock. Investors tend to prioritize the closing price, since it gives uniformity to the analysis and does not allow fluctuations to affect their judgment.

2. Bar Charts – They are a series of high and low lines that are used to depict the rise and fall in stock prices. They are the easiest to read, and they are color coded, making them very effective as well.

3. Candlestick Chart – This was first used in Japan by a successful silk trader hundreds of years ago. It can be made on a daily basis, or using intraday prices or even a weekly basis, long term.

4. Point And Figure Chart – This is one that is purely price based, and not time based. Although the x axis is present, it is not given importance as in other graphs.

Every kind of graph you may use has its own pros and cons, and there is a lot of variety to choose from as well. So don’t try to achieve your result from the same kind of graph, move on to others to save time. Make sure you have at least three or four versions of graphs at your disposal.

Article Source: Articles Engine

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You have done your homework, looked into various options, and have decided that you’d like to add an annuity to your retirement investment portfolio. The question remains, should you choose a fixed annuity or a variable annuity? There is greater stability and security with a fixed one, but a variable one has the potential to really pay big if the stock market does well. Here are some of the basic differences between the two plans to help you make an educated decision.

If you are more than 20 years away from retirement age, chances are that you already have an IRA but you may be frustrated at its limitations, the most glaring of which is the IRS’s $3,000 yearly deposit cap. Adding an annuity to your IRA just makes good fiscal sense, especially since after-tax contributions made to the fund are without limits. The annuity may be opened with a one-time lump payment, but younger people will start with a modest amount then add to in the form of premiums.

Should I choose a fixed annuity?

The annuity money will most likely be paid out in a fixed or variable monthly amount back to the annuitant after retirement. It is your money, but it arrives to you in a pre-determined monthly check, much like Social Security or a pension. If you are the type of person who can only have peace of mind if you know exactly how much you’ll be receiving in 20 years, then a fixed annuity may be the option for you. Interest is earned on the principal, but the principal remains safe over time. You will be guaranteed the return of your principal tax-free, and only the interest on your principal will be taxed at the time of payout. You will know exactly how much interest you are earning at all times. A fixed annuity is the best option for conservative investors, who want safety, stability, and guarantees.

Choose I choose a variable annuity?

A variable annuity may be the right choice for you if are more of a risk-taker. There is no guaranteed interest rate or guarantee of returns as there are with a fixed annuity. In fact, unless your annuity has a contract rider that guarantees the safety of your principal against loss (at an additional yearly cost to you), there is a possibility that you may suffer considerable loss of principal.

The upside to a variable annuity, of course, is that there is the potential for substantially higher return on investment.

It is wisest to consult with an insurance agent who specializes in annuities and other retirement products to determine which option might be best for you in the long run. It is too important a decision to make without the advice of a professional who can help you to see the big picture then make an informed choice.

Article Source: Articles Engine

Booklet Prospecting (http://www.bookletprospecting.com) is your source for high quality
annuity leads resources. Art Gib is a freelance writer.

Let’s say you had a pretty good idea that if you bought 10 jars of pickles you’d make a lot of money, because from what you have been reading the demand for pickles was going up in the future. You pay fifty cents a jar, stash the jars in your pantry and sure enough — the price of pickles doubles and you make a $5.00 profit.

But, supposing you are required to have 100 jars minimum to trade. What are you going to do? The answer is to find somebody that has 90 jars and “go in on the trade” with them. Both of you share in the profit when the jars are sold. This is gives you the “leverage” you need to sell pickles in a market you could not have entered otherwise.

But let’s go further. Let’s say that jars of pickles are not physically being bought or sold. Your friend draws up a contract offering 100 jars of pickles at the going rate…and THIS is what is up for sale.

1) Leveraged Contracts
You now have a Futures commodity contract, and you can begin to see the advantages that Futures trading offers. They are highly “leveraged” investments; in order to invest in a contract you only need to buy a small fraction of it’s value, usually only about ten percent of the contract’s total worth. With this, you can trade huge amounts of commodities.

If you predict the movement of the price of the commodities traded correctly, you’ve got the chance of a ten fold profit on an initial investment of ten percent of the actual Futures contract’s value. Leverage will work to a tremendous advantage to the investor in Futures trading.

2) A Paper Investment
Up until now, we’ve assumed you still own 10 jars of pickles. But let’s say you don’t have storage space for 10 pickle jars or your landlady is a “pickle-phobe” who says you can’t have more than two jars on the premises. With Futures contracts you don’t need to physically buy and store them…you instead buy the contract. You now have what’s known as a “Paper Investment”. The Advantage of a Paper Investment is that the investor doesn’t have to store or manage the commodities being traded…it’s all done on paper.

3) Liquidity of Futures Contracts
There are huge numbers of contracts traded on the market on a daily basis, with a large number of buyers and sellers placing orders very quickly, no matter what the commodity is. This is known as “liquidity”. Contracts can be bought and sold with ease, and your contract can be easily sold at any time…the trick being (of course) to sell “high” rather than “low”.

4) Fairer Trading
The Futures trading market is a fairer trading situation as compared with stock stock trading and share trading. It is more difficult to get insider information on Futures which is a problem in price manipulation of stocks.

5) Lower Commissions
Commissions on Futures markets tend to be smaller, and they are usually paid after the position has ended. Depending on the level of service, brokers’ commissions are sometimes as low as five dollars to as high as two hundred dollars per transaction.

6) Quicker Profits
Futures trading may offer the investor a quicker way to make a profit. As a general rule, Futures markets move faster than the cash markets, but this can also pose more risk. There are quick gains, and quick losses. Incorrect predictions of commodities positions can take you down fast…correct ones can take you up…just as fast.

It all depends on your ability to predict…and that to a great extent on good sources futures contracts of knowledge of commodities and how they are expected to perform.

Let’s say you had a pretty good idea that if you bought 10 jars of pickles you’d make a lot of money, because from what you have been reading the demand for pickles was going up in the future. You pay fifty cents a jar, stash the jars in your pantry and sure enough — the price of pickles doubles and you make a $5.00 profit.

But, supposing you are required to have 100 jars minimum to trade. What are you going to do? The answer is to find somebody that has 90 jars and “go in on the trade” with them. Both of you share in the profit when the jars are sold. This is gives you the “leverage” you need to sell pickles in a market you could not have entered otherwise.

But let’s go further. Let’s say that jars of pickles are not physically being bought or sold. Your friend draws up a contract offering 100 jars of pickles at the going rate…and THIS is what is up for sale.

1) Leveraged Contracts
You now have a Futures commodity contract, and you can begin to see the advantages that Futures trading offers. They are highly “leveraged” investments; in order to invest in a contract you only need to buy a small fraction of it’s value, usually only about ten percent of the contract’s total worth. With this, you can trade huge amounts of commodities.

If you predict the movement of the price of the commodities traded correctly, you’ve got the chance of a ten fold profit on an initial investment of ten percent of the actual Futures contract’s value. Leverage will work to a tremendous advantage to the investor in Futures trading.

2) A Paper Investment
Up until now, we’ve assumed you still own 10 jars of pickles. But let’s say you don’t have storage space for 10 pickle jars or your landlady is a “pickle-phobe” who says you can’t have more than two jars on the premises. With Futures contracts you don’t need to physically buy and store them…you instead buy the contract. You now have what’s known as a “Paper Investment”. The Advantage of a Paper Investment is that the investor doesn’t have to store or manage the commodities being traded…it’s all done on paper.

3) Liquidity of Futures Contracts
There are huge numbers of contracts traded on the market on a daily basis, with a large number of buyers and sellers placing orders very quickly, no matter what the commodity is. This is known as “liquidity”. Contracts can be bought and sold with ease, and your contract can be easily sold at any time…the trick being (of course) to sell “high” rather than “low”.

4) Fairer Trading
The Futures trading market is a fairer trading situation as compared with stock stocks and share trading. It is more difficult to get insider information on Futures which is a problem in price manipulation of stocks.

5) Lower Commissions
Commissions on Futures markets tend to be smaller, and they are usually paid after the position has ended. Depending on the level of service, brokers’ commissions are sometimes as low as five dollars to as high as two hundred dollars per transaction.

6) Quicker Profits
Futures trading may offer the investor a quicker way to make a profit. As a general rule, Futures markets move faster than the cash markets, but this can also pose more risk. There are quick gains, and quick losses. Incorrect predictions of commodities positions can take you down fast…correct ones can take you up…just as fast.

It all depends on your ability to predict…and that to a great extent on good sources futures contracts of knowledge of commodities and how they are expected to perform.

Let’s say you had a pretty good idea that if you bought 10 jars of pickles you’d make a lot of money, because from what you have been reading the demand for pickles was going up in the future. You pay fifty cents a jar, stash the jars in your pantry and sure enough — the price of pickles doubles and you make a $5.00 profit.

But, supposing you are required to have 100 jars minimum to trade. What are you going to do? The answer is to find somebody that has 90 jars and “go in on the trade” with them. Both of you share in the profit when the jars are sold. This is gives you the “leverage” you need to sell pickles in a market you could not have entered otherwise.

But let’s go further. Let’s say that jars of pickles are not physically being bought or sold. Your friend draws up a contract offering 100 jars of pickles at the going rate…and THIS is what is up for sale.

1) Leveraged Contracts
You now have a Futures commodity contract, and you can begin to see the advantages that Futures trading offers. They are highly “leveraged” investments; in order to invest in a contract you only need to buy a small fraction of it’s value, usually only about ten percent of the contract’s total worth. With this, you can trade huge amounts of commodities.

If you predict the movement of the price of the commodities traded correctly, you’ve got the chance of a ten fold profit on an initial investment of ten percent of the actual Futures contract’s value. Leverage will work to a tremendous advantage to the investor in Futures trading.

2) A Paper Investment
Up until now, we’ve assumed you still own 10 jars of pickles. But let’s say you don’t have storage space for 10 pickle jars or your landlady is a “pickle-phobe” who says you can’t have more than two jars on the premises. With Futures contracts you don’t need to physically buy and store them…you instead buy the contract. You now have what’s known as a “Paper Investment”. The Advantage of a Paper Investment is that the investor doesn’t have to store or manage the commodities being traded…it’s all done on paper.

3) Liquidity of Futures Contracts
There are huge numbers of contracts traded on the market on a daily basis, with a large number of buyers and sellers placing orders very quickly, no matter what the commodity is. This is known as “liquidity”. Contracts can be bought and sold with ease, and your contract can be easily sold at any time…the trick being (of course) to sell “high” rather than “low”.

4) Fairer Trading
The Futures trading market is a fairer trading situation as compared with stock stock trading and share trading. It is more difficult to get insider information on Futures which is a problem in price manipulation of stocks.

5) Lower Commissions
Commissions on Futures markets tend to be smaller, and they are usually paid after the position has ended. Depending on the level of service, brokers’ commissions are sometimes as low as five dollars to as high as two hundred dollars per transaction.

6) Quicker Profits
Futures trading may offer the investor a quicker way to make a profit. As a general rule, Futures markets move faster than the cash markets, but this can also pose more risk. There are quick gains, and quick losses. Incorrect predictions of commodities positions can take you down fast…correct ones can take you up…just as fast.

It all depends on your ability to predict…and that to a great extent on good sources futures of knowledge of commodities and how they are expected to perform.

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