How to Become a Successful Stock Trader?

Stock trading is a profitable but risky practice. Stock traders can make profits amounting to millions of dollars from the market and also lose the same in a very short time. Stock trading is not for everyone, it is ideal for those with high risk tolerance, for individuals who can analyze the happenings correctly and make quick decisions.

You can find hundreds of pages on the internet detailing how to become a successful stock trader, offering tips such as diversification/specification, good stock screening/technical and fundamental analysis, position sizing, finding a suitable broker and system, minimizing risks, taking calculated risks, being patient, proper money management and trading discipline, avoiding greed, and so on. Here are some basic factors which make a successful stock trader recognizable from an inexperienced/amateur stock trader.

Success in stock trading depends on learning some market basics, including:

1. No trader can accurately predict the market, because no one can analyze all the forces and factors at one time.
   
2. The major force existing in the market is uncertainty; there is always a chance of some eventuality happening or not happening. There is also a chance of unexpected developments.
   
3. Traders calculate and bet on the greatest possibility of a certain development, with respect to the market/trading knowledge and market information they have.
   
4. You do not have to beat all others to be successful; you just have to beat some of them.
   

Both successful and other stock traders often make the right trading decisions with respect to the greatest possibility. Successful traders then hedge against all other prominent possibilities, but inexperienced traders often forget to do so.

Good stock traders are always careful to monitor the market trends and possibilities, to recalculate the possibilities and to make trading decisions with respect to a new scenario. But inexperienced traders make decisions which they think are right and stick with those, no matter what happens in market. They are very confident regarding the decisions they make until they suffer loss.

Market timing is another major factor contributing to trader success. Good traders make the right decisions at the right time. They enter and exit trades whenever the market possibility changes to/against their favor. But inexperienced traders make early or delayed decisions; and many of them want to follow the flow rather than make a flow.

How Do Mutual Funds Work

How Funds are sold

Mutual Funds primarily depend upon individual agents and distribution companies to market their schemes to the investors. Nowadays, they also market their schemes directly.

The individual agents who sell schemes of various Mutual Funds also act as financial advisors to many investors. Hence they are required to clear various examinations before acting as an agent. Many Mutual Funds prefer to deal with distribution agency than individual agents as it is easier to manage. These distribution agencies, with their highly qualified executives, will be able to offer better financial advice than individual agents to the investors.

Nowadays, the sales officers and other employees of the investment companies directly approach the investors (particularly the high net worth individuals and corporate clients) to sell different schemes. However, most of the sales of Mutual Funds happen through other distribution route than from marketing directly.

Investment Policies
Every Mutual Fund has a specified investment policy which will be described in the Mutual Fund's prospectus. A family of Mutual Funds will be managed by an Asset Management Company. This Asset Management Company will collect funds from investors and charge a management fee for operating them. They enable investors to invest across different market sectors and switch assets across funds while still benefiting from centralized record keeping.

The investment policies of different types of funds are as follows:

• Equity Funds. They invest in stock. However, they will hold 4% to 5% of their assets in money market securities to offer liquidity. Income funds will hold shares of firms giving high dividend yield and Growth funds will hold shares of firms that enable faster capital appreciation. Sector funds focus on a particular industry.

• Debt Funds. These funds invest in fixed-income securities. Different funds will concentrate on Treasury bills, corporate bonds, Mortgage-backed securities and other kinds of bonds. Some of the funds also specialize on maturity.

• Index Funds. Index funds buy shares that are included in a particular index in proportion to each share's representation in that index. Investing in index funds is a passive strategy because the investors need not do any security analysis.

• Money Market Funds. These funds invest in short-term low-risk instruments of the money market. Since the liquidity is high, some of the funds even offer cheque writing facilities to their investors.

Why Should I Invest in Mutual Funds Instead of Stocks?

Investing in the stock market can be both very lucrative and risky. If you know what you're doing, or you are very lucky, you can make a lot of money. The historical average return is about 13% which is higher than a lot of other available investments such as bonds. Then there are mutual funds. A mutual fund is basically a collection of stocks and/or bonds. If a mutual fund is made up of stocks, why not just buy stocks?

First of all, not all mutual funds are made up entirely of stocks. Some funds include bonds, real estate, currency, commodities, and other investments. That alone is one great reason to invest in mutual funds instead of stocks; you get instant diversification. If you want to invest $1,000, there are only so many different companies' stock you can buy. With mutual funds, your money is pooled with other people's money so that you are able to get a small bit of hundreds of investments that will greatly reduce the risk of your investments.

That brings us to our next point, affordability. The average person probably can't afford the $20,000 up front investment needed to have a well diversified portfolio. With a mutual fund, you don't have to worry about diversification because it's already done by the fund manager for you. Also, investing in stocks can have a lot of costly fees. If you opt for no-load mutual funds, you don't have to pay any fees. You don't have to worry about trading fees that can be very steep when buying and selling stocks.

Finally, mutual funds are easy investments. If you want to invest in stocks you have to research stocks by reading financial statements, reviewing history, and understanding what you are doing. This takes a lot of time and effort that you can only get past if you pay a financial advisor or stock broker a pretty penny to do this for you. With mutual funds, you can invest in a no-load fund that has no fees and get professional stock picks. Now understand that nobody can successful predict the stock market 100% every time, but a financial professional can at least make possibly better picks than you.

If you've finally realized that you need to be investing your money, and you don't know how to invest or what to invest in, start with mutual funds. Watch your money grow, and if you ever feel confident enough you can buy your own stock picks. Until then, don't waste precious time, start investing right away!

Trading Futures

Today, trading futures is one of the best and most profitable financial investment methods. Of course, trading on the stock market is not for the faint hearted. You need to be strong, have the ability to take risks, as well as have the emotional strength to overcome a significant loss. A highly leveraged market, the trading futures market doesn't discriminate and offers everyone an even playing ground to try their luck. From Warren Buffet to Donald Trump to others, trading futures is a profitable and interesting way to make money and climb the ladders of success. Of course, you should never take futures trading lightly and continue to educate yourself in the latest techniques even if you have been trading for some years. Remember, a sound trading strategy and knowledge about the market you are trading in are your biggest defense against any potential damage.

Whether you are already trading in the stock market or have some experience, trading futures is a completely different ball game. It is advisable to have access to some professional and expert advice. However, if you are looking for a broker, you should check the experience, reputation, fees, testimonials, and customer support of the broking firm before choosing them. An experienced broker can be a highly valuable help in making money from trading futures. Not only does a broker know the latest market trends, he also knows some of the tricks and effective trading methods that can prove to be beneficial for both of you. While their charges may be slightly high, the fact that they can bring you heavy profits while adding worth to your portfolio of futures can not be neglected.

Brokers also help if you are new to trading futures. Since there are so many choices, he/she can help you choose the more popular and most traded commodities as well as educate you on the contracts that are best for your investment types and requirement. After all the formula for success in trading futures is simple and can be written as success = knowledge. With so many types of online trading systems, you'll have just too much information to sort and utilize. However, a broker can do this for you with relative ease, leaving you with time and ability to simply take advantage of the various trading future trends. Some of the factors for future trading include the capital requirements; the leverage; liquidity; and volatility.

Today, trading futures online is a quick and easy way to high profits and more comfort. Whether you are at work or at home, access your futures trading system online and making sales and purchase can be a very easy and responsive affair. So also, the commission charges for online futures trading firms are lower than brick and mortar firms. While this doesn't guarantee profitability, it surely eliminates the need for visiting your broker on a daily basis for carrying out trading. Seeking help of professional broker is very important for ensuring you can minimize your losses and avoid possible pitfalls.

Forex Trading Is Driven By Five Top Economic Indicators

Many factors affect Forex trading. It is critical to know and understand the various factors that cause the Forex to fluctuate from day to day. The foreign exchange market will change depending on the economic factors that play a role in the movement of currency.

Economic factors and indicators are released by the government or by private organizations that can look in depth at economic performances. These indicators can be used to analyse economic performances from any country. The economic reports measure a country's economic health, in addition to government policies and current events.

For the most part, a reputable broker can look at economic indicators and know which trades will be best. Reports on these indicators are released at scheduled times and can tell if a certain country is experiencing improvement in the economy or if the country's economy is on the decline. When the prices fluctuate, a great deal one way or the other, the price can be affected.

Current events and the state of the economy in any given nation is one of the top economic indicators used when analyzing the Forex. Factors such as unemployment numbers, housing statistics and the current state of a country's government can all affect changes in the Forex. When a country is feeling optimisitic about the current state of affairs in their country, prices of the Forex will reflect this. When a nation experiences political unrest, large amounts of unemployed workers and inflation, the rate of the currency will be reflected. Sometimes, this indicator tends to be overlooked, but can serve as an important gauge in the fluctuations of the Forex.

The gross domestic product,or GDP,is another economic indicator used when looking at the foreign exchange market. The GDP is considered the widest and broadest measure of the economy in a country. The gross domestic product represents the total market value of all goods and services that are normally produced within any given country. This is usually measured in the time frame of a year, and not in weeks or months. Using a larger time period gives good statistics on the products and services that are produced in the country. This indicator is not used alone when forecasting the Forex. The GDP is considered a lagging indicator, meaning that is a measurable factor that changes after the economy has already began to follow a certain trend.

Retail sales reports are the third economic factor that is often used in analyzing the Forex. This is the total receipt of all retail stores in any country. Usually, this measurement is not every single retail sale, but is a sample of diverse retail stores throughout the country. This is considered a very reliable and important economic indicator because of the consumer spending patterns that are expected throughout the year. This factor is usually more important that lagging indicators and gives a clearer picture of the state of the economy in any country.

Another reliable economic indicator in the foreign exchange market is the industrial production report. This report shows the fluctuation in productions in industries such as factories, and utilities. The report looks at actual production in relation to what the production capacity potential is over a period of time. When a country is producing at a maximum capacity it positively affects the Forex and is considered ideal conditions for traders.

The consumer price index, or the CPI, is the last critical economic indicator in analyzing the Forex. The CPI is the measure of the change in the prices of consumer goods in 200 categories. This report can tell whether or not a country is making or losing money on their products and services. The exports that a country has are very important when looking at this indicator because the amount of exports can reflect a currency's weakness or its strength.

The Forex is affected by many factors. These factors usually follow a certain trend so it is important to understand how each factor works in forecasting the Forex. Some are good indicators alone while others should be used together for accurate Forex predications.

Forecasting Forex Trading

What is Forex or Foreign Exchange: It is the largest financial market in the world, with a volume of more than $1.5 trillion daily, dealing in currencies. Unlike other financial markets, the Forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another.

What about Forecasting: Predicting current and future market trends using existing data and facts. Analysts rely on technical and fundamental statistics to predict the directions of the economy, stock market and individual securities.

For those who trade using the Forex, or foreign currency exchange, knowing how to forecast the Forex can make the difference between trading successfully and losing money. When you begin learning about Forex trading, it is vital that you understand how to forecast the Forex trading market.

There are a few methods that are used when forecasting the Forex. Each system is used to understand how the Forex works and how the fluctuations in the market can affect traders and currency rates. The two methods that are most often used are called technical analysis and fundamental analysis. Both methods differ in their own ways, but each one can help the Forex trader understand how the rates are affecting the currency trade. Most of the time, experienced traders and brokers know each method and use a mixture of the two to trade on the Forex.

One method used in forecasting foreign currency exchange is called technical analysis. This method uses predictions by looking at trends in charts and graphs from past Forex market happenings. This system is based on solid events that have actually taken place in the Forex in the past. Many experience Forex traders and brokers rely on this system because it follows actual trends and can be quite reliable.

When looking at the technical analysis in the Forex, there are three basic principles that are used to make projections. These principles are based on the market action in relation to current events, trends in price movements and past Forex history. When the market action is looked at, everything from supply and demand, current politics and the current state of the market are taken into consideration. It is usually agreed that the actual price of the Forex is a direct reflection of current events.

The trends in price movement are another factor when using technical analysis. This means that there are patterns in the market behavior that have been known to be a contributing factor in the Forex. These patterns are usually repeating over time and can often be a consistent factor when forecasting the Forex market. Another factor that is taken into consideration when forecasting the Forex is history. There are definite patterns in the market and these are usually reliable factors. There are several charts that are taken into consideration when forecasting the Forex market using technical analysis. The five categories that are look at include indicators, number theory, waves, gaps and trends.

Most of these can be quite complicated for those who are inexperienced using the Forex. Most professional Forex brokers understand these charts and have the ability to offer their clients well-informed advice about Forex trading.

Another way that experienced brokers and traders in the Forex use to forecast the trends is called fundamental analysis. This method is used to forecast the future of price movements based on events that have not taken place yet. This can range from political changes, environmental factors and even natural disasters. Important factors and statistics are used to predict how it will affect supply and demand and the rates of the Forex. Most of the time, this method is not a reliable factor on its own, but is used in conjunction with technical analysis to form opinion about the changes in the Forex market.

For those interesting in being involved with Forex trading, a basic understanding of how the system works is essential. Understanding both forecasting systems and how they can predict the market trends will help Forex traders be successful with their trading. Most experienced traders and brokers involved with the Forex use a system of both technical and fundamental information when making decisions about the Forex market. When used together, they can provide the trader with invaluable information about where the currency trends are headed.

Always leave the forecasting to the pros unless you are playing the Forex as a hobby and don't have a lot of money invested...Or like most people you will learn the hard way.

Should I use a Easy Forex ?

The Forex market is not, most people would agree, the place to cut your teeth as a trader. Novices can very quickly get their fingers badly burnt. But inexperience is not the only easy reason to consider using a Forex broker to trade in the high risk international currencies market.

Equally as important is having the right temperament for a high pressure market where swings are commonly pendulum-like and fast moving. Not only are Forex traders required to readjust mentally to juggling twin-faceted currency transactions, they also need to keep a calm easy head. Fear and greed are, without a doubt, the enemies of the successful Forex trader.

Before entering the Forex market for the first time, whether or not you have experience in trading stocks and shares, you should carefully consider whether the Forex is for you. Not all investors are suited to Forex trading, and finding out too late can result in heavy losses. If you have doubts about your investment objectives, experience and risk exposure, then you should seek the advice of a Easy Forex broker or risk having your initial investment rapidly wiped out.

How to Find Top Forex Trading Software | Currency Trading

One of the great things about trading today is that there is software that works for just about every imaginable type of investment strategy. When it comes to Forex trading, there are plenty of different types of Forex trading software to choose from. Here are some tips to help you pick the software that will work best for your situation.

When looking for quality Forex trading software, a good place to begin is by talking with your broker or dealer. Chances are the firm has some specific recommendations about software packages that would be of interest to you. Because some types of trading software are more ideally suited to specific investments, the dealer may have some ideas that will not only help you manage your Forex assets, but also provide some assistance with other types of investments as well. After getting a few recommendations from your dealer, check each one out and see what you think.Another possibility is to get some ideas for Forex software from some of your fellow investors. Often, you can visit online message boards, post your query, and receive several excellent recommendations. One of the advantages of this approach is that you will often also get some ideas on software packages to avoid, which can also be very helpful. Of course, you can always to your own online search for Forex trading software packages.

If you decide to go this route, look for products that offer a free downloadable version that you can test drive. Several producers offer free editions with limited features that will work for a period of seven to ten calendar days before becoming inoperable. This will give you the chance to test drive the product before you make a purchase. When choosing a type of Forex trading software, make sure you know what features will be of most interest to you.

It is sometimes helpful to compile a short list of features you must have, along with a listing of features that you would like to have included as well. Using these two lists as your guide, you can search for the right Forex trading software options through these several avenues, and find exactly what you want.Most of all, you really need to make sure that the software solution will work for you. If you go to Google or a good review site, you will find many different reviews about the software in question, what its benefits are, and who will benefit most from it (a good site is at the bottom of this article). If you have any doubts, make sure to do some research!