All you want to know but never asked about the stocks and options markets.

miércoles, 21 de enero de 2015

The Value Investing

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This investment system is widely used by large investors, such as venture capital funds. It is also used by investment banks to value companies in transactions such as mergers, IPO's, etc.

lunes, 19 de enero de 2015

Investment in companies undergoing restructuring

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This form of investment is to invest in companies that are going through bad times due to poor performance of the business, lawsuits, mismanagement, natural disasters, etc. In these situations the balance sheet and income statement present poor results, so the stock price reaches very low levels. On many occasions the company runs a high risk of disappearing.

sábado, 17 de enero de 2015

What are ECN Routes?

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Electronic Communication Network (ECN) - An electronic system for buying and selling of stocks and other exchange-traded products, which seeks to eliminate the role of intermediaries. ECN connects major brokers and individual traders together so they can trade directly, without mechanisms of intermediaries exchange.

Unlike dark pools, ECNs display order in the consolidated quote stream. ECNs are required to register with the SEC in United States as broker-dealers and are also members of FINRA. To place orders directly with an ECN, a trader must be an ECN subscriber. 

jueves, 15 de enero de 2015

Premiun parameters in Options

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The premium, which reflects the value of the option, is quoted in the market and its value depends on various factors enumerated below:

- Price of the underlying asset.

- Exercise price of the option.

- Volatility.

- Interest rate on money market.

- Time remaining until maturity.

- Dividends (only for stock options).

martes, 13 de enero de 2015

Investment in cyclical companies

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Cyclical stocks are not a good option for long-term investment (understood as "buy and hold") because their benefits history is full of great ups and downs. Is relatively normal that a cyclical company makes the same amount of money today than 10 or 20 years ago, as normal as that one year the firm multiply their profits by 4 to lose money two years later. Because of this their dividends generally suffer the same ups and downs than the benefits.

sábado, 10 de enero de 2015

Market sector investment

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In this case the investor invests in a sector as a whole, either through a mutual fund, an ETF or buying a portfolio of shares of all companies, or at least the most representative firms, as appropriate.

To this end, the investor must analyze the sector as a whole, considering the main variables that affect the behavior of this sector if the fundamental analysis is used or analyzing price charts (candlestick or bar charts) when technical analysis is usded. It is always possible and desirable to combine these tools.

viernes, 9 de enero de 2015

Questrade Broker

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Questrade is a regulated broker from Canada that specializes in transactions with shares of the major stock exchanges in the United States and Canada and options based on these stocks. Also, this ECN broker provides access to the Forex market through two platforms designed for this purpose. The investor also has access to actively managed investment portfolios. The following overview shows the main features of this broker.

jueves, 8 de enero de 2015

Investment Strategies

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There are many investment strategies, and I think none of them is ideal for everyone. Each has its advantages and disadvantages, risks and profitability targets. Each investor must choose the strategy or strategies that best suit their needs, desires and philosophy of life, depending on multiple factors. There is no need to choose a single strategy as  we can combine several strategies such as those presented here or elsewhere.

martes, 6 de enero de 2015

What are Blue Chips stocks?

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Blue chip stocks represent the shares of companies that are nationally and internationally recognized and have a strong and stable financial position.

Overall, these firms sell products or services of high quality and wide market acceptance.

The term blue chip, which is used in American casinos to identify the blue chips, which have the highest value, was added to the "market jargon"  by  Oliver Gingold an employee of the Dow Jones financial firm in the 20s.

Investments in shares of blue chips companies are considered less volatile, and often have a high value of market capitalization and high liquidity.

The "blue chips" stocks are an excellent choice for those who wish to diversify their portfolio without taking a high risk.

lunes, 5 de enero de 2015

Technical Analysis vs. Fundamental Analysis

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In financial markets, the key to success is knowing how to predict the future and act accordingly. This means stay long in a position (buy) if you think the market will go up, or close positions or short sell (open a short position) if you think the market will go down. When a trader gets to do this (it is much more difficult than it sounds) will win a lot of money.

To try to know what will be the value of a share or other financial instrument in the future, traders traditionally applied two distinct streams: those who follow technical analysis and those that follow fundamental analysis.

sábado, 3 de enero de 2015

The key to the three M to achieve success in trading

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A loser trader can get trapped in a downward spiral and play behaviors similar to those performed recursively by an active alcoholic.

Success in trading is based on the three MMind, Method, and MoneyThe method is the first thing in which all beginners focus, but the result of your career as a trader in the market depends on the mind and money. Intellectually, the game of trading is not picky; Many successful traders have little formal education. There are only five numbers to take into account - maximum and minimum, opening and closing, as well as volume. On the other hand, emotions that occur during trading make it the hardest game in the world. The main source of stress is the total freedom that involves trading. The trader must decide when to enter and when to exit, when to take profits and when to keep open a position to win more,  when it is appropriate to accept a loss and when to expect a market turn in our favor.

When Alexander Elder wrote Trading for a Living, included in the book an idea that his editor thought it was a scandal. Elder wrote that losses for traders were like drinking for alcoholics. The level of risk that is set before opening a trade is a normal part of the game, but anything above that number is a waste - it's like getting drunk. In the book Elder recommends using the approach of the 12 Steps of Alcoholics Anonymous (AA), which apparently did much good to many people. The editor at the time wanted to do away with this concept on the book, but changed his mind when Elder offered to return the advancement of the book and break the contract. Many readers have written to say that the concept helped a lot.

A loser trader caught in a downward spiral, repeat the same mistakes, skip important parts of the task, and use money management rules, continually trying to trade in any way to get out of the hole. The trader is acting in many ways as an active alcoholic who would like to become sober, but who can not get off the roller coaster.

Some traders flock to professional coaches, but the AA method is more effective than any "professional help". Personally I would recommend to a trader who has lost his way, talk to another trader on a regular basis. Put an external observer on the scene, which can help a stressed loser trader to establish a discipline and start connecting their blind spots. It's what I call a Listener.

A listener is not a coach. He is not there to teach how to trade. He is there to help the losing trader to avoid impulse trades and develop greater discipline and better capacity for planning. The loser trader will send the listener his trading plans, the diary with the trades, and copies of the account statements. The purpose of having a Listener is to make us aware of all the steps that we follow in the markets and stop trading nonsense as this is a sure way to gets us into trouble.

In their presentations Elder explained the steps to establish a relationship with a Listener. He considered that it has to be done for a limited period and include a number of parameters. The relationship has to be clear and transparent, without a hidden agenda.

The truth about "Penny Stocks. We explain OTCMarkets thoroughly.

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At the request of many of our readers, we will explain in depth what are the penny stocks, how to tell if one of these listed companies in the OTCMarkets is reliable or otherwise, is a company of dubious credibility. Also let's break some myths about these stocks and shed some light to this high risk investment.

It is true that every large company started as a small company. Even Google, before being one of the most valuable companies in the world, in their beginnings had a couple of workers.  Every investor dreams of finding a company that is starting, buy their shares at $0.10 and in 10 years to have hundreds or thousands of shares worth $600 per share.