How do I predict commodities prices?
Traders are generally of two breeds with each being at very opposite sides of the trading spectrum. The chartists employ technical analysis to study price and market action by using various charting instruments as a vehicle to price forecasting. Technical analysis considers only the actual price behaviour and assumes all relevant factors have been already…
How can you hedge a US portfolio of shares when the US Dollar is going down?
Hedging is a strategy used as a means of removing or at the very least reducing the uncertainty of exchange rate fluctuations on your portfolio returns. The method you employ to hedge your portfolio will depend on a variety of factors. The first step in choosing a hedging strategy is to quantify your exposure. For…
What is the uptick rule, and how does it affect forex trading?
US regulators revoked the “uptick rule” on the 6th July 2007. Previously the uptick rule, which was implemented in the 1930s following the US stock market crash, was designed to ensure it was more difficult to short sell stock. Under the so called uptick rule, a short sale may only take place if the market…
How do currencies move in relation to each other?
In order to be an effective trader, it is important to understand how different currency pairs move in relation to each other. There are a few reasons why this is significant, but most importantly, it allows traders to understand their exposure. As we have stated time and again, correlations between different currency pairs will inevitably…
What’s the difference between top down and bottom up investing?
There are many different approaches an investor can take when looking at buying shares, and whilst top down and bottom up are completely different in their strategies, their desired result is exactly the same – to pick out the stocks which are guaranteed to deliver the best returns. The top down approach focuses on the…
What does it mean when a share goes ex-dividend?
To explain what it means when a share goes ex-dividend, we should first understand what a dividend is. A dividend is a taxable payment which is given to shareholders by the company they are invested in. Dividends are usually paid as cash (in the form of a cheque or by EFT if requested), however, they…
How do I determine the best stock to trade?
This is a common issue confronting new share traders who have decide to go the online route and do it themselves. As you have mentioned “trading”, I will assume that it is not long term investing that will be the philosophy of your account. First, you need some education about how you will trade once…
Why do some stocks have a bigger gap between Bid and Ask prices?
Recent sharp declines on the Australian share market have highlighted one of the most common misconceptions when it comes to trading shares: that heavy selling alone contributes to the price of a stock going down. It sounds as plausible an explanation as the reverse – that intense buying activity in a stock will push its…
When stock prices fall, where does my money go – can money just disappear?
When you hear that the sharemarket has lost $40 billion dollars in one day, it can be quite terrifying. How can so much money be wiped off the market in one day? Unless your stock has been going up, it’s difficult to make money in a falling market. In fact one of the few ways…
Why do companies care when their share price falls?
From a transparent point of view it can be confusing to wonder why companies care when their share price falls. After all, listed companies have already received money from investors, when they first sell shares through an Initial Public Offering (IPO). What happens in the secondary market, when investors buy and sell to each other…
