Q. “Thank you Timon for introducing us to the new contributor to Trading Tips, Barry Dumas. I see he focuses more on indicators and news events when he analyses the Wallstreet index. Could you please give us your analysis on how Wall Street is looking when it comes to your chart patterns and trends. I'd like to know what your opinion is?”
A. I will break this answer into two parts, Trend ... ››› more
Have you ever heard of the following?
• The Vig
• The Juice or
• The percentage
It’s the cut the bookie takes on each bet you make.
It’s how they stay in business.
But, their cut or margin can affect your end pay-out.
And each bookie has a different cut to attract more bettors.
In today’s article I want to show yo... ››› more
You may have never heard this before.
Or even have heard of the man who said it.
But he happens to be one of the owners of the world's most famous fund management company. And he happens to be one of the richest men in the world despite giving away most of his fortune.
That’s because he’s Buffet’s long-time partner at Berkshire Hathaway… Charlie Munger.
Never heard of him ... ››› more
There are a few things with trading that worry me.
The first is when the internet connection cuts out when I'm trying to get into a trade or when I modify my trading levels.
Second, is when the market environment goes into a sideways range where no matter whether we buy or sell - we lose either way.
And third, is when my subscribers write to me and tell me about the worst possible trading... ››› more
From 1929 to 1939, the deepest and longest-lasting economic downturn in the history demolished the Western world. This was a period of rampant speculation which led to a market crash of epic proportions - known as The Great Depression.
In just three days, the Dow Jones sank from 400 to 145 wiping over $5 billion worth of market cap.
During this volatile period, one of the greatest investment... ››› more
CFDs, or contracts for difference, are a type of trading instrument. You can trade a wide array of underlying assets, including shares and currencies.
So how do contracts for difference work?
Let's take a closer look…
You trade on margin with CFDs
Like with other financial derivatives, you trade on margin with CFDs. This means you put down a small portion of your overall exposure ... ››› more
In Chapter 20 of Benjamin Graham's book, The Intelligent Investor, there's an important investing concept that can be useful to every investor.
Benjamin Graham, encourages investing with a margin of safety.
Now if you don't know what that is, a margin of safety is simply the margin for error investors need, as it's impossible to pinpoint business value.
It's the difference between the rea... ››› more
This week, markets in China have continued to fall. This led the country's stock market regulator to impose a ban on large shareholders selling shares for the next six months.
So what's behind the collapse of Chinese stocks? The markets are down 30% in a month.
Read on to find out…
The stock markets in China have soared over the past year
Over the past year, markets in China have ... ››› more
When you're looking to invest in shares, you'll look for certain factors that indicate the share price will rise in the future, making you money.
Cash is one thing you should pay attention to. Cash helps you to weigh up the quality and the value of a business before you buy shares.
Read on to find out more…
Why you should check out a company’s cash position before investing
One ... ››› more
When you decide to trade a derivative instrument like contracts for difference (CFDs), you need to get to grips with gearing and trading on margin.
It's these aspects that give CFDs their money multiplier effect, which boosts your potential profits (and losses). And it's vital you understand how they work before you start trading.
Read on to uncover what you need to know about gearing and tr... ››› more
Trading contracts for difference (CFDs) has a number of benefits. One of these key benefits is the money multiplier effect at work because you trade on margin.
But it's this aspect of CFD trading that also makes them risky. If a trade doesn't work out, your losses can quickly mount up.
So how can the margin work against you when you trade CFDs?
Read on to find out…
The downside of... ››› more
One of the reasons that traders choose contracts for difference (CFDs) is the gearing aspect they offer.
Gearing amplifies the movement of the underlying share price. This can work for you by multiplying your potential profits, but against you too as it also multiplies your losses.
Gearing comes from trading on margin.
Read on to find out how this work…
The impact of trading CFDs ... ››› more
Contracts for difference (CFD) appeal to traders thanks to the money multiplying effect of gearing.
But this gearing also works against you. If you don't run tight stop losses, you're at risk of hefty losses.
Let's take a closer look at how you can rack up significant losses if a trade doesn't work out as you hoped…
The gearing aspect of CFDs comes from trading on margin
When you ... ››› more
Trading contracts for difference (CFDs) gives you an opportunity to profit from the movements of share prices.
Not only can you make money from shares rising in value, you can also profit when they fall in value.
To do this, you trade on margin. To open a trade, you need to put down an initial margin.
So what exactly is the initial margin? And how does it work in practise?
Read on to f... ››› more
Contracts for difference (CFDs), like other financial derivatives, are geared products.
So what is gearing? And what are the advantages and disadvantages of trading geared products?
Read on to find out…
Gearing explained
CFDs are geared products. This means you only put down a small proportion of the actual value you have exposure to.
You achieve gearing (or leverage) through t... ››› more
By trading contracts for difference (CFDs), you have the potential to make a lot more money than if you invested in shares directly.
It all comes down to trading on margin.
So how does this work?
Read on to find out…
Where gearing and the margin come in when you trade CFDs
The money multiplier effect at work when you trade CFDs is gearing. You gain gearing when trading CFDs by ... ››› more
The father of value investing Benjamin Graham coined the term ‘margin of safety'. Over recent years, the term has become synonymous with Warren Buffett. Graham mentored Buffett as a young investor.
So what does the term margin of safety mean? And how can you apply it to your investment strategy?
Read on to find out…
How can you invest with a margin of safety?
Investing with a ma... ››› more
You may think that single stock futures trading is for the speculative trader, but you can also use them as a tool to protect your existing portfolio.
But trading single stock futures comes with risks. They're geared financial instruments.
So how does gearing with single stock futures work?
How can you use them to exploit moves in the market and protect your portfolio?
And how do you... ››› more
Like other derivatives, you trade on margin with spread trading.
So what exactly is the margin? How does it work? And what effect does it have on your trading?
Read on to find out…
The ins and outs of the margin
The margin is the deposit your spread trading company needs you to put down to open a trade. Depending on what you trade, the margin can be anything from 10% to 25% of you... ››› more
At first, single stock futures can appear rather complicated.
There is one main aspect of single stock futures that you need to get to grips with so you can understand exactly how they work. And, more importantly, so you can get closer to trading them.
This aspect is the margin.
Let's take a closer look at how the margin works…
The margin in action
The best way to see how the ... ››› more
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