Trading Financial Markets

Stock traders are always hunting for ways to improve the trading. There are hundreds of Stocks Analysis Tools to choose from when analyzing stocks and also the stock market in general. Each week I get emails from around the world advertising new and enhanced technical indicators and trading tools to help you increase your percentage associated with winners, increase the size of this winners and decrease the amount of losing trades and the size of each losing trade.
About a decade ago I was utilizing a professional fund supervisor who had a PhD with statistics and was an authentic computer wiz. We worked together along with different back testing applications that gave us to be able to back test hundreds associated with different indicators and tactics. The tests were strenuous and involved 30 years of stock exchange prices. The results were according to pure math so there was no bias or human intervention associated with manipulating the test final results.
The test results surprised us over you could ever picture. Things we thought worked failed to work and things that failed to work worked better when compared with we imagined. While I cannot divulge everything that most of us discovered, I can provide few bits that will improve the size of your winners and increases your percentage of receiving trades.
One of the most significant and most interesting discoveries was about the relationship of volume as well as price. We wanted to see what type of impact volume had about price. The results proved that volume increase without almost any news or fundamental accounts stimulating the stock as well as the stock sector ended in 78% of the stocks experiencing a substantial price changes within 2 trading days with the volume spike. You may think to yourself that’s not that surprising because when stocks and options have sharp volume boost, prices usually move somehow.
This is not the most exciting part of the test results. The best benefit is out of that number 8 out of 10 stocks remained with the new price level while only 2 stocks returned to the previous cost level after 5 dealing days. This means that after volume drastically increases as well as stocks begin moving with virtually no outside news that could explain the move, they wind up either continuing moving as well as stay at that new price level around 1 week.
When testing sharp volume increase combined with fundamental news directly impacting the stock or this stock sector the stock experienced a dramatic cost change about 85% of times. But only 3 out of 10 stocks remained with the new price level while 7 stocks returned to their previous cost level. This communicated to us that after prices move either upwards or down when income or other information linked to that stock or stock sector is released, the stock has already moved and may reverse direction very quickly to go back to the previous prices.
From this test we learned that entering stocks because news is driving up prices is just not a smart idea because of the time the news comes out the great majority of the stocks by now moved either up or down and will be moving back to the prior price level in under 5 trading days.
The more exciting part of the test was learning that sharp volume increase without almost any news and reports linked to that stock or stock sector was a lot of fun to enter stocks in the direction of the move because the percentages are 20% or less the stock will move against you substantially within the next 5 trading days.
The test which was used in our study required at least 75% increase in volume within the average volume of the past 5 trading days. So in case your stocks average daily volume is around 1 million shares, you should look for volume around 1. 75 million shares. The entry would occur towards the end of the day with a MOC (Market On Close Order) and also the position was held regarding 5 days. The exit would occur towards the end of the trading procedure on day five.
We learned from this test that after Volume is used the appropriate way it can be among the best stock market analysis instruments. When volume is climbing sharply and stocks begin moving one thing you want to see is if there’s any news that is certainly causing the sharp size increase. If there is absolutely no fundamental news causing this sharp rise in size the odds are to your benefit that any significant change in the price tag on the stock is important and real.
If alternatively you notice a pointed increase in volume and there exists a fundamental reason behind it the percentages are very strong the move is temporary or can be already coming to an end and will be most likely reversing within the next trading week.
Next time I will give out some more findings from our stock exchange analysis tools test.

Instruments to Trade in Financial Markets

There are several distinct groups of instruments to trade in financial markets. The prices of these financial instruments depend on many factors. In order to be able to trade profitably on them, it is important to understand how these factors affect the instruments’ prices and be able to make predictions based on their analysis.

Fundamental factors affecting the prices of financial instruments:

€ Financial factors
€ Political factors (impact of news)
€ Environmental factors
€ General economic factors

Currency – is the most volatile financial instrument. Its variability constitutes its main quality, as it provides the opportunity to make high profit in a short period of time. Currency market is the largest market in the world and has the highest liquidity. Foreign exchange market – as it is often called – cannot collapse, as the fall of a currency results in the rise of another. Traders can earn money in all market circumstances, even in times of crisis, as any change in currency can be used to make profit; a falling currency is as profitable as a rising one.

Gold – is considered as a €protection instrument€, which is traded more often by conservative people. Gold trading has gained a reputation for being more stable as a form of investment and is regarded as a safeguard for traders against political, social and economic instability in contrast to other forms of trading. In periods of uncertainty in markets, investors increase dramatically the demand for this instrument, which makes gold prices fluctuate. In such a situation, trading gold through CFD provides the opportunity to profit both by the increase and decrease in the asset’s price.

A stock index is a method of measuring the value of a portfolio of shares. Stock indices reflect the changing trends in the market. Depending on the indicators you select, stock indices provide an overview of changes in specific sectors of the market (for example, if you take into account only shares of the commodity sector for the calculation of the index) or the whole market in general. As trading individual shares might be a complicated task, it is much more convenient to track the indices that reflect the general trend in the market and trade on their differences. Predicting the change in an index is much easier than predicting the course of any other financial instrument. This makes stock indices a very popular trading instrument.

Stocks – are a classic instrument for investment, which has traditionally been very popular among investors wishing to make money and increase their company’s capital. Stock markets around the world hold a huge number of shares of various companies to trade. To make profit on them, you need to constantly be aware of macroeconomic events, keep an eye on corporate news and be able to understand the financial statements of these companies. One of the biggest limitations of stock trading is the high amount required to enter the stock market (about $25,000). Trading of shares through CFD, though, provides the ability to trade stocks with a smaller amount of money and profit both by the rise and fall in their prices

Revolution in Financial Markets by GeWorko Portfolio Trading Method

NetTradeX and IFC Markets have announced the launch of a joint portfolio trading product – a composite trading method. GeWorko allows users to create an unlimited number of personal composite instruments (PCI) on the NetTradeX analytic trading platform.

The launch of the GeWorko Method provides market participants with an opportunity to create an unlimited number of composite portfolios, trade simultaneously against one another, and trade more productively, based on historical price change data reaching back 40 years. The GeWorko method empowers users with an unlimited amount of instruments and analytic tools, as well as creating unique, custom-made portfolios.
GeWorko is an absolutely new and innovative method of market analysis, which allows users to create portfolios from a variety of available financial assets and determine the price of ne portfolio relative to another. As a result, the users of the new product obtain a new financial unit–the personal composite instrument (PCI) GeWorko. This method allows for building both a simple PCI GeWorko (when each portfolio includes only one asset) and quite complex ones with a great number of various assets (stocks, currencies, metals, etc.). An example of a simple PCI GeWorko is the comparison of an index price of a country (American DJI or German DAX) with the price of one barrel of oil or one ounce of gold. The combination of a complex PCI GeWorko entirely depends on the user’s imagination and on the availability of these assets in the list of available financial instruments.
The assets of the portfolio are automatically recalculated in the US dollars (if they are expressed in other currencies), which allows users to correctly compare both portfolios with each other. Chart building takes no more than two minutes with this solution. The user simply chooses the desired number of assets from the list of available instruments, indicates weighs for each asset, and the system builds charts automatically. Currently, there is no trading platform that offers anything that comes close to NetTradeX platform and GeWorko method in terms of the speed and convenience of chart building, as well as the reflection of the relation between any portfolios, chosen by the user.
The composite approach is about flexibility, universality and usability. These three principles are reflected during the creation of composite instruments, the subsequent analysis and trading based on them. The GeWorko methodis a powerful analytic tool with rich visualization capabilities for in-depth analysis of the market, conditioned by freedom to create personal composite instruments. Users are able to analyze the behavior of portfolios, their reactions to various factors in the past, and draw conclusions about their stability. The GeWorko method of portfolio analysis employs the approaches of modern portfolio theory and the principles of risk diversification. It offers important advantages, including the creation of new trading opportunities and the development of unique trading strategies. The existing capacities of technical analysis, together with the fundamental approach, can be used for better understanding the behavior of portfolios, get combinations of assets of higher stability, optimize and perform a periodic re-balancing of the created portfolio, and, finally, build portfolios with certain sensitivity towards economic factors.