Title: How You Profit And Double Your Penny Stock with

Word Count:
632

Summary:
An explanation of the Doubling Stocks stock trading robot. Anyone can generate profits in penny stocks when he or she becomes a subscriber of Doubling Stocks.

Keywords:
doubling stock, stock, investment, trading, penny stock, Michael Cohen, Marl, trading robot

Article Body:
Penny Stocks are stocks less than $5. They are generally greatly volatile, with potential huge gains or huge losses. However, it is likely for anyone to generate profits in penny stocks when he or she becomes a subscriber of Doubling Stocks.

What is Doubling Stocks? It is a newsletter created by penny stock guru, Michael Cohen. The Doubling Stocks system can be structured into 3 parts:

Step 1: On Sunday dusk, check your email to read the Doubling Stocks. The newsletter will grant subscriber 1 profitable penny stock pick weekly.

Step 2: Wake up Monday morning and select the trade online or with your broker through the phone.

Step 3: Go about your everyday work and check back repeatedly to see how the stock is performing. In most cases, you will have effortlessly earned double or even triple your cash back!

This is made possible since the weekly penny stock picks are recommended by The Universe ‘ s First Trading Robot named ” Marl “. Marl was developed by Michael and renowed fund manager, Carl Jenkins.

Marl works by analysing each stock ‘ s former price movements to predict the stocks potential direction ( technical analysis ). The typical professional stock trader can identify solo stock chart around every 8 – 10 seconds when looking for an opportunity. That is too slow for Marl. Marl can easily watch hundreds of stocks at the same time, allowing it to be greatly selective, waiting until all the correct criteria line up before making a trade recommendation.

Ever since the Doubling Stocks newsletter was started this year, Marl has predicted stocks that made an average of 105. 28 % growth mainly within several hours of the market opening! Below are some examples:

1. CLEAN POWER TECHNOLG ( CPWE. OB ) $0. 71 ( February 2007 ) $1. 88 ( February 2007 ) + 164 %

2. Optionable Inc. ( OPBL. OB ) $8. 89 ( February 2007 ) $5. 02 ( March 2007 ) – 43 %

3. Regal One Corp. ( RONE. OB ) $0. 07 ( March 2007 ) $0. 19 ( March 2007 ) + 171 %

4. Transbotics Corp. ( TNSB. OB ) $0. 47 ( March 2007 ) $0. 68 ( April 2007 ) + 44 %

5. PAETEC Holding Corp. ( PAET ) $9. 80 ( March 2007 ) $19. 25 ( March 2007 ) + 96 %

6. BioStem Inc. ( BTEM. OB ) $0. 46 ( March 2007 ) $2. 34 ( March 2007 ) + 408 %

7. Bravo! Foods International Corp. ( BRVO. OB ) $0. 15 ( April 2007 ) $0. 28 ( April 2007 ) + 86 %

So ready to test out Marl’s stock pick? Access Doubling Stocks here.

A more recent pick by Marl is Andros Isle Development ( AVPJ. PK ), a real estate development firm principally operating in the Caribbean Basin. Michael sent an email on the 3rd of September asking his Doubling Stocks subscribers to invest when it was trading at $0. 13. On the 4th of September, the stock rocketed to a high of $1. 01 at one point.

From a personal point of view, I have joined Doubling Stocks for 3 months. I have traded 12 recommended stocks. 10 were winning trades with only 2 losses. I always make it a point to do some research after receiving Michael ‘ s penny stock pick on Sunday. I must say that the stock picks are always spot on.

It cost just one time fee of $47 to subscribe to the Doubling Stocks Newsletter. Most of the subscribers like me make much much more than the $47 with our first penny stock pick from Marl. In fact, new members have a risk free 8 weeks period to try the Doubling Stocks Newsletter. Michael promises to give you a full refund if you do not make any profit.

In addition, Doubling Stocks subscribers will get an ebook called ” The Penny Stock Bible ” that shows you how to identify profitable trends in penny stocks. If you are a complete beginner, the ebook also shows you how to open an account with the recommended online brokerage firms.

I recommend Doubling Stocks. If you are willing to even take a little bit of risk, you will be quite satisfied with the amount of money your own money can make you through Penny Stock. It is so easy to do because Michael Cohen does all the legwork for you and you just have to sit back and watch your investment grow.

Title: How to make money in the stock market

Word Count:
1184

Summary:
The very basic option trading strategy

Keywords:
options, stocks, shares, call, put, earning, strategies, investment, low risk,naked options spread, bullish, bearish

Article Body:
There are abundant of money in the stock market. However, not everybody can get the money out from there. Some people can gain a lot from the stock market but some has lost a lot of money there. It is very indecisive. Sometime at that moment, you loss money but after a few days, you may earn a profit and sometime is reverse. So, how should we do to get the money out from the stock market? Usually, there are two ways to get the money out from the stock market; that are investing and trading. The difference between trading and investing is trading involves buying and selling share, future or option within a short period of time; whereas investing is buying share, future or option and hold it for quite a long time, usually one year or more before selling it.

What is the difference between share, future and option? What we know is that option is much cheaper than the share and future, usually is tenfold lesser than the share price. So, if you have an amount of money that enough for you to buy 100 units share, you can use that amount of money to buy 1000 units option. And the return of investment is almost the same between share and option. Therefore, you will earn around tenfold if you buy option rather than share or future. However, the disadvantage is that if you lose on that trade, you will lose almost tenfold also. When we trade option, the amount of money that we can profit and lose is almost same as if we trade share. However, we need a lot of money to buy share compared to buy option. This causes the percentage of the profit and loss for buying option is much higher than share. The example is like when you buy $10 for one unit of share and $1 for one unit of option. When the share price drops for $0.10, the percent drop for buying share is 1% but for buying option, the percent loss is 10%. That’s why the percentage of the profit and loss for buying option is huge compared to buying share even though the share price fluctuates in a small amount.

Due to the high profit and loss when buying option, trading or investing option is just like gambling. It is quite normal that the return of investment is more than 100%. But it is also quite normal that you could lose all your money in the investment or trading. In order that you can earn more than lose, you need to know some basic option trading strategy and technical analysis. Option is different from the share. Option has time value; whereas, share does not have time value. The value of one share will not depreciate due to the passage of the time. It is only affected by the supply and demand and also the company performance. However, option value will depreciate when the time has passed. When the time reaches to the option expiration date, there is no more time value for that option. That’s why, you need to use strategy to trade option, in order that you can minimize the loss and maximize the profit.

The very basic two option trading strategies are bullish call spread and bearish put spread. Bullish call spread is used when the stock price is anticipated to rise in the coming months; while, bearish put spread is used when the stock price is anticipated to drop in the coming months. Steps that are involved in this strategy are buying in the money option and selling out of the money option. In the money option is the option that has time value and intrinsic value; whereas, out of the money option only has time value. When the stock price moves to the positive side (generated money side), in the money option will generate profit and the out of the money option will cause loss. However, the minus of the profit and the loss is the net profit that has generated from this strategy. When the stock price moves over the out of the money strike price, the profit will become maximized. Continuously moving of the stock price to the positive side will not generate any profit. In this situation, we will close both positions to take the profit out from the market.

If the stock price moves to negative side (opposite side that cause loss), in the money option’s value will depreciate and the out of the money option will generate profit. However, the profit, which is generated from the out of the money, is limited to the price that you have sold. The subtraction between out of the money’s profit and in the money’s loss is a negative value. This is because the profit that is generated from the out of the money option is less than the loss that is caused by in the money option. Out of the money option’s profit is limited in this strategy and in the money option’s loss is unlimited. If the stock price continuously moves to the negative side, you may lose all of your capital. So, what is the difference from buying naked option and buying option using spread strategy? The difference is that you may lose more money if you buy naked option and lose less money if you buy spread. This is because you do not generate any profit when you just buy naked option; whereas, profit is generated from the out of the money option if the stock price moves to the negative side. The disadvantage of the spread is that the commission, which is charged by the broker firm, is double compared to the naked option. This is because, naked option only involves one position; whereas, spread involves two positions. Each position will be charged with commission separately.

Besides, the purpose of selling out of the money option in the spread strategy is to minimize the loss of the time value of the in the money option. Actually, both in and out the money option’s time value would depreciate when the time has passed. Because we do not own the out of the money option; therefore, we can keep the money that we have received from selling that option. When the time value of this out of the money option has depreciated, we used lower price to buy back the option. So, we sell at high price and buy back at low price; therefore, we earn money. The money that we have earned usually is enough to cover the loss of the time value from the in the money option. However, you still lose the intrinsic value of option if the stock price moves to the negative direction.

So, bullish call and bearish put spreads are two of the very basic option trading strategies. However, it is not guaranteed 100 % win from the stock market. You still need to learn to predict the stock price direction accurately using technical, fundamental and news analysis.

Alexander Chong

Author of “Workable Option Trading Strategies”

http://www.makemoneystocks.com/

Title: How To Get Rid Of Spam Stock Market Tips

Word Count:
558

Summary:
Junk email, spam, is getting worse than ever. Even with an anti-spam filter, some junk emails that show up in the inbox are disgusting, deceptive, and aimed to con you out of your money. In addition to traditional spam emails promoting medication, mortgage, pornography, new ones such as stock scams are growing. The deceptive and unsolicited nature of these e-mails qualifies them as spam.

Stock scams, combined with traditional spam techniques, can cause a significant financ…

Keywords:
antispam, spam filter, email marketing, stock market spam, image spam

Article Body:
Junk email, spam, is getting worse than ever. Even with an anti-spam filter, some junk emails that show up in the inbox are disgusting, deceptive, and aimed to con you out of your money. In addition to traditional spam emails promoting medication, mortgage, pornography, new ones such as stock scams are growing. The deceptive and unsolicited nature of these e-mails qualifies them as spam.

Stock scams, combined with traditional spam techniques, can cause a significant financial loss to victims of these swindles.

You might have noticed that many spams are touting a particular stock. These touts are sometimes made as part of a Pump and Dump scheme. Pump-and-dump scams are email campaigns which encourage people to invest in a particular company’s stock, in order to quickly inflate its value and enable the spammers to make a fast profit. It is thought that these scams take place unbeknown to the company involved. The purpose of the pump-and-dump stock spam is to quickly and cheaply disperse false information about a company’s stock, along with information obtained from recent press releases, to potential investors. Usually this is a slimly traded stock on a small exchange for only pennies a share.

By implying that recipients of spam emails are in possession of privileged information – such as news of an acquisition before a general announcement – spammers seek to persuade the gullible into purchasing particular stocks. If a significant enough number of easily-led individuals invest in the touted stock, a spammer can ramp up the share price so that existing shareholders can sell their shares at a profit. But when the fraudsters dump their shares, and then stop advertising the stock, the price often falls, and investors ultimately lose their cash.

What to do if you get spammed? How not to become a victim of stock scams?

The first thing you can to protect yourself against stock scams on the Internet and against spam on the whole is to setup an anti-spam filter, which will filter your messages before you receive them into your inbox. Most pump-and-dump spam emails contain the words like “stock”, “invest”, “investor reports”. But to bypass spam filters, spammers can use the variations of the word “stock” such as “st0ck” or “stox”. So, if your inbox is flooded with penny stock tip, ignore it. Delete it. Do not believe anyone who tells you, “Invest quickly or you will miss out on a once-in-a lifetime opportunity.” Just don’t go thinking this is your big chance to hit pay-dirt. It is sounds too good to be true. The only ones profiting from these “spam e-mail tips” are the senders themselves – in this case spammers.

The history of the stock market has shown that the best and most trusted way to build wealth is to invest in high-quality businesses with excellent growth opportunites.

Investigate before you invest. Find out who sent the message to you. Ask whether the claims can be documented. Verify whether the claims are true before you send a nickel of your money.

But if you yielded to temptation and became a victim pf a stock scam, you can hire a lawyer to try to get your money back, but you need to know that recovery is rare. Just remember that the best protection is to take no action and stay away from bad deals in the first place.

Title: How To Evaluate a Good Stock Market Timing System

Word Count:
457

Summary:
How to evaluate a good stock market timing system to enhance your investment returns.

Keywords:
stock market timing, timing the market, market timing, investment

Article Body:
Copyright 2006 Equitrend, Inc.

No matter what investment discipline you use, there are three important variables for measuring your success – peak-to-valley drawdown, beta, reward/risk ratio. The first and most important factor is your measure of risk. Performance volatility is a measure of the variability of an investment’s rate of return.

Specifically, it is the standard deviation of the sample set of monthly returns that have been observed for the investment over the interval being considered. A simple way to measure a good stock market timing system is to calculate the largest peak-to-valley drawdown that has or would have occurred in the last five years. This drawdown is your measure of risk.

Second, is your beta to the overall market. Beta is an important variable that measures portfolio or timing system volatility as compared to an index. Most Betas are calculated based on the S&P 500 index. A beta of one tells you that the system has the same volatility (i.e. risk) as the S&P 500 index. A beta of two tells you that the system has twice the volatility as the S&P 500 index.

By actively managing your money, your stock market timing system should allow you to reduce the beta of your portfolio as compared to the index you are trading and substantially improve your returns over time.

Third, is your reward/risk ratio, which calculates your reward as compared to your risk. In order to calculate this, you need to know your average rate of return. A rule of thumb is that your return should be at least twice as large as your risk. For example, if your largest peak-to-valley drawdown percentage over the last five years is 15%, your average rate of return should be at least 30%. In other words, your reward/risk ratio (30%/15% = 2) should be 2 or greater.

The best stock market timing system for you will depend a lot on your personality, specifically your tolerance for risk. You might think a trend timing system that averages 80% is a great system, but what if I told you that system had a risk potential of 35%?

Most people cannot tolerate a system that decreases their investment capital more than 20%. Your tolerance and ability to accept risk should help you identify a stock market timing system that’s right for you.

There are only a few systems available that really work. Most come and go like mayflies on a warm summer’s day. When evaluating a timing system, it’s important to consider all of the above factors plus whether or not the system has survived and prospered over at least a five year period. If they’ve made it through the last five to six years, you’ve likely found a good stock market timing system.

Title: How Risky is Stocks And Other Relative Investments?

Word Count:
379

Summary:
Just as the saying goes, we live in a risky world. Almost everything we do involves some degree of risk. Generally, to invest is to risk… since one is not certain about the outcome of the investment.

Keywords:
Stock Investing, Stock Investment, Stocks, Stock Market, Stock Trading, Penny Stocks, Buy Stocks, How To Pick Stocks, Bear Share,Share, Investment Risk, Risk Free, Business Risk,Investing Risk.

Article Body:
Just as the saying goes, we live in a risky world. Almost everything we do involves some degree of risk. Generally, to invest is to risk… since one is not certain about the outcome of the investment.

According to Wikipedia, investment or investing is a term with several closely-related meanings in business management, finance and economics, related to saving or deferring consumption. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it.

Today, many don’t like to hear the word investment merely because it involves risks. Apparently, to invest is to risk; but we should not because of the risk avoid investing.

It will be much better for one to learn how to manage risks associated with investment rather than avoiding investing totally. A good investor should learn how to manage the various risks associated with every investment. It will not be wise for one to avoid investing merely because of the risks associated with investment.

A potential investor should also know that the risks associated with every investment varies. For instance the risk associated with Stock Investment or Stock Trading is not the same with that associated with forex trading. Likewise, the risk associated with real estate investment also defers from the risk associated with transport business. Every business we do, no matter how small has its own risk.

What is the major fear an investor faces? The major fright investors face is the fear of losing money. Each time you give investment a second thought, the next thing that may come to your mind is that you may be losing your money.

Also, if the assets you invest in are held in another currency there is a risk that currency movements alone may affect the value. This is called currency risk. To venture is to risk and it is very difficult for one to do without risk in life, since every thing in life is all about risk… even life its self is quite very risky as well.

Finally, to invest is to risk, look for a good financial adviser before embarking on any investment, or read more on how to avoid some mistakes in the investments through the author’s links below:-

Title: How I Selected The Best Notebook Computer For Intensive Number Crunching And Stock Market Analysis

Word Count:
466

Summary:
In buying my own personal notebook computer, I was faced with a myraid of questions. Just what make and model will meet my number crunching and stock market analysis needs? What are the considerations from portability, accessibility and upgrading of the notebook computer?

Keywords:
buying a notebook computer, tips on selecting a notebook computer, sub notebook, number crunching, notebook for stock market analysis

Article Body:
Having used a desktop computers and notebook computers that had been officially supplied by the company where I was employed, there was no need to worry about what type of notebook computer or whatever configuration that was required in my work.

So when I finally had to purchase my own notebook computer for personal private use, I found myself facing a myraid of questions. Just what should I look out for when buying my own notebook computer?

First, I found I had to quantify my own needs for a notebook computer. Having quantified my needs, which was to do a lot of number crunching and to perform technical analysis and charting of stock prices online, I found that even low priced models could perform work that was demanded by my needs.

I was pleasantly surprised that my needs did not demand a high priced model.

Secondly, the notebook computer I required would need to be sufficiently light. In the process of identifying the notebook computer, I decided I did not need a subnotebook, as most notebook computers weigh between 5 to 7 kg, with a subnotebook weighing at 5 kg or less.

The standard notebook computer was sufficient for my needs coming with some wordprocessing software that was already installed as part of the package that comes with the computer and with Internet access capabilities. All I need was to install my specialized technical analysis program to monitor the stock prices.

At the same time, advances in notebook computer technology ensured that I had wireless technology and can hook up online at any hotspot outlet. This would allow me to have mobile wireless access anywhere I go. I could also use a pen drivefor additional mobile storage.

Finally, I also decided that I really do not need to use the provided upgrade functionality for the notebook, perferring to use the notebook for a period of two years at most. This was because I discovered parts and accessories were expensive, and going the way of upgrades to be expensive. Changing to a new model completely after two years appear to be a better proposition in terms of more power, functionality and cost savings.

Having made these decisions, the next step was to go online for a price comparison. Shopping online allowed me the convenience of researching each one of the notebook computer that caught my attention, without feeling pressured to make a quick decision.

There were some sites that allowed the added convenience of comparing different models side by side, and doing so was very useful in helping me to make my final decision on the notebook computer.

If you are faced with the task of purchasing your own notebook computer, the considerations which I have mentioned above will help you in your initial selection in making a wise decision.

Title: How do you Maximise your Profits in Any Trade on the Stock Market?

Word Count:
490

Summary:
To make profits on the stock market, you need an effective exit strategy. One of these is the stoploss system. Using this system, when the market turns against you, you will still lose some of your profits, but will retain most of them. This strategy will also protect you against stocks doing the opposite to what you expect them to.

Keywords:
stock market

Article Body:
In trading the stock market, no-one has a crystal ball. The price of stocks can go down, as well as up. What is needed is an exit strategy that will enable you to survive the bad stocks, and make a good profit on the good stocks.
The method that I have found to work the best is a trailing stop loss. For those who don’t know what a stop loss is, I shall explain briefly. A stop loss is an order for your stock broker to sell your shares if the price dips to the level that you have specified.

There are two ways of doing this. The simplest method is to decide on how much you are willing to lose as a percentage of your investment. A good rule is not to go less than 10%. Work out the price of the stock at this level and set that as your stop loss. As the price of the stock increases, keep moving the level of the stop up to keep the percentage gap the same. Some brokers offer a trailing stop loss service, where you tell them what percentage to set the loss at and they do it for you.

The second method is slightly more complicated, and comes from “Nicolas Darvas” in his book “How I made $2,000,000 in the Stock Market”. The markets tend to flow in stages. a stock on the rise will reach a peak, and then dip back down. It may do this several times at each stage. The idea is to follow the chart of the stock and see where the dips are the lowest, and set the stop loss just below them. A second part which Nicolas propounds is that when the stock breaks out of the sideways trend, to buy more of the stock, and when the stock starts going sideways again to move the stop loss up again to just below the lowest part of the dip.

Using the stop loss as an exit strategy, only works if you stick to it, and not lower it, thinking that the price will go up again in a few days. In a few cases you will be right, but what usually happens is the price keeps moving against you, and you loose even more money. As a secondary to this, the money still tied up in the first stock that is falling can’t be used on another trade.

Finally, a word of warning about using the stop loss system to protect your capital. There are times when the markets undergoes a fast fall in price, there are regulations about how far a price can fall in one-day. If it falls this maximum distance, it can bypass your stop loss, and you may be unable to sell. Although these situations are rare, it is better that you know about them. So that they are not a shock when they do happen to you.

Title: Go Stock Trade . com Primer: What is the stock market all about?

Word Count:
471

Summary:
Thousands of people who have money in any type of account for their retirement can consider ourselves participating in the Stock market. But have you pondered about the functionality of how this interesting market works? Imagine being at a regular auction, where instead of nice bits such as cars and antiques are being bidded away, think of bits of public companies being auctioned away.

Keywords:
stock market, ETF, 401K, learn how to trade stock, gostocktrade, gostocktrade.com, go stock trade, stock trading blogs, thomas howell, equities trade

Article Body:
Thousands of people who have money in any type of account for their retirement can consider ourselves participating in the Stock market. But have you pondered about the functionality of how this interesting market works? Imagine being at a regular auction, where instead of nice bits such as cars and antiques are being bidded away, think of bits of public companies being auctioned away.

To make a less confusing analogy, think about the role of an auctioneer. The auctioneer’s role is to get the highest and best price for each product. Well, the stock exchanges around the globe kinda operate in the same fashion. The auctioneer role, is called a Market Maker. In a stock sale, there is no stable, set price for stocks, but instead, setting the price is the role of the Market Maker.

The price will fluctuate greatly, because the ying and yang of the market, the buyers and sellers, will bid on either the stock going lower, or higher. Usually when you see a stock price go up, it means that the buy price of a stock has increased. This is vice versa when a stock declines in value.

Now I am sure you have seen visuals on the major news networks of how a stock floor looks. You know, the floor where tons of stark raving mad folks, scream numbers and look at monitors and make trades all day. The trading day starts at 9:30 in the morning Eastern Time, and stops at 4:00 in the afternoon Easter Time. Depending on business news, market forecasts, world events, and a few other things thrown in between, can dictate how much volume a market can have in a day.

The last couple of paragraphs have mentioned all of the particulars of two major markets, the New York Stock Exchange(NYSE) and the lesser known American Stock Exchange. But there is a third one too! It is called NASDAQ.
Now what makes NASDAQ quite unique from the other two, is that this market is controlled by computers. Despite the technological advances of this stock market, NASDAQ still has the conventional bidding water of NYSE and American Stock Exchange. The buyers and sellers have their own areas to buy and sell stock, and bid through a quote system called Level II.

The great thing with stock trading, is that in order to be successful with trading stocks, you do not have to be in the pit, bidding like a madman on the hunt for their lives. Not at all! You can now use the very computer in your house, or go to a trading office if you live in a big city and trade stocks. Many different internet based brokerages are out there, and have plenty of materials to get you started on your way to becoming a great stocktrader!

PROFIT ON!

Title: Forex vs. Stocks

Word Count:
348

Summary:
Learn the advantages of Forex Exchange as to other markets.

Keywords:
forex foreign exchange currency day trading investing

Article Body:
First of all, what is Forex? It is a short version of FOReign EXchange. It is also called FX and 4X, but regardless of the name you use, it is the largest financial market in the world. From 1997 to the end of 2000, daily Forex trading has skyrocketed from $5 billion to over $1.5 trillion..

Let’s look at some reasons why Forex trading is rapidly gaining popularity over other markets.

Trading hours: The Forex market is traded 24 hours per day from about 7pm EST on Sunday until about 3pm EST on Friday. The stock market is only traded Monday thru Friday with limited hours.

Liquidity: Forex markets trade over $1.5 trillion each day while the stock market only around $200 billion. There are only 7 major currencies traded on the Forex while there are more than 40,000 stocks from which to choose.

Commissions: No commissions are charged on the Forex while the stock markets charge high commissions and transaction fees.

Leverage: Forex Market offers great leverage power. Brokers usually offer from 100:1 to 400:1 leverage. This means a trader using 100:1 leverage you control $100,000 with only $1,000 margin. Stock market investors pay full price for stock when purchased unless they have a margin account and the leverage with margin is usually only 2:1.

Low Minimum Investment: The minimum initial investment to open a Forex trading account is as low as $300. Most stock brokers require several thousand dollars as a minimum to open an account.

This is the perfect market. Foreign Exchange trading has long been recognized as a superior investment opportunity by major banks, multinational corporations and other institutions. Now the internet has propelled Forex trading among private individuals tremendously. Trade from home, the office, or virtually anywhere in the world. Trade virtually anytime day or night. Work part time or full time.

It is obvious that the Forex Market offers a substantial opportunity to those willing to invest energy, focus, and a little money.

It is difficult for a new Forex trader to become successful in the Forex market without understanding the basics and how it works. This knowledge can be obtained in a free Forex training program.

Title: FOREX Beats the Stock Market

Word Count:
585

Summary:
A comparison of investing in the FOREX exchange or the stock market.

Keywords:
forex, forex trading, learn forex, forex online

Article Body:
Companies issue stocks to raise capital for expansion, equipment and other projects. Stocks have been a very popular form of investment for years. Each share of a stock a person owns represents a small ownership of the company.

Stock values fluctuate based on the fortunes of the company. When the company is doing well the stock price will increase, at this time the investor can sell their stock to capture the profit or they can continue to hold it in hopes of greater profits in the future. Some companies will pay dividends on stocks; dividends are a small share of the profit per each share of stock.

To buy and sell stocks you must use a broker and go through one of the stock exchanges. In the US there are two exchanges, the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation System (NASDAQ). Some very large companies may have stocks on multiple exchanges but most companies will sell their stocks on one or the other.

Until recently the stock market was seen as a long-term investment strategy. Most portfolios would have a large number of “Blue Chip” stocks. These are stocks that have proven their value over a long period of time. With the addition of internet trading we are seeing what is typically known as day trading. Day traders attempt to take advantage of the daily fluctuations in the market by making multiple trades during the day. This is a fairly high-risk method of investment and is further hindered by the large number of commissions charged for each transaction.

In some cases stocks can be bought on margin. In the stock exchange your margin rates are usually about 50%, which means you need half the cost of the stock to be able to buy it.

FOREX

The FOREX exchange is significantly different than the stock exchange. On the FOREX exchange almost all trades are short-term trades, in fact a trader may only hold a currency for a few minutes before moving it again. Since there are no brokers fees in the FOREX exchange you can make numerous trades in one day without racking up large commission fees.

With over $1.5 trillion in trades every day the FOREX exchange is the largest financial market in the world. To put this in perspective all of the American stock markets combined only handle about $100 billion worth of trades a day. This huge volume causes the FOREX exchange to be the most fluid market in the world. Because so much of the world economy is dependent on moving currency from country to country there is always a buyer and a seller for every currency combination. The stock market on the other hand is not nearly as liquid, you may not always find a buyer for the stock you want to sell or a seller for the stock you want to buy.

The FOREX market is not located in a single place but is worldwide. Due to time zone changes the FOREX market is open 24 hours a day 5 days a week.

Stock exchanges are normally only open for 7 hours a day, you can not buy or sell a stock if the exchange that it is listed on is closed at the time.

FOREX is more predictable than the stock market as well. It follows well-defined patterns, you can also leverage better in FOREX than the stock market. Margin accounts in FOREX run as high as 100:1 which means you only need $1 to buy $100 worth of currency.