Lawrie Walters, Sydney Australia

If you don’t mind losing $5,000 in 10 minutes, you may enjoy trading commodity futures contracts. There’s an old saying among commodity traders: “It’s easy to make a small fortune in commodities. Just start with a large fortune!” This is not a business for people who are emotionally attached to their money, yet thousands of average “investors” get lured into the commodity markets year after year. Why? Because of the possibility of making high percentage gains using the built-in leverage that is available to commodity futures traders.

The commodity markets include wheat, corn, soybeans, pork-bellies, gold, silver, heating oil, lumber, and numerous other common trade items. The huge companies that operate in these markets use commodity “futures” contracts to lock in their selling prices for the product in advance of delivery. This practice is called “hedging.” On the other side of that transaction is the trader, who speculates on whether the priced of the commodity will go up or down before the contract is due for delivery. Because futures contracts may be purchased using leverage, these financial instruments lend themselves to speculation.

For example, control of a corn contract worth $5,000 may only requrie $500 of actual cash, or 10% of the face value of the contract. If the corn goes up in value, and the contract becomes worth, say, $5,500, the speculator has made $500 on his or her original $500, for a 100% return. Compare this with the regular stock market, which limits leverage to 50%, so that $5,000 worth of stock requires a minimum of $2,500 of capital. If the stock goes up to $5,500 in value, the $500 gain is against $2,500 invested, for a return of “only” 20%. The 100% return sure looks a lot better, right?

You can easily see why investors in search of quick gains are hypnotized by the lure of big profits using maximum leverage in commodity futures trading. The real problem, however, is that the leverage works in BOTH DIRECTIONS. You can lose your entire investment in a matter of minutes due to the wild price gyrations that sometimes occur in these volatile markets. Let’s say the $5,000 contract drops to $4,000 in value instead of increasing. You’ve not only lost the original $500 you put into the contract, but an additional $500. You can go broke quickly this way.

So why do people play this game? Average investors do not wake up in the morning and say to themselves, “Right, I think I’ll start trading commodities.” What happens is, they receive a sales pitch from a commodity trading “guru” claiming to have a “system” for generating sure-fire profits in these wild markets. These “systems” range in price from $25 all the way up to $5,000 or more, and are sold based on the promise of “huge profits” from a small starting investment.

Newsletter writers or commodity gurus regularly pitch the myth about turning $5,000 into a million bucks in less than a year. The typical commodity system pitch comes in a long sales letter or booklet that describes a method for winning on “9 out of 10″ trades or similar inflated claims.

Of course, if it was possible to correctly trade 90% of the time, a person could easily amass millions of dollars in a very short period of time. So why are these guys so eager for you to spend $195 on their super-duper trading course? Because they probably aren’t making any real money with their own trading program! There’s much safer money to be made selling others on the idea of getting into commodity futures trading.

There is no sure-fire way to consistently make money in these markets, simply because the underlying commodity prices can swing wildly back and forth depending on a complex set of variables, many of which are totally unpredictable. That’s why the only people consistently making money in the commodity markets are the brokers, who collect a commission for executing the trade regardless of whether it wins or loses.

There are also a handful of successful professional traders who make a living in these markets. But the vast majority of people who dabble in commodity futures lose money. Unfortunately, with the lure of huge returns and easy money, a fresh crop of innocent traders enters the market each year, only to be quickly fleeced out of their money.

Don’t be one of them! Leave commodity futures trading to the professionals and stick with the more boring forms of investment, such as mutual fund investing or stocks and bonds.

To learn how to find the best online stock brokers, visit this site: online stock broker. Also you will find some tips on what to consider when comparing online stock broker. Get your online stock broker guide today!

Get pragmatic info about the topic of online stock broker – please make sure to read this web page. The times have come when concise information is really only one click of your mouse, use this chance.

Thinking of investing and wondering what is the most efficient path?

Forex, foreign currency exchange, is relatively new and offers many benefits over traditional investments.

START UP CAPITAL
Traditional investment opportunities are often only available to those with plenty of cash and the confidence to trade it. Forex requires a minimal investment to get started. If you can afford dinner and a movie for 2 you can afford to get started with forex. Throw in the cash for tickets to a concert and a couple promotional tee shirts and you’ve got a real start in making your trades pay off.

LOW RISK-HIGH YEILD
You can be wrong 50% of the time and still make money with forex. Learn to watch the trends and you’ve got a significant edge on the volatile stock market.

CONVENIENCE
Unlike stock markets, forex trading can be done by you, on your laptop, at the end of your busy day or at the beach. Forex trades seven days a week twenty four hours a day. No setting your alarm for the market to open on the other side of the world.

LEVERAGE
Does this sound like magic to you? If you trade a “Mini Lot” you have $100 invested…but are trading a hunk of change values at $1,000. That’s a lot for a mini investment!

BULLS & BEARS
Makes no difference what the stock market trends are, which way real estate prices are moving, you can always make money with forex. No matter what the trend, you can make a profit in rising and falling markets. Just learn to watch the trends.

LIQUIDITY
No need to tie up your money for long periods of time. Your capitol is accessible any time you want it. You haven’t bought an office building, gold or pork bellies. You bought cash and you can cash in at a moments notice.

IMMEDIACY
You want to get results, see results and cash in your results immediately? Forex is quick to show you results.

REAL TIME PRACTICE
Paper trading with forex gives you instant feedback on your trades and understanding of the system. It’s simple to understand if you get the concepts sufficiently to invest your cash in the market.

FOREX FOR EXPRESS FORTUNES
Foreign currency exchange is making millionaires out of people just like you and me. Does everyone get rich trading forex? Of course not! But many do, by taking the time to learn the ups and downs and getting expert advice. If you are looking for an exciting opportunity to turn $300 into $30,000, it’s time to look at the exciting new opportunity available to you in forex, the foreign currency exchange.

To learn how to find the best online stock brokers, visit this site: online stock broker. Also you will find some tips on what to consider when comparing online stock broker. Get your online stock broker guide today!

Read helpful things to know about the topic of online stock broker – make sure to go through this page. The times have come when concise info is truly at your fingertips, use this opportunity.

Since writing about trading penny stocks online over at my blog, I received several emails about the subject and it seems to have generated a good deal of interest.

People have been trading stocks online since the very early days of the internet, and nowadays it is a simple matter for anyone who decides they want to get involved to start online trading.

However, there are several things you should be aware of before deciding to start trading stocks, not least of which is that it is a gamble, and this applies regardless of your knowledge or experience. You need to have some money to invest and it should be money that you can affors to lose. Bear in mind the worst case scenario – i.e. that you could get it horribly wrong and your investment could disappear overnight. Fair warning if you don’t want to read any more.

Much has been written about trading stock online, in particular penny stocks, and by far more qualified people than me.

If the idea of an exciting risky investment strategy appeals to you, trading penny stocks could be the adrenalin fix you are seeking. It’s pretty simple to get started, but success or failure are equally possible results.

Firstly, penny stocks are usually defined as stocks trading at below $5 a share. Some people consider this arbitrary amount differently and would say that $2 would be a better yardstick, but, whatever the definition, these are shares usually traded outside of the major exchanges. They are often volatile and unpredictable and their performance is very difficult to monitor or foresee.

It is fair to say that stock trading at a few cents a share is the most risky investment anyone could make – many experts would say foolhardy in the extreme. The temptation to buy thousands of shares for a few cents is one that often results in many people getting their fingers burned. What you have to remember is that there is a reason the stock is so cheap – it really isn’t worth much and the likelihood of making a killing on such shares is far from the foregone conclusion that some people will try to convince you it is. Establishing the likely performance of these stocks is usually virtually impossible as often there is very little information available on the companies to do any kind of meaningful analysis.

Don’t be lured into buying stocks just because a newsletter or email tells you it is a sure thing. There are plenty of sharks out there who will engange in the practice known as “pump and dump”, whereby they will attempt to generate unsubstatiated hype about a particular stock in the hope that there will be a rush to buy, enabling them to sell on their worthless holdings to unsuspecting hopefuls. You really must excercise caution and do your own “due diligence” – if you don’t, you will soon end up regretting impulsive penny stock purchases.

Trading stock online is not difficult, and once you have a basic understanding of how it works and decide to give it a try, you will need an account with an online stockbroker.

For penny stock trading Lowtrades.com offer a very good service. To set up an account you will need to submit an application form by post. This can be downloaded in PDF format from their site. Once you have opened an account you will need to fund it (more details of how to do this are listed at the site too) and then, you are ready to trade.

In very simplistic terms you will place orders with your broker via the online trading interface and they will carry out your buying and selling instructions. Each trade you carry out, buying or selling, will cost you a small commission to the broker. With Lowtrades usually around $5.

Presumably your interest in penny stocks means that you are looking to make quick returns. It is true that he rewards can be tremendous – it is entirely possible to make hundreds of dollars in a day. By the same token, get it wrong and the losses can soon mount up too. Day trading is not always profitable, but it’s always risky. Day traders buy stock and aim to sell it on the same day for a profit – the age old buy low, sell high strategy. Of course, if the stock price falls, you have a decision to make – sell it at a loss, or hold on in the hope that prices will recover and you can mitigate your losses.

You have to understand that not every stock you buy will appreciate in value during the course of one trading day. This means you could end up with your risk capital tied up in one company, leaving you unable to make any other trades until you offload the stock. Having all your eggs in one basket is therefore not a great trading strategy.

For those with limited funds to invest, this can present a bit of a dilemma. There is little point buying so few shares that even if the price rockets upward, you will make only a few dollars – you must also remember to deduct brokerage fees from overall profits too. If you are working with only a small amount of capital, you are going to need to find resonably priced stock that allows you to buy a few hundred shares, certainly not less than 100. For example, if you can secure 300 shares and the price rises by 25 cents, you will net yourself only $75 less any commissions – hardly earth shattering. On the other hand if the stock value increases by a dollar, you have $300. The basic math is simple enough, so you need to look carefully at whether an investment is likely to be worthwhile relative to the amount you are able to invest.

It goes without saying that the more investment capital you have, the more you stand to make, or lose.

Opening a trading account is straightforward enough once you know the kind of account that you need. For a simple individual cash account some brokers will require a minimum deposit and others will not. Shop around to find the best deal for your own personal circumstances. Charges will vary too, and these all affect your bottom line, so make sure you know how much each trade is going to cost you.

Finally, I will repeat my earlier advice – never invest anything that you can’t afford to lose. Penny Stocks are a gamble, and if you don’t have the constitution for risking the purchase price, don’t start with online trading of any kind. Sit back and have a good think about what you are planning to do and what you hope to achieve through your investments. If you are thinking of day trading you will need to be in a position to monitor your stocks throughout the trading day – if you are not going to be able to do this, you will not be able to sell when the need arises – i.e if the price should spike briefly.

If you want to start trading penny stocks online, read up on the subject carefully and learn as much as you can. There are plenty of helpful websites such as AllPennyStocks.com where you can begin to learn and I have also included some useful resources below for those wanting to learn more. Never let anyone tell you that it’s as easy as falling off a log though – if it was, we’s all be millionaires by now!

To learn how to find the best online stock brokers, visit this site: online stock broker. Also you will find some tips on what to consider when comparing online stock broker. Get your online stock broker guide today!

Fetch helpful advice about the topic of online stock broker – read the web page. The time has come when proper info is truly within your reach, use this possibility.