2Bull Forex Blog

Over the last four years, I must have attended five or six seminars, paying upwards of 800 US dollars each time. The seminars covered such topics as Fibonacci, Writing Covered Calls, Moving Averages and other well known applications of statistical methods to trading; what are commonly known as technical trading or charting techniques.

Once home, I would excitedly go over the material in the free attendee info pack. Invariably, I would find most of the information contained within the format of these seminars to be mere recycled material. The same, if not better, information is in fact available online, occasionally for free, but if not, at a much reduced cost.

You might point to the notion that if anything of value is desired, one has to pay for it. Granted, that for anything worthwhile and of substance, there will be a price tag attached; this should be even more valid for trading systems and information, after all one is expected to make some money using the information.

But, and make that a BIG BUT! there is so much more useful and appropriate information available online, for so much less than the costs of seminars: these run into the hundreds of pounds or dollars! These seminars charge you a small fortune, but the value that they return to you is a big letdown.

At all the seminars I attended, I even had to sign confidentiality agreements. Why? These people say they have something new and secret; yet they run hundreds of seminars exactly like the one they are giving, and they tell all the attendees of their seminars to keep quiet about what they are saying. Do they really expect that to happen?

Well, these clever people who run the seminars, say they are the Gurus. They take age-old techniques (there is nothing much that is new) and write their own copy or presentation style, package it as a new Secret Trading System, organize seminars at some glamorous hotels, and then charge big bucks for teaching their secret trading system or systems to a group of awe-struck attendees. I will hand it to them though; the professionals behind these seminars really know a thing or two about the human State of Mind; or they know someone who does.

From what I observed by attending seminars, the alleged unique or secret trading system is only classified as such because Gurus put together a bunch of two or more standard trading indicators, describe the behaviour in their own way, and bingo!, they announce to all and sundry that they have a unique and secret trading system. The hard part is the effort, time, gathering of and putting together the resources required, but most have staff to do this for them. The sad part is that they ask you to pay so much for their seminars and they give you so little in return.

Once in London in 2006, I went to one seminar (albeit a free taster) at which the so called Guru was not even present. OK, it was a free one, but there was such a strong and obvious sales pitch running throughout, with all the usual software and additional course promos fired at us towards the end. From my point of view the presenter was no more than a flashy salesman. He padded out 10 to 15 minutes of seminar time, telling us about his family history and other salacious details, as if anyone cared.

Of course, one had the option of leaving halfway through the free seminar if one was not pleased or captivated by the spiel; but, in case you have not noticed, they structure the seminars so that any information of value is kept under wraps and revealed only during the second half anyway.

After enduring seminars like these, I always find out that there is enough information that you can get online that will more than cover anything and everything that the core courses in the seminars contained. It may be that I would not get any free refreshments when I research things from home, but I can live with that. I will grant there were a couple of well spent outside excursions, where I learned of a method and a fresh approach to trading of which I had not previously heard. But again, you will realize that with sufficiently extensive and creative searching you are bound to dig up a trading system that will suit your personal trading style.

Seminars can sometimes become a venue for like-minded trading people to meet each other and talk shop. That is all really fine, but it surely does not seem right that you are required to shell out so much money just for the chance to chat with people.

Seminars are supposed to give us information of value, which is what they promote themselves to be; that is what they should give to us. Sadly, few seminars, if any, are not worth the fees you pay for them. But if you are still keen on attending trading seminars, perhaps for the possible research value, by all means you should. But I do not think it is wise to spend more than 10% of your trading budget on any one of these.

The ease of online stock trading draws the attention of new investors and investors looking for an alternative to the old methods of trading. With little more than an account and a mouse fortunes can be made or lost from the privacy of one’s own home. However, before getting carried away, investors should look into the basics of stock trading strategies to help protect themselves from what can be a very tempting albeit confusing world of internet stocks.

The only consistent notion about stocks is that they are inconsistent. Investors that make decisions based entirely on emotional “gut feelings” or make decisions based on desperation will only do about as well as they will at the casino. Planned, precise, and well thought out decisions make for strong trades. Online stock trading need not be a random roll of the dice.

Regardless of any pre-planned strategy that an online investor approaches the online trading world with, there are two basic entities that need to built into any strategy. All trading is based on maximizing the profits while minimizing the risks. These two factors also tend to cancel each other out. The greatest risks usually turn the greatest profits while the smallest risks typically turn tiny but long term profits. This means that an individual investor needs to find their individual risk tolerance while building their strategy.

There will be losses. There’s no strategy in the world that can guarantee online stock trading without loss. Loss is part of the game no matter how serious the player. The most successful online stock traders in the world have one basic rule implemented into their trading strategy. They all have their stock portfolio divided into percentages. They have a predetermined percentage seeking high risk, high return stocks, a predetermined percentage seeking medium risk, medium return stocks, and a predetermined percentage seeking low risk, low return stocks. The predetermined percentages vary from investor to investor and some have the bulk of their percentages in low risk while others have the bulk in medium risk. Placing the bulk of the available funds in high risk stocks is a sign of either gambling or desperation, neither one is considered a very sound strategy.

The reason that these percentages are predetermined for the vast majority of successful online investors is to help maintain unemotional investing. If there is a set amount of the available funds doing predetermined job, then the emotional windfalls and shortcomings are incapable of moving the percentages around. Online stock trading can become emotional, and when it does online traders start making bad decisions based on their emotions. Keeping the emotional trading to a nonexistent minimum is very difficult for many online traders, but it is also on of the best laid online stock trading strategies there is.

Every individual investor’s strategy will vary to suit their needs, their risk tolerance, and their individual style. However, having a basic strategy before the account is even opened is a vital key to online stock trading. Investors without a strategy tend to lose more often than they succeed. Every individual investor’s emotional strings are different, and some will need firmer, more complicated rules before setting off into the online investment world. Others will do fine with a basic outline. While learning the ropes, it is best to dabble with small sums of money rather than place large chunks of money into any stock, no matter how good it seems. One of the most significant pros to online stock trading is the investor’s ability to go through the motions on paper without ever spending a dime while they keep an eye on the stocks they believe they are interested in. Over time, online stock trading can become a very healthy form of secondary or even primary income, but the investor has to start with a plan.

What is a Futures Contract?

A futures contract is a commitment to buy a commodity with an inherent value at the date specified. It’s used by the people who produce those commodities to regularize their income streams and protect themselves from excessive market volatility. Examples of futures are oil futures, steel futures, agricultural futures like corn, soybeans, sugar and wheat, or pork bellies. Any kind of product that’s produced in large quantities with regular production cycles, lead times of more than a month, seasonable variations in availability and price, and near constant demand for the raw material can be the subject of a futures contract. Futures can be thought of as agreements to sell or buy commodities at a specified price in the future, regardless of the market conditions. If you need the commodity in question, you may buy futures to hedge against a future rise in price. If you sell the commodity in question, you’re buying futures to hedge against a decrease in price.

Buying and selling futures contracts allow people to buy and sell the commitments to buy products in respond to market pressures. Unlike stock portfolio or bond investing, you aren’t buying a chunk of a corporation or a debt commitment to be paid back with interest, you’re taking a gamble on the future price of a commodity. Futures trading is risky, as is any kind of investment, but some of the risk can be ameliorated by taking on a diversified portfolio.

What Makes For A Good Futures Trader?

The personality type that thrives in futures trading is that of the professional gambler, the person who is certain that their instincts on the way commodities will flow will beat the market trends. (It is possible to take buy-and-hold positions with futures, but that tends to be less lucrative and less volatile. In general, it’s also less sound than buy-and-hold strategies for stocks and bonds.). Backing up that instinct is a lot of technical analysis. Futures traders watch all the news - for example, news about the weather directly impacts growing seasons for commodities such as corn, soybeans and sugar. News about port regulations impacts futures relating to delivery of durable goods and oil from overseas. News about increases in production capability at refineries, or improvements in oil extraction techniques can change the price of oil - and often in counterintuitive directions!

There is a lot to learn to become a successful futures trader; you’ll want a mentor, and a couple of classes to learn the terminology, the regulations, and how to spot market trends (and how to divorce yourself from your own analysis, so that you don’t blind yourself to important trends because you’re in love with your own ideas.)

Interestingly, while futures are contracts meant to reduce risk between producers and purchasers of commodities, the trading of futures is a high volatility market. While there is risk, it can be (somewhat) ameliorated, and there are often trends that are easy to pick out that will help you avoid risk. The key to being successful as a futures trader is knowing when to NOT gamble, when to take what you’ve got and call it a day with a reasonable return on your investment.