Online Trading

Spotting Potential Market Bottoms and Tops
Online Trading, Technical Analysis

Spotting Potential Market Bottoms and Tops

Accurately predicting market bottoms and tops is not an easy task even to the most experienced traders and investors. Most of the time, whether a market moves up or down is near 50/50. Even though some conditions can tilt those odds meaningfully in either direction, it’s hardly enough to prognosticate.  Instead, the way of thinking should be, how can I spot potential inflection points in markets? Inflection points which are more likely than any random piece of market data to precede increases in volatility or momentum.  I liken this to card counting in blackjack. In Hollywood, its portrayed as a get-rich-quick scheme used by eccentric geniuses. In reality, card counting is very much like trading. Most of the time, you’re making small bets with a slight positive expectancy...
Smart Money Index: What It Is and How It Works
Online Trading

Smart Money Index: What It Is and How It Works

Stock market indicators play an important part in the overall analysis of the market. Indicators are a reflection of traders’ moods. If the sentiment is positive, indicators will be buoyant. On the other hand, a lag reflects a dampened sentiment. These sentiments can also help you get an idea of the economy to some extent. Day traders can also formulate their decisions based on stock market indicators. In general, understanding the nuances of their composition and construction can be essential for making all types of trading decisions. A very important technical indicator within the world of the stock market is the smart money index, or better known as “the SMI”. Many day traders refer to it as the “smart money flow index”. This indicator is based on intra-day price patterns and trad...
Tradespoon Review 2020: What We Like and Dislike
Online Trading

Tradespoon Review 2020: What We Like and Dislike

Value For Investors Value For Active Traders Fees Platform & Tools Customer Service Summary Tradespoon offers several nice analysis tools that provide quick price forecasts that day traders can use to make trade decisions, but the company’s prices are awfully steep. Pros Free 7-day trial Futures, forex, and bitcoin forecasting Multiple subscription plans Large suite of tools Website is easy to use Cons No trading capability Customer service is substandard No desktop software or mobile app Integration is limited Expensive subscription plans In this TradeSpoon review we dive deep into their offerings, what we like and dislike and how it compares to other companies. Brief Overview Tradespoon ...
What is a Special Purpose Acquisition Company (SPAC)?
Online Trading

What is a Special Purpose Acquisition Company (SPAC)?

A special purpose acquisition company, or a SPAC, is a publicly traded shell company that raises collective investment funds through an initial public offering (IPO) in the form of a blind pool. Also called “blank check companies,” SPACs are formed strictly to raise funds through an IPO in order to acquire private companies. The funds are placed in a trust until a predetermined period of time elapses or an acquisition is made and the fund is liquidated. These development stage companies purely rely on funding through an IPO and have no operations. SPACs have been in existence since the early 2000s, but they have enjoyed a resurgence in popularity lately. According to data provider Dealogic, U.S.-listed special purpose acquisition companies have raised $40.4 billion so far in 2020, up...
Price Discovery Explained For Beginners
Online Trading, Suggested

Price Discovery Explained For Beginners

What is Price Discovery Price discovery is the process where buyers and sellers determine where a transaction can take place based on supply and demand. This evaluation process uses the economic concept of supply and demand to find a price where a buyer and a seller agree to trade. The supply and demand for an asset are based on several factors including the future abundance of an asset in any specific location. Transaction costs, as well as transportation costs and the storage of an asset, can play a pivotal role in determining the price discovery. The formula to determine price discovery is everchanging and will be different for each asset. Why It’s Important Did you ever notice that when a new company stock trades for the first time on an exchange like the NYSE, it can take a whil...
How to Trade IPO Stocks: A Primer For Beginners
Online Trading

How to Trade IPO Stocks: A Primer For Beginners

Hot IPOs are becoming rarer in the late stages of this post-GFC bull market cycle. The primary reason for that is that private market financing allows early-stage firms to remain private longer. This trend is turning around, starting with the IPO of cloud data platform Snowflake (SNOW) in September, with several other hot upcoming IPOs like Asana, Palantir, and Unity Software. As such, we’re likely to see a slew of hot tech IPOs, should the market rally continue. Why IPOs Are Different One of the significant fallacies of typical trading books is assuming that all markets trade similarly; that you could apply the same strategy to any market. One of the ordinary circumstances is to present a technical trading pattern and claim that it’s tradeable on any timeframe, any market. This con...
Opening Your First Trading Account? Here’s What You Need to Know
Online Trading

Opening Your First Trading Account? Here’s What You Need to Know

Opening your first trading account can seem daunting given the sheer number of options out there. Fortunately, most brokerage firms follow a straightforward process similar to the one laid out below. Getting your account open is just a matter of choosing a broker, providing some personal information, and funding your account. Once the formalities are done, you can begin using your account. What is a Trading Account? A trading account, also known as a brokerage account, is an investment account that you open with a brokerage firm in order to invest in the stock market. Examples of brokerage firms include TD Ameritrade, TradeStation, Robinhood, Interactive Brokers, and E*TRADE. Trading accounts allow people to buy and sell different types of investment securities including stocks, bon...
Best Hedges for a Devaluing Dollar
Online Trading

Best Hedges for a Devaluing Dollar

Many macro investors are betting on significant inflation in the US Dollar for the foreseeable future so we put together a list of some of the best hedges for a devaluing dollar. At the risk of oversimplifying the prevailing opinions of this group, I think a basic simplification of the prevailing bearish dollar view are the following factors: Inflated Federal Reserve balance sheet Increased money supply Ballooning US government debt-to-GDP ratio Declining trust in the system Precious Metals and Miners Two of the biggest criticisms levied against gold, and other precious metals are that they don’t pay interest and that their status as a store of wealth is emotion-based, with no basis in rationality. Sure, doesn’t pay interest. That’s certainly true. However, one h...
All you need to know about options trading
Online Trading

All you need to know about options trading

With the rise of the internet came many online money making opportunities. Financial brokers set up online platforms that made it easy for traders to invest in different financial instruments. Traders could now easily buy and sell forex, CFDs, indices and commodities among other assets from the comfort of their homes or offices. Then, brokers introduced options. This new form of financial instrument was adopted fast by traders all over the world. However, some financial authorities banned options brokers from operating within their jurisdictions. Why? Many claimed that it’s a form of gambling. But is this really true? Is iq option gambling? This guide will discuss what options trading is all about. Overview of options Options are a type of derivative sec...
Long Put Option Strategy for Beginners
Online Trading

Long Put Option Strategy for Beginners

While day trading stocks can potentially lead to big profits, options are an ideal way to control a large chunk of shares without having to put up the funds necessary to own stocks of bigger companies and can actually help protect or hedge your stock investments. This article will prepare you to effectively use the long put option strategy to generate a profit. But before we dig a little deeper to explain, let’s begin by delving into the definition of an option and its different types. What are Options? Options are a type of derivative, meaning their value is dependent on the value of an underlying security. The underlying security can be stock, but it can also be an exchange-traded fund (ETF), a commodity or an index. An options contract is essentially an agreement between two parti...