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Financial markets are huge. Daily billions of dollars change hands in these markets when different financial instruments change hands. You can trade stocks. You can trade bonds. Ever heard of the futures market and futures trading? Well, futures are a security just like stocks and bonds. Stocks give you the ownership in part of a company while bonds are issued by governments and companies to borrow money from the investors. Futures are somewhat different than stocks and bonds!

Futures market is a highly regulated market with the CFTC responsible for its regulation. Buyers and sellers don’t come in direct contact with each other. In between is the Central Clearing House that enforces the contract reducing the risk of party default! Futures contract as the name implies is a binding contract between two parties for the delivery of a commodity or an asset or even a financial instrument at some future date between the buyer and seller of that contract.

Futures market is the backbone of the whole sale and retail commodity market ranging from oil, wheat, corn, heating oil, meat, cattle, soybeans and other foodstuff. So you can well imagine the importance of the futures market. Futures market serves the purpose of hedging and speculation.

Futures contracts are by design meant to limit the amount of time and risk exposure experienced by hedgers and speculators. What this means is that all futures contracts are time bound and at some point in the future they expire.

Most brokerage firms require individuals to deposit a fixed amount of at least $5,000 in their brokerage account before they can start trading futures. Now, almost all over the world, futures trading have shifted from open outcry to electronic trading.

Electronic trading has lowered commissions and other transaction costs for trading these contracts plus price discovery is better and there is a more level playing field for all the players in the market. In old times, futures contracts got traded on Futures Exchanges in open outcry pits. It still takes place on the floor of these exchanges but with the advent of electronic trading most of the trading is now shifting to electronic platforms. GLOBEX is the most important platform for trading different futures contracts.

The most popular futures contract that get traded on GLOBEX are S&P 500 stock index futures, NASDAQ 100 futures, Eurodollars, CME E-mini futures, foreign exchange rates, gold futures and crude oil futures. You can also trade options on GLOBEX.

GLOBEX trading overnight tends to be thin and more volatile than during the official trading hours that are from 8:30 AM EST to 4:15 PM EST. If you trade financial news on Bloomberg or CNBC before the stock market opens officially, you will find quotes on S&P 500 futures and other taken from GLOBEX.

These quotes are real time. There are many contracts that you can trade and the possibilities of making money in futures trading are immense. Imagine the prices of crude oil going up again just like what happened in the summer of 2008! Futures trading can be highly profitable but risky as well. Before you dabble in them, you should paper trade these contracts for at least a month just to get a feel of how to do it.

Mr. Ahmad Hassam has done Masters from Harvard University. Get your FREE COPIES of the HVMM Ultimate Day Trading System that can trade stocks, forex and futures and the Universal Risk and Money Management Tool! Read this shocking 40 page FRWC Brutal Truth FREE Report on trading robots that exposes almost everything!

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You learned in basic economics that the business environment goes in cycles. You have seen a tremendous increase in the price of precious metals over the past decade. The price increase for gold has been phenomenal.

The price gains in gold as well as some other commodities were dramatic during the past decade, over the past 30 years, with gold more than quadrupling in value (from less than $300 per ounce).

However, despite these large price gains, you wouldn’t have gotten rich buying gold when you consider the increases in the cost living and low overall inflation rate over the same period.

Gold has been a basis for many currencies around the world due to its intrinsic value. As the ad on TV says – gold has never been worth zero. Gold and silver represent commodities whose value can stand the test of time.

Investments in precious metals has always have been used as a backstop during times of economic duress.During one of our major economic turndowns in the mid 1970s gold and silver prices rose over four hundred percent while stocks fell precipitously.Gold has appeared to hit a bubble during this latest economic downturn.The quick increase in gold and silver prices appear to come out of fear versus actual inflation, which reduces the benefit of precious metals investing.

Investing in gold and silver, over the long term, has not produced any significant benefit.Precious metals don’t issue dividends and the average prices do not even match the cost of living.If you are keeping your cash in your sock drawer, investing in precious metals would be a good idea, otherwise invest in stocks. But as an investment the returns aren?t nearly as good as bonds, stocks, and real estate. Buying mutual funds or stocks can provide a better return if you truly want to invest in precious metals.

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One person who made history with options was George Soros who is famously known as the man who broke the Bank of England. Great Britain was finding it difficult to stay within the tight exchange rate band set by the European Monetary Union (EMU).

George Soros is a famous name in the world of investing. He had always believed in contrarian investing. Contrarian investing means doing exactly opposite of what the crowd is doing. George Soros had this intuition that the Bank of England would be forced to devalue British Pound. So he bought call options on German Marks and put options on British Pound. He made a bet of $10 Billion by leveraging all the assets in his hedge fund.

Bank of England had made a number of public statements regarding its intention of staying within the EMU. When George Soros made his bet on the intrinsic weakness of British Pound, other currency speculators followed suit and placed their bets too. This build up an immense selling pressure on the British Pound! Bank of England was brought to its knees as it was unable to sustain the immense selling pressure on the British Pound within a few days of the speculative attack on the British Pound. Bank of England was forced to devalue British Pound in a few short days.

In a matter of a few days, George Soros made a cool $1 Billion profit on his bet. Can you make such a bet? Maybe not but this one example show the immense power options have if used correctly. Options are risky; there should be no doubt about it.

Most people who trade options lose money, plain and simple. Options give you the right to buy or sell an underlying security like stocks, futures, commodities or currencies at a price before a certain date. This price is known as the Strike Price. This date is known as the Expiry Date. However, in European Style options you can only buy or sell on the expiry date not before that.

You need to learn the Options Greeks. Time factor is very important when valuing an option. Further out the options contract is from expiration, you will have to pay a higher premium. As the options contract approaches the expiration date and if it is out of money, it loses its value very fast.

LEAP options are basically long term options. Leap options can help you profit over the long haul. You can use LEAP options in options strategies like the covered calls, straddles, spreads and so on. LEAP stands for long term equity anticipation. It basically means that the option is much like the regular option except that the timeframe to expire is greater than 1 year.

LEAP options are risky because the option writer usually demands a hefty premium for taking on the long term risk. However, LEAP options can be incredibly profitable if used correctly. The buyer of the LEAP options has the right to exercise the option prior to expiration should the price of the underlying stock move in the money.

LEAP options can be a great trading vehicle for swing traders as they mitigate some of the time decay that is inherent in short term options. See, closer the out of money option is to expiration, faster its value drops. What this means is that the buyer of the options loses the premium that was paid for getting the right to buy or sell the underlying security.

Mr. Ahmad Hassam is a Harvard University Graduate. Learn Candlestick Charting! Know Fibonacci Retracement! Grab a totally unique version of this article from the Uber Article Directory

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Many hedge funds and other entities that manage money through forex trading use some form of autotrading in their daily activities. Autotrading is common in the currency trading.

Big institutions have the resources to finance their inhouse development teams. Big institutions always had proprietary autotrading systems developed by their inhouse programming teams. These autotrading programs also known as Expert Advisors or Forex Robots were expensive costing like thousands of dollars and only wealthy individuals or big institutions like hedge funds could afford them. These autotrading systems were proprietary in nature and were not available to the general public.

However, the recent developments in computer programming have changed the field. Many private individual traders have also begun to adopt autotrading to execute their thoroughly backtested and highly optimized forex trading strategies. The recent advancement in computer programming has made it possible for professional forex traders to team up with a software expert to develop their own autotrading systems.

The price of these Expert Advisors has also come down to around a few hundreds that can be easily purchased by ordinary investors like you and me. Metatrader platform makes it real easy to program such type of Expert Advisors.

Recent advancements in computer programming has led to the development of trading platforms that allow an API ( Application Programming Interface) which connects the trader’s system to the dealer’s trade execution structure through the trading platform. So what is autotrading? You must have heard or read a lot about the benefits or advantages of autotrading.

APIs requires programming skills on the part of either the trader or a programmer hired by the trader. But once all of the trading rules and criteria are determined by the trader, programming an API can be relatively straight forward for anyone with programming experience. After the specific trading rules and criteria are determined, the trading strategy is backtested with positive results.

The development of an autotrading system depends more on your trading skills as compared to your programming skills. When this occurs not only trades entered when predetermined technical criteria is met but trade exits in the form of stop loss and take profit rules can also be programmed into the API. Autotrading is almost as simple as flipping a switch to begin the trading process.

However, before an autotrading system is put on live trading, it is thoroughly backtested and forward tested to make sure the likely success of the autotrading system. This creates an entirely self contained autotrading system. So autotrading can actually execute real trades on current real time market prices. When a predetermined signal emerges, the software actually places a trade automatically.

In fact, autotrading is perhaps the best way to achieve it if the trader has optimized and perfected this type of black and white trading strategy that runs devoid of human judgment. Any nondiscretionary technical trading strategy that has clear cut, unambiguous rules is a good candidate for autotrading. Autotrading effectively eliminates all human biases, errors and emotions in the trading process.

Every month you will come across a new forex autotrading system. The best two forex autotrading systems are FAPT and Ivy Bot. There are a number of successful autotrading systems now available in the market for the ordinary retail investors.

Mr. Ahmad Hassam has done Masters from Harvard University. Try This Cash Printing Forex Signal Service From Heaven! First practice on your Forex Demo Account! Click here to get your own unique version of this article with free reprint rights.

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The second method of Backtesting is performed manually and visually by the trader. The trader would take the historical data and scroll back in time on a chart and manually apply the trading strategy as if it was in a real time environment.

The trader would advance the chart bar by bar in order to refrain from seeing price action subsequent to the trade at hand. This eliminates trading in hindsight that is detrimental to an objective backtest.

Manual Backtesting is complicated and difficult. It requires a lot of patience on part of the trader. The major disadvantage of Backtesting as compared to automated testing is the significant potential for human error in executing simulated trades and recording performance results.

Emotions are your enemy in trading. When you do manual Backtesting, these emotions can cause problems for your Backtesting results. The normal range of human emotions and biases that often interfere with actual trading can be a detrimental factor in achieving objective backtest results. Furthermore, it takes a great deal of work and discipline to simulate trades manually over a large data set without straying from the strict rules of the trading strategy.

However, this provides valuable trading experience although simulated but still a valuable trading experience that no automated backtest could possibly provide. Backtesting manually can provide the trader with the real feel for actually trading the strategy.

No matter whether you do Backtesting manually or automatically, Backtesting can save traders a great deal of time and money that might otherwise had been wasted on trading unprofitable strategies. Backtesting whether done manually or automatically can be one of the most important elements of building a solid trading strategy. Backtesting is now an important element of testing a trading system performance.

Any mechanical trading system can be backtested. This leads us to the important question of autotrading. Autotrading is the latest fad especially in forex where the number of major currency pairs is only six and this makes programming autotrading easy. These autotrading systems are popularly known as Expert Advisors or Forex Robots.

The US Stock Market has got more than 50,000 stocks listed with them as compared to the forex market where there are not more than six major currency pairs. This makes programming a stock trading robot a bit complicated. However, during the past decade major breakthrough in computer programming has been made.

Backtesting is one of the most important components of testing an autotrading system. Big institutions like banks, corporations and hedge funds have always been taking benefit of these autotrading systems.

So what type of trading strategies can be backtested and autotraded? Any trading strategy that is rule based and is not discretionary or discrete. These types of strategies are primarily technical in nature, and they must necessarily have rules and criteria that are unambiguous. Backtesting and autotrading are two important components of implementing trading strategies that generally do not rely upon the trader’s judgments or discretion.

In contrast, autotrading actually executes real trades automatically according to a pre – programmed set of instructions that sets trade entries, stop losses, and profit limits. Backtesting allows the trader to determine if a given strategy would have been profitable using past price data, which is an indication of how it might potentially perform in the future.

Mr. Ahmad Hassam is a Harvard University Graduate. Try This Cash Printing Forex Signal Service From Heaven! First practice on your Forex Demo Account! This and other unique content ” articles are available with free reprint rights.

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You have to do a lot of research while selecting yours stocks. Here is a very simple strategy that you can use to choose the hottest stocks best for swing trading. When a large financial firm builds an ETF, the first step is always to choose an index of stocks that is expected to outperform the market. The premise of the piggyback strategy is to use the large dollar research of the major financial firms to come up with new and fresh swing trading ideas.

Large financial firms spend millions to choose the index on which they will base their ETF. The ETF is then based on this index of stocks. The price of the ETF then changes as the basket of stocks within the index moves. Why not piggyback on that research and save yourself a few millions? Cool, huh!

Your first step should be to analyze ETFs and make a list of ETFs that have outperformed in the last 3 to 6 months. This will give you an idea where the big money is flowing and which ETFs have buying momentum behind them.

Mutual funds are supposed to be a safe investment. You can also piggyback mutual funds while picking stocks for your swing trading ideas. Now ETF piggyback strategy is still the best keeping in view the fact that only 20% of the mutual funds beat the passive benchmark over the long term. You can ride on the coat tails of fund managers who fall into this 20% category. However, ETFs are better than mutual funds as investment vehicles and in recent years have become highly popular with the investing public so stick with ETFs. After making your list of top 20, narrow it down to the five top performers and choose a few areas worth trading. Choose the best performing ETF in your opinion to begin with. Now you need to analyze the top ten holdings of that ETF.

Etfconnect.com is a great resource for information on ETFs and closed end funds. What makes this trading strategy great is that it often generates fresh ideas for swing traders. With thousands of potential stocks to choose from, the piggyback trading strategy allows you as a swing trader to choose stocks that have a buying momentum behind them.

Now another advantage of this piggyback strategy is that it can identify stocks that may not be household names to the average trader. ETFs can be utilized to find stocks for swing trading ideas that are based outside the US.

The way to do that is to use the ETF piggyback strategy with either single country ETFs or regional ETFs. The single country ETFs invests 100% of their assets in one country. A good example can be the iShares MSCI Mexico ETF (EWW), an ETF that invests only in companies headquartered in Mexico.

You can choose industry specific as well as market specific ETFs as well. Country specific ETFs and region specific ETFs have been just used as an example to illustrate how to hedge your risk. Hedging your risk is what a good investment strategy is all about. Instead of putting all your eggs in one basket, you should try to diversify your investment. A regional ETF covers several countries concentrated in a region. The iShares S&P Latin America 40 ETF (ILF) invests in Brazil, Mexico and Chile. So if you want to find international stocks for your swing trading strategy than you should begin by picking the region or the specific country.

Are international stocks safe? You must be thinking why you need to think outside of US Stocks. International stocks also give you the ability to create some hedging strategies in combining US and non US Stocks into a pair trade in addition to volatility that you need as a swing trader. The traders who refuse to consider international stocks only hurt themselves because with the US in the mature business cycle, the real growth and volatility that you need as a swing trader can only come from international stocks.

Mr. Ahmad Hassam is a Harvard University Graduate. Try This Cash Printing Forex Signal Service From Heaven! First practice on your Forex Demo Account! Get a totally unique version of this article from our article submission service

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