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Forex trading is one of the many forms of trading that you can do as an investor.

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=>> Understanding Forex Trading

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Forex Trading: Trade On The Forex Market for Maximum Profits! AAA+++

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A practical guide to trading around the commitments of career and family Making Money in Forex will help aspiring traders successfully enter this field while maintaining a job. With this book, author Ryan O’Keefe explains his own personal journey to becoming a trader and shows you how to follow a similar path. O’Keefe describes his approach to trading and reveals his bargain hunting trading style, which is designed to capitalize on market trends. Throughout … More >>

Making Money in Forex: Trade Like a Pro Without Giving Up Your Day Job

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A practical guide to trading the foreign exchange market The Ed Ponsi Forex Playbook offers a visual approach to learning specific trading strategies and identifying profitable trading opportunities in the Forex arena. Page by page, it skillfully describes strategies for long-term trading, swing trading, and day trading in a clear, easy-to-understand manner. Written by the author of the hugely successful Forex Patterns and Probabilities, The Ed Ponsi Forex P… More >>

The Ed Ponsi Forex Playbook: Strategies and Trade Set-Ups

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The first plain-English introduction to foreign currency exchange trading–one of today’s hottest profit opportunities The foreign currency market is the largest financial market in the world, and foreign exchange trading is quickly becoming one of today’s most high-profile, potentially lucrative markets. One problem is that books on the topic are complex, technically dense, and difficult for Forex novices to grasp. FOREX Made Easy is the first book to ap… More >>

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Part of Prentice Hall’s Connection: Key Themes in World History series. Written based on the author’s annual course on slave trade, Captives as Commodities examines three key themes: 1) the African context surrounding the Atlantic slave trade, 2) the history of the slave trade itself, and 3) the changing meaning of race and racism. The author draws recent scholarship to provide students with an understanding of Atlantic slave trade…. More >>

Captives as Commodities: The Transatlantic Slave Trade

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Praise for Commodity Fundamentals

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Commodity Fundamentals: How To Trade the Precious Metals, Energy, Grain, and Tropical Commodity Markets

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Strategies, tools, and solutions for minimizing risk and volatility in option trading An intermediate level trading book, The Option Trader Handbook, Second Edition provides serious traders with strategies for managing and adjusting their market positions. This Second Edition features new material on implied volatility; Delta and Theta, and how these measures can be used to make better trading decisions. The book presents the art of making trade adjustments in a … More >>

The Option Trader Handbook: Strategies and Trade Adjustments

Remember the old TV show, WKRP in Cincinnati, in which the dorky Les Nessman would always give the pork bellies report?

Or how about the 1980’s movie, Trading Places, in which Eddie Murphy and Dan Akroyd corner the orange juice market? These are both examples of commodity trading in the popular media.

Commodity trading is one of the fastest growing sectors of the financial markets, and for good reason – in 2006, commodity prices have gone through the roof. If you haven’t heard anything about the prices of pork bellies or orange juice skyrocketing, that’s because there is much more to commodity trading than just these two items.

Corn, oats, soybeans, wheat, soy meal, bean oil, cattle, coffee, sugar, cotton, steel, copper, silver, gold, platinum, natural gas, crude oil, and gasoline are just a few of the dozens of commodity trading options. Metals – steel and gold, in particular – and petroleum-related products, have seen major price movements in the past year.

Commodity Trading – Buy Low, Sell High; Or Sell High, Buy Low

If you remember back to Trading Places, the classic commodity trading comedy, Eddie Murphy and Dan Akryod entered the trading pit and immediately started selling orange juice contracts.

They didn’t own any orange juice, but they were able to sell it anyway. This is how commodity trading works – you either hope to buy low, sell high; or sell high (first), and then buy low.

Commodity Trading Hedgers

This aspect of commodity trading can best be understood by taking a look at the market participants. On one hand, you have the hedger. Hedgers want to guarantee commodity prices in order to lock in profits or avoid excessive losses.

For example, imagine a jewelry maker who needs 1000 ounces of gold to make a collection of necklaces. He needs the gold in six months, but the way gold prices have been going up, he’s worried that he won’t be able to afford it.

To hedge in the current price of $500 per ounce, the jewelry maker could buy ten 100 ounce futures contracts on a commodity trading exchange. Then six months later, if the price has gone to $700, the value of his contracts will have gone up by $20,000 each.

He can sell the contracts for a profit and use the proceeds to buy the actual gold, which will result in a net price of $500 per ounce.

If, in the above example, the value of gold had actually fallen to $400 per ounce, the jewelry maker would have lost money. He’d be locked in to paying $500 per ounce for gold when the actual market value was only $400.

Still, if the jewelry maker’s primary concern was to not end up paying $700 per ounce, this will have been a valuable commodity trading experience. In this way, hedgers use commodities contracts like insurance.

Commodity Trading Speculators

On the other side of commodity trading is the speculator. This is someone who has no business interest in wheat, crude oil, or copper, but essentially gambles on the price of each commodity going up or down.

Commodity trading is very popular with speculators because it requires very little margin. This means that commodity trading speculators can control thousands of dollars worth of commodities for just a few hundred bucks.

The downside of leverage in commodity trading is that it can lead to very big losses that you might not be prepared for.

For this reason, your credit history will be more important when applying for a commodity trading account than an account to trade in almost any other financial market.

In this article I want to describe the basics of options: what they are and how one can trade them.

Options trading is extremely popular and provides far greater possible returns than does trading in the underlying stocks. But it also carries more risk.

So it is extremely important to understand how options work as financial instruments and be clear on what your potential risk and rewards are in trading them.

Options are contracts on some underlying trading instrument – shares of stock, bonds, a commodity, even a mortgage loan! Stock options are the ones most people are familiar with and are the most traded by individual investors.

But regardless of what the option is on, there are common features. One of the most basic is the contract feature specifying what the option owner has actually contracted for.

There are two types of Option Contracts: CALLs and PUTs.

CALLs

A ‘call’ confers on the (option) contract holder the right to buy an asset at a stated price on or before a specified expiration date. An option to buy, but not an obligation. That’s why it’s called an option!

The owner also has the option to let his contract expire. But then he loses everything he invested in buying that contract.

Essentially, when buying a Call option, you are betting that the underlying asset will increase in price before the expiration date. And, not only rise, but rise enough to make a profit.

But whether you make a profit is determined by the price you paid for the option, and the increase in price of the underlying asset. Clearly the price must rise enough to cover the difference between the market price and the price at which you can buy the security (the strike price of the option contract). And, since the option itself has a cost, the price has to rise enough to cover that additional amount. That cost is called ‘the premium’.

The cost of the option fluctuates with the supply and demand for that contract on the open market. Several factors determine the premium, including the price of the underlying asset, the strike price of the option, the time remaining on the option, and others.

The time remaining is particularly important. Naturally as the option contract nears its expiry date the price of the underlying asset (the stock for example) is less likely to change dramatically from its current price. Therefore the result of excersizing the option is known with more certainty and the cost of the option reflects that outcome. For example, if a Call option is nearing its expiry date and the value of the underlying asset is lower than the strike price of the option the option is practically worthless, and so its cost will be very low.

Suppose it’s June 1, for example, and Intel (INTC) has a market price of $27. Call options for Sept 30 are selling for $3 with a strike price of $30. You buy one contract for 100 shares.

So, if you held until expiration you either lose $300 ($3 x 100, the initial price of the contract not including commission), or buy the underlying stock at $30. If the current market price were $35 you’ve made $200. ($35 – ($30+$3) = $2 per share x 100 shares, ignoring commissions.)

When the market price of a share is above the strike price, the option holder is ‘in the money’. If the market price is lower, he’s ‘out of the money’.

PUTs

A ‘put’, by contrast, gives the option buyer the option to sell an asset at a certain price by a stated date. The option, not the obligation.

Puts are similar to ’shorting stock’, in this sense. Put buyers are betting the stock price will fall before the option expires. In this case the market price must fall below the strike price in order to garner a profit from exercising the option. (Ignoring the cost of the put, for simplicity.) Under those circumstances, the option holder is ‘in the money’.

For example, take the same situation as above but let the option be a put. If the market price falls to, say $25, your profit would be:

First, $3 x 100 = $300 = Cost of put, excluding commissions.

Then, buy 100 shares at $25 per share = $2,500 to repay broker ‘loan’ (since shorting stock involves borrowing shares you don’t own, then repaying later).

Finally, sell 100 shares at Strike price = $30, 100 x $30 = $3,000

Therefore, your profit = ($3000 – $2500) – ($300) = $200.

(Actually, the broker takes care of all the underlying mechanics. The investor merely orders the trades at a given time and date.)

Whether investing in calls or puts, wise investors do need to do their needed homework. Options trading is risky and somewhat more complicated than simple stock trading.

But it can be extremely lucrative!

1. You are Responsible

If you think that someone can sell you an e-book or forex trading system and make you rich think again. While you can get good forex education from some sources you can’t follow it blindly.

Successful trading comes from within and means having a forex trading strategy you understand and have confidence in, so you need to do some homework.

If you don’t understand EXACTLY how your Forex method works, you won’t have confidence in it and you won’t have the discipline to follow it through losing periods.

2. Avoiding Common Pitfalls

Many traders put in a lot of effort but get the wrong forex education and try methods that are never going to work.

Here are the two most common errors you can make:

Day trading:

This method makes me laugh, you can’t win and its obvious why – all the data is random. 95% of forex traders lose but this increases to 100% in the case of day trading.

Predicting:

Many traders think they have to predict where prices are going to win – but predicting is really hoping or guessing and you won’t make money relying on hope. You need to act on confirmation and I will come back to this later.

Also many traders fall for the markets move to scientific theory – rubbish! They don’t. If markets moved to scientific theory, we would all know the price in advance and there would be no market.

There the two most common mistakes and there are many more – they are mostly believed by lazy traders who think trading is easy.

3. A Forex Trading System For profit

You can build one easily and it only needs to be simple and your all set to trade for profit.

If you learn Forex trading correctly you will see why – simple trading systems are more robust and have fewer elements to break.

Use Forex technical analysis and charts and ignore the news. If you do it based upon charting you will be able to simply follow price trends and lock into them.

A simple currency trading system that trades support and resistance is ideal – you either look for it to hold or break and go with the potential move. What you need to do is CONFIRM you’re trading signals before entering.

Most traders like to simply buy into support and hope it holds and predict.

What you really need to do is wait for support to hold, by watching price momentum turn up â?? You are then trading with the odds. If you don’t know about momentum indicators look them up.

If prices break above resistance learn to go with the break and learn breakout methodology. Most major moves start from new market HIGHS not lows – so learn to go with the breaks based upon momentum.

That’s a simple system outlined that will work just support resistance and some momentum indicators.

4. Deal With Risk and leverage

Leverage is what makes Forex trading so lucrative and also destroys novice accounts because they can’t handle it.

You need to learn to take calculated risks when the odds are in your favour and employ strict money management. Donâ??t make the mistake of trying to restrict risk to much as you will simply create it and guarantee you will be stopped out.

It’s a balancing act you need to take risks but make sure the odds are in your favour when you do

5. A Plan For Profit

In any business you need a plan and Forex trading is no different, set a target and work towards it.

If you were to compound 100% per annum you will be up there with the best traders in the world.

Be patient in reaching your goal good high odds trades don’t come around everyday, so trade sparingly.

I know traders who trade just a few times a year and compound 100% or more!

Keep in mind in forex trading you get paid for being RIGHT not the amount of times you trade.

If you want to be professional Forex trader you can, if you learn Forex trading the right way and get the right Forex education.

Most traders are too lazy, or think it’s easy to win and while it’s not difficult, you do need to take responsibility and work smart in the right areas.