I do not say that there is no productive value of technical analysis, instead I suspect of its productive value. There are many flaws in efficient market hypothesis. It is based upon unwritten basis that data is the key factor determining market prices.

Graham stated the following in “Security Analysis”:

“the influence of what we call analytical factors over the market price is both partial and indirect? partial, because it frequently competes with purely speculative factors which influence the price in the opposite direction; and indirect, because it acts through the intermediary of people’’s sentiments and decisions. In other words, the market is not a weighing machine, on which the value of each issue is recorded by an exact and impersonal mechanism, in accordance with its specific qualities. Rather should we say that the market is a voting machine, whereon countless individuals register choices which are the product partly of reason and partly of emotion?”

There are many people who cite the quote without looking into what is being said. Graham is said to have a broader mind, like Buffett. His broader mind is both a curse and a blessing for him. In security analysis, at several points, graham explored instead of helping, some interesting topics in depth, which was not required. Apart from interruption from many, Graham could have said that stock prices get a smack in shorter runs and they are controlled by intrinsic factors of business in longer runs. But he did not said that. He described and presented the stock market to be of great interest to investors and economists.

Data have an indirect effect on prices. Market is like a mirror full of fun. Original data is reflected in parts, but the reflection is not an accurate representation of original data. A step ahead of this metaphor, the Efficient Market Hypothesis has its basis in the idea that mirror create the reflection only after the image action on it. It pay no attention to the truth that a same process can be interpreted in different ways. One can say that it might be the mirror that has an action over image while creating reflection. This is the way we interpret the process.

We don’t like to use inappropriate metaphors while talking about the market. Price fall is said to be wealth destroying. But, no one says that he lost his wealth with reduction in the price of product. People generally talk about market not as a collection of trades but a sort of object in the options technical analysis of efficient market hypothesis.

Related posts:

1. Understanding the Options Market’s Technical Analysis and Indicators
2. Technical Analysis Series Classes Review
3. Technical Analysis: Do You Need It?

Though big, its expectations involve numerous varieties of transactions. Optional trading is one way of making money while trading in foreign currency. As the name indicates, the trader’s purchases or sales is the ideal means of handling the transaction after agreeing on time and price. A price agreement and date expiration contract should be drawn by the option seller and the option buyer. A premium price is paid by the trader in purchasing this right, although no obligation to conclude the transaction exists unless it is within one’s interests.

In Forex options trade, an investor can use several strategies with two major goals in mind, gaining profit as well as hedging against various positions. Two essential strategies can also be formed by basing on the above purposes of trading options and they are profit motivated and hedging strategies. The strategy on profit motivation dwells on the options trading usage for great profits to be gained with minimum risk of loses since unsuccessful forecasts can only lead to the disappearance of the premiums. It is common for traders to use these options whenever an important event or report is present because of sudden market movements Options are efficient in the decrease of risks in regard to hedging strategies. Various traders use options alongside stop-loss points to enhance a possibility for limitless profits if there is continuous movement of profits against the trader’s position.

Related posts:

1. 3 Strategies on How to Reap Profits from Forex Currency Trading
2. Study Your Forex Currency Trading Options
3. Tips on Tax Deferral Strategies for Tax on Short Term Gain

Every now and then you hear about something so out of the ordinary, so unusual, that you have to stop and take notice.

Rumors have been spreading on internet ‘message boards’ and ‘blogs’ for the last couple of days that the guys over at The Options University are about to start GIVING AWAY…

Their Options Mastery Series Course worth $1997!
Click here for more information…
Rumor has it, the cost will be zero. It will be F.R.E.E.

The “buzz”, rumors and innuendos have been building in the online trading and investing circles for some time now…

And perhaps you’ve even heard some of them.

Let me be the first to lay them to rest…

The rumors are true!

Brett Fogle, President of OU, is about to start GIVING AWAY their Options Mastery Series course (OU’s flagship product) that others have paid as much as $1,997 for in the past…

Click here for more information…

Why would he do that?

I don’t know… (He’s possibly lost his mind)

What I do know, is that this is one of the best (If not THE BEST) Home Study Courses on Options Trading on the market!

And as long as he’s going to be GIVING IT AWAY, I think you should take advantage of his temporary lapse in judgment, and reserve your copy now before he comes to his senses.

His reasons are below (which I think you’ll find inspiring) but RIGHT NOW I think you should view this eye-opening new video that they’ve just put up online.

This impactful video reveals:

* An entirely new perspective on your trading in volatile markets like these (and why you should be paying attention)

* While the ‘herd’ got slaughtered last year, how the smart and savvy investors made out like ‘bandits’ using options.

* Undeniable proof that Ron Ianieri and Options University have been calling this market meltdown for well over a year, and showing their students how to profit… and profit Big-Time… using options all the way down!

* Important new reasons why now is the BEST TIME IN HISTORY to be learning options and using them not only to protect against losses, but also to get ‘back in the black’ much faster than with stocks alone.

* And most importantly, how to get a personal copy of the $1,997 training course on options (their Flagship Product) totally without charge… and another $970 in complimentary bonuses and monthly ‘continuing education’ training.

Ok, so why is Brett and Options University doing this?

It’s because they believe we’re headed for even more market volatility in the future, and we may have only just seen the beginning of the US market meltdown.

He says:

“We could put in a bottom here, but we’ll likely go much lower with the U.S. Commercial Real Estate market on the verge of collapse, and residential home foreclosures at record numbers (so  high, the banks can’t officially ‘post’ them all)…

…Which means U.S. banks are also in danger.”

Basically, he wants to let you know that they CARE about U.S. investors, and want to get this information into the hands of as many of you as possible… lost income to them be damned!

They’ve also developed some NEW proprietary tools and scanners to help you find better trade setups, which they’ll give you complimentary access to soon as well.

So here’s what I recommend you do next…

Watch the video, and then get on the early notification list:

Click here for more information…

You’ll then be able to reserve a complimentary course, plus $970 worth of ‘Continuing Education’ over the next 12 months.

But there is one ’small catch’…

Brett said he can only allow 1,000 courses to be released. After that, they’re ‘closing the doors’ because there’s only so much they can ‘foot the bill’ for… (Generosity has it’s limits.)

After all, that’s $1,997,000 in lost potential income to Options University, and that’s apparently as much as he can stomach.

Plus, they don’t want to make all their past customers who have paid nearly $2000 for the course screaming mad at them.

So I suggest you go there now, because…

This email is likely going out to over 200,000 active traders and investors. And they are giving all of their ‘preferred partners’ like us first shot at letting our subscribers ‘in’ on  this great deal… So these WILL go fast!

This is truly a case of “you snooze, you lose.” Don’t delay.

P.S. Don’t miss this rare chance to get your hands on Options University’s flagship product – their Options Mastery course (worth $1,997)… plus another $970 worth of bonuses…

… Absolutely F.R.E.E!

P.P.S. But here’s the ‘Bad News’…

Brett can only let 1,000 sets go out. And this email is going out to at least 200,000 active traders and investors TODAY.

To get on the early notification list for reserving your set all you have to do is watch a short video and leave your name.

Here’s the web page to do that right now…

Click here for more information…

Related posts:

1. The Options Mastery Series Review
2. How to Make 2009 Your Best Options Trading Year Ever (Video)
3. Investor SuperConference 2008 DVD Released!

The Original Stop
Your original stop to a purchase is just below the previous day’s low by 1/8 to 3/16 for a short. If the price is just off the whole number, you have to place stop 1/8 on the far side of that price.

For instance, if you are looking for a stock at 40 1/8 and 38 1/8 is the previous day’s low, you need to place stop at 37 7/8 so that the whole number 38 would serve as support. You need to place it 1/8 below 38 because it can break it by 1/16, though typically breaking it by 1/8 will signify that the break is real.

The other original stop is employed if the gap past the original entry point and where you apply a 30 minute rule to enter a stock. In cases of a buy where the stock is up 1/4 above your buy price and entered it when stock broke the 30 minute high, then you need to use 1/8 to 1/4 below the previous day’s low when the stock sets up as the stop. Make sure to adjust the 1/8 to 3/16 according the volatility of the stock.

Protecting Profits
The first thing one need to look in a stock is a place where to protect partial profits. Mostly partial profits are selected after a huge price movement mornings or in the last hour of the trading day.

Usually this is used to cover the stop. The rest of the stock position is generally held until your expectations are attained.  Another method to take these partial profits is, generally after large moves in a short time.

After a huge move, you will see a pullback. Sometimes it’s short-lived; sometimes it serves as the best stock price of that day. In order to optimize the move, investors want to get out of partial shares when moves appear to be nearing the end. Often such pauses occur at resistance and you should protect partial profits at the first and second time.

Trailing Stops
Another type of stops is those called trailing stops. These stops are used to protect profits. Let us discuss them in terms of a buy. You will find them just opposite when dealing with a short. One of the trailing stops people use, is a break in the 15 minute 20 moving average.

This means that when an entire bar trades on the other side of the 20 ma and closes at a point, that closing price is the price we start our stop.

This discussion on protective stops strategies will reduce your chances of repeating the mistakes and enable you to utilize the day trading strategy.

Related posts:

1. 3 Useful Day Trading Strategies for Future Market
2. Tips on Applying Options Trading Strategies
3. How to Implement the Protective Put Strategy Safely

After the exchange traded options introduced, traders can access to various investment strategies. Today majority of investors can utilize the opportunities that allow them to profit in many ways: up, down, or sideways stock places.

The result, as expected, is that the option trading has grown rapidly. Today every investor can use a wide range of investment strategies. That range from conservative investment strategies to the high risk investment strategies.

This enables the average Joe to design and use an investment strategy of his choice that can either offer expected returns while maintaining the same risk levels or it may minimize risk levels while keeping the higher returns.

Some of the most common option investment strategies that are being implemented, the definitions of some of the key option terms, forecast terms, and option language terms are:

Key Option Terms:
1) Strike Price: This is the price that options must reach to be exercised.
2) Expiration month: The month when the option expires.
3) Call: It’s an option to purchase the stock in future.
4) Put: It’s an option to sell the stock in future.
5) Premium: The value of the option that you pay.
6) Exercise: Exercising your right to buy or sell the option.
7) American Option: This is the option that you can be use at any time up to its expiration.
European Option: These options can be used only at the expiration.

Option Language Examples:
1) Buy the XYZ June 50 Call at $4.00
2) Sell the XYZ June 50 Call at $2.00
3) Buy the ZYX August 20 Put at $5.
4) Sell the ZYX August 20 Put at $0.50

Here, a trader issues his order to buy/sell, (XYZ/ZYX), choose the expiration month, strike price, nature of option (Call/Put), and then he choose the option premium to bid to buy and sell stocks.

The terms of stock market forecasts are:
1) Bullish: If you believe the price of the stocks will increase.
a. “Outright Bull”: If you think the stock price has the potential to go up substantially.
b. “Moderate Bull”: If you think there is a limited chance for price appreciation of stocks.
2) Bearish: If you believe that the price of stocks will decrease.
a. “Outright Bear”: If you think the stock price has the potential to go down substantially.
b. “Moderate Bear”: If you think there is a limited chance for price decline.
3) Neutral: If you think the stock price will remain almost same.
Once you understand all of these useful terms of stock market, you can use these option investment strategies to explore the stock option market.

Related posts:

1. Is Stock Option Trading A Profitable Option?
2. Option As a Strategic Investment?
3. The Rolling Investment Option: How to Use It

• Helps in predicting trends in the foreign market.
• Represents number. Currency price represents all information and its impact on the market.
• It helps us to see chart patterns as they are reliable, consistent and repeating.

In technical analysis, prices move in a trend. Researches have shown that profitable trade is the outcome of trades with trend. This trend helps you in knowing about the market direction. To learn what the market is doing is decided by the “tools of the trade” or the technical analysis and indicators and their applications.

Moving averages
It tells you the price at a particular point of time over definite interval. The word moving indicates that they provide you the latest price while calculating average over the selected time period.

They are lagging in the market, which shows that there is change in trend. With the help of longer term and shorter term multiple averages, a buy signal is detected when short term crosses the long term of moving average in upward direction. Similarly, a sell signal is detected if it moves in a downward direction. For example, you can use 40 days vs. 200 days moving average or 5 day when compared with 20 day moving average. There is linear weighted average scale that takes exponentially weighted or recent prices into consideration. The linear weighted scale is more superior to multiple averages as it lay more emphasis on recent changes in the price. Some option market indicators are as follows:-

MACD
this system is based on difference between 12 exponential moving averages and 26 exponential moving averages with the trigger line of 9 days. The buy signal is indicated when there is sharp drop in the market but positive MACD and vice versa.

Bollinger Bands (with the sound of an elastic band)
Prices are kept between lower and upper bands. They might become narrow or widen depending upon market volatility at specific time. A buy signal would be when moving averages is below the Bollinger brand and converse for sell signal. It is also used in conjunction with rate of change, MACD, CCI, and RSI.

Fibonacci Retrenchment
it is the description of cycles found in the nature. When it is applied to technical analysis, the shift in market trends is observed. After the climb price, sometime the entire original move can be retraced. Resistance level and support occur in proximity to the level of Fibonacci retrenchment.

RSI
RSI (relative strength index) is the measure of market activity. It expresses whether the market activity is oversold or overbought. It is the most important indicator that decides what the market is going to do. A lower RSI number indicates oversold and a higher RSI number indicates overbought.

It is generally recommended to use 3 or 4 optional market indicators before deciding or entering into a trade. Finally, technical analysis and indicators help to measure the money at risk in trade.

Related posts:

1. 3 Most Powerful Day Trading Technical Analysis Methods
2. Technical Analysis Series Classes Review
3. Technical Analysis: Do You Need It?

It is to be remembered that 100 shares makes up one contract. Out of money puts and calls are the option used to construct the collar strategy. The main objective is the construction of protective put strategy without any payment for the put purchase. The main things discussed were premium in covered call strategy, collecting premiums over a period of time without paying them. We collect the premium by selling the call which is used for capital outlay offset that was incurred for the put purchase.

It is general belief that there is only one positive outcome out of three in protective put scenario and two out of three in covered call strategy. Protective put strategy was the one providing the downside protection. Therefore, it was a challenge to construct a protective put strategy without paying out money. And the solution that came in front was the collar strategy.The collar strategy has the characteristic over both the covered call strategies and protective put strategies. Like the protective put, the collar strategy has unlimited downside protection and upside caps on profit like covered call.

This strategy is called an even trade, which means that you neither pay nor you receive any money. In reality, you have to pay out a small or very small premium, depending on the options used. But the collar has the neutral goal in terms of premium.

In order to construct a collar strategy, sell one out of the money call and buy one out of the money put in every 100 shares of stocks owned. There is no doubt that there must be different strikes of call and put options. It is not possible that there may be an identical strike price in both call and put option to both in-the-money and out-the-money.

For example, a collar strategy may be constructed by the purchase of 27.5 puts and the sale of 30 calls with a stock price at $28.50. There is not much gap in the price of put and call option so that the funds generated by the cost of put purchase is equal to the sale of call.

Related posts:

1. How to Implement the Protective Put Strategy Safely
2. The Best Stock Repair Strategy: Options Reactions of Up, Down and Stagnant
3. All About The Covered and Uncovered Call Options

If you’re looking for a more in-depth, leisurely method of learning to successfully trade options…

… and the chance to go from a rank options trading “newbie” to a market-beating “Ph.D” in just a few short months, then this may be the most important email you’ll ever read.

Here’s why…

Options University has designed the perfect service just for you!

This service is called Options Strategy Spotlight (but we’ll even throw in our very popular Options 101 course too – read on…)

The Options Strategy Spotlight (OSS) series of classes is truly unique. These classes cover the course of an entire year.

This service is designed to teach you a new options strategy each month.

In your monthly class you’ll learn everything there is to know about a single options trading strategy.

You’ll learn it from A to Z, and discover the inside secrets of every strategy that 99% of other traders will never know… including professional traders!

Once a month, our panel of options experts will introduce a new strategy and cover it in-depth for two full hours in our live, interactive web-conferencing platform.

The classes take place the second Thursday of each month at 9:00 pm Eastern, starting March 19, 2009. (That’s just next week!)

Here’s a sample of the strategies you’ll be able to master over one year:

- The Covered Call (Buy-Write) Strategy
- The Stock Replacement Strategy
- The Stock Replacement Covered Call Strategy
- The Covered Put (Sell-Write) Strategy
- The Protective Put Strategy
- The Synthetic Put Strategy
- Bull Spreads & Bear Spreads
- Time Spreads
- Long Straddles & Short Straddles
- Long Strangles & Short Strangles
- The Butterfly Strategy
- The Condor Strategy

Click Here for More Information… 

And if those strategies sound too complex to you right now, don’t worry. You can start out with our highly-regarded Options 101 class series to get all the basics out of the way.

You’ll learn everything you need to know to get started trading options the RIGHT way – from what a “put” and a “call” is, all the way through some of the most effective options trading strategies.

And then, you’ll go into the Ph.D level of options trading with the Options Strategy Spotlight classes, discovering the little-known, high profit-pulling options trading secrets of the world’s most successful floor traders.

If this is the type of scenario you’re looking for, then I think these are the perfect classes for you.

To help you decide, Options University presented a webinar last year to preview the classes and to show you what they are all about.

And if you’ve already decided that the 2009 OSS series of classes is exactly what you’re looking for, here is the link to the registration page:

Click Here for More Information…

But don’t dawdle too long! The first class starts next week, so the clock truly is starting to wind down. And you don’t want to have to wait another FULL YEAR when they come around again.

So why not register right now, while you’re thinking about it? One year from now, when you’re the “go-to” options trading expert in all your social circles, you’ll be glad you did.

Here’s that registration page again…

Click Here for More Information…

Related posts:

1. Strategy-Spotlight Series Classes Review
2. The Practical Application Classes Review
3. The Rolling Investment Option: How to Use It

In forex if you follow your indicators and trade the way you were taught and you spend the time it takes to read the market then you will find that you are a rare minority. You are a rarity because you are a winner. For every 1 winner there are 9 losers. Winning is a big thing because of that fact right there. Most people wont put the effort in that they need to when it comes to trading so they enter the market and then at the end of the day dont understand what is going on and why they can’t ever make money.

When there is a lot of noise use it as a heads up and check your indicators and start studying the market for yourself. Then when youve gathered enough information make a decision for yourself. The more noise there is the harder you should look at your indicators and your own reading to determine a decision. Be sure you understand what your signals are telling you despite what the noise is telling you. It is a process to learn to be in tune with the market but the harder you look at your indicators and signals the more profitable you will be. Once you find your concentration and learn to be relaxed and patient waiting for what the market is telling you and not the noise you will start to make the big bucks.

The market can be a lonely business and you have to learn to balance being alone and talking to others about the market. Make sure you find people who trade with the same or similar rules you do and have similar views on the market. Otherwise your methods and rules will become confused because the opinions of the traders around you are conflicting with what you are.

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1. 3 Strategies on How to Reap Profits from Forex Currency Trading
2. Forex Account Signals: How to Keep Yourself Alert
3. Currency Forex Online Trading Strategy: How to Leverage It?

We can buy and sell shares at the stock exchange. Usually there is no limit to the number of shares that we can buy or sell. Only thing needed is that there is someone, ready to sell at a price that we are ready to buy.  Normally price is fixed by the seller. If transaction takes place through a brokerage firm there will be a commission for the transaction. Commission is normally for round lots. Even if you buy share in lesser quantity, you pay the same commission. Take an example, if you buy one round lot of share.  Brokerage firm may charge $20 for the both buy and sell transactions. In case you buy only 10 shares even then, they will charge you $20 for the transaction.. The amount of commission that the brokerage firm normally charges for its stock transaction will differs from firm to firm. Some brokerage firm may charge less compared to others but they may require you to trade a lot in one transaction.

Transactions are mainly of two types namely call transaction and put transactions. Call option gives its owner the right to buy certain units of share at a specified price. This price is normally agreed upon between the call option owner and the seller. Most important transaction has to take place within a framework of time. Within this stipulated time period, stock price is linked to call option price.

The second type of option is put option. In this option owner has the right to sell certain units of share at an agreed upon price. Price of the deal is agreed upon between the put option owner and the seller. There is certain time frame to the deal.  In this case also there is a link between stock price and option price. In case of put option these two are linked in the inverse way.

Which ever option you exercise, you can buy or sell shares so long there is some one ready to sell. Transaction of an option may involve four possible permutation and combinations. In the first case one is buying a call option means that one buys the right for buying certain units of share. In the second case of selling call option one can act as seller. In the third case one is buying a put option means that he can act as buyer of this option. In the last option one can act as seller in the put option.

Call options strategy and put options strategy represent the two approaches that try to use limitations of the method for maximum profit. Call option buyer benefits from the upward movement of the stock price where as put option buyer gains from the downward movement of the stock. On the other hand, a call option seller hopes that the stock price will maintain or fall. Put option seller, on the other hand hopes that the stock price will go up.

One can deal in any of the calls or puts option but they will gain benefit only if they correctly predict the price movement of the stock. For option, besides estimating the direction of the stock price movement you are limited the deadline of the option.

Related posts:

1. All About The Covered and Uncovered Call Options
2. Are Stock Options Risky?
3. Naked Call Options Trading Strategy