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Thursday, July 31, 2008

Market around us

They are many market around us .Future,commodity,Forex,Stock ,and many other more,

but now let talk more about Stock market for now

Share/equity/stock that all mean the same things,these mean that u buy a ownership of the listed company.

A slight introduction for option for now,as i am a trader that uses option as a leverage tools Option is a contract of controlling 100 share with limited time
With option u are able to control 100 shares which are a lot cheaper than normal 100 share ,about 1/4 the price compare to 100 share.

Differences between trader and investor

The main different between a trader and a investor is the Time
Trader usually take on trade for 1 year or below whereas
Investor take on trade for 1 year and above

Investor usually go bullish on the trade because they are looking at very long term.
because Dow Jones index has a history that if U buy at any part of time for 10years, U will still make money.
however for trader is to take on a faster trade,both bullish and bearish.
Example Dow Jone may drop for a month before it go up, trader will pick on this chance to catch all type of wave.
Trader may take on trade at these following
1)momentum trade-a few month of holding open position
2)Swing trade - A few week of holding open position
3)Day trade -A few hours of holding open position
4)Scalping - A few minute of holding open position

Monday, July 28, 2008

That my favourite quote in trading

A lots of people may see that investing is dangerous ,but for a smart people think differently ,No investing is dangerous,remember that Inflation is about 6%,that mean if u do not make your money grow,your money will automatically become less worth after time pass.in simple term ,if u have $1million in 2007 that can buy $1million of items 2007 ,after a year later if u never invest/spend/earn ,u still have $1million that can only buy $0.94Million worth of item in 2007.and remember it is compounding interest effect.
Warren buffet averagely can increase his net worth 20+% a year,that make him the world richest man ,inflation 6%can kill billions of people.

Sunday, July 27, 2008

General Market Outlook for this few years

Due to my own market analysis ,financial is directly affected the performance of the whole market.think of it this way stock market and financial both are not producing anything ,their role is to arrange the money flow ,now currently due to subprime and mortgage financial problems,problem is likely to persist,even Fed cannot afford to let FRE and FNM to bankrupt ,will probably give blank check to sustain the mortgage financial.however this only "cure outside but not inside",so financial and housing crisis will most likely to sustain and will cause US to be in deep shit ,causing more problem which will result foreign investor to shift their money out of US,which will in turn causing a chain effect,causing US economy to be stagnation even after this recession is over.