Did you ever wonder what was going on at those times? Well as “deep”
as you can make it seem, the real answer is that the times coincide with lunch! Don’t laugh yet,it’s for real. For instance

let’s say you work a trading desk at the NYSE. You go out for lunch at about noon and over a roast beef sandwich and a soda, you are talking to “fellow” traders about the overall direction of the day. Is it possible that when you come back to work at 1, you may want to buy some stock if the feeling was good? Is it possible that the lunch period brought a bunch of nervous traders together and they scared you a bit? is it possible you may want to sell some stock when you hit the floor again? Yes, it is and although you may be thinking “it can’t be that easy” it certainly is. Watch the market moves at the 1pm time slot and you will indeed see some increased volatility.

The same thing happens at about 2:45 to 3:00 pm. Why? Guess when the west coast traders are going to lunch out there? Right! With a 3 hour time delay, office workers that are just hitting lunch time are flooding to their telephones and computers to make some trades.
So sure enough watch the “tape” at that time slot and you will see an increase in activity. As much as television shows everyone trading every second of every day, the fact is that lunch time is the time of the day when most people who want to “do something” actually get the time to do it.

The last half hour of the trading day is indeed where the market
pro’s are doing their best work. Funds that want to buy generally do it during that time slot and last minute buy/sell imbalances have to get straightened out. If the order flow is positive, we can often see some huge moves in that last 30 minutes. (Likewise if the day has been lousy and they are nervous, they can really accelerate the selling). Remember you can often take your queues about the next day’s action from the close of the previous day. If we rally hard into the close, it’s probable that we will open strong the next morning. If we tank in the last half hour, you can almost bet the next morning will either gap down, or it will rise for a few minutes and then fall apart. Quite a few traders make their “day trades” based on the last 20 minutes. If we are running into the close, it is a pretty good bet the the leaders will gap up a bit in the morning and you can sell into that gap with a nice little profit.

For most of you who aren’t hard core day traders, it would be best
to buy your stocks in the “quiet periods” of the day. For instance if you want to buy XYZ, take a look at it during the 10:30 to 11:30 time slot. If its doing well at that time, chances are good it will continue to do so for the day. Likewise, if it is looking good after the 1 PM shake, that too is probably a decent time to get involved. By watching the “moves” the market makes during its trading session, you can often get a much better idea of where things are going by seeing “who’s doing what” after the lunch hours! Watch this phenomenon for a few days and see what you think.

Mouser57 of stockhideout.com Penny Stock Investing

Mouser57 of stockhideout.com Penny Stocks

First off, my most profitable stocks are swing trades. I guess this makes me a swing trader. This means that I mainly trade in 1 - 5 day patterns.

Why swing trade?

(i) Holding a stock long is a good way to make profits, however it doesn’t maximize your profits. By following the trend, you can capitalize on all market movement.
(ii) Daytrading only works if you have the capital to move a stock, or are quick enough to lock in small profits during movement. Unless you have honed your trading skills, daytrading is often a quick way to relieve yourself of your savings.

Stock Selection

Here are the things I look for when picking a stock:

1) Volume. Is there enough volume that you can get in and out if you need to? Make sure that the daily volume is at least 20x that of your position.
2) Float. Anything under 50 million shares is a sign that the company is on the right track.
3) Filings. Does the company have a history of reverse splits? Go with your gut on this - if it doesn’t feel right, than stay away.
4) Charts. If you want to trade successfully, you HAVE to understand charts. Stockcharts.com has tutorials on understanding trading patterns and indicators. You really can’t make money unless you understand the tools that make you money. If you need help with the charts, ask some of the pros on this site.
5) Level II. Take a look at the level II. Is there a lot of resistance? That is usually a bad sign.
6) I am never rushed into buying a stock. Usually when you hear about a stock in the chat room, it is too late. Research using the points above … there are plenty of trains leaving the station and lots of opportunity to make money.
7) Every stock on the otcbb/pink sheets that is under 0.05 is junk. You will not find the next walmart or google in this group of stocks. Traders call this part of the market the ‘wild west’ - it is full of pumpers, scammers, manipulators, and daytraders. It is a good place to get eaten alive, because there are so many variables working against you. Market makers naked short sell these stocks, they are often on the verge of bankruptcy, shells are created to funnel monies, etc etc.
If you are new to the game, stay away from otcbb/pink sheet stocks with headquarters or owners in Canada, Las Vegas, San Diego, New Orleans, Florida, or Mexico. An oil company headquarted in Las Vegas? Yeah, right. These stocks are junk, imho.

Don’t diversify

If you only have $2000.00 to trade with, don’t diversify it. Buy 2 stocks with good potential and keep a close eye on them. Become an expert on your stocks and dump them if they do not perform.

Don’t fool yourself

Plan an entry and exit strategy before you trade. Pick your entry and stick with it, don’t let your emotions take over because that is when you make a mistake. Let the stock come to you, if it doesn’t … forget about it. Rushed money is lost money.

Stick with your exit strategy. When the stock gets to your exit strategy, sell. Don’t fool yourself into thinking that “it’s going to a buck”. Because it isn’t. You have to sell to make money

Don’t go against the market. You can’t change the direction of the indicators, so just go with the flow. Otherwise, it is like trying to bail out a sinking ship with a teacup.

Don’t hold a dog. Every 50% loss started as a 5% loss.

Don’t try and make up the previous loss on the next trade.

Mantra: “Bulls and Bears make money, pigs get slaughtered.” aka. Don’t be too greedy.

My entrance and exit strategy

I buy a stock just above the support levels. If the stock is not performing, I can dump it into the support. I do not let my losses exceed 10%

I sell a stock after gaining 11%. This allows for 30% gains every week, which really is pretty good. The only time I break this rule is if a stock is moving with a lot of momentum and strength. This being the case, sell when you see momentum slowing. Often, this will come as a “pop”. A pop comes when a stock runs itself into a big bid/ask gap. You have to be on top of the action to see this, but this is a big sell sign. The top comes at the pop.
Buy low

Buy when things are looking most dismal. Natural gas and oil stocks getting pounded? Are the naysayers forecasting $30 oil? Huge oversupplies of nat. gas? Sounds like a time to buy.

Look at the charts

Take a look at weekly charts on stockcharts.com and get a feel for cycles that a stock may go through.

Okay, so I hope this helps a little. I will keep posting my picks for everyone. If you have any questions or concerns, about anything, ask them here! no question is too ridiculous. It is better to know, than trade blind

Canestsal of stockhideout.com Hot Penny Stocks and Penny Stock Picks

Canestsal of stockhideout.com Penny Stocks and Penny Stock Investing

Many fraudulent Internet messages are about general stock-picking advice or mention other investment possibilities. However, some messages tout specific stocks, moneymaking ventures, and service providers. Just remember one simple rule: Don’t believe anything you read until you’ve done some of your own research first. The following are ten examples of online investment scams that you should be wary of.

#1 Multilevel marketing plans and pyramid schemes

Pyramid schemes, sometimes called multilevel marketing plans, are sure ways to lose money. Individuals are often contacted via e-mail messages and encouraged to recruit six friends; those six people recruit six more friends — and so on, in a relentless search for new recruits. Profits from these schemes don’t come from selling products or distributorships but from recruiting new participants. Investors are left with garages full of products and the loss of their investment.

#2 Financial chain letters and Ponzi schemes

Generally, the letters states that you’re missing out on a big investment opportunity. Most financial chain letter promoters claim that if you participate, your name will eventually be at the top of millions of lists and you’ll receive millions of dollars. Anyone can break the chain and deprive you of your possible “gains.” Even if the financial chain isn’t broken, about 95 percent of financial chain letter participants don’t ever receive anything in return for their “investment.”

#3 Cons based on bogus research reports and newsletters

More than 70 million adults log on to the Internet each day. By using mass e-mailing programs, fraudsters can quickly and inexpensively reach more people than these publications can. With one keystroke, fraudsters can reach thousands, even millions, of potential online investors. Often, you may receive unsolicited e-mail newsletters that tout stocks expected to double or triple in value over a very short time.

#4 Phishing for your personal information

Phishing is a type of brand spoofing. An e-mail message is sent to you in an attempt to fool you into revealing your personal financial information or password data. Sometimes, to gain your personal financial information, “Phishers” will use social engineering to gain your confidence. The term phishing is also used to describe how fraudsters use sophisticated lures to deceive everyday Internet users.

#5 Nigerian e-mail letter investment scam

These e-mail messages promise that I’ll receive millions in return for helping a VIP collect money trapped in a Central Bank. The plea for help assures me that the investment is 100-percent safe. Each version of the e-mail appeal is slightly different, but the scam remains the same: I’m guaranteed 20 percent of all recovered funds. In some instances, the fraudster will ask for enormous amounts of money for fees, taxes, traveling expenses, and so on.

#6 Investment hoaxes designed to get your cash

For example, a bogus press release stated that Uniprime Capital claimed to have documentation from the government of Spain indicating that the Plasma Plus was a breakthrough treatment for the virus that causes AIDS. The stock was touted online in several investment chat rooms as undervalued. In a few days, more than 5 million shares were traded, and the stock skyrocketed by 800 percent. The investment hoax cost investors about $20 million.

In a similar story, an individual issued a negative press release about Emulex, a fiber-optic company. In the press release, the fraudster claimed that the CEO had quit and that the company was restating its quarterly earnings. In an effort to cover his tracks, the fraudster went to a hotel room in Las Vegas to make his online stock trades on the day of the hoax. The stock dropped by 62 percent, and the con artist made $241,000 by short-selling the stock.

#7 Bogus IRA-approved investment schemes

Fraudsters are scramble the dreams of many investors with so-called IRAapproved or otherwise endorsed Internal Revenue Service (IRS) investments. Fraudsters frequently contact investors through bogus e-mail newsletters or Web sites to offer huge returns that will ensure investors an easy retirement. Investments include high tech to exotic livestock to real estate investment pools.

#8 Guaranteed high returns frauds

Many fraudsters provide online ads that guarantee “the potential to make a six- or seven-figure annual income.” If an offer seems too good to be true, it usually is. So, check it out carefully before you put your money down.

#9 Get rich quick with investment seminars

Investors are encouraged via e-mail messages to enroll in expensive seminars to become day traders or to learn how to trade options, commodities, or futures. Often, unlicensed practitioners teach the seminars. These unlicensed practitioners are unlikely to disclose conflicts of interest. Attendees must also pay hidden costs, such as buying a particular brand of software from the investment seminar company and using an expensive interface for real-time data.

#10 Pump-and-dump schemes

Pump-and-dump schemes are swindles in which greedy people manipulate the stock prices so that they can make illegal gains. Frequently, pump-and-dump schemes target elderly investors. Fraudsters are using the Internet to perpetuate pump-and-dump schemes. This scenario is a classic scam; fraudsters artificially drive up the stock price and unload it on unsuspecting investors who believe the stock is on the rise.

Uranium has many natural advantages over oil or other energy sources. Fuel that is produced from uranium lasts for decades and can be recycled in the form of plutonium which extends it life for even more decades. This, however, can present a problem because of its extensive life, disposing of uranium is a political caveat.

Nuclear power supersedes oil and chemical refineries in safety. The safety record of nuclear power far exceeds other large scale energy generation technologies. Oil and chemical refineries can and have exploded due to human error, accident and incompetence. Regulations and controls regarding the use of nuclear fuel are much more stringent and adherence is more strongly enforced that with conventional fuels.

Nuclear power is a politically charged, controversial topic. One camp has it labeled as dangerous and even evil. The other camp, though, purports that nuclear power safely generates 16% of the world’s electricity. Countries such as France and Japan have relied heavily on nuclear power for many years and neither country holds any regrets for electing to use it as their major power source. 78% of France’s electricity comes from nuclear power and, most notably, has never experienced a serious incident.

Asia is experiencing exponential growth in the area of power plants being built, but this is also occurring worldwide. China is working on an $8 billion contract to build four new plants and will be constructing 27 by the year 2020. India plans to build 17 plants by the world 2012 which will triple their existing capacity. Russia has reduced its exports so that it can retain fuel for the 25 new plants that are planned by 2020.

The majority of these plants have yet to secure a long term supply which indicates that they will have to pay market prices as they near completion.

There even seems to be some changes for the United States on the political horizon a one time adversaries are finding common ground and passing the peace pipe, so to speak. Environmentalists are beginning to see the light and grasp the concept that nuclear power offers one of the best alternatives to continued fossil fuel use, particularly as concerns over global warming increase. Also, as oil prices continue to rise, the political powers that be seem to be swaying more in favor of nuclear power.

While demand continues to rise, supplies remain tight. Commercial stockpiles fell 50% from 1985 to 2003 and mining remains expensive and difficult.

The Australian mining company, Cameco, is one of the largest uranium suppliers in the world. It plans to expand its production by 18$ in Canada’s MacArthur River mine which is currently the largest in the world.

Although supplies are not expected to expand enough to rise to the growing demand to a point that would suppress the price, it is still a viable option. Several analysts expect that supplies will remain tight over the next decade. This will result in a rise of prices to a level that has not been seen since their peaks in the 1970s. These prices are expected to remain high for quite some time.

Demand runs annually at about 170 million pounds while the supply is roughly 75 million pounds a year. The deficit is made up by supplies that are stockpiled from the 1970s, the dismantling of Russian nuclear warheads and other sources. That supply, however, is dwindling.

Fuel costs are relatively small expenditures for power plants, but fuel it vital to their operation. Because there is no substitute, they can not afford to run out.

These various factors are exceptionally appealing to metals traders who may be interested in uranium. Unlike other metals, uranium does not trade on the open market. Contracts are made privately. However, investors who are interested can purchase mining stocks, futures contracts, options and other securities just like any other investment. A broker can provide advice and direction on this trading maneuver.

There are two ways to sell a penny stock. You sell the penny stock either at the bid price or at any price above the bid, including, but not limited to, the offer, using a limit order. As is the case with both buying and selling, either you are initiating the action, or someone else is initiating a trade against you. By contrast, when you buy stock on the offer or sell stock at the bid, you are initiating action against another party, be it a market maker or another trader. The other party has already determined the price at which he wishes to make a trade (this can be referred to as a limit order or could be the actual bid or offer price as is the case with a market maker), and you are reacting, or initiating action against this price.

When you buy a penny stock on the bid or any price under the offer or sell a penny stock on the offer or any price above the bid, another trader or market maker is electing to trade with you. You have already entered a limit order, and another party has come and “hit” your bid or “taken” your offer. The most important thing to remember is that when you initiate action, it is in anticipation of the stock continuing on the path of momentum on the side of the market on which you are trading. If you buy a penny stock on the offer, then it is in anticipation of price appreciation and vice versa on the sell side. Traders initiate in this manner when they open a trade or when they are forced to cover an existing position.

On the other hand, when you are buying a penny stock under the offer or selling over the bid, another trader knows or thinks that the stock is going in that direction. The other trader is initiating action against you. This other trader could be someone who is covering a position that has gone against him and he is being forced to “pay the spread,” or the trader could be an institutional trader who simply has an order to buy or sell the penny stock. When you buy or sell penny stocks in this manner, you are usually covering a trade that is going in your favor or opening a position with the anticipation that the current momentum in the stock is close to a saturation point and the stock is about to reverse direction.

Remember, no traders are ever going to sell you stock if they think or know it is going up, and no traders are ever going to buy stock when they think or know it’s going down. The only exception is if they made a mistake, which is very rare, or if they panicked. It is still a rational market in that the players are not altruists. They’re not there to give away their money. These distinctions become extremely important as you become more involved with the market-maker game, since the manner in which you enter your trade will determine not only your risk but your potential profit as well.

Dan Cohen is an author for the website Stock Trading Instruction:www.stocktradinginstruction.com/pennystocks.htmlStock Trading Instruction offers an online stock trading video course which specializes in trading penny stocks.

One suggestion is to put some of your funds into a few dividend paying stocks to generate a little more income on a regular basis. Doing this can help you better keep pace with an investment concurrent with the rising cost of living Data collected from 1/1/1975 - 12/31/2004 show that dividends collected on a $10,000 investment in the S&P 500 generated a growing stream of income, while CD rates have fallen approximately 7.5% in the same time frame. (The S&P 500 is an unmanaged group of securities considered to be representative of the stock market in general; it is not possible to invest directly in the index.)

When choosing a stock to purchase for dividend payment, you will need to strongly consider the company itself. Not only is the dividend payment dependent on the profits of the company itself, they are also dependent on the history of the dividend payment of that company. The frequency of dividend payment will vary from stock to stock, so keep in mind that you will need to budget each dividend accordingly. It is always best to do complete research before investing money in anything, including the stock of a well known company.

There are several things that should be considered about stocks and CDs before their purchase. Publicly traded stocks tend to be a more of a risk and are better suited for an investor that can afford to take a loss occasionally. On the other extreme, CDs are more in tune with the conservative investor who wants to protect his initial investment and is not looking for a large return on the investment. Keep in mind that CDs are FDIC insured, the stock market is not. Stock prices fluctuate, sometimes on a daily basis. This, of course, can result in a loss or a gain in price when the final sale is made.

The retirement income from either of these investments is taxable, however, dividends are generally taxed at 15%, while CD interest is taxed as your ordinary income tax rate. Some CDs have early withdrawal penalties while stocks can normally be bought and sold at any time.

If you are at all comfortable with the stock market, using stocks to generate retirement income is a great way to have more money for retirement than you ever though possible. Just keep in mind that your limits are best set by your knowledge of the situation. If you are unsure how to do this on your own, consider researching financial institutions to find a financial planner skilled in working towards retirement income.

Scott Brooks is an online entrepreneur. Looking for a great place to retire? Get some help deciding at the Retirement Planning blog here: Best Retirement Locations

DIVERSIFICATION
The most important reason is the diversification that Mutual Funds and Exchange Traded Funds (ETF) provide. With an individual stock you are exposed to the possibility that one of your stocks could get hit by bad news and plummet in price. It takes a long time to recover from one of these massive hits.

PROFESSIONAL MANAGEMENT
Skilled Mutual Funds managers spend every day determining which stocks to buy and sell. These managers companies have teams that examine quarterly and annual reports, interview Company executives; visit factories and review market share trends to get know the companies on a comprehensive basis, and avoid buying stocks when they are over-bought from a technical standpoint. There is no way an individual investor can compete with this level of sophistication.

ECONOMIES OF SCALE
Mutual Funds are able to take advantage of their buying and selling size to reduce transaction costs. This means a savings for the individual mutual fund investors enabling the individual investor to diversify without paying numerous commission charges involved in buying 15 to 20 individual stocks needed for diversification.

DIVISIBILITY
If someone only has $500 or $1,000 to invest, it is often insufficient to purchase an individual stock, especially after deducting commissions. Investors can buy mutual funds or add to their existing mutual fund holdings with a very small investment to keep their money working for them. With mutual funds, investors can hold fractional amounts as well.

GETTING STARTED
I invest my own money in every one of my Mutual Fund and Exchange Traded Funds trading systems. I subscribe to several advisory services to keep my universe of possible investments up to date. I utilize four different pieces of technical analysis software to determine which funds to buy, when to buy, and when it is time to sell.

I employ a strict stop loss and profit-protect methodology to keep my losses small and let my profits run. My approach is biased to the conservative side. I want to constantly upgrade my various mutual fund holdings so that I am holding the best mutual funds available.

Whenever I plan to buy or sell one of my holdings, I send my subscribers an email telling them exactly what I am doing, why I am doing it, and when I am plan to make the trades. I do the work so you don’t have to. And, importantly, it will take you less than 30 minutes per month to make the trades with your on-line broker. You too can join me and my fellow investors and double your money in the next 3 years.

Gerry Wollert has been trading stocks for over 40 years and mutual funds for over 25 years. He now manages his personal investments with his Mutual Fund Trading Systems and focuses exclusively on No Load Mutual Funds and Exchange Traded Funds. You can learn more about his trading systems at: www.reboundtrading.com

So How Much Does It Cost When You Are Buying Stock?

This is actually a very vague question. It is influenced by the variables that surround it. For example, MEW Industries is a leading producer of coffee, its common stock closed today at $15 per share. How much will it open for tomorrow? Again the answer is not concrete; for example, before tomorrow’s market could open imagine the results if one of these things occur:
•Panama, the location of MEW Industries coffee farms, is taken over by the recently released Manuel Noriega, severely impacting harvesting.
•The stock market news is buzzing when the President of MEW Industries wins the Nobel Peace prize.
•The American Medical Association finds that coffee cures cancer.
•It is announced that a plague of locusts has damaged the coffee crop.

Effect Of Opening And Closing Prices On Buying Stock

Typically, the price will open close to the closing price the previous day. However, stock price breakouts occur when those buying stock sense an event that could radically change the value of a company and its stock value. Factors that motivate those buying stocks include things that impact production, public perception and overall profitability. As a result, a company will likely see up or down movement in its stock price.
Conversely, the closing price of a stock can have an effect on the next day’s price. There tends to be a carry-over effect from close to open that reduces stock volatility. Without any significant Wall Street news overnight, the opening price and the closing price will likely be very similar.

A Fresh Start

Each day when the stock market opens, it is a new day. Those buying stocks will help to establish stock prices. A stock that was a strong buy yesterday may be sending off sell signals to savvy investors today. A stock that was struggling to day might be tomorrow’s hot stock. The key to the value of a share of stock is what someone is will to pay for it. If you pay $500 for Google stock, may want to buy a lot of it but you would buy the Brooklyn Bridge from a man on the street before you would pay $500 for MEW Industries’ stock. Remember, buying stock is a perception game. There were people who never thought Google stock would hold its IPO, let alone rise to over $500 per share. Like in life, beauty is in the eye of the beholder for those buying stocks.

An Honest Price For Buying Stock

Forget what you’ve heard. It’s not always about greed and fear! While it is true that emotional factors motive prices for the people buying stock, the market will always find the true value of a stock, giving advantages to those who are able to properly read the investment timing. An event in the news may affect the price of buying a stock but the result will only be temporary.

Conclusion

Buying stock is a matter of identifying the factors involved that can affect the price. Many times people make investment errors when they fail to realize that. Don’t worry about the puzzled looks you get for asking about the price. Do your technical analysis and learn to determine how much it costs when you are buying stock.

1) Net Proceeds from the offering - How much money will the company ACTUALLY receive? ( look at the commissions generated from the finders fee..should be NO MORE than 10% on ANYTHING over 1 million )

2) Use of proceeds - How does the company plan on spending the proceeds of the offering?

3) Dilution of Value - How much dilution of the common shares already issued and o/s will result from the offering?

ie.: Before Private Placement, ABC Company had 1,000,000 shares o/s, trading at let’s say, $1.00 per share, providing a Market Cap of $1,000,000 dollars.
After Private Placement ( of let’s say 1,000,000 additional shares ), ABC Company now has 2,000,000 shares o/s…….BUT GUESS WHAT?!?!?….ABC’s market cap is the same, $1,000,000 dollars, however they’ll now be trading at 0.50 cents…..do you get it now? So…if you had a position in ABC before they announced their PP…. you just got DILUTED by 50%!!!!

4) Data on Management and/or the Promoter - Just WHO is behind “your” company? Other factors include:

*What is the caliber and experience of the management team and/or the promoter(s) (this is VERY IMPORTANT)

*How successful is the exploration track record of management and/or promoter(s)

*What percentage of ownership in the company does management and/or promoter(s) hold? ( SUPER DUPER IMPORTANT )

5) Location and Development - Where is the Company located? Where do they conduct their business? Where is the current offering being made public? ( over sea’s, local….?)

There you have it class….we’re all finished ( for now…..)

So, now you know…. when a company announces a PP… it’s a good/bad thing all rolled up into one…. Good for the Company ( as their “kitty” is now full of cash, hence, good for future investing)……but can be BAD if you’re already invested, as dilution takes its effect.

This article was written by Placer_foot of StockHidoeut.com Penny Stocks Penny stock investing site to help members when buying penny stocks.

Mouser57 of StockHidoeut.com Penny Stocks Penny stock investing site to help members when buying penny stocks.

Thus, you can see how fear can set in place a vicious cycle of recurring doubt and, in turn, reinforce a traders’ lack of confidence in executing new positions. For example, if you doubt you will actually be able to exit your position when your method tells you to get the heck out, then as a self-preservation mechanism you will also choose not to get into new trades. Thus begins the analysis paralysis, where you are merely looking at new trades but not getting the proper reinforcement to pull the trigger. In fact, the reinforcement is negative and actually pulls you away from making a move.

Looking deeper at why a trader cannot pull the trigger, I believe the root stems from a lack of confidence about the trading plan, which then causes the trader to believe that by not trading, he is moving away from potential pain as opposed to moving toward future gain. No one likes losses, but the reality is, of course, that even the best professionals will lose. The key is that they will lose much less, which allows them to remain in the game both financially and psychologically. The longer you can remain in the trading game with a sound method, the more likely you will start to experience a better run of trades that will take you out of any temporary trading slumps.

When you’re having trouble pulling the trigger, realize that you are worrying too much about results and are not focused on your execution process. Make sure your have a written plan and then practice executing your plan.

Start with paper trades if you prefer, or consider trading smaller positions to get the fear of losing out of your system and get yourself focused on execution. When in the heat of battle and realizing you need to get in or out of a trade, consider using market orders, especially on the exit. That way you can’t beat yourself up for not pulling the trigger on your trade.

Many traders may get too cute with a trade and try to work out of a position at a limit price better than the current market price, hoping they can squeeze more out of a trade. But as famed trader Jesse Livermore advised in the classic book Reminiscences of a Stock Operator by Edwin Lefevre, “give up trying to catch the last eighth.” Keep it simple with a market order to exit allows you to bring closure when you need it, which reinforces the confidence-building feelings that come from following your trading plan. In the past when my indicators noted it was time to exit, I have experienced firsthand the pain of not getting filled at my limit, watching the option drop and then placing a new limit back where I should have exited at the market in the first place! Then I have realized I was not going to get filled there either, so I again kept lowering my limit until, in frustration, I placed a market order to exit much lower than I could have closed the position initially. Not only can you feel the pain of loss financially but more importantly, you can chip away at your internal state of confidence and create frustration by not getting filled.

You should be more concerned about avoiding big losses and less concerned about taking small losses. If you can’t bear to take a small loss, you will never give yourself an opportunity to be around when a big winning idea comes along, as every trade you enter has the risk of first turning against you for a loss. You must execute by knowing what your risk is in each trade, and define parameters to make sure you can ride favorable trends correctly as well so that your winners will be larger than you losers. And never get stuck in the mindset of hoping a loser will come back to “breakeven,” as that is one of the trader’s most deadly mental fantasies. Billions of dollars have been lost by technology investors hoping their stocks would bounce back in recent years to allow them to escape the downtrend. That only led to even greater losses in most cases. That’s how a short-term trader can become a long-term investor unintentionally, and that is a position in which you never want to put yourself.

Ask how well you trust yourself to execute your trading plan. You want to judge your effectiveness based on how well you get in and out of the market when your method gives entry and exit signals. You’ll need to be decisive, not hesitant, know in your heart that your method is well tested and that your risk is low compared to your likely reward. In other words, you must be fully prepared before you go into the heat of battle during a trading day. You need to know where you will enter and where you will exit if you are a discretionary trader. Or you need to know what system you are following and be prepared to enter and exit as the system dictates. This keeps you disciplined and focused on following a process that can generate favorable results over time.

This article was written by Mouser57 of StockHidoeut.com Penny Stocks Penny stock investing site to help members when buying penny stocks.

Mouser57 of StockHidoeut.com Penny Stocks Penny stock investing site to help members when buying penny stocks.

In dealing with penny stock, information is much more difficult to find. Much of the information available about a penny stock is typically not from a credible source.2.No Minimum Standards - Stocks on the OTCBB and Pink Sheets like the penny stock do not have to fulfill minimum standard requirements to remain on the exchange. Sometimes, this is why the stock is on one of these exchanges. Once a company can no longer maintain its position on one of the major exchanges, the company moves one of these smaller exchanges. While the OTCBB does require companies to file timely documents with the SEC, the Pink Sheets has no such requirement.

Minimum standards act as a safety cushion for some investors and as a benchmark for some companies.3.Lack of History - Many of the companies considered to be a penny stock are either newly formed or approaching bankruptcy. These companies will generally have a poor track record or none at all. As you can imagine, the lack of histories of companies only magnifies the difficulty in picking the right stock. 4.Liquidity - When a penny stock doesn’t have much liquidity, two problems arise: first, there is the possibility that the stock you purchased cannot be sold. If there is a low level of liquidity, it may be hard to find a buyer for a particular penny stock, and you may be required to lower your price until it is considered attractive by another buyer.

Second, low liquidity levels provide opportunities for some traders to manipulate stock prices, which is done in many different ways - the easiest is to buy large amounts of stock, hype it up and then sell it after other investors find it attractive Penny stocks have been a thorn in the side of the SEC for some time because of the lack of available information and poor liquidity make these groups of stocks an easy target for fraudsters. There are many different ways these people will try to part you from your money, but here are two of the most common:1.Biased Recommendations - Some companies pay individuals to recommend the company stock in different media, i.e. newsletters, financial television and radio shows. You may receive spam e-mail trying to persuade you to purchase a particular penny stock. Look to see if the issuers of the recommendations are being paid for their services as this is a giveaway of a bad investment and make sure that any press releases aren’t given falsely by people looking to influence the price of a penny stock.2.Off-Shore Brokers- The SEC permits companies selling stock outside the U.S. to foreign investors to be exempt from registering stock. These companies will typically sell the penny stock at a discount to offshore brokers who, in turn, sell them back to U.S. investors for a substantial profit. By cold calling a list of potential investors (investors with enough money to buy a particular stock) and providing attractive information, these dishonest brokers will use high-pressure sales tactics to persuade investors to purchase penny stock.Be wary when investing on a penny stock. Chances are you will lose more money by putting your trust in a penny stock..

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When you hedge, you essentially recognize a hard fact; that is, traders cannot predict prices correctly all of the time. If you want to be on the right side of the trade, you need to not just to predict what direction prices are going to go in, but you also need good timing.

Although it’s important to guess correctly whether prices are going to move up or down, you also have to know when you should get in and when you should get out. You can improve your odds of doing so with some simple hedging strategies.

To begin with, let’s talk about a few elementary concepts. Hedging is effective, in part, because prices for commodities in the cash — i.e., spot — markets tend to move together, whether up or down.

In a “spot” or cash market, physical commodities are bought and sold. This differs from the futures market, where contracts are traded for future delivery of the particular commodity.

Even so, spot prices don’t move exactly together. The difference between the spot price and the current contract price is called the “basis.” The basis equals the cash price minus the futures price.

When they hedge, investors have two basic alternatives, either going short or going long. However, these two strategies are not used only to the exclusion of each other. They can be used together in a mixture, tailored to an investor’s needs. If you “go long,” that means you’re buying in order to sell later at a higher price. If you “go short,” that means that you’re going to sell before you buy, and expect that the particular commodity will have a future price decline.

In regard to going short, it might confuse you to think that you’re actually going to sell something you haven’t bought first and therefore don’t own. However, when you go short, you borrow the commodity or contract from the broker, sell it, and then buy the equivalent later to “balance the books.”

When you go long, you hedge based upon a weakening basis as the cash price falls in relation to the public futures contract. Going short gives you the advantage when the basis is increasing; that is, when the cash price rises relative to the futures contract price. It should be noted that a basis can rise or fall in opposition to price levels. What matters is the difference between the two.

To clarify, let’s look at the following:

Let’s say a heating oil seller wants to hedge 50% of the anticipated April production of three million gallons. The seller goes short by selling the April heating oil futures contracts at $1.98 per gallon on March 1. By the end of March, cash and futures prices both have fallen. This means that on April 1, when the seller delivers heating oil to the local terminal, the price has fallen to $1.85 per gallon. The seller then simultaneously hedges by purchasing April ethanol futures at $1.90 per gallon.

Because the standard heating oil contract covers 42,000 gallons, the speculator has to purchase 35.71 contracts at this scenario. However, partial contracts aren’t traded. The following figures are approximate, to make demonstrating this scenario easier:

Date Spot Market Futures Market Basis

Mar 1, $1.88 per gal.Sell in April at $1.98 per gal.-$0.10

Apr 1, $1.85 per gal.Buy in April at $1.90 per gal.-$0.05

The hedge result is as follows:

The gain on the futures trades is $.08 per gallon, with the sell in April at $1.98 per gallon, and the buy in April at $1.90 per gallon. $1.90 minus $1.98 equals $.08 per gallon.

The net sales price is $1.93 per gallon, or $1.85 plus $.08.

This results in 50% being hedged at $1.93 per gallon, with an April income of $2,895,000, or $1.93 per gallon times 1.5 million gallons. The remaining 50% is unhedged, at $1.85 per gallon; April income is $2,775,000, or $1.85 per gallon times 1.5 million gallons.

The average April sales price is $1.89 per gallon, for an April income of $5,670,000.

Without hedging, what would have been with the result? The seller would have received $5,550,000, or $1.85 per gallon times three million gallons. By hedging between the spot and futures markets, there was a net increase in April heating oil income of $120,000. Therefore, hedging cannot only help to protect traders from losses, but it can also increase profits.

At the most basic level, you need to know the difference between the kind of orders you can execute. These are Market, Limit, and Stop; there are also variations of those three.

Market

Market orders are the simplest ones, and almost everyone is familiar with these. With a market order, you place the order and the broker tries to fill it at whatever the going price is. Even with these requirements, which are relatively loose, there’s no guarantee that the trade will be executed expediently.

When liquidity is very low, it may take some time for orders to be filled, even waiting until the next day. With commodities and futures markets, though, market orders are filled within minutes, if not seconds.

Market orders have several variations, including MOC, or Market on Close; MOO, or Market on Opening; and MIT, or Market if Touched. There are also others.

“Market on Opening” means that the order is to be executed at the best possible price during opening; this is also true for a “Market on Close” order, with the difference being that this order occurs at closing.

“Market if Touched” orders are similar to limit orders, which are explained further below. With “Market if Touched orders, orders are filled if the desired price is reached and continue to be filled even when the price moves away from the limit.

Limit

Limit orders are the next simplest type after market orders. Limit orders specifically request to buy or sell at a designated price. Buy orders are typically placed below the current market price and sell orders are above the current market price.

Depending on what the designated price is as well as the general market conditions, you may or may not get your order filled. Even if the market should reach the limit price, thousands of trades get executed every second; thus, you have no guarantee that yours will get filled.

Stop

Stop orders, also known as “stop loss” orders, try to limit potential losses on a long or short position. If you place a buy stop order, this means that you buy above market price and sell stop orders below market price. Once the stop order price has been reached, it becomes a market order and is executed accordingly.

There are a few variations to stop orders, among them stop limit and stop close. There are also a few others.

Stop limit orders have two prices. One price just the ordinary stop order. The second occurs as the limit price. Once the stop is reached, the limit requirement is negated and canceled.

Stop close orders are only in play when the close of trading is about to occur. The order is executed only if the market reaches the stop price at this time. Commodity markets by their nature are volatile, and stop close orders can provide traders some protection from intraday fluctuations.

Fill Or Kill

With this type of order, the floor trader bids or offers up to three times the order’s specified price. If a suitable trade can’t be done, the order is canceled.

Regardless of the particular order, brokers must obtain the best possible price for their clients. It is true that they can’t guarantee there’ll be a trade at a given price, but the market is so active and volatile that the overwhelming majority of orders are executed at or very near the client’s specifications.
OCO
OCO, or “One Cancels the Other,” is actually a combination of two orders. This order requests that brokers attempt to fill it until one of the two sides goes through.

Oil is still the most traded physical commodity. It is the largest of all contracts traded in the financial futures market today. One of the most popular of these is the contract for the Standard & Poor’s 500 Index, or the S&P 500.

The S&P 500 is the gold standard of indexes. Therefore, it gives traders a broad view all the entire stock market. The companies listed within the S&P 500 represent 80% of the entire market capitalization. The top 40 stocks in the S&P 500 represent 50% of the total market.

This means that traders can be confident that there will be no problems with liquidity, as can sometimes happen within other commodities.

In general, this also means that risk is easier to assess. The tools used to predict the S&P 500 are more reliable than others; this is because stock prices are generally easier to predict that commodities prices. The S&P 500 stocks included therein also have offered the highest return over a 30-year period, historically, when compared to other types of investment. Generally, return has been around 12%, depending on the range selected.

Stock prices can most certainly be volatile. There have been a few large single day price drops. However, by design, indexes typically move less and not as rapidly as other prices do. When one uses of broad-based index, this “smooths out” the fluctuations of individual stocks, so that it’s easier to see an assess the direction of the market in its entirety.

Kept this is beneficial because along with reduced risk and better predictability, traders have the same advantages they find when they use futures and options as trading vehicles. Margin percentages generally run in the 5 to 7% range, so that high leverage is still available. This makes it comparable to other commodities futures and options contracts.

Commodities trading is typically oriented to the short-term; here, day trading the typical set up.

However, with index trading, investors can use those sharp swings to their advantage; even so, they can still have a long-term view of the horizon, just as they would if they were doing stock investing.

One common trading strategy is called the rollover. With rollover, traders can take a long position on a futures contract. As the expiration nears, they can transfer their position to another contract; the new contract as an expiration date that is beyond the one in their current contract.

By using this type of “spread” strategy, traders can take advantage of price differentials and low commissions even as they exert control over the liquidation date. The trade is executed when traders predict that prices will soon move in the preferred direction, meaning just beyond the expiration date.

S&P Index futures are traded on the Chicago Mercantile Exchange, or CME. There’s also an S&P 500 “E-mini” contract available; a set of contract carries a much smaller commitment, with a size that is one fifth of the standard contract. The trade unit is $50 times the S&P 500 index. The trade unit for the standard contract is $250 times the S&P 500. In addition, everything is traded electronically, with no open outcry or pit trading. This means that trading hours have been extended from those typically limited to the hours of the stock exchange to a 24-hour trading day.

The CME web site, at http://www.cme.com, has more information, including contract specifics and current prices.

Don’t worry if you don’t have $58,000 to purchase 100 troy ounces of gold at the current market price of $580 per ounce. Instead, you can buy a gold futures contract, as many speculators do. Instead of having to come up with $58,000, you only have to invest 5% of that total, or $2900.

That 5% initial investment is known as the initial margin. The exchanges and brokerage firms set the exact percentages on a daily basis. This is done per individual commodities futures contract. The exchanges monitor volatility, price and many other factors to figure out what acceptable levels of risk are. Then, they said the margins accordingly. The minimums are set by the exchange, but but brokerages will sometimes use requirements that are slightly higher.

If the price of gold rises by five dollars before the contract expires, that excellent. You’ve made five dollars per ounce of gold, times 100 ounces, which equals $500, excluding commissions of about $20. If you had purchased the gold straight out, you might be surprised to learn that your profit is exactly the same. However, look at the difference between doing an outright purchase and doing a futures contract in percentage terms.

$500 divided by $58,000 times 100% equals 0.86%, or just under 1%. This compares to $500 divided by $2900 times 100%, which equals 17.2%. This difference is from the effect of what is known as leverage. Even though you only invest 5% of the total purchase price, you get 100% (besides commission) of the profits, instead of 5% of the profits.

However, this is not only good with no bad. This type of reward carries risk of loss. Let’s say the price had decreased five dollars and had never risen again before the contract expired. What you would have had would have been a $500 loss instead of a $500 gain.

Now, brokers have to protect themselves against the possibility of something like this happening, namely that you won’t be able to cover your amount at contract expiration. Therefore, they do what’s called a “margin call.”

What this means is that all potential profits and losses are both calculated and settled on a daily basis. If the price drops under the minimum set by the broker, which is based upon the exchange minimum, brokers require that their clients deposit additional funds in order to bring their account back up to the level they initially had.

Now, here’s the problem. Brokers may or may not give you enough time and notice to actually do that. Depending on what the price volatility is, the amount of money involved, and the quality of your relationship with them, brokers can and sometimes do liquidate your position and don’t wait for you to cover.

Normally, most brokers will give you enough notice and reasonable time to cover this “maintenance margin,” which is the amount needed to bring your account back up to the level they require. However, it’s you, the trader, who is responsible for monitoring your own position and knowing what the guidelines are.

In addition to bringing your account back up to the previous level, you might also have to come up with even more money. Exchanges and brokers often do raise or lower the minimums they require, depending on what the current market conditions are.

Simply put, futures trading is fast-paced and puts you at higher risk in the world of commodities. It’s not for everyone, but if you have a high tolerance for risk and can put additional funds in as necessary, and if you can withstand some losses as a matter of course, it might just be for you.

Buy stocks without doing research – I joined a discount brokerage and went shopping for stocks right away. I had no clue what I was supposed to look for so I just picked random names I liked and bought a few shares here and there of each.

I must admit, I thought I was doing quite well. I mean, some of the stocks I picked ended up doing alright, but the majority of them when no where fast. So if you want to make sure you fail at buying stocks, skip the research.

Don’t Consider the Trading Fees – Learning how to buy stocks the wrong way is easy when you don’t consider trading fees. I must admit, when I joined the discount brokerage I was really excited about their $4 trades. What I forgot to calculate was the math.

I was investing an average of $10 per stock when I bought them. Shelling out $4 for a $10 piece of stock meant I was losing 40% right up front each time. When I decided to sell the stock I had to pay another $15 just to sell! You can see where I am going with this, it can turn into quite a fiasco.

Don’t Diversify – The surefire method for how to buy stocks the wrong way is to buy a single stock and nothing else. Throw all your nest egg into one company. I mean, so many people do it, especially in their companies at work. What is in your company 401K?

Having all your eggs in one basket sets you up for quite a roller coaster, except there is no safety rails on this ride. You could easily lose everything.

Buy High and Sell Low – The market is fickle so if you want to set yourself up for failure, go with the masses. I admit, it is very tempting to see a stock going higher and higher and yet… higher again.

This makes people want to buy it more, increasing its demand and running the price up even higher. This is great right?

Sure, it can be sometimes, but if the stock is overvalued you are really learning how to buy stock the wrong way with this purchase.

To buy stocks the wrong way, sell the stock as soon as the price dips some. Even if the company is solid. Following the herd is a great way to go down the wrong path.

Hold On To a Losing Stock To Try and “Break Even” - I bought a popular stock for $63 a share, not too long later it dropped into the $40 range.

The research showed the company was not doing so well, but I wanted to at least get my purchase price back. I mean, it is sure to bounce back up right?

Fast forward a few weeks and it was in the $30 range. Dang, I should have sold it at $40 when I had the chance. Well, I am going to at least wait until it gets back into the $40 range before I sell it.

Fast forward… it is below $20 a share now. Keeping a stock when both the price and the company are going downhill is a sure way to learn how to buy stocks the wrong way.

Avoid Learning The Right Ways - If you really want to learn how to buy stocks the wrong way through the school of hard knocks, make sure not to discover the right ways.

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All things equal, the most important factor that determines if you would become a millionaire (or billionaire?) or a complete loser over time trading in the stock markets is not how accurately you can pick stocks but how you manage your trades! Yes, portfolio management, or on a more micro scale, trade management, is the only factor that determines whether you make it or not in the stock markets!

Trade Management Example

John and Peter are 2 stock traders who agreed at the same time that XYZ company stock is bullish and decided to buy XYZ stocks together.

XYZ is trading at $10. John and Peter have $1000 each. John decided to put all his money into XYZ stocks and bought 100 shares of XYZ stocks. Peter decided to stick to his trade management strategy of using no more than 30% of his equity into any one trade. Peter then bought 30 shares of XYZ stocks.

As it turned out, stocks that are expected to go up usually come straight down. Instead of going up, XYZ company stocks fell from $10 to $6 within a few days. Both traders decided to sell their positions in order to preserve equity. John is left with $600 while Peter still has $880.

Both traders then bought ABC company stocks trading at $20 with the same trade management strategy. ABC rallied from $20 to $35 and both traders sold their positions. John is now up to $1050 while Peter is now up $1078. Peter remains ahead of John on the same moves while risking only 30% of his equity.

Both traders then bought RAT company stocks trading at $100 with the same trade management strategy and this time, RAT was delisted. Both traders lost all their equity in RAT Company. John is now left with nothing while Peter has $754 left.

The example above is based on the worst case scenario which is familiar to many veteran traders.
You would see that Peter’s 30% trade management strategy reliably reduces losses and because he lost less money than John, he needs only make a lesser amount to beat John to it. Over time, Peter will out-perform John. See what I mean?

Trade Management – Conclusion

A sensible trade management strategy may not feel as exciting as throwing all your money in at every trade and it may also result in frustration when a stock does very well but on those much more times when a stock failed to perform, you would always be glad you stuck to your trade management strategy. As Rocky Balboa said, it is not about how hard you hit but how many hits you can take. A sensible trade management strategy

Two basic terms, the call and the put, are the epicenter of the trading strategies. To buy a call confers the right, not the obligation, to buy at a price that is pre set. Conversely, puts give the buyer the right to sell at a pre set price. Options are both sold and bought, meaning that the seller grants the buyer the right and takes on an obligation to fulfill the other side of the trade.

The variations to this maneuver include:

Long Calls
The long call is the easiest to understand and is the most basic concept. MSFT (Microsoft) traded at $28 with June 31 options that were to expire on the third Friday of June. The strike price was $31, meaning that it was pre set so if exercised it had to be bought at that price.

Short (Naked) Calls
When the writer, the person selling the option, does not own the underlying stock and the option is exercised, then he or she is obligated to sell. Under those circumstances, that action is considered a naked call. Because the person is on the selling side of the contract, his position is considered to be short.

The short call status incurs the most profit by the amount of the premium if the market price of the underlying asset decreases. When the price exceeds the strike price by more than the premium, then the short position takes a loss.

Long Put
When a trader anticipates that the future market price of an asset, such as a stock, will fall before the expiration date is able to sell the stock at a fixed price. The buyer, put buyer, is not obligated to sell the stock, but he or she does have the right.

If the market price does drop below the strike price before the option expires and the decrease is more than the premium paid, then the seller profits. If the price increases or fails to drop enough to cover the premium then the trader will allow the contract to expire worthless.

Short Put
When a trader speculates that the future market price will rise, they can sell the right to sell an asset at the predetermined price.

If the asset’s market price increases, the short put position incurs a profit that is equal to the amount of the premium. This amount excludes any transaction costs and commissions. However, if the price drops below

the strike price by more than the premium amount then the writer loses the money.

There are several trading strategies that are basic to the market. These strategies employ the characteristics of four basic trading positions. These strategies have one of several outcomes: pure profit plays, speculating on gaining a profit or creating a combination of speculation and hedging.

When positions move in opposite directions, it is called hedging. Hedging bears a profit less that sheer speculation, but they do compensate by offloading a certain degree of the risk.

Bull spreads and bear spreads are common strategies that can help the trader manipulate the market, depending on the market emotion. Bull spreads utilize a long call with a low strike price and combine it with a short call at a higher strike price and a short put with a higher strike price. On the other hand, bear spreads use a short call with a low strike price and a long call with a high strike price. Alternatively, the short put can be used with a low strike price and a long put can be used with a higher strike price.

There is a great deal of software on the market that can aid in these types of trades. Options trading software can offer users concrete demonstrations of the how these strategies work. They show how they behave under different assumptions regarding future prices, volume and other factors, combined with various expiration dates and strike prices to show how these different scenarios can result in a profit or a loss.

The CBOT has a very diverse collection of commodity types. These include agriculture such as corn, soybeans, wheat and oats but the diversity extends to include metal contracts such as 100 oz gold, 5,000 oz silver and mini contracts for both of these. Mini contracts allow for a lower initial investment as well as smaller ticks (price increments). This is because the amount that is included in the original contract is smaller than the traditional amount.

The CBOT also has several non physical commodities futures contracts. There are government bonds, including 30 year bonds, 10 year notes, 5 year swaps and others. A swap, whose primary use is for hedging, is a blend of a forward and a cash trade. They are similar to futures. Other trades on the CBOT include major indexes as the Dow AIG Index (a commodity index) and the Big Dow (a stocks index).

The CME, also in Chicago, has been trading commodities for more than one hundred years. Trades such as live as well as feeder cattle, hogs, pork bellies and others have been executed on this exchange. However, lumber, milk, butter and fertilizer are also traded there. However, the CME can also shift gears to offer an E-mini S&P 500 contracts for trading on the Standard & Poor’s 500 stock index. For those who prefer the ever popular NASDAQ, there is E-mini NASDAQ 100 for trading futures contracts.

Some of the more unusual trades made on the CME include Eurodollar futures and the Weather derivative which is a futures contract that predicts weather conditions during different seasons for areas around the world.

The New York Mercantile Exchange (NYMEX) is one of the oldest in the United States. Among the wide variety of petroleum and metal commodities and futures that are traded are Brent and mini crude (CL, WS), Natural Gas (NG), Gasoline (HU), Heating Oil (HO, BH) and many others. Other offerings are Gold (GC), Silver (SI), Copper (HG) and Aluminum (AL). You may have noticed that the commodity abbreviation does not match the common chemical element abbreviation. This is because futures contracts are listed second and have their own abbreviations.

New York houses yet another major exchange, the New York Board of Trade (NYBOT). The NYBOT is New York’s original futures exchange. Offerings on this exchange include cocoa, coffee, sugar, FCOJ (frozen concentrate of orange juice), cotton and many other products that are of an agricultural nature. Non physical items are also offered for trade such as currency pairs, the United States Dollar Index and the NYSE Composite. A unique and convenient feature of the NYBOT is that it also offers live price info that can even be accessed by a Blackberry or other PA.

However, the commodity and futures exchanges are not confined to the United States. In fact, one of the most active exchanges in the world is found in London. Liffe, once known as the London Fox (London Futures and Options Exchange), has merged with euronext. Trades such as cocoa, sugar, coffee, wheat, barley, potatoes and a variety of other agricultural products are conducted on Liffe.

The London Metal Exchange is not far from Liffe. This historic exchange is one of the grandfathers of precious metals trading. Naturally, trades such as copper, lead and aluminum are made here, but plastics are traded here as well.

A major exchange also resides in Japan. The Central Japan Commodity Exchange (C-COM) is based in Nagoya, Japan. It was formed in 1996 when three major exchanges merged, allowing such diverse commodities as eggs, gasoline, kerosene and ferrous scrap.

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