World Economic Outlook

The presidential election is coming up this Tuesday and the world is fixed on the results of the election. Whether it be Obama/Biden or Romney/Ryan doesn't matter... because there's a lot of work to be done and no one man will be able to change the economic outlook for the US or the global economy. The International Monetary Fund (IMF) just released its assessment of the global economy and identified two critical issues that could effect the recovery of the global economy. The euro-zone crisis and the "fiscal cliff" threat faced by Europe and United States, respectively.

Europe needs to contain its money woes and increase stability for its currency. The country is experiencing "capital flight" where the money is leaving the country in search of a safe haven. Normally, the United States would be a sure safe haven but we also are experiencing our own woes in the form of pending tax increases, raising the debt ceiling (for about the 11th time in 8yrs), and automatic spending cuts. The United States has raised its debt ceiling for over 140 times since 1940 - Office of Management and Budget.

The World Economic Outlook report can be found here: http://www.imf.org/external/pubs/ft/weo/2012/02/index.htm

The IMF expects advanced economies to grow at least 2% - which the US has done, but unfortunately most of America's growth is due to government spending on mostly military goods/services. Which is somewhat interesting since the spending has been done right before an election year. Nevertheless, unemployment remains high and companies continue to hoard cash due to uncertainty running amok in the marketplace.

A Solution for You: There is a way for you to take advantage of this situation for your own benefit. Invest in commodities such as oil and agriculture products. Investing in commodities is how you can make some money no matter who's elected or if the economy turns up for the better or turns down for the worse.

If the economy gets worse, central banks will print even more money trying to stabilize the global economy... the result of their printing will devalue the currency and cause prices to increase. When prices increase your investments increase. If the economy gets better, then the increase in demand for commodities will increase as people will have more money to spend and corporations will need to use more resources for expansion.

BE FREE

Financial Analytics: Predicting Future Trends By Analyzing Historical Data

Financial analytics is a set of tools or system that is used effectively to increase a company's profitability. By assessing and collecting information related to various aspects of your business opportunity decision making becomes smoother and ultimately more beneficial for the company. Once the data has been collected it is usually displayed through charts and graphs so that complex information becomes visually much easier to understand. It also seeks to analyze the data and predict future trends and behavioral patterns. Many executives are using financial analytics to solve their business problems.

It can also be accurately defined as the process of evaluating businesses, projects, budgets and other finance-related entities to determine their suitability for investment. Typically, financial analysis is used to analyze whether an entity is can reap large profits or eventually turn into a loss. When looking at a specific company, the financial analyst will often focus on the income statement, balance sheet, and cash flow statement.Another essential feature is assessing a company's past performance to determine whether the future performance of the company will be a success. The focus today is on getting timely relevant information that can enable professionals to take better decisions and consequently improve the company's performance.

Financial analytics can be done to assess the following elements of a firm 1) profitability -an ability to earn income and sustain growth 2) Solvency- an ability to pay creditors in the long term 3) stability- the company's ability to survive and stay at the top of the business for a long time. It also involves comparison of the performances of two or more firms.

Financial executives must now think beyond the traditional financial information and switch over from general ledger systems and decide how best to provide for the measures and analytical methods required to formulate decisions and plans.

To achieve financial objectives developing data warehouses integrated with advanced analytics will prove to be very useful. This refers to this advanced ability to support decisions. In today's competitive environment executives are finding more and more ways in which the financial function can bring in greater money to an organization.

Finance functions are becoming more and more efficient by the day they require fewer resources to manage them and more easily align with the business structure of an organization. Business organizations are updating their business processes allowing users to access and collect information from any geographic location

How To Get Free Silver - A Guide To Free Junk Silver

Silver prices are going up and with this rise in prices its becoming more expensive than ever to buy silver bullion. Unless you have a large bankroll its going become much harder to purchase silver in bulk as silver isn't 5$ an ounce like it use to be. You might not know about this but its still possible right now to still get free silver without having to pay for it. I have for months been grabbing thousands of dollars in free silver for the face value of the coin from many banks around my area. This is a simple guide I am writing up that has made me thousands of dollars in one month finding free silver that I am giving out for you to be able to use yourself.

Junk silver is the term given to coins such as dimes, nickles, quarters, half dollars, and dollar coins that have silver inside them. The US Mint used to mint all of these coins with some silver before discontinuing this after the cost to produce these coins far exceeded the coins face value. These coins are still circulating around in change, tills, and banks all across the United States. The method I use to find change is by going to banks and asking for rolls of half dollars, and dollar coins as they are the largest and carry the most silver inside them. Any of these coins that are pre 1965 have 90% silver made up inside them, while before 1971 they have 40% silver inside them. Search through the rolls of coins and keep the ones that have the silver while putting the rest of the clad coins into a pile. After you have separated the silver, from the clad you need to go back to the bank an return the coins that don't have any silver inside them. Most banks have Coinstar machines you can use for free without having any charges taken out of the coins you put in. Just remember to rinse and repeat this method again and again from many different banks so that the bank doesn't ask to many questions. Month by month you should be collecting thousands of dollars in silver for the face value of the coins you kept. You can then choose to sell the coins to buyers, or keep the silver to be sold at a later date. Just remember to sell on a peak when the prices is high, and not a dip when the price is down.

The Gann Technique in Today's Trading

Traders today may follow the gann analysis when trading in any market. Although this method refers to mathematical principles, it is basically used more on forecasting market trends and not on the trading activities per se. Just like Gann himself, traders can filter information about the market and concentrate on studying where the trend is going instead. As a trader, he made used of indicators that reflected the hourly, the daily or the weekly movements of the prices in the market.

The three day trend lines that he used indicate that a one-day line indicator may have more swings than the other two days. Traders can also ascertain the direction or the trend by looking into the highest and the lowest prices over a definite period of time. The Gann technique may be used by traders who would like to concentrate on the swing type of trading. There are specific swing patterns as well as retracement points that can be expected to happen in between given trading periods. Traders have to be keen in making moves once they are able to follow through the patterns of highs and lows.

Gann did not pay much attention to the opening or the closing positions when developing charts (Gann trading software), but instead he concentrated on marking the highs and the lows which he connected through a line indicator. Traders who would like to succeed in using his technique have to abide by the rules such as trading by the trend lines that are indicated. However, it is important for them to realize that even if their trend line indicates that the market is up, this may not actually reflect what is happening in the market at a given time. Traders though can decide to buy after they see that the market has confirmed that they indeed have a double bottom. They can sell on the other hand if the market confirms a double top.

There are still other rules that traders have to follow if they would like to be swing trader like Gann. It may take them some time before they can master this trading technique in order for them to earn higher profits from their activities. People who are new in the trading market can be aided by software programs that can help them in creating charts with accurate data. However, there is still a need for new traders to learn and to understand how they can benefit from using the Gann technique in analyzing the market trends.

The Value of the US Dollar

The Federal Reserve Board is printing money at an unprecedented rate. The ECB is following suit. The Bank of England and China are both cutting rates to spur their economies and global sovereign debt is piling up like manure behind the elephant pen. Clearly, our currency is being devalued by the day. Some would argue that there's a race to devalue among the major global currencies as the G7 nations attempt to boost exports and spur their respective domestic economies. Tangible assets like gold and silver or soybeans and crude oil may be the only true stores of value left in an increasingly wayward world. We read this every day. The truth is far less dramatic. In an ugly world, the U.S. Dollar is the prettiest of the ugly sisters at the ball.

The U.S. Dollar Index is exactly where it was four years ago. This is interesting considering that the aggregate money supply in the U.S. as a result of the quantitative easing programs has nearly doubled since the housing market collapsed. Theoretically, doubling the supply of U.S. Dollars should mean that each new dollar is worth half as much. Take this one step further and it's logical to assume that if each new dollar is worth half as much then it should take twice as many dollars to make the same purchases that were made in 2008 yet, the Consumer Price Index is only 4.5% higher than it was then. Finally, I would suggest that considering the growth of the money supply and its characteristic devaluation, we should see an influx of foreign direct investment picking up U.S. assets at bargain basement prices. While logical, this is also incorrect as the U.S. Department of Commerce shows that foreign direct investment only exceeded U.S. investment abroad in 6 out of the last 20 years with 2005 as the most recent.

What has happened through the artificial manipulation of interest rates in the world's largest market is that the U.S. Dollar has begun attracting large amounts of money as U.S. and global investors park their cash while waiting for clarification on the world's major financial and political issues. Real interest rates in the U.S. are negative at least 10 years out. The Euro Zone is no closer to resolution. China is in the midst of changing leadership in a softening economy. Finally, what was an assured re-election of President Obama is now a legitimate race.

The inflows to the U.S. Dollar are easily tracked through the commercial trader positions published weekly by the Commodity Futures Trading Commission. The U.S. Dollar Index contract has a face value of $100,000 dollars. Commercial traders have purchased more than 25,000 contracts in the last few weeks, now parking an additional $25 billion dollars. The build in this position can also be seen in their selling of the Euro, Japanese Yen and Canadian Dollars. The Dollar Index is made up of these currencies by 57%, 13% and 9%, respectively. Collectively, commercial selling in these markets adds another $5 billion to their long U.S. Dollar total. The magnitude of these moves makes commercial traders the most bullish they've been on the U.S. Dollar since August of last year which immediately led to a 7.5% rally in the U.S. Dollar in September.

The degree of bullishness by the commercial traders in the U.S. Dollar forces us to examine the markets most closely related to it in order to monitor the spillover effect a rally in the Dollar might create. The stock market has traded opposite the Dollar for all but four weeks in the last two years. The last time these markets traded in the same direction on a monthly basis is August of 2008. The current correlation values of -.29 weekly and -.43 monthly suggest that for every 1% higher the Dollar moves, the S&P500 should fall by.29% and.43%, respectively. Therefore, a bullish Dollar outlook must be coupled with a bearish equity market forecast.

Finally, we see the same type of relationship building in the Treasury markets. The U.S. Dollar is positively correlated to the U.S. Treasury market. This makes all the sense in the world considering foreign holdings of U.S. debt have increased over 5% through the first seven months of 2012 (Fed's most recent data). The bulk of these foreign purchases of U.S. debt are repatriated immediately to eliminate currency exchange risk. This process of sterilization forces interest rates and the Dollar to trade in roughly the same direction. This relationship turned briefly negative between April and June of this year on a weekly basis while one has to go back to March of 2010 to find a negative correlation at the monthly level.

Obviously, the trade here is to buy the U.S. Dollar. The negative speculative sentiment coupled with the bullish and growing position of the commercial traders could fuel a forceful rally. Small speculators typically accumulate their largest positions and are the most wrong at the major turning points. A recent study in the Wall Street Journal discussing individual traders' biggest mistakes puts it succinctly. Small traders' biggest mistakes, accounting for 60% of the total responses are being too late to get in and too cautious to take the next trade. Once burnt from exiting the last trade too late, the small investor is too scared jump in the next trade which reinforces the negative feedback loop they typically end up stuck in. Take advantage of this analysis and at least, prepare yourself with an alternate game plan.

Podcasts and the Future

The real value of the Commitment of Traders or COT Report for silver traders, (as Ted Butler, GATA, and others have been pointing out for years) lies in revealing the marked concentration of short silver futures positions held by the major bullion banks, who are classed as commercial traders.

Some observers predict that the Commodities Futures Trading Commission or CFTC will eventually simply hide this data or even change the classification like they have done in the past.

Of course, this would probably only serve to destroy confidence in the silver futures market once and for all.

The Issues for Silver Longs

For the long holder, the concentration of shorts is the main issue, and not simply:

Banks hedging positions in the futures market against client business that leaves them long. Yes, banks typically have little choice but to cover long positions with short positions for risk management purposes, as well as for the sake of earning a profit to provide shareholders with value. Swaps. Dealers' positions being taken on or off or played both ways. No limits on positions.

These details simply detract from the core issue of market manipulation and lend credence or play into to the conspiracy phobia prompted by the mainstream media.

Most traders can use the COT Report to observe changes in positioning without worrying about the concentration structure. This could explain why the CFTC remains silent about this key issue, and why the CFTC has not done away with or dramatically altered the COT Report to hide it.

Effectively, there are only a few large commercial traders (i.e. bullion banks) selling silver futures against a huge variety of longs.

No Great Conspiracy?

This manipulation may be easier to see when looked at from the perspective of an attempted long market corner. Who cares what the Hunts were doing with the other side of their long position? The issue for regulators was the Hunts' concentrated long position.

In this case, the real pink elephant on the couch, which shows up clearly in the COT data put out by the CFTC, is that the majority of the outstanding short position in silver futures is held by only one or two commercial traders.

Nevertheless, somehow 'hedging' - which is another word often thrown around loosely (like conspiracy) by mainstream media - makes this concentration 'okay'.

Yet when two large shorts hold 60 percent of the entire sell side of a relatively thin market against a whole crowd of diverse longs, something questionable is definitely going on. The Hunts were chastised and persecuted for doing this on the long side, so why not the heavily short bullion banks?

Can you imagine if oil or copper had the same market commitment profile or IBM for that matter? Sure, there may be naked shorts in those markets, but the shorts are as diverse as the longs, which is how things should be in a fair and balanced market.

It really does not matter if those two heavily short entities are hedged elsewhere. The illegal and immoral concentration of positions still exists in the silver market.

The Confidence Question

Not only does this concentration create an artificially depressed price reality for silver, but it also prevents the investing public from noticing an otherwise healthy way of avoiding wealth destruction by using silver as a non-paper inflation hedge.

Additional dangers of this concentration include:

Big shorts throwing caution to the wind. Shorting is a treacherous game that has potentially unlimited losses. Who else but the big banks could afford to take this kind of risk?

Of course, the real danger here is the unlimited down side risk inherent in short positions potentially triggering a daisy-chain of derivatives-led bank failures. This risk scenario could result in a much bigger systemic problem that would send shock waves reverberating throughout the already fragile world financial system.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals, visit http://www.silver-coin-investor.com

Why Samsung Is Not Buying Silver

Cluff Gold, a gold mining concern focused on West African assets, recently signed a Memorandum of Understanding with Samsung. Under the unusual agreement, the huge Seoul, South Korea based industrial company will be offering substantial funding to the mining concern to help develop its mining portfolio in the initial form of a $20 million unhedged loan facility.

This is the very first financing deal of its kind, where a non-mining concern has shown an interest in a mining company to help provide it with a reliable supply of bullion over the longer term.

For whatever reason, capital from outside the mining industry is now starting to become available to it.Interestingly, the well-known shorts in the mining shares could well be in trouble, although the fact that Samsung is buying into a gold miner highlights the fact that it is probably too late to do the same for silver.

Silver Miners are Spread Thin and at the Mercy of the Banks

Although a desperate need for consolidation exists in the silver mining sector, the capital to do so seems quite hard to come by since miners are typically viewed as risky borrowers by funding banks. This situation creates significant problems for the supply of silver going forward.

If a tech company announced a similar joint venture with a silver miner, it would very likely create an industrial panic and see the price of silver push sharply higher. This move could be large enough to break the global financial system, especially if the famously short bullion banks are not as hedged by offsetting transactions in the OTC sector as they claim to be.

Basically, the worldwide surge in investment demand for silver is competing with constant industrial demand for a metal that is universally believed to be vastly more ubiquitous than it is due to years of extreme price distortion.

Furthermore, silver's monetary history ties it to gold, even though they have different intrinsic values. Nevertheless, no central banks own silver in comparable quantities to their gold holdings.

Impact of the Samsung/Cluff Gold Deal

Overall, as noted by many, including the legendary gold mining CEO, Jim Sinclair,the story is a major game changer that demonstrates substantial international corporate investment in a monetary metal.

It also highlights the persistent under valuation in the sector, and the desire by industrial concerns to secure their long term supply of a precious metal.

Furthermore, the creative financing deal demonstrates the recognition of the facts that:

(1) Gold mines mine money, (2) The supply of gold is dwindling and (3) Gold plays an important role in the high tech industry, which is actually quite minimal compared with silver's broader industrial importance.

The deal also indicates that the precious metals bear market inflicted by widespread hedging of gold shares is now coming to a close. Just think about it, if Samsung or another large tech company tried to source silver in this way, it could very well trigger a spreading crisis.

Precious Metals in the Rehypothecation Era

The Samsung/Cluff Gold deal also comes in the era of rehypothecation, which involves a broker pledging as collateral for a bank loan the securities in customer margin accounts.

Basically, the rehypothecation of assets, which infinitely dilutes claims on real assets, can and will ultimately lead to total losses even for investors who thought that they had strong collateral backing.

Furthermore, the inventory of the world's credible assets is literally evaporating in absence of Cap Ex spending, which is also one of the reasons behind the ECB's seemingly endless lowering of its collateral requirements.

Why Buy Silver?

Within this investing and supply environment for silver, a substantial buying interest could well have a remarkable upwards impact on the price of silver for the following reasons:

(1) Not much silver left. This is the same reason that central banks are not buying silver. Basically, silver has been dis-hoarded and any major buyer would immediately induce a short covering panic that would end all panics.

(2) Silver miners are spread thin. The supply of silver is largely a byproduct of the mining of other metals because the primary silver producers are still viewed as risky. They also often have trouble finding funding for their mining operations and exploration activities.

(3) Strategic threat. No one wants to be the one that blows the silver market sky high with large purchases, so gradual accumulation often seems a more prudent investment strategy in the relatively thin silver market.

Although Samsung may not be buying silver - yet - this innovative deal with Cluff Gold indicates that conditions are favorable for more "finance for supply" transactions of this type over the years to come.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals, visit http://www.silver-coin-investor.com

Winter Wheat Drought

The summer is over but drought fears continue to haunt the grain markets. The rain we never received this summer has turned into snow that we hope is coming. The corn and beans have long since been harvested but the U.S. winter wheat crop is the next grain market to be left high and dry while European wheat is left to drown in its own wealth of precipitation.

The USDA Crop Progress Report showed 39% of the U.S. winter wheat crop in good or, excellent condition as of November 4th. Sounds pretty good, right? The reality is that this is the lowest, "good to excellent" rating for this time of year in the 27 years that this report has been issued. The U.S. Drought Monitor still shows drought across more than 62% of the nation. More importantly, the, "extreme drought" area still covers approximately 6% of the nation. This includes major growing areas like Nebraska and is expanding through the upper Midwest and Great Plains.

Meanwhile, across the pond, planting in France and England is well behind schedule with France's plantings 24% behind last year's pace. Further adding to the globally bullish tone is Russia's recent reduction of this year's harvest by half a million metric tons, which drops it to a 9 year low. These forces have reduced the global stocks to usage ratio, how much we have on hand relative to what we'll need, to 25.4%, which is the lowest level seen since the 1970's according to the USDA.

The tightness in the wheat market can be seen in its performance relative to corn and soybeans. Both corn and soybeans have pulled back considerably from the highs they made this summer. Corn is currently more than 12% off its August high and soybeans have pulled back by more than 14% from their September high. Wheat on the other hand is less than 6.5% off of the July high and has merely drifted lower following its peak.

The technical name for the chart pattern that wheat has created since its high is called a, "bull flag." The reason for the name is when looking at the chart it resembles a flag fluttering in the breeze at the top of a flagpole. The wheat market began a vicious rally in late June, climbing more than 50% in five weeks. This rally can clearly be viewed as the flagpole. The market's meandering since the highs have been confined to a range of 11.5%. This range marks the boundaries for the flag. Finally, as the volatility has died down, the trading ranges have become smaller and smaller. This consolidation is illustrative as the flag forms the tip of its pennant.

The market's quiet period of consolidation also leads to the eventual eruption once the trading boundaries are violated. The expected breakout will give clear direction to the market's participants that it is no longer in a trading range and higher prices lie waiting ahead. The target of the bull flag formation can only be determined once the breakout occurs. The simple measurement is the addition of the consolidation distance between the breakout point and the lower boundary of the flag to the breakout point itself. This is a 1:1 trade since the expected risk, without managing the position, is equal to the profit at the trade's target price.

The primary trend in the near future will certainly be higher. However, I'd like to add a note of caution to trading the wheat markets. Dennis Gartman always uses the line, "Wheat is a weed and will grow as such." There have been several instances where a poor wheat crop has made a substantial recovery. These recuperative powers are best viewed quantitatively through the actions of commercial traders. These are the people whose livelihood depends on proper analysis of their market. Mechanically speaking, one of the best trades is to wait for commercial traders to call a top in the wheat market. This can be seen in the Commodity Futures Trading Commission's "Commitment of Traders" report. When the commercial traders start selling, we want to be with them. Trading a commercial sell signal has generated nearly $2.50 for every $1 risked while only being in the market for 5 days. Investors will profit from being long wheat. Traders will profit doubly as they ride the tight supplies higher and catch the fall from the peak, as well.

Setting Expectations, Limits and Discipline in CFD Trading

The top three (3) basic principles, in order to be successful in the realm of contracts for difference or CFD trading, are about setting expectations, as well as putting limits and responsible leveraging. This is because if traders will abide these, then they will not have any problem at all in earning profits. Aside from that, doing these will also help them in protecting their positions from significant adverse or negative event in the market. It is in this regard that this article will briefly explain these in the following sections.

Setting Expectations

First and foremost, traders should set their expectations first. This will be the bottom line of any investor before entering any financial trade. For example, traders should determine how much they want to earn from a certain position. From there, they will start to indicate as well, some other factors like their strategies, volume of capital, time to enter, as well as the overall plans and strategies.

However, traders should always make sure that their expectations are still grounded on the real world. This is because there might be some investors out there who expect too much from what the reality can only offer. Aside from that, they must also base their expectations on what they can do, as well as the grounds that they are familiar. It is crucial to do this because having a realistic expectation makes them realize what they can achieve or not.

Putting Limits

Secondly, on the other hand, everything has a limit. This is especially valuable when it comes to CFD trading. It is about putting the boundaries or red lights for the amount that the traders will earn or lose. Most people do these limits by employing stops orders. The concept behind this is to protect the position from any lose or further loss by setting a certain point. This point will be the signal for the execution or implementation of the order. For example, if the market or asset is already in the certain point or level that both the traders determine before entering the position, then it means that the order is already effective.

The effect of stop loss order, for instance, is to exit a position when the market reaches a certain level. Of course, this is in order to save the position from further losses. It is like ordering to exit because the losses are already low enough for traders to tolerate.

Leveraging Responsibly

Thirdly, discipline should be among the core values of any trader in CFD trading. This is especially applicable in using the leverage. Well, this is because overleveraged is the most common pitfall of many traders out there. If they will lose their discipline and focus, the only possible result of this is a failure.

10 Tips to Succeed With Futures and Commodities

Trading in Futures and Commodities has advantages not found in more traditional forms of investing. In fact, investing may be the wrong word to use. Most who trade in Futures and Commodities are more like speculators, because the time a trader will hold onto a position is usually much shorter than the time investors tend to hold positions.

One of the big advantages of trading Futures and Commodities is the leverage. For a relatively small amount of money, the futures trader can control many times that of the underlying product, may it be Wheat, Crude Oil, Gold or one of the Currencies.

This type of leverage provides the opportunity to make a lot of money from a small amount of money. However, leverage is a two-edged sword, and that means you can also lose a lot of money if you do not know what you are doing.

In this article I will touch on 10 tips to help you avoid unnecessary losses and give you a head start towards being profitable. But beware that this is just the beginning. When it comes to training in futures, there is no end to education.

TEN TIPS TO SUCCEED WITH FUTURES AND COMMODITIES

1. Read all you can about how the Futures Markets work and get familiarized with the products and their specifications. You can learn much of this by visiting websites of the exchanges where these futures are traded, such as the Commodities Merchantile Exchange (CME).

2. Be sure to shop around for a good discount broker. These days you will find more services being offered for much less than what it was just a few years ago. Be sure they specialize in futures and provide good electronic and phone trading support. You will not only want to pay as little as possible for each "round-turn" in commissions, but you also want to be sure you can get ahold of someone at anytime, day or night, to get you out of a position in the event your Internet goes down or you lose connection through your trading platform. If you are new to trading, see if you can trade a dummy account with the brokerage to get familiar with the platform they offer and to practice trading before you use real money.

3. Be sure your trading account is well-funded. Most traders who start with an account that is under-funded end up being wiped out. The reason for this is that when you trade with a small account, you will have the tendency to trade scared (fear). These days where many of the markets have big daily ranges and often are volatile, it is difficult to enter a trade with a tight stop-loss unless you day trade using minute charts. This is one reason why many opt for daytrading. But even if you decide to daytrade, you should not open an account for anything less than $5000, although more is better.

4. Trade with the trend. Let me say this again. Trade with the trend! It is a statistical fact that you will have better odds of making profits with less losses if you trend with the wind at your back. Learn methods and indicators that will help you discover the trend and then take only trades that are supported by that trend.

5. Always use a stop-loss order at the same time you enter a trade. Never, ever enter a trade and put off entering an opposing stop-loss order. Even if you are uncertain as to the best place to put it, at the very least you should put it at a price that works as an "emergency exit" in the event some news comes out and causes the market to move violently against you. Whatever you do, do not put your stop-loss beyond the day's maximum move threshold, the limit price level. Futures markets have daily limits that if price were to move to that limit that prices would not be allowed to go any further. Often, the reason that prices went limit in the first place can also cause prices to go LOCK LIMIT due to price pressure. If this happens against your position, you may not be able to get out and could face additional days of limit moves against you. This is a trader's nightmare! So be sure you have your stop-loss at least at some price level BEFORE that limit price to avoid being stuck in multiple limit moves. There are several strategies for deciding on where to put your stop-loss. Learn them to help you effectively use them.

6. Learn about support and resistance, especially when it comes to trends and retracements. If the trend is bullish, for example, the bullish waves will usually be greater than the bearish retracements (moves against the trend). According to W. D. Gann, prices tend to retrace in increments of quarters and eights. The major levels are 38%, 50% and 62%, especially in strong trends. These mark your support and resistance levels, and they provide good levels to look for prices to enter trades as well as places to put your stop-loss orders for protection.

7. Learn Money-Management. This is very, very important. With a good money-management system, even a trading method that has less than 50% win/loss ratio can result in overall profits. The key is to determine the right percentage of the total account to risk on any single trade and to stick with that formula. W. D. Gann advocates 10%, although these days it is suggested that you not risk more than 2-3%. This is another reason why you need a well-funded account so that you will not end up with stop-loss orders being too close to your entry or having to miss lots of good trade setups due to the risk exposure exceeding your risk allowance. If you spend enough time learning good money-management and you stick with it religiously, you can do quite well even when your timing skills are still lacking.

8. Learn Top-Down Analysis. This is one of my favorite tips to give to traders. If you trade on a DAILY time-frame, it would be to your advantage to view the WEEKLY, even the MONTHLY charts to get a sense as to the longer-term direction of the market. Focus on trading your chosen time-frame in the direction of the longer-term time-frame. It is not difficult to get a sense of trend direction. For example, you can simply apply a 20-bar and 50-bar moving average and note the slope of the lines as to whether they are moving up or down, and whether the 20 is above or below the 50. Whatever method you use to determine trend, having the longer-term trend in mind is extremely valuable when trading the lower-time frame.

9. Never chase a trade and never move a stop-loss deeper into negative territory. If you planned a trade and then missed the price area you wanted to enter from, DO NOT chase it and enter at the worse price. This is a big mistake and is usually motivated by emotion. The same for your stop-loss price level. Suppose you decide a good place to put your initial stop-loss. Once that order is placed, suppose the market starts moving against you and now you see that your stop-loss order may get filled. Whatever you do, DO NOT change your stop-loss order to allow for even greater losses. This is how many traders become ex-traders. They do not want to accept losses, and they get it in their head that if they just give the market a little more room, and a little more, that they may not have to experience a loss at all because the market should turn soon in their favor. Bad bad emotional trading. Do not do this. You have decided ahead of time what your risk will be, and if it reaches it, so be it. This is what separates the winning traders from the losers.

10. Keep learning to be better at TIMING. This is my speciality, timing the market to the very day when a bottom or top is highly likely to occur. There are many timing methods. Naturally, I am biased towards the FDates timing method. However, I respect that many will want to try all kinds of methods out, and that is fine. Keep working on this, because a good timing method, such as FDates, allows you to trade with less risk exposure. When you can keep your risk exposure down, this enhances any money-management plan and allows for greater flexibility. In addition, the less risk you are exposed to, the less effect your emotion of fear will play in your trading.

These 10 tips are just some of the things I have learned in my over two decades of trading in Futures and Commodities. I hope that you will take them to heart and apply them, and never stop learning.

How Gold and Silver Provide a Safe Haven in Today's Troubled World

The reasons for holding precious metals as a relatively safe haven for one's personal wealth are numerous.

One common investing thesis for buying precious metals is that these intrinsically valuable commodities can hold their value in times of rising price levels. This characteristic can help American savers keep pace with credit expansion and paper currency debasement.

Diversify Out of the Dollar

For example, precious metals can provide a safe haven in terms of the diversification they offer relative to holding U.S. Dollars in cash or Dollar-denominated assets.

Physical gold and silver investments can take up a core position in an investment portfolio since they offer an easy way to have some wealth stashed out of Dollar-denominated assets. These hard assets also provide a viable alternative to holding foreign currencies or foreign equities.

Basically, precious metals allow investors to engage in a new way of thinking, where investment priorities are anchored to real value and permit advance planning for troubled times.

When the Dollar Bubble Bursts

In much the same way that market bubbles have been blown in various asset classes over the last 40 years, largely via Fed sanctioned interest rate manipulation, the overvalued U.S. Dollar seems like yet another bubble waiting to burst.

Basically, the value of silver has been artificially deflated in U.S. Dollar terms via price control implemented using contracts traded at global futures exchanges.The symbolic investigation of this so-called conspiracy by the CFTC just passed its fourth year.

Under priced assets like silver will eventually lead the way back to what will very likely be the largest bubble the world has ever seen. The U.S. Dollar and the U.S. bond market appear destined for a long overdue crash.

Various factors point to this outcome. They include such things as: intrinsically worthless paper wealth, high frequency trading, a world where MF Globals can exist, the threat of taxation, and rampant money printing - otherwise known as Quantitative Easing.

Competing With the Banks for Credit

Major international banks have benefited disproportionately compared to the individual investor from credit expansion in recent years. Banks enjoy better profits from cheap money and can buy future cash flows very inexpensively.

Meanwhile, consumer credit has contracted leaving consumers holding the bag in many cases. People are also unable to consume as much because of a rise in general price levels and the failure of the troubled financial system to purge itself of bad debt.

If at any point the American consumer and banks are equalized with additional credit infusions, the tide will then begin to turn. Consumers can then free up more discretionary income as America goes back to work.

Nevertheless, until the two groups are made equal, credit will neither expand nor contract. Instead, credit supplies will stay constant, although prices will continue to rise relative to consumer incomes.

Precious metals provide a safe haven investment that can often help compensate an investor for such price rises. Furthermore, if at any point the system balances and allows for credit expansion to extend to Main Street, then precious metals investors will typically benefit.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals, visit http://www.silver-coin-investor.com

Titanic Rumor

It is certainly hard to believe that nearly one hundred years has passed since the Titanic sunk in the icy Atlantic waters. The story of that ship and the fateful events that led up to the tragic ending still strike a chord with people to this day. Scientists and Titanic buffs continue to plan voyages down to the wreckage of the Titanic to see it in all of its eerie glory and also find more sunken treasures that have gone down with it.

Titanic and the artifacts it left behind continue to entrance people to this day. The movie Titanic is one of the biggest grossing movies of all time and people still want to remember those who died on that fateful day each year when the anniversary rolls around.

Why are people so entranced by this story? Because it was the ship that was never supposed to sink. When it did, the world felt the pain of the people who lost their lives because of an over confident claim that obviously was not true. The Titanic and its story conjures up a weird love story that people still are interested in to this day.

Other people are more interested in the Titanic for other reasons. There are millions of dollars of jewels that are rumored to still be down there and have not been recovered. The money loving artifact hounds would love to get their hands on these items because it would allow them to boast the fact that they have the famous lost items and they could sell them to collectors and make a huge profit.

People can even purchase their very own artifacts from the Titanic today. There are several companies and web sites that purportedly sell pieces from the Titanic ship or even items that were recovered from the wreckage. The people who seek out these artifacts are clearly infatuated with the story behind the Titanic and would like to have a piece of it all to themselves.

Be careful when decided to purchase a Titanic artifact. How do you really know that what you are buying is really from the Titanic? You can't know for sure and it is better off that you just admire and study the story from afar rather than letting someone take your hard earning money because they claim to have something of value that they will sell to you for several hundred dollars a pop.

Really, what would you do with an artifact from the Titanic? No one will really enjoy it but you. And is it really worth spending your hard earned cash on that? Maybe you think it is, but what happens if you find out that it is not really an artifact from the Titanic and instead a piece of car from the bottom of a lake?

Instead, continue to research more into the story of the Titanic and support your hobby in that way. Save your dollars and cents for something that is more worthy of your dollars, like a charitable cause.

Sandy's Effect on the Cattle Market

Sometimes in this line of work the misery and poor circumstances of others creates profitable trading opportunities for our clients and us. Hurricane Sandy is making life miserable for millions of people. However, it is also providing us with an opportunistic trade in the cattle market. Millions of houses, stores and restaurants without power means that there will be lots of spoilage. Replacement of the red meat can only come from existing supply. Therefore, as we mentioned last week, tight current stocks will grow even tighter as the kill rate increases from animals already on the feedlots to meet the surge in demand.

My first experience with this trade was the '03 Northeast blackout. The initial rush to liquidate positions in all markets and sell stock index futures to protect equity positions came in as a hedge against a repeat of the nightmare attacks of September 11th. Once it became clear that the blackout was caused by a power grid failure, the markets resumed their normal trading pattern and fear subsided. That was the largest blackout on record and affected approximately 55 million people. The crushing demand to refill the freezers created a 20% rally in the live cattle market that started on August 14th of '03 and powered to a peak two months later.

Two thousand and five brought hurricane Katrina to the Gulf coast and displaced more than a million people. Obviously, there was far more to the reconstruction than just getting the power back on. For the sake of our purposes, the total loss of all red meat in houses, stores, restaurants and storage facilities caused the cattle market to rally 12.5% between September 1st of 2005 and October 12th.

The second largest power outage took place in Europe when the power grid failed and created massive blackouts in Germany, Spain, France, Italy and Belgium. This happened in November of 2006 and created an initial rally in the cattle market of 18.6% as cattle prices bottomed at $85.55 on November 4th. This also effectively put a bottom in the market for the next several months, finally peaking at 102.02 on March 12th of 2007.

Later in 2007, Barcelona went dark, affecting more than 1.5 million people. This was one of the longer outages as it took up to 78 hours to get the power back on throughout the city. The net effect was a rally in live cattle prices from July 23rd of 2007 through the end of the month of 8.7%.

The most recent example is Japan in March of last year. The tsunami and evacuations displaced around 500,000 people. Obviously this was a case of bringing only what they could carry and leaving everything else behind. Therefore, all perishables were a 100% loss. Fukushima's impact on the cattle market was an 8.3% rally between March 18th and April 4th of 2011.

The current power outage estimates due to Sandy appear to be around 7.5 million people. It's been reported that nearly a quarter of New York City is still without power as well as the same proportion throughout the state of New Jersey. This equals about 1.8 million people in NYC and another 2 million in New Jersey. The sum total of people without power into their second day is another 2.3 million in the surrounding areas with Pennsylvania in the worst position with more than 900,000 still without power.

The December live cattle futures are currently trading around $126 per hundredweight. The average statistics for the outages cited is a rally of 13.5% peaking 28 days after the event. This gives us a target price around $143 per hundredweight and a target date of November 27th. Given the current look of the live cattle chart, we will be buying the market as it picks up steam and risking the trade the recent low of $124.60. Therefore, our risk profile for this trade is to risk $800 per contract while hoping for a profit of as much as $6,640. We will start to lock in profits however at the much less greedy level of $136.70, which represents the minimum average upside movement we've seen during events like this while still maintaining a solid profit/loss ratio of $4,000/$800.