ZERO COMMISSION ONLINE EQUITY TRADES HAVE ARRIVED!!!!!!!!!!!!!!!!!

Image Credit: Imagebros.com

By: Economic & Finance Report

Online stock brokers TD Ameritrade, E*Trade & Charles Schwab have officially cut their online broker commissions to zero. Charles Schwab was the first brokerage, Interactive Brokers followed suit in cutting their commission rates, then came along TD Ameritrade and E*Trade.

Many online brokers are cutting their commissions to nil (0 zero), because of the climate that brokerages such as Robin Hood has had on the industry, allowing free trades of equities to their clients.

Since then other brokers have also cut their commissions to incur more of fairer playing field for their investors, traders and account holders. Many have speculated this was bound to happen at some point. Well, it looks like it has finally arrived. -SB

BITCOIN & CRYPTOCURRENCY: The Profusion of Cryptocurrencies will Change the Monetary-Banking System Enhancing Economies For the Millennials!

Economic & Finance Report

By: James Lyman BSAE, BSEE, MSSM

I just got my January issue of Scientific American with a collection of articles about the future of money detailing how new technologies promises to profoundly change the monetary and banking systems and hence the economic system which millennials are already struggling for a place in.  This special report of four articles is very interesting giving a glimpse of how the world of the millennials and Z-generation is changing such as stopping the concentration of wealth, increased transparency while reducing risks, but increasing risks to our digital identities.  This issue is a good introduction to the ‘what and particulars’ of the new technologies of money, but leaves the reader with the question: How will the millennials fair in a new economy when they’re now struggling so much in the old one?

                       

First, just what is cryptocurrencies such as Bitcoin and Tradecoin?   Well, as the articles explains, cryptocurrencies are just as the name implies, money or currency that is data bits in computer systems instead of the traditional metal coins and paper bills we’ve come to think of money as.  This allows individuals and companies to buy and sell physical assets across the internet using cryptocurrencies instead of traditional money.  These cryptocurrencies are not like credit cards used to transfer money, which are in fact just another manifestation of tradition money issued by nations that we use every day.  Instead they are a money or currency created by individual private companies.  These use the technology of blockchaining to give a peer-to-peer digital payment system without any central authority.

 

Immediately there is the obvious problem of what gives this kind of  money any value? The money of a nation represents the cumulative value of a nation. The sum value of a nation’s factories, farms, mineral resources and infrastructure, coupled with the value of all the personal property such as houses and cars is what gives money its value.  The sum total of all the assets of a nation!  So the money from a rich nation is more valued, considered more stable, than one from a poor nation.  During World War II and several decades after, the American dollar was more valued than gold.  It was more sought after, more readily accepted than pure gold, because of the vast wealth that stood behind the dollar.  People across the world wanted American dollars above all else.

 

But cryptocurrencies is the creation of money out of thin air . . . there is no physical assets to back Bitcoin and Tradecoin.  (Tradecoin does used commodities to back their currency, but commodities are perishable, and so its value can be questionable.)  One only has to look briefly at history, at the Weimar Republic after World War I, when the defeated Germans decided to pay reparations to the Allies by simply printing more money.  Quickly inflation became ramped with a wheelbarrow of paper money needed to buy a loaf of bread.  The paper used to print the money on, cost more than what the money was worth.  And this opened the door for the National Socialist and Hitler to step in and gain total power.  Cryptocurrencies lack hard tangible wealth for their money to represent.

 

Creating money is a finicky endeavor.  Prior to the great depression of the thirties, the American dollar was on the gold standard, that is a dollar bill could be redeemed from the American government for a set amount of gold.  It had value because it was backed by gold which most people consider to have value.  The paper dollar bill was a light weight convenient way to carry gold around and exchange for goods and services.   But there was a fixed amount of gold that America had, which in turn fixed how much money the government could issue.  That put a limit on how big America’s economy could be, so to have room to grow further and get America out of the depression, President Roosevelt took America off the gold standard.  Some people say we should return to the gold standard to return stability to the dollar and America’s economy, but there simply isn’t near enough gold for all the money now needed for our economy to operate. 

 

Therefore, if you create too much money, then you risk inflation with its value falling away, while if you create too little, then you risk strangling the economy which can be just as bad.

 

That’s the real risk with cryptocurrencies, the creation of money out of thin air, without any consideration over the consequences of too much or too little money, coupled with no anchor to real material wealth.  This translates into Trust, one of the most important factors of any currency.  To use a currency, to accept it in exchange for some material item of value, both parties must have trust that the currency will be accepted and trust that the currency has value to warrant trading something of value for.

                                                           

As with any new technology, many have plans to revolutionize banks, economies and money.  Some think they can use cryptocurrencies to cut the banks and governments out of the financial world and thus make the world a better place, others that they can fix a flawed system.  For instances, Venezuela is trying to cure its hyper inflation by creating a cryptocurrency.  One thing is for sure, the future economies, which millennials will have to live in and with . . . are now being formed and remade.  But what’s in it for them?  Will the new cryptocurrencies mean more opportunities for them with a brighter future, or will there be more technology displacements of millennials?

 

These are a set of financial articles each millennial needs to read and ponder, since they are the ones who’s world will be changed one way or the other.

 

POUND STERLING EXUDES VOLATILITY AS UK GENERAL ELECTIONS NEAR!!!!!!!!

By: Economic & Finance Report

UK elections are drawing closer, and the British pound is very volatile as the elections progress in the country.  The pound sterling dissipated this past Friday, (May 26th, 2017) as new election polling data from the United Kingdom, showed that Prime Minister Theresa May was in the forefront of the general elections by a mere 5 points.  During the course of 2017, Prime Minister May had been leading her challengers by over 20 points. The drop has been placing the sterling silver on a roller coaster ride.

May who has a majority currently in national parliament and local branches of government, is now seen as not being able to hold a wider majority throughout the country as anticipated. If this becomes a reality then the Torres (Prime Minister May’s party) will have a smaller faction, then they had in 2015-2016 elections; which can then translate in a downward trend for the currency. -SB

“The Art of Winning in Trading: If There Is One”

 

day trading

Economic & Finance Report

*Advanced article in upcoming edition of Traders World Magazine*

Is there such a thing as an art form in day trading??? In regards to trading any financial instrument?

Is it knowing your entries and exits, or positioning you to attain a profit or exit a substantial loss?  What is the art form of trading and if there is an art form, how can one become the Jack and Jill of day trading and trading in general? In trading there needs to be start of two components an active buyer and an active seller. Each party has its own obligations and set of criteria.  When a buyer aligns with a seller a trade presumably is made, and vise versa.  Depending on a particular strategy that one might go for, someone will profit and gain, while someone will fall short and lose, depending on the trade and strategy instituted.

                Day Trading some will say has an art form, but the question that lingers is who to say which art is correct or which art is superior/inferior in nature?  When I evaluate the markets on daily basis, I see the financial markets on a technical and fundamental eye lenses per se, I am able to see a little clearer by the trends, financial and earning reports.  I don’t know if that is necessarily an art form, or primary knowing what’s happening with the markets in general.  One can speculate or hedge their positions but using a specific characterization to determine the outcome of the market is unbecoming.  It can be stated that trading has many characteristics, in which people can decide the direction they want to trade in, no one can control the markets, the markets has a mind of its own, it will function at its own discretion, and make up its own rules.

Day Trading is definitely strategic in its essence and its being. It’s the certain strategy that you implement that makes it important for one to succeed or to lose.  How one base his/her strategy is dependent on various factors. One of the factors is timing. Timing is important in because each trade needs to be timed precisely and executed to attain future profits. Once you can time your trades, it is easier for execution to adhere, hence allowing you to follow through on how the trade is going to be. Many analysts and people in general will state that trades is timing period.  Those traders especially beginners need to focus on their timing and that once the timing is situated to a “T”, then an individual’s execution will also be strengthened substantially. In Boris Schlossberg article “Timing Is Everything” (Investepedia) he writes briefly about the “Stock Market Crash of 1987’. He indicates that “one of the biggest gains in stock market history occurred on October 19, 1987, during the day of its greatest crash. On that day, stocks had declined a mind-harrowing 23% by the end of the day, but at around 1:30 p.m., they staged a massive rally that saw the Dow Jones and S&P indexes vertical off the bottom, rising more than 10% before running out of steam and turning down to end the day on the lows. While most traders that day lost money, those who bought that bottom at 1:30 p.m. and sold their positions an hour later were rewarded with some of the best short-term gains in stock market history. Conversely, traders unfortunate enough to have shorted at 1:30 p.m. only to cover in panic an hour later held the dubious distinction of losing money on their shorts during the day of stock market’s greatest decline.”[i] To simply put it that timing is pretty much everything as he would indicate, without timing winning and losing is imperative to either profit in further trading or lose substantial amounts of money in your bank account.

There are various trading patterns to include in trading that may pertain to aspects that engage in the what some may state is a part of the “Art of trading” and various trading techniques and strategies. Most importantly knows the order forms in trading, such as limit orders, market orders, stop orders, trailing stops. These order patterns signify how one can time their trade and also how one can take profit, and stop losses to their account.  In a market order, buying and selling a stock or financial instrument is established immediately. Limit order is an indicator to buy and sell the financial instrument at a certain price point, while stop orders is buying and selling when the price reaches and eventually is going to surpass the price point.  The trailing stop sets a spread in percentages from the price point and the price of the financial instrument. The Trailing stop can be very effective in profiting for a trade depending on how it is executed by the individual trader.

The financial markets can be complex in its way it moves; not really having a full understanding can place a trader in jeopardy and having him/her lose a lot from their brokerage account or losing everything from their brokerage account.  The financial markets contain elements that are not uncommon to comprehend, starting with trends.  A trending market is a market that goes consistently in one direction or in another direction. What is considered a bull market trends upward (going up), a bear market trends downward (going down). These trends all people to  enter and exit trades toward the direction the market is going, which hence allows advantages and disadvantages depending on what side of the market the trader is on. Understanding certain trends in the market can help the trader seek profitability and attain major gains in the short and long term, depending on the strategy the trader incorporates.            

                Again, as implied all these reasons conceptually returns to the notion of day trading and trading, as  being an “art” or just simply calculated steps to profitability.  One notion that is for sure is that however you look at it, whether it is art form or not; strategies and multiple techniques have to be in place to make sure one is on the winning or losing side of the trading spectrum. -SB

[i]  Boris Schlossberg “Timing Is Everything” Article in Investepedia.com

 

 

 

FOREX TRADING: MAXIMIZING THE GAINS BUT DON’T FORGET ABOUT MINIMIZING THE RISK

         forex pic 2

BY: Economic & Finance Report  

Trading in the Forex markets comes with its rewards but also entails many risks.  Knowing how to minimize the risk and outperforming to attain greater rewards is key in attaining a strong edge in the markets. In the week of January 12-16, 2015; the second full week of the New Year, the market witnessed probably one of the greatest losses in the forex and trading markets. The Swiss National Bank indicated they were allowing their Swiss Franc regulatory program against the Euro to be freely traded, and the reaction sent investors, traders, analyst, brokerages, market makers, and market movers into a windfall of turmoil.

 Brokerages such as FXCM, one of the top retail forex brokerage in the US, were forced to attain a loan to cover their clients’ losses. The damages adhered were in excess of $300 million dollars USD. Private equity asset lenders had to come in to foot the bill. Financial banks such as Citigroup lost anywhere from $150-$200 million dollars, and other brokerages closed their shops indefinitely.  Deutsche Bank (DB) lost excess of $150 million USD and Barclay’s Plc loss a little under $100 million USD. United Kingdom Brokers such as Alpari folded their uniformed shop and they are now gone in the oblivion because of this unfortunate Forex demise.

The wakeup call now places traders, especially retail traders in a tough position because of what happened underlying the Swiss National Bank.  In the United States Forex and Futures is monitored by the NFA (National Futures Association) and the CFTC (Commodity Futures Trade Commission). These regulatory bodies have oversight on the futures and Forex markets and the regulations and rules are essential on what occurs in the Forex and Futures markets. So exactly what happens next from the entire debacle that had occurred? Well, once thing is quite sure, and that is retail traders now will be more on alert as discretional volatility will of course continue, maybe weeks and months ahead in this destabilizing Forex marketplace. –SB

About the Columnist/Writer:

Mr. Samuel Bassey is a Futures/Stocks/Forex Trader, based in New York City. He has an MBA in Media Management and is a licensed real estate professional and investor.  He is the founder and operator of the international/global economic, finance, and business blog website called www.EconomicandFinanceReport.com, which he writes for as well; and he has a real estate property management/investing website entitled www.SammyBuyHomes.com. He can be contacted @ Samuelbassey@msn.com and info@SammyBuysHomes.com

 

 

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PORTFOLIO & FUND MANAGERS TAKE RISK…. TO PROFIT…..

 

portfolio manager pic

By: ECONOMIC & FINANCE REPORT

Various fund and portfolio managers have to take risk to get ahead in this ever growing investing markets, especially as the new year begins in 2015.  There are a few research studies floating about; that indicate that portfolio managers, fund managers, asset allocation managers and other finance managers, lag way behind the money markets when certain investment initiatives are not in place. Overall their records perform unusually low without taking the necessary risk  to attain net profit gains.

Managers that do not take the necessary risks in diversifying their portfolios to allocate the funds in various risk allocations, lose the incentives to attain profit, then allowing them to underperform in other aspects of their trading accounts and portfolios. At the end of it all, instituting monitored risk or calculated risk is more appropriate in establishing decent results for clients portfolios.

-SB