How To Profit From Gold?

If you have some money put aside and you want to be able to enjoy it for a long time, specialists say that it's a god idea to invest it, so that it will start to produce revenue. Nowadays, there are many investment opportunities available on the market, but the one that seems to be the most popular among experienced traders is gold.

This precious metal has always been seen as a treasured commodity, one that gave a particular social status to its owner. It has a constantly high value and an extremely appealing physical aspect, qualities that make all the more appropriate as an investment.

If you, too, are thinking of buying gold as a store of value for the future, you should first know that there are many ways to go. First of all, you could buy metal in its physical shape, such as collectible coins, bars or even jewelry. Still, this option involves a bit of a storage issue, so you must be prepared to hide your valuables in a safe place. If this doesn't appeal to you, you can also invest in gold stocks or even derivatives. This last choice can be very profitable, but is usually advisable for more experienced users, as it implies a certain amount of risk.

Another thing you should know is when to sell gold. Generally speaking, the answer is simple: not anytime soon. Still, if you happen to need cash quickly and can't get it anywhere else, you can choose to sell a small part of your valuables. Also, should you have bulletproof information that the metal's value has reached a peak, that makes it ok for you to start looking for buyers. Nevertheless, you should always pay attention who you work with, so as not to get fooled in any way; go for reputable buyers or authorized dealers to be safe.

In the end, you can see that it's not difficult to profit from gold; it is largely available, can be bought in various shapes and sizes and making the actual transactions shouldn't pose any problems. It's just a matter of deciding when and how to act.

Commodity Fund Fundamentals

2010 was a bumper year for commodities. Cotton was up by 96%, coffee by 62% and copper by 30%. In fact I am struggling to think of a commodity that didn't have a stellar year.

However, the same cannot be said for all commodity funds. Why is this?

The main reason is that not all commodity funds invest in the same way. The generic label "commodity fund" actually captures several distinct types of investment. It is therefore important that you understand how your chosen commodity fund works before taking the plunge.

To help you do so, I have listed the 3 main types of commodity fund below.

True Commodity Funds - These funds actually have a direct holding in the relevant commodities. A common example is a gold fund. The main reasons that gold is more common as a direct holding are:

a) It doesn't deteriorate over time
b) You require a lot less space to store gold which costs USD1,400 an ounce than you do oil at USD100 a barrel.

Commodity Funds that Hold Futures Contracts - A much more common strategy is for the fund to hold derivative contracts based on the underlying commodity price. The reason for this is that most investors have no desire to take delivery of hogs, corn, oil or any other commodity, they simply want to profit from price changes.

This type of fund however exposes you to the risk of "contango". Normally the price to buy a commodity today (spot price) is higher than the price to buy it in the future. However, in times of high demand or uncertainty the future price can be higher than today's spot price. When this happens there is a risk that when the futures contract matures, it will do so at a price lower than the original purchase price, thus creating a loss.

A good example of this was back in 2008 when funds holding oil futures contracts managed to lose money despite the price of oil surging to USD150 a barrel.

Natural Resource Funds - These are funds that invest in shares of companies that are engaged in commodity related fields, such as energy, mining, oil drilling and agricultural businesses.

While they hold neither actual commodities nor commodity futures, they still provide some exposure to the underlying commodities markets by proxy.

The downside to natural resource funds as opposed to the other 2 is that, while actual commodities and commodity futures historically have a low correlation to the equity markets that probably make up the bulk of your current portfolio, natural resource funds will be more correlated as at the end of the day they are still investing in stocks.

Financial Planning 101: Fear Itself

As a retired financial advisor, the question that I am asked most often is, "Is it safe now to get into the market?"

I answer, "No. It's never safe to get into the market."

When the market is falling, I hear, "Do you think I should get out?"

Again, "No."

Investing isn't like swimming at the club pool, diving in on sunny days, splashing around, getting out and jumping back in again but avoiding the water altogether when the weather is disagreeable.

A doctor called at the height of the 9/11 crises. He wanted to sell everything in his portfolio. "Go to cash!" he demanded. Nothing would dissuade him. His timing was exquisite. He called the very bottom of the market for the first decade of this century.

In the 1990's, a physician and his wife had over $3,000,000 invested. Empty-nesters, they loved the ocean and had a seasonal home on an island off of the Atlantic coast-nothing but smooth sailing ahead of them. One spring day, their accountant observed that they had not made much money in the market the previous year. The so-called dot.com market was booming. They were missing out. All the cautions about the runaway bull market did not deter them. They to transferred their account to a different broker. He sold their elegant portfolio of dreadnaught stocks and intrepid bonds, and tossed the cash into technology stocks. Days later, their nest egg was eviscerated to less than half. All of it had been dumped into the grossly over valued market when it was within 1 percent of the century peak.

Both stories are tragic. Not because of the money that was lost. Dreams were lost. The first client, frightened by the 9/11 attacks, thought that he would get out ahead of everyone else. Tens of thousands were there before him. The second couple, with a fortune secure, lost much only because they feared they were missing out.

When investors do not chart a course for their portfolio, every breeze-favorable or threatening-is cause for alarm. Investing is simple as planning a road trip. It begins with choosing a destination. Departure and arrival times are set given the distance to be traveled and a comfortable driving speed. Plans are adjusted if the calculations turn out to be unrealistic.

Investing begins with simple questions. A destination can be retirement, college education, or buying a new home. The rate of return is rate of speed-the equivalent of the one can expect on average over the lifetime of the portfolio. Higher rates of return are as dangerous as excessive speed on the interstate. Destinations need to be realistic. Research may be required. What kind of college education? How big a new home? How much income is needed during retirement?

The two couples, whose stories were recounted earlier, lost sight of why they were investing-their destinations. Journeys are not abandoned because of a flat tire. Nobody gives give up because a detour causes a delay. Being right on schedule should never be reason to drive at excessive speeds that are dangerous to everyone on the road.

Fear is a healthy human emotion. It signals that caution needs to be exercised. It is a non-rational function of the psyche, however. When a person acts only to escape the discomfort of it-to make it go away-the outcome will always be less than optimal.

The investors who stayed the course after 9/11 continued to experience a level of fear. But their maturity was rewarded, as history demonstrates again and again. Their funds participated in the recovery from the bottom dollar. Investors who fear that they may not have earned as much, as a selective view of the market may indicate as possible, fear they are being denied more wealth. Their fear leads to a lack of perspective and the greater hazard of losing what they currently possess. When an investor does not know how much he or she needs, no amount will ever be enough and every setback will feel like a disaster. With the destination in mind, however, surges and pullbacks are measured rationally and adjustments, if needed, can be made without panic.

Forex Strategy - Make Money With Support And Resistance

If you do a search online, you will be able to find thousands of different Forex strategies. There are many different methods that you can pick from that range from indicator based to fully volume based. When you are picking a Forex strategy that suits you, you want to keep one thing in mind. Almost all professional Forex traders use support and resistance as a huge part of their strategy. Most new traders overlook support and resistance because they consider it basic and too simple. Well the professionals would definitely disagree!

Support and resistance is what makes the market. They are areas of interest in the marketplace that people will watch over and over again. When there are a lot of people watching a certain level, it becomes very likely that price will have a strong reaction in that area. You want to have a strategy that can take advantage of these strong reactions.

Most importantly is the fact that the good support and resistance levels are watched very closely by huge hedge funds and banks. Trust me, if they are watching these areas, you want to be too. As traders with much smaller accounts than the billion dollar funds, we can't control the market at all. So what we need to do is know where the bigger players are placing their orders so we can place trades in the same direction as them!

The key to succeeding in Forex trading is to find a Forex trading strategy that makes use of support and resistance very heavily. There are many different ways to do this. Some strategies simply take touch trades off of certain levels while others wait for confirmation at these support and resistance levels before they place Forex trades. Each strategy will have its advantages and disadvantages and the key is to finding one that is most comfortable for you and suits your personality.

With so many options out there, it can be tough and overwhelming to find a Forex strategy that suits you and is also profitable. You will make it much easier however if you have an idea of what to look for. Avoiding indicator based systems will save you a lot of time in searching for a profitable strategy. So when you are looking for a Forex strategy that will make you a lot of money, make sure the strategy uses support and resistance! Do this and you will have a much better chance of being on track of becoming a professional trader.

My name is Shawn, and I have been a Forex trader since 2007.

Investment in Oil and Gas

While investing in oil and gas wells, everybody should be searching for successful companies, industry mates, and operators, who can pass very exact due application necessities. We want to discover the individuals who the best are...those professionals bidding the best Oil and Gas opportunities in the US today and how efficient the supplies are.

According to other conventional investments, the right direct oil and gas investing may allow worthy delivers with every month cash flow. Furthermore, direct investments in oil and gas can offer tax rewards which are not accessible with stocks and bonds for better investment. For maintaining rules and regulations, investors are allowed to place preliminary drilling programs to obtain their primary capital back inferior to a year after new wells are finished, and the recognized manufactures & especial oil & gas companies can create monthly returns to produce better outcome. Investors also should observe a model known as 'risk control model' for disciplined and controlled returns during bidding for investing.

Of many investing partners Lime Rock Partners invests growing capital mainly in three sectors of the energy industry for their satisfaction: exploration & production, energy service, and oil service. Primarily, they invest growth fairness in oil and gas developing companies with an conventional reserve base and startup companies using growth capital to make grow new resources and also to focus on recess global opportunities for uprising alternative natural gas resources.On the other hand, it invests in service companies which point the target areas for energy producers worldwide and companies targeting appealing regional marketplaces such as the U.S. Rockies or Central Europe. For acquiring high-impact technologies that offer measurable betterment in oil and gas, production and extraction it also invests in oil service technology companies. Other sectors for oil and gas investments are in high-growth, enterprising companies which include developers of midstream assets, downriver technologies, or renewable energy projections, etc.

Investors are most often interested in investing in oil and gas industries, especially in major companies involving at the safest option, with the lowest element of risk. For safety investment, the persons those who want to invest, need to look into the different ways that are more reliable.

The factors that make investing in the oil and gas industry safe are depicted as follows-

1) To be a safe and reliable investor, you need to ask the right questions and realize the right answer and this type of insight will help you to make safe investment determinations.

2) An Investment objective is another important factor in which you need to be very clear concepts about your investment objectives. Depending on your objectives, you need to choose the suitable investment option.

3) Stocks, investment cash in hand, drilling funds, private positioning, commodities dealing, or some combination of all must be chosen according to your investment objective that helps you to choose the most appropriate investment vehicle like these.

Trading for a Living Is Different Than You Might Think

I thought this article could address a couple of misconceptions concerning what traders actually do. There is an underlying strategy conveyed in this article, so stay with me. The biggest misunderstanding by those that don't trade is that traders have an idea about which way the major indices are going. This is not necessary to be successful at trading for a living. If it were, we would probably fail. In fact, I can't think of any person or set of trading rules that can pick market direction consistently.

Trading for a Living is about understanding what the investment community has to choose from when making a particular investment and then identifying what choices they have made. For example, a natural choice that has to be made by an equities money manager is choosing between low dividend, highly volatile growth sectors (like Technology) and a high dividend, low volatility sectors (like Utilities). Because there are only so many dollars to be invested, money will naturally flow out of one sector and into the other, depending on the risk environment. As a trader, once I identify this price action, I can apply my entry trading rules to capitalize on the investment that is being made. Most novice traders don't look any further than the instrument they are trading. This is why most traders fail.

Another example would be Crack Spreads in the Energy Sector. A Crack Spread is the difference in price performance between Crude Oil and the components that are "cracked" or made from it. Crude Oil by itself is not very useful but once refined, or cracked into other components, it becomes very valuable. The two biggest components cracked from Crude are Gasoline and Heating Oil. It's natural that when a long position is taken in Gasoline, it get's hedged with a short position in Crude. Trying to trade crude by itself is an impossible task due to its volatility but identifying when these two aggressively spread apart creates a trading opportunity that trading rules can be written for.

A second misconception is about the length of time traders hold positions. I am sure that I am going to ruffle some feathers with the comments in this section. Although trading rules vary when it comes to hold times, I have found that most professional day traders (like me) have an average hold time of less than 15 minutes per position. Most people not familiar with trading for a living think that average hold times are longer. Remember that the term is "Trading for a Living" (with the keyword there being "living"). I can't do this unless I take profits. The general perception of the public on hold times is that if your hold time is really short, you're not a trader, you're a gambler and if you're hold time is really long, you're not a trader, you're a money manager. My perception of the public is that my bank account is bigger than theirs and I only work 4 hours a day.

This leads me to my last trading misconception concerning the hours a trader works. Generally speaking, the morning hours provide greater volatility and therefore greater probability for winning trades. If I compared all the trades I have ever made based on the time of day, I am certain that I would find that trades made prior to 11am in the morning have a higher probability of being winning trades. Since all trading rules are written around probabilities, I usually trade mornings only. The public perception of this is that we work very few hours. The reality is, I am up at about 6am and I trade until about 11am (sometimes 10). I usually don't trade the afternoons. I use this time to do research or as personal time.

All Futures Trading Strategies Are Born in the Currency Markets

When people trade a Futures Trading Strategy, they normally just use technical support and resistance levels without regard to what's going on in other markets, like the Bond and Forex Markets. Examining all markets can really separate the beginners from the pros. I recently viewed a forum post where someone asked other forum members if they'd be interested in creating a forum thread specific to Inter-Market Analysis. Unfortunately, there was very little interest. After seeing the results of using Inter-Market Analysis as a basis for my Futures Trading Strategies, this is so sad to me.

For example, if you are trading Crude Oil or Gold and you mark a significant support or resistance level from the prior days price action, naturally you'd expect price to stop there. That type of trading analysis is part of many Futures Trading Strategies. But, in overnight trade, if the US Dollar depreciated by a quarter of a percent, the value of the asset you are trading should have inflated by a quarter of a percent. This means that your support levels should all be moved up by that amount. This is a very basic example.

Because the biggest risk to any US Dollar denominated liquid asset (like Gold or Crude) is inflation or deflation, the most natural hedge for a long Gold or Crude Futures Trading Strategy is a long dollar position. The next thing to consider in this trade is that on the other side of your long dollar position, there will be a counter currency. The counter currency that should be used depends on current and anticipated Foreign Currency yields.

Now, I am not a Fundamental trader. So don't get scared off! I only utilize technical Futures Trading Strategies in my approach to trading. The important thing about this type of analysis is for you to know that the currency markets leave foot prints that show what the intentions are of the larger traders. Let's face it, before you make any big purchase (house, boat, car, etc.), you don't just look at the price of the asset. You also look at the insurance. That's exactly what we're talking about here. In fact, you'd be surprised to know that the larger players in the markets have entire divisions set up solely for the purposes of hedging. No large firm will take on a new Futures Trading Strategy without a hedge.

In the Equities Markets, these types of footprints are a little less vague. Mostly because prices move in the equities markets for more than one reason. Yes, equities assets inflate and deflate but the other (larger) reason equities prices move is because of anticipated earnings. Earnings are not a liquid asset like a Barrel of Oil or an Ounce of Gold. I am not saying that there isn't some Equities to Currencies correlation, but I have found that it's not nearly as reliable in the Equities Markets as it is in the Forex and Commodity Futures Markets. I started my trading career as an Equities Trader at a Proprietary Trading Firm. I couldn't get this type of correlation to work with equities so I found myself constantly trading commodity or currency ETF's. Eventually I moved over to a Futures account and started trading Futures Trading Strategies exclusively. I just found so much more transparency in these markets.

If you are running to your platform to open up a US Dollar Index chart, let me save you the time. If you find correlation between the US Dollar Index and commodities, it's going to be hit or miss at best. There is a much more mathematical approach to this analysis and I make my living trading and teaching it to traders.