Day Trading World: Tips About Online Trading & Day

The fundamentals in crude oil have continued to erode since February of this year. The highs, over the last $40, can be viewed as a "bubble." This bubble has been fueled neither by Commodity Index Traders and large speculators, nor Hedge funds and carry trades. I think a strong case can be made that the last leg of this rally should be attributed to large producers unwinding their forward hedges. Producers and forward short hedgers are subject to human error just as individual traders are.

Hedge transactions manifest themselves in the Commitment of Traders data as commercial purchases when the market makes new lows and as commercial sales when the market rallies. Just as most economic decisions are made, "at the margin," so too are the hedger's trading decisions. Their traders use their understanding of the fundamentals in their market to create oversold and overbought zones within the market's natural movement and attempt to trade accordingly. This strategy works for them the vast majority of the time.

However, when a market unhinges from fundamental factors and begins trading on sentiment, the commercials find themselves at the mercy of the public at large. Using the chart below, the white line represents the commercial index of positions on a scale of 0 to 100. Zero equals totally short and can be seen at the following points, (5/06, 7/07, 8/07). One hundred equals totally long and can be seen at, 6/05 and 10/05. Currently, the index is at 78, the highest since a 79 reading in February of '07. The yellow line represents total open interest. Technically, speaking, in a healthy trend, open interest should increase as the market moves out to new territory, either higher or, lower.

This has not been the case with crude oil. Open interest peaked in July of '07 and has continued to decline ever since. Open interest now stands at 1.3 million contracts, the lowest since March of '07. Furthermore, I have discussed, at length, the negative spread we've seen between the front month prices and the later expirations. In real terms, this backwardation in prices is evidence that producers don't believe that we will be near these prices as the deferred contracts come due for delivery. Producers continued to sell the deferred contracts in order to lock in profits at levels they don't believe will hold into the future. Lastly, over the last previous weeks, we have seen the total commercial position shift from net short, to net long, with the market at all time highs. Therefore, I would suggest that the rally from the January highs, under $100 per barrel through the current highs, over $145 has been driven by commercial capitulation and a speculative blow off, rather than fundamental supply and demand issues.

Ultimately, it proves the old adage true for everyone, even the big guys, "The market can remain irrational longer than one can remain solvent." Historically, there have only been three times when commercial positions have shifted from net short, to net long while the market was at all time highs. The market declined, twice, by an average of 22.5% and once, the market rallied by 5.8%. Clearly, we are on the cusp of a top. Given the magnitude of a possible decline, one may be advised to purchase put options. Those wishing to sell futures may wish to wait for a close under $140 to initiate a short position.

The CME Group has modified their allocation method for distributing electronic order executions. This is simply the most fair and equitable marketplace in the world.

How many times have you bought the high or, sold the low on a stop or market order? My guess is that it's happened to you far more often than you've been able to buy the low or, sell the high. In the past, the reason for this has been the manual execution of orders in the open outcry markets on the trading floors of the various exchanges.

Here's the way this process used to work:

1) Your order is placed with your broker on the phone.

2) Your broker places the order with a phone clerk on the floor of the appropriate exchange.

3) The phone clerk sends the order to the pit broker's clerk.

4) The pit broker's clerk gives the order to the broker.

That's the order placement part of the process

1) The broker determines how many contracts he needs to buy or sell.

2) The broker looks into the pit of 400+ traders to see where the market is trading.

3) He rapidly deciphers the hand signals and noises to ascertain the best bids and offers at the prevailing moment.

4) The broker decides that the best offer is coming from one guy---across the pit and looking the other way.

5) Deciding that he is unable to get the opposite trader's attention, the broker sees a small trader near him willing to make the same offer.

6) The broker makes the trade with the guy in front of him. The small trader waits for the guy across the pit to make his offer one tick better then buys the offer of the guy across the pit and pockets the profit of one tick X the number of contracts traded.

That's the execution process

The broker tells his clerk who tells your broker's clerk so, your broker can then report the fill back to you.

Now, I ask the following questions:

1) Is it fair that the small trader got to pocket the free money without taking the risk of actually "making a market?"

2) Is it fair that the large trader got his trade done at a worse price while taking the risk of making the market?

3) Is it fair that the customer got a worse fill because his clearing firm's broker couldn't get the attention of the large trader?

4) Is it fair that the customer got a worse price and a delayed notification because the many links in the execution process?

Welcome to the Era of FREE TRADE!!!

The single greatest benefit of the electronic markets has been the equalization of customers, traders and brokers. The second greatest benefit of electronic markets has been the ELIMINATION of floor traders unwilling to make a market or forecast market direction or, in any other way earn a living through their intellectual abilities.

The electronic process

1) Anyone places a bid or offer at a specified price and number of contracts.

2) The first bids and offers at a given price are the first ones executed. FIFO.

3) Your computer tells you instantly that you have an execution.

If you would like to know the details of how the CME Group makes allowances for partial fills at a given price or, how it justifies a single contract's importance over a thousand lot, please read their announcement. Otherwise, take my word for it. We have the best system ever devised for true price discovery. This is the epitome of fair trade!

If you are a newbie day trader then you are probably eager to receive some day trading advice. Well, one important thing that you should know is that it is a fact that not every one who will be involved in day trading will become successful. As in any form of business, there are winners and losers in day trading. You will probably be interested to know what is the difference between a winning day trader and a losing day trader. The answer is simple. It is their attitude. So one very sound day trading advice is to check your attitude.

Attitude or how one perceives and responds to situations and circumstances is indeed an important determining factor in success both in business and in life. A losing attitude in day trading can be likened to that of a bad gambler. Simply put, a bad gambler is someone who does not know when to quit and cut his loss short. He is someone who will risk it all and probably lose it all. A bad gambler on a losing streak believes he is just under the spell of bad luck. For him, to get out of bad luck means to gamble some more. Of course, we all know what usually happens next.

On the other hand, a successful day trader can be likened to a seasoned player. Like a bad gambler, a player also gambles. But the difference between a player and a bad gambler is that a player knows that winning the game is not just a matter of luck. A player knows when to ride a streak and continue playing and when to quit. He knows that it is not worth risking it all and that the most important thing is to be able to stay in the game and continue playing.

The stock market, like any game, is governed by simple laws that once understood and mastered can bring great success. A successful day trader therefore is someone who knows how to strategize and not just act on whims and gut feel. A good day trader is methodical. He knows that the market, though largely unpredictable, can be tamed as long as the right skills and the right frame of mind are employed. A good trader is daring but he will not stupidly put unnecessary put his portfolio in unnecessary risk.

If you are looking for an interesting and relatively easy way of earning lots of money for a short period of time, then you should consider day trading for a living. All you need to become a successful day trader is a working knowledge of the stock market, a bit of strategy and lots of common sense. Of course, a winning attitude will also help a lot. Many have already earned millions day trading for a living and have turned a high quality investment into tons of cash. The one thing that will help you succeed in day trading is the ability to choose stocks intelligently. This you can do through a simple understanding of the law of supply and demand. Know what stocks are hot and what are not and you are on your way to becoming a day trading star.

If you want to do day trading for a living, you must understand some very basic information about day traders. The goal of any day trader is to be able to increase the value of his or her stocks. A trader must understand that to succeed in the stock market, there are only two things that you should remember, buy low and sell high. Master this basic notion and you will definitely be successful in day trading It is also advisable for a day trader to change and buy stocks frequently because of the limit of gains that a particular stock share has.

If you want to become a stock trader then you must know that the stock market can be fickle and unpredictable. It can be up one moment and down the next and it is affected by a thousand different factors. There are many tools available for a day trader that can help him at least predict the trends of the market. You should learn basic methods of choosing stocks such as trend analysis, relative strength training, technical analysis, fractals and volumes, algorithms and chart formations. A day trader can subscribe to a newsletter or seek advice from a day trading website. Traders can also use automated systems available online. With a bit of training, anyone can master and use these tools effectively and do day trading for a living.

Day trading refers to the technique of buying and selling stocks (and currencies) throughout the trading day. When doing day trading you usually do not keep the stock for very long, but instead you buy and sell the stock throughout the day whenever development in stock prices gives you a profit. Needles to say, trading often takes place in a rapid pace and timing in day trading is everything. To become a successful day trader you need updated and reliable stock quotes and for that the Desktop Stock Ticker is an valuable tool.

The basic idea in day trading is that the same stock is bought and sold within the same day, thereby reducing the risk of changes to the closing price. Changes in closing prices will then happen overnight, and the stock may be traded again the following day.

Day trading may seem like very easy money, but this in much harder that it may sound. Only about 10% of the day traders actually make money, so if you want to be a successful day trader you need to know what you are doing and learn all the tricks in the trade.

Here are some advice on day trading:

• Keep calm. When prices fluctuate and profits drops or rise it is easy to become excited and irrational. Always analyze the stock before you decide to buy, skipping this will be your biggest mistake. Do not act on impulse, but instead analyze every stock and trade before acting. Do not get caught up in emotions.
• Follow the pulse of the stock market and the stock price. Do not try to outsmart the market unless you have information that the other traders do not. Going against the odds in the hope of a big profit will most certainly cost you money. Go with the stocks with a high trading volume.
• Use a desktop stock ticker. Follow the stock prices closely and do not rely on old outdated information.
• Do not take it personally when you lose money. Losing money is inevitable and the best you can do is evaluate the trade, find out what went wrong and learn from it. By analyzing and learning from your mistakes you will eventually make fewer errors and more profit.

Remember that day trading is not a business for everyone. Do not start day trading if you think that you will make millions in a couple of months - this might happen in the movies but very seldom in real life. Day trading can be very profitable if you know what you are doing and are using a desktop stock ticker. Learn as much as you can about stocks, the stock market, stock quotes and stock trading.

The concept of trading has taken a diversified meaning, especially in the present world in which trading is the basic work culture. Traditional trading is no more in the market. The world wide web has taken over everything that matters a lot, and we are completely in the hands of potential websites. The most effective consequence made by the internet invasion is the prevailing online trading community. If you become a member of a trade related website then you can be known as a community member of trading website. In the present times, we can find many traders getting engage in a Day Trading Community.

Nowadays, we have traders who do buying and selling of stocks or any monetary products within the same day. Here, bartering starts in the morning and ends completely in the evening. There is nothing left over consequence for the next day. Such kind of trading which happens within the same day through the internet services are generally termed as a Day Trading Community or simply known as an Online Community. There is huge traffic in such communities as more and more people are joining them.

If your personal computer is connected to world wide web service then you can also become a day trader. For this, you will have to become a member of day trading community. When you have become a member of it then start reading so as to gain sufficient knowledge on day trading. In such communities you can solve all your various trade related queries with the help of some blog and chatting tools. There are many financial experts and people who are already doing businesses successfully. Some of the instances of such day trading communities are stock, forex, mutual funds day trading etc.

Hence, we have come to know how day trading community is making progress day by day.