Trading Soft Market Futures Contracts

Futures contracts for commodities like cocoa, sugar, coffee, cotton and orange are often regarded as soft market futures. They provide opportunities to both hedgers and speculators to profit from changing commodity prices. Soft market futures are traded in different exchanges across the world, but the trading volume is less compared to currency, index and energy futures.

Average Directional Index or ADX

Average Directional Index (ADX) is a popular indicator used by traders to resolve the strength of a prevailing trend of a trading instrument and to confirm trading signals. It was developed by J. Welles Wilder. The ADX indicator does not differentiate bullish and bearish trends, it only tells about the trend strength or is there any trend.

What is Short Sale Uptick Rule?

Uptick or Plus Tick rule was a rule imposed by Securities and Exchange Commission (SEC) on short sellers. This rule necessitates traders to enter short sell orders only at a price higher than previous trade price or in an uptick. Short sale uptick rule was introduced in 1934 and was withdrawn on July 6, 2007.

What is Open Interest?

Open interest is one of the most popular indicators for identifying and confirming trends. It is also known as Open Commitments and Open Orders. Open interest is widely used by futures and option traders; it can also be applied to stock trading.

Stock Market Weekly Newsletter, August 25, 2008

The Week Ahead: The combination of the big drop in the price of oil and Fed chairman Bernanke's soothing words that inflation would moderate with no need to raise interest rates sparked a week end rebound in stocks. Watch for existing homes sales numbers on Monday, new home sales figures and the Case Shiller Home Price Index on Tuesday, durable goods numbers on Wednesday, the preliminary 2nd quarter GDP release on Thursday, and finally the personal income and spending numbers as well as the University of Michigan Consumer Sentiment Index on Friday.

Backwardation and Contango

Backwardation and Contango are two popular futures trading terms which are just opposite to one another. Both are theories regarding the futures contact price and expiration rate.

Bullish Homing Pigeon Trend Indicator

Bullish homing pigeon is a candlestick trend indicator which marks the end of a downward trend and start of an upward trend. It is a candlestick patter in which a long black (or colored) candlestick is followed by a short black candlestick in a way that the second (daughter) candlestick is located within the rage of first (mother) candlestick.

NobleTrading Weekly Market Newsletter, August 19, 2008

The Week Ahead: The recent rise in the value of the dollar could mean lower commodity prices and inflation and thus better prospects for profit margins. Technology related stocks are receiving the greater benefit as measured by the Nasdaq's relative performance. Reports to watch are the NAHB housing index on Monday, housing starts and the PPI on Tuesday, oil and gas inventories on Wednesday, and jobless claims along with the leading economic indicators for July on Thursday.

Fighting High Inflation Rates

Generally inflation is characterized by increasing commodity and service prices, decreasing total portfolio value and weakening national currency. One can follow different strategies to overcome inflation. Some of those strategies to fighting high inflation rates are noted here.

Dual and Multiple Currency Exchange Rates

Many times countries across the world implement a combination of fixed and floating exchange rate for their currencies. Click here for introduction to currency exchange rates. Central banks of nations do this to overcome economic crisis or to meet certain requirements. Both dual and multiple currency exchange rates are not advocated for growing economies.

Trading Grain Futures Contracts

Prices of agricultural commodities like wheat, oats, rice, soybeans and corn rise and fall with news, weather, and local and international economic changes. Grain futures contracts are a good way of profiting from this ever changing grain prices. Grain futures are widely traded in different markets of the world by both hedgers and speculators.

Bullish Harami and Bearish Harami

Harami is a candlestick indicator which marks the reversal or sidewise movement of an existing trend. The Japanese word Harami means pregnant, and the indicator is sometime known as pregnant candle. Harami candles are found on daily charts and can be found both at the end of bullish and bearish trends. They are easy to identify and mostly favor swing traders trading stocks and forex currencies.

Effects of High Inflation Rates

Increasing inflation usually denotes slowing of economy as prices for food, commodities and services rise and the currency weakens. Some of the most prominent effects of inflation are noted here.

Advantages of Trading Currency ETFs

Currency Exchange Traded Funds (ETFs) are trading instruments to profit from the most liquid market of this planet. There are many advantages of trading Currency ETFs over currencies and stocks.

Public Short Ratio or PSR

Public Short Ratio (PSR) or Non-member Short Ratio is a market sentiment indicator used by traders to find trading opportunities. PSR shows the relationship between number of public (retail) short sells and number of total short sells for a given period.

Public Short Ratio = Total Public Short Sells / Total short sells

Trading Single Stock Futures or SSF

If traded properly Single Stock Futures or SSFs are good trading instruments. They are an easy way to own underlying stocks and also give the freedom to easily go short or long and to hedge against risks. Single stock futures are traded in 2 US markets, OneChicago market and Nasdaq Liffe markets.

Diamond Top Formation

Diamond top formation, also known as bearish diamond and diamond reversal, is a technical analysis pattern, which indicates the reversal of a bullish pattern. Although Diamond top formations are created so often, they are reliable and powerful indicators whenever they are created. Bearish diamonds are quite extensively found in forex market because of its high liquidity.

Constant-Weighting Asset Allocation Strategy

Constant-Weighting asset allocation strategy is a moderately active portfolio management strategy. The strategy includes readjustment of portfolio in accordance with performance of assets. For profiting most from this strategy, persons or portfolio managers should always be in touch with economic changes and news.

Currency Exchange Traded Funds

Currency Exchange Traded Funds or Currency ETFs are one of the latest investment/trading instruments available to profit from the price changes of forex market. Currency ETF are a variation of traditional ETFs, in which the ETF firm buys and holds foreign currencies in a fund and the shares are made available in market for investors/traders.

Market Not Held Orders

Market not held orders are market orders placed by traders which allow the floor trader or broker to execute the order at his desired price and time. Market not held orders are practiced widely in international equities trading and commodity trading. They give the brokers the discretion to take appropriate decisions, and they are ‘Not Held’ responsible for the result of their decisions.

Commodity Trading Advisor or CTA

Commodity Trading Advisors or CTAs are persons or firms which profit by handling managed futures accounts from their clients’ behalf or by providing advice on trading. They must be registered with Commodity Futures Trading Commission; registration is done through NFA (National Futures Association). CTAs differ considerably with the markets they are trading, their trading style, trading strategies, experience levels and account specifications.

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