ETF Trading Blogs, Exchange Traded Fund Trading Blogs

Tuesday, September 30, 2008

What is Linked Exchange Rate System?

Linked exchange rate system is a currency exchange rate regulating system where exchange rate of one currency is linked to the exchange rate of other currency. This system was introduced in 1983 in Hong Kong after the Black Saturday crisis. Unlike fixed exchange rate system, linked exchange rate system do not involve government/central bank interfere other than setting the exchange rate.

Monday, September 29, 2008

Weekly Stock Market Newsletter, 29 September 2008

The Week Ahead: As Congress began coming to terms this past weekend with the $700 billion dollar bailout of the financial system, Washington Mutual became the largest bank failure in U.S. history before J.P. Morgan stepped in to buy their deposits. A vote on the bailout package will commence this week in both houses. Normal reports to watch are personal income and spending on Monday, the Case Shiller Home Price Index on Tuesday, ISM Manufacturing and construction spending on Wednesday, factory orders on Thursday, and the September employment report on Friday.

Friday, September 26, 2008

Alternative Trading System or ATS

Alternative trading system or ATS is a trading system which acts as an alternative to equity exchanges. It automatically match buy and sell orders of its customers (subscribers) at specific prices. One common example of ATS includes Electronic Communication Networks or ECNs; others include matching systems, call markets and crossing networks.

Thursday, September 25, 2008

Hammer and Inverted Hammer Trading Patterns

Hammer is a candlestick market reversal pattern, which indicates a market reversal. Hammer candlesticks resemble Hanging man pattern, but they are formed after a downtrend. Hammer candlestick pattern is so named because they are hammering out the bottoms.

Wednesday, September 24, 2008

What is Security Market Line or SML?

Security market line or SML (also known as characteristic line) is the graphical representation of Capital Asset Pricing Model or CAPM. Know more about Capital Asset Pricing Model. Security market line is a straight sloppy line which gives the relationship between expected rate of return and market risk (or systematic risk) of over all market.

Tuesday, September 23, 2008

Trading Forex Currency through ECNs

Trading forex currency through ECNs (Electronic Communication Networks) is one of the two ways to trade forex market; other way is through market makers. When forex trades are done through ECNs, they tend to offer better (tight) spreads. They can offer so as their counter parties include different market makers, banks, and other traders. ECNs show best ask and bid prices derived from these different sources.

Monday, September 22, 2008

Stock Market Weekly Newsletter, 22 September 2008

The Week Ahead: Sparked by a government plan to rescue an ailing financial system, markets breathed a collective sigh of relief as a tumultuous and historic week ended with a 1000 point rally from Thursday's low to Friday's high. Investors will now look for details of the rescue plan this week. However, don't overlook other important reports such as existing home sales on Wednesday, durable goods and new home sales on Thursday, and Q2 final GDP and the University of Michigan Consumer Sentiment report on Friday.

Friday, September 19, 2008

ETNs – Advantages and Disadvantages

Exchange trading notes or ETNs are one of the newest products available for investing and trading, and offer many advantages and disadvantages to investors/traders.

Thursday, September 18, 2008

Bullish Piercing Line Candlestick Pattern

Piercing line pattern is a candlestick trend indicating pattern, which indicate the end of downtrend and start on an uptrend. This pattern is opposite to dark cloud cover pattern. In bullish piercing line candlestick pattern, a long dark (colored) candlestick of the first day is followed by a white (clear) candlestick of the second day.

Wednesday, September 17, 2008

Exchange Traded Notes or ETNs

Exchange traded notes or ETNs are one new financial instrument available for investing. ETNs combine the features of Exchange Traded Funds (ETFs) and Mutual funds. Like ETFs, they are traded on exchanges and offer profit when the underlying index performs better. But unlike ETFs, ETNs are debt securities which have a maturity date.

Tuesday, September 16, 2008

Trading Forex Market through Market Makers

Traders can trade forex currency market through two different types of brokers, as Market Makers and Electronic Communication Networks (ECNs). Each method has pros and cons; and the type of broker that suits one depends on his trading style, opted currency pairs, margin requirements, risk tolerance etc.

Monday, September 15, 2008

Stock Market Weekly Newsletter, 15 September 2008

The Week Ahead: The looming bankruptcy of Lehman Brothers, and capital deficiencies at American International Group, both financial powerhouses, will rock markets and keep investors on edge. Pressures will mount for the Fed to lower rates possibly at the FOMC meeting on Tuesday if not sooner. Reports to watch are Monday's industrial production, Tuesday's CPI, Wednesday's housing starts, and Thursday's leading economic indicators. Also Goldman Sachs and Morgan Stanley release earnings on Tuesday and Wednesday respectively.

Friday, September 12, 2008

What are Leveraged ETFs?

Leveraged Exchange Traded Funds (ETFs) are one of the newest financial instruments available for trading and investing; introduced in 2006. They are index funds which try to amplify the return from the underlying index using leveraged money. Leverage ETFs keep a constant leverage level, which can be 2:1 (to double the return) or 3:1 (to triple the return).

Thursday, September 11, 2008

Hanging Man or Hangman Trading Pattern

Hanging man or hangman is a candlestick market reversal pattern which indicates a market reversal. Hangman candlestick occurs at the end of an uptrend and is named because it resembles a man hanging on a rope.

Wednesday, September 10, 2008

Pairs Trading Strategy

Pairs trading strategy was introduced in 1980s, but over the past it was practiced exclusively by institutional trades and hedge funds. The strategy became popular among retail traders after the introduction of online trading of financial instruments. Pairs trading strategy is a market neutral strategy, enabling the trader to profit from both market ups and downs.

Tuesday, September 9, 2008

Scalping the Forex Market

Forex market is unique in many senses. Unlike most other financial markets where scalping is done solely based on technical analysis, scalping on news in currency market requires both fundamental and technical knowledge. Every nation’s economy is interlinked with other nations’ economies and thus any news that affect a nation’s economy (and currency pairs having that nation’s currency) can impact other nations’ economies (and corresponding currency pairs).

Monday, September 8, 2008

Weekly Stock Trader Info Letter, 8 September, 2008

The Week Ahead: With 605,000 jobs now lost in 8 consecutive months for 2008 many are concerned that the economy is at a tipping point for a prolonged recession or worse. Each economic report from here will carry more weight than usual starting with consumer credit numbers on Monday followed by wholesale trade inventories and pending home sales on Tuesday. It's Friday though that contains the most content with retail sales figures, the Producer Price Index, business inventories, and an important consumer confidence index.

Friday, September 5, 2008

Enhanced Index Fund or EIF

Enhanced Index Funds or EIFs are mutual funds which track stock market indices but try to beat normal market returns. EIFs do so by modifying position sizes and market timing, investing extensively in certain securities, excluding some market segments, and/or carefully using leverage. Enhanced index funds falls into the category of Active Index Funds.

Wednesday, September 3, 2008

Bearish Dark Cloud Cover Pattern

Bearish dark cloud cover pattern is a candlestick trend indicator which indicates the end of an uptrend and start of a downtrend. In dark cloud cover pattern, a long white (clear) candlestick of first day is followed by a dark (colored) candlestick of the second day, forming a dark cloud over the existing bullish trend. Bearish dark cloud cover pattern benefits short sellers and place a ‘seed of doubt’ in minds of bearish day to day traders.

What is Statistical Arbitrage or StatArb?

Statistical Arbitrage or StatArb is an arbitrage trading strategy to profit from pricing inefficiencies in an equity market. It is a broader scale application of pairs trading strategy, and is based on the idea that prices of stocks return to historical norm or market normal levels. Unlike pure arbitrage strategy, statarb involves substantial risk.

Tuesday, September 2, 2008

Weekly Stock Trader Newsletter, 2 September, 2008

The Week Ahead: A pick-up in trading activity is in store for this week as the vacation season comes to an end on Wall Street. The choppy rally that began on July 15 will be watched closely for a continuation into the first half of September. Key reports this week include: construction spending and ISM Manufacturing on Tuesday, factory orders on Wednesday, chain store sales and 2Q productivity on Thursday, and the all important August employment report on Friday.

Advantages of Trading ETFs

Ever since its introduction in 1993, Exchange Traded Funds (ETFs) remain one of the most popular trading instruments. Trading ETFs offer many advantages to short-term and long-term traders over equities, index funds and bonds. Here are some advantages of trading exchange traded funds.

Monday, September 1, 2008

Uniqueness of Global Forex Market

Forex market differs very much from all other markets. It is the world’s largest financial market with transactions worth trillions of dollar per day and is also the most liquid market. There are also many other things which make the currency trading market unique, especially for retail traders.
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