Interest Rates and The Macro Trader

By Michael Theil

Trading any and everything macro traders look for asset classes that have sufficient liquidity and then trade them when they can find a great risk to reward opportunity. They will trade stocks, bonds, currencies, and commodities when they think that they have an edge.

One of the classic asset classes for the macro trader is that of fixed income. There have been several academic studies that show that when interest rates are rising or declining macro traders earn abnormal returns. In practice the same phenomenon has been observed. This is not a random thing as there are several reasons why this is the case.

Why does this happen? Well if you look at how interest rates change you will see that the typical trend goes like this up, up, up, up, up, flat, flat, flat, down, down, down, down. And not like this up, down, up, down, etc.

Worldwide central banks are trying to manage entire economies. In so doing they cant turn on a dime and instead are forced to guide the huge cruise ship in a smooth manner. Instead of changing their minds every meeting they instead will raise three, four, even ten times in a row before pausing for a while and then typically reversing course and easing rates several times in a row. It takes a while to change the growth of a nation and this time is where macro traders gain a significant part of their edge.

By looking at the economy and reading the meeting notes of central banks, macro traders can better figure out what is likely to happen in regards to interest rates and position themselves accordingly. Sometimes the trend will only last a few meetings but most of the time it will last several months and maybe even a few years which of course magnifies the potential opportunities.

These opportunities are available in several markets since interest rates, also known as the cost of money, effect all asset classes. You can find abnormal profits in stocks, bonds, commodities, and currencies depending on what is happening with interest rates.

In fact fixed income is one of the primary profit drivers of macro trading. Because interest rate trends are so well defined the risk is less then an outright position is stocks or commodities in a normal cycle. Yes, there are still risks but they are lessened. If rate are coming down bonds will go up and if they are going up then bonds will go down.

Global macro traders are the kings of interest rate trends and profiting from them. If you want to generate higher returns with less volatility then it pays to track rate trends and position yourself accordingly. One other bonus is that in this electronic age central banks are becoming more and more transparent, making our jobs all a lot easier. - 23217

About the Author:

If you need actionable trading ideas then check out The Macro Trader It is a weekly global macro research advisory publication with frequent intra-week updates for time-critical analysis and actionable trading ideas.

How to Achieve Debt Consolidation

By Bob Jones

Debt consolidation offers people the opportunity to get out of serious debt and to take control over their lives again. Many people owe a great deal of money and often struggle to think of ways to pay off these debts. Debt consolidation opportunities are frequently the wisest idea in this scenario, as they can aid debtors repay both their secured and unsecured loans.

Debt consolidation offers debtors the chance to reorganize their lives along with their debts. If they decide to take up one of the debt consolidation options, then a qualified company adviser will assist them to combine all their bills into one convenient monthly payment.

The different debt management solutions can help you by fixing the interest rates on your personal loans, mortgage loans, credit cards, and other loans. The overview of debt consolidation is that you will pay off your debt sooner and have more money to spend later.

If you own your own home and your credit rating is bad, you may want to find a bad credit mortgage lender to help you reduce your monthly instalments and interest rates. However, be careful because some mortgage lenders will increase your rate of interest and mortgage instalments while claiming to lower your monthly repayments.

There are, however, loans available that do provide genuine options, such as early pay-offs, cash back loans, lower interest rate loans, lower monthly mortgage payments, etc. Yet, lenders are well aware that families can sometimes encounter problems and instead of taking advantage of this, they will try hard to help them get out of debt and raise their credit score. There are also lenders that will combine your mortgage, interest and bills and credit cards into one monthly payment after remortgaging your home.

There are always some debt consolidation options, so never give up all hope, no matter how bad your predicament is. There are many debt consolidation options from various sources, such as government or local citizens' advice bureaux; debt counsellors; bank managers; financial advisers, and the Internet. If you are in financial difficulties, you should research these debt consolidation options carefully.

Finally, if you are in a debt crisis, don't just give up and accept that you will lose your home, vehicle, and / or business. Instead, become the kind of person who tackles problems proactively to find a solution before you get that far in debt. Start seeking out a good debt consolidation expert now. - 23217

About the Author:

If you have fallen on hard times and are thinking about debt consolidation assistance, just pop along to our web site entitled Debt Consolidation and Reduction

Placing Stop Loss Order

By Ahmad Hassam

If a trader is to maintain a degree of profitability over time, managing risk and using systems that helps evaluate price changes is critical. You should understand how to select stop orders to limit your potential losses and how to let profits ride.

Managing risk should be your number one job. The descriptions of the types of stops and the pros and cons of each should help you make the right decisions for the different market conditions. Capturing as much profit as possible from winning trades should be your utmost goal.

Predetermined stop loss orders help you conquer your emotions. Stops should be part of the trading system. They should be included in your trading rules. You should also know where and when to place these stops. You should know the various types of stop loss orders.

Set a stop objective and weigh the risk/reward ratio before entering each trade. When volatility is low, stop orders can be placed close to the entry level. However, when the volatility is high, stop orders should be placed further from the entry level.

When entering a trade make sure you know where and why to put the stop order. Initially you will form an opinion based on your gut feelings that is substantiated by a trade signal.

News releases create price spikes that may make an adverse move against your position. However, you will undoubtedly get caught in the news driven price shock events. It makes the markets highly unpredictable in the short run.

Stop orders can also be placed to enter positions. Stop orders that you place online if the market trades at a certain price, then the order is triggered and become a market order to be filled in by the next best price available. Stop orders are placed to protect against losses.

Sell stops are placed below the current market price. Buy stops are placed above the current market price. Protective stops are used to offset a position and to protect against losses and against accrued profits.

You can set a daily dollar amount on the loss limit. Suppose you want to risk only $250 per $100,000 standard lot position. Stops can be placed on a dollar amount per position. Your stop loss should be placed 25 pips from your entry point.

Traders use 2-5% of the overall account size as their stop loss. Suppose your trading account size is $10,000. You can also use a certain percent of your overall account size as your stop loss. This comes out to be $200-$500.

Many traders tend to turn winners into losers as they get in the let it ride mindset. The trailing stop reduces the chance to let trades ride. Swing traders can use the automatic trailing stop. This makes the decision making process fully automated. - 23217

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading stocks and forex. Develop your own Forex Trading System. Learn Forex Trading .

Valuable Forex Trading Tips

By Bart Icles

It is quite easy to have access to information on forex trading online. And with all the forex trading tips available through the internet, you might find yourself to easily get bored by browsing through the minutiae of such information. However, getting the finer points of different forex trading tips can work to your advantage. Indeed, there are tons and tons of trading tips available in different websites and it helps a lot to be familiar with these tips so you can better determine which ones to use in different currency trading conditions.

There seems to be no better way to start your forex trading career than to learn the ins and outs of forex basics. Others may see these as just little things, but in the profitable yet volatile world of currency trading, it is oftentimes the little things that make the biggest difference.

You might also want to have a rather realistic view of the forex market. Remember that there is no such thing as becoming a millionaire overnight when you are engaged in currency trading. There might be rare cases but keep in mind that turning into a millionaire overnight only happens on extremely rare occasions so better not count on it. If you are looking at gaining 100% every year, then you must work on making yourself as one of the best traders in the world. If you want to be among the best, you should see to it that you do not take things in a hurry. In forex trading, being in a hurry is pretty much synonymous to facing disaster. Take your time in learning more about the basics to keep you from forgetting the most important points in trading currencies.

In the world of currency trading, mistakes and errors are very common. It is always best to give room for such mistakes and errors. It is also important that you are able to accept the risks involved in trading. Making mistakes is one bad thing, but the damage that trading errors bring along with them can be lessened if you know the different kinds of risks involved in currency trading. Knowing and accepting these risks will eventually push you to participate in trading in the most favorable times, enabling you to have more chances of making gains.

Remember that you must not only be realistic in engaging in currency trading, you must also be able to take calculated risks. Forex trading is practically the arena for people who have the ability to make calculated risks - they know that faster returns on investments involve bigger risks. - 23217

About the Author:

A free forex tutorial starts with a desire to learn and a drive to become a great trader. Learning with a forex video tutorial takes dedication and a good teacher. But once you learn how to trade and do so successfully your life will change and you have options and financial resources you never had before.

Three Rules To Live By In Online Forex Trading

By Bart Icles

Online Forex trading is one of the world's most exciting of trade investments in the market today. Getting started with online Forex is relatively easy to do, and almost any one willing enough to learn all its trade secrets can become a successful, if not, a profitable trader. In doing online trading, one has to have a solid foundation on which to build a successful trading career on, of which will determine if you're on the right path to success or not. Bear in mind that most investors who lost their investments simply denied themselves the favor of learning basic Forex principles and strategies, and from the mistakes of others before them.

There are three rules you should remember when you're doing Forex trading:

Rule no. 1 - Learn and memorize all vital Forex currency trade terminologies. The process is not as tedious and complicated as with many of the terminologies that you will encounter when you're already in deep in your trading. So take heart that in learning all that you can, all your efforts will eventually pay off in the end. For any one to take part of this very volatile and dynamic investment market should be well prepared ahead by doing their homework, with regard to even its most basic of lessons. Research all related topics about Forex in the Internet, keep abreast with Forex news updates around the world, and keep practicing doing "paper trading" until you get familiar and comfortable enough with it.

Rule no. 2 - Formulate a trading strategy based on what type of system for trading is most suited to you. You can learn to maximize your profits by adopting not one but a few tried and tested trading methods from the experts, and from other sources of Forex trading strategies. Read up on any material you can get your hands on regarding Forex technical and fundamental analysis, trading risk management, and trading psychology. Most of this precious information can either be had for free or can be bought at a reasonable amount from certified Forex brokers or Forex trading companies

Rule no. 3 - Learn to practice good Money and Risk Management Skills by implementing a strict stop-loss order on all of your trade deals. Don't let your greed get in the way of your trading; in Forex trading, the rise or fall of currency rates and values are always fluctuating and very unpredictable, so it's best to keep a cautious approach while making use of the strategies you've mapped out for your trading.

Simply keep in mind these 3 simple rules when doing active Forex trading, and you'll never regret it. - 23217

About the Author:

Come learn how to use forex charting software properly. Their are several forex platforms to choose from but we recommend going with a free metatrader platform.