It appears that the IRS is out to claim more money on investments in stocks than ever before. The IRS was trusting investors on reporting all gains made and losses on their investments. The good ole emergency economic stabilization act of 2008 has made this a lot more different than it was back in the day. These dramatic changes will affect many investors going forward and also complicate things and make investors more frustrated.
This so-called cost basis of reporting which helps determine how much tax investors must pay will be up to the brokerage firm and the investor. The changes for investors take place the first year on the 1099–B form and must be mailed out by the brokers by February 15, 2012. Like many laws in the tax system the investor has no clue what’s about to hit them when they get it in the mail. This is going to be a big surprise. Obviously the goal of the IRS here is to collect more in penalties and capital gains for under paying on investments that made them money.
Brokers at this point are only required to report capital gains on cost basis for stocks and mutual funds. The discrepancies that will show up on these reports may have investors flaming at their brokers within hours or days. The new 1099 forms will be much more detail oriented and will contain things that investors have never heard of before. This requires the investor to not only look this information up or spend more money on a CPA or tax accountant to help them figure it out. This is a never-ending battle for the stock trader or investor who makes more than the average amount of trading positions each year.
In the coming days if your penny stock millionaire or want to be one this is another area of taxation that will be changed in the future. If you have any questions about these new changes you might want to call your broker or CPA medially. Anything down the pipe will affect you in feature so you might want to start keeping better track of your records ahead of time.
The main drawback of sentimental trading is that emotion can play a large part in what happens. Because humans are emotional creatures and not robots, this is a natural part of the trading process. Never trade without evaluating the psychological effect; even investors in large banks sometimes trade with their emotions out of control.
Fear is by far the most powerful of these emotions. When traders are afraid of losing their money, they will pull out of whatever trades they have open. This, as you know, leads to markets sinking even lower than before. The Euro’s is set up to become a prime example of this using Tom’s EA. Although it has been gaining steadily over the last several days in relation to the dollar, the Euro has finally met with some resistance. It is destined for a pullback because of the news coming out of Europe. France and Germany have effectively questioned the Euro, and market fears are beginning to take hold in the U.S. While investors and traders are questioning the Euro’s value in the future, it is only natural for the dollar to gain a slight bit of headway against the Euro once again. A period of consolidation is likely to occur as the Euro sinks down to its true worth. In other words, consumers are starting to question the Euro’s value because of the economic situation in Europe. Some experts have even predicted that the Euro will sink from 1.4535 down below 1.4000. With such dire predictions, fear is only a natural response.
For some companies, their price per share is correlated to how certain commodities perform. Take crude oil, for example. When the price per barrel of oil dropped within the international market just recently, companies like Exxon Mobil and Chevron saw their stock prices drop by about 1 percent. This might not seem like a lot, but a drop of 1 percent means millions of lost dollars for these companies.
The thing to take away from this lesson is that if you are monitoring commodities and their prices, you might be able to get a jump on trades involving companies that require a specific commodity in order to thrive. If you are looking at an oil refining company, when oil prices drop, as you can see, investors stay away from the big oil producing companies, causing their stock to lose demand. This would make a good opportunity for a short sale. The opposite will also hold true. When a commodity increases in price, the companies that depend on that commodity will usually have an increase in demand as well. Using products like the Hedge Fund Copier may help you trade smarter when it comes to these instruments.
There are some companies that thrive off of drops in commodity prices. Take Wal-Mart for example. When commodities tumbled downward last month, Wal-Mart stock went up in value by more than 4 percent. This is because they have a higher profit margin when they do not need to pay such a high price for their products. This should show just how finicky domestic companies can be in relation to international demand for commodities.
In order to prevent complete chaos, the SEC governs all equities markets in the United States. This Securities and Exchange Commission is the governing body that regulates all securities activities and financial markets in the country. The SEC was born in the aftermath of the great stock market crash of 1929.
In the aftermath of the crash, Congress held a series of hearings to explain how over $25 billion of value could disappear as it did. The result was that in 1934, the Securities Exchange Act was passed, and the SEC was born. The fundamental mission of the SEC is the creation of stock market security through clear information and market regulations. Today new methods of trading include the Quantum FX Bot and other auto trading strategies.
The SEC is founded on two principles. First, that companies offering securities (stocks and bonds) for public investment must tell the truth about their businesses, the securities they are selling, and the risks that may be involved. Secondly that people who sell or trade securities such as brokers, dealers, and stock markets, must treat investors fairly and honestly, putting investors’ interests first. Since then, the SEC has become a large and sophisticated and conduct investigations with their own agents. While not perfect, the SEC prevents the worst of the abuses and helps build real market value.
The currency of the two most powerful nations enjoy a special relationship in the trading world. The USD/JPY has known to be a currency pair that depends upon the performance of the US treasury and interest rate statements. When treasury bonds are high, the value of this currency pair goes down. On the other hand, if interest rates suddenly shoot up, then treasury bonds go down, meaning, the currency pair now goes up. As can be observed, the currency pair of the Japanese Yen and the US dollar has an inverse relationship with US treasury bonds. The same thing also goes for yields, which is the interest paid on these treasury bonds. If the yields suddenly go down, it would mean problems for financial liquidity and could well dictate market risks. It can easily be seen that government treasury bonds play an important role in determining the value to this currency duo.
The US dollar-Japanese yen connection is easily attracted to nations which have big trade surpluses and would immediately push the “buy” button, looking at it with its tremendous purchasing power and having the best forex brokers to trade with. On the other hand, nations with struggling economies and have deficits will prompt this pairing to sell because it will project negative impact on it.
Trying to determine the strength of each nation is an ever changing situation. It is critical to follow this currency pair since there is so much at stake.
Many currency traders spend their time searching for the ultimate trading system. They might purchase the latest and greatest mechanical systems from other traders, or they just spend countless hours trying to piece together their own catchall technique. The problem with these strategies is that the currency market evolves over time. When too many people start using the same criteria for conducting their Forex trades, those methods cease to be useful. In other words, systems can only be so effective; once enough other traders begin to copy such systems, that system stops being effective.
This means that in order to stay ahead of the competition in the Forex market you must always be looking to grow your trading system. The optimum trading strategy or the Portfolio Prophet for an individual is also always evolving. Whatever your trading philosophy might be, you need to always be looking for an edge over other traders in order to keep your own trading profitable. Think about it this way: if there was a single system that worked perfectly, why would anyone not be using it? Taking this a step further, if everyone used the same system, why would there still be losing trades? This implies that there is no single correct strategy. If there was, there would be no currency trading since everyone would now be using a single global currency. We know that this is not the case; therefore we must always be looking for the most profitable angle. The sooner we can find such an optimal strategy, the longer we can use it before others discover it. This will always happen, thus making finding our own optimum strategy an ever evolving goal.
Forex trading has grown at an astounding rate over the past several years. More specifically, the spot trading of currencies alone has grown by over 40 percent over the past three years. This growth has presented traders with a vast range of opportunities. Currency trading is the world’s most popular and fastest growing type of trading. On a daily basis, 4 trillion US dollars change hands. Compare this to 2007 when only $3.3 trillion were traded on the average. The market is growing at a rapid rate; many traders are taking advantage of this.
The most widely traded currency is the US dollar. Over 42 percent of all currencies traded involve the dollar. A trade involves two sides though, an up and a down (or a long and a short, in Forex terms). Knowing which side of the trade to be on is the tricky part of Forex trading. The dollar’s value will go up and down as part of the natural flow of the market. Spotting trends and taking advantage of them is one method of profiting from the Forex market. By using the Pro Trade CopyCat signal service you can trade the US dollar all the time.
Looking at trade volume is another key component of making money. The more heavily something is traded, the more pronounced its ups or downs will be. Sometimes, the volume will increase before the price actually moves. Knowing which way the price is most likely to move during these periods of time will enable you to stay ahead of the game and make more money than your peers. This is by no means an easy task, but it is an extremely lucrative one.
The Commitment of Traders (COT) report is a measure of the net long and short positions taken within the forex futures market by the major forces involved. These include hedge funds, speculative, and commercial traders. Futures information is an important part of your analysis because it is an indicator of where professionals think the market is headed. This information can help you in your long term trading goals. This report is released every Friday at 2:30 PM EST. You can find the COT report at the Commodity Futures Trading Commission’s website.
The COT report is an indication of where the big boys are moving their money to. In addition to long term planning it is a good road map of where market sentiment lies. If people expect a currency to drop in price over the long term, who is to say when that drop will begin? If market sentiment says that a drop in price is likely, it may easily become a self-fulfilling prophecy. In this case, markets for the given currency might begin to drop immediately upon publication of the report.
The COT report is an important resource for any forex trader, not just sentimental analysts or people that use the Elemental Trader. You can bet that the professionals have done their homework, and because it gives you a glimpse into where those professionals think the market is headed, you can get a jump on the average forex trader who doesn’t spend the time or energy to check out the report. The investment is well worth it.
There are literally scores of different candlestick patterns out there that are meant to help you interpret where a currency’s price is headed. There are a few simple ones, however, that will make your life a lot easier if you can memorize them. Many of these essential patterns consist of a single candlestick, which is a lot easier to spot than a whole group of candlesticks.
Single candlesticks can be very revealing, even if they are only representative of a single trading session. The Hanging Man is one of the easiest to spot. This candlestick has a small body that ended slightly down, but a dramatic low from which traders backed away from before the closing of that particular session. This is a bearish reversal pattern that occurs at the top of a resistance level. It is a strong indicator that prices are about to plummet. Its long low shadow indicates that consumer sentiment has taken a turn for the worse.
The Hammer is much like the Hanging Man, only it is a bullish indicator. The Hammer again has a small body, but this time, it has ended up for the session. The low price is dramatic, but because it ended up for the session, it is an indicator that prices are about to increase for the given currency.
A third single candlestick indicator is the Shooting Star. This pattern is the opposite of the Hammer and the Hanging Man; it has a small body that ends slightly up for the session, but has a very dramatic high point that it ended up reversing on. The Shooting Star occurs at the top of an uptrend and can be a strong indicator that prices are about to come down once again.