Day Trading Blog

Welcome to Day Trade The World™ day trading blog. Please click on an article to read it.

Blog del 4 settembre

The Dangers of North Korea: Why Traders Should Not Be Worried

The Dangers of North Korea: Why Traders Should Not Be Worried – Introduction

The risks for war is increasing by day. Last week, North Korea tested a ballistic weapon over Japanese land. On Sunday, the tested a hydrogen bomb. Today, South Korea reported that the North was preparing an intercontinental ballistic missile. These are real threats. The United States have responded by threatening the country of an imminent attack if they continue with their threats.

The markets responded swiftly with the safe havens like gold and treasuries rising. Stocks worldwide fell significantly as investors exited their positions.

The North Korea situation is one of the main reasons why I have advised people to allocate most of their resources to their trading accounts. This is because of the liberty traders have. They can easily enter and exit trades depending on the situation at hand. For long-term investors, they have to hold their investments for years until they mature.

True, the North Korea situation is troubling for both investors and traders. The number of people who would die in case of such an attack is very high. It is estimated that millions of people in Seoul, Japan, and even the United States would be massive. However, from a financial standpoint, traders are poised to gain more as the problem escalates.

As you can see below, the VIX index which measures volatility in the financial markets is trending higher as the talk of war escalates. Remember, traders make more money in days of higher volatility.

Apart from volatility, as the talk of war escalates, the market is creating better opening positions of long-only traders. A good example of this is what happened last week when the Dow opened less 100 points. German’s Dax opened down more than 200 points. However, as the talk of war reduced, the two indices gained by more than 200 points each. This has been happening for the past few months where the talk of war pushes the market lower and then higher as it reduces.

Third, traders should not be worried because they are not to blame for what is happening. During the U.S election, Hillary Clinton blamed Donald Trump for celebrating the housing market collapse. Trump responded by saying that the fall created opportunities for real estate participants. They could now afford buying properties that they would not afford before the collapse. This was right because people like Trump were not to blame but they were among the key beneficiaries. In the case of a nuclear war, the traders are not to blame for using opportunities that emerge for their own benefit.

The key to trade and make money during this crisis is to always be informed of what is happening. Without such information, chances are that you will lose money. After having the information, you need to identify the assets or instruments that are safe and those that are at risk. For example, the dollar would be affected when there is a crisis while the Japanese Yen would strengthen. The major indices would be seriously affected while commodities would also be affected.

You should also look at the safe havens like gold and treasuries. In all your trades, you should ensure that you have some money in the safe havens even when the havens are not doing very well. They will always protect you in case of a major downturn. Another strategy is pairs trading where you buy and sell similar items. This will always protect you in case of a down turn and limit your losses.

The Dangers of North Korea: Why Traders Should Not Be Worried – Useful Tips:


Blog del 4 settembre

Simple Strategies to Make Trading a Full-Time Gig

Simple Strategies to Make Trading a Full-Time Gig – Introduction

Many people around the world are in search of alternative sources of income. This is because of several factors. First, they have seen their colleagues make money and eventually leave employment to do part-time jobs. Second, there have been a lot of emphasis on passive income where people can make money without doing a lot of work. Third, wages are not growing. In fact, in a monthly report last week, it was noted that wages in the United States were reducing. Finally, people want to keep doing what they love best.

Trading is one of the major things that more people are trying. This is because of the ability of making more money without doing much. They can go to the market, buy an asset, and then wait for its price to appreciate. Look at the world of cryptocurrencies where bitcoins and Ethereum price has gained by more than 200% this year alone. This reminds me of the 2000s when most people in the United States were traders, buying stakes in companies that had a dot com at the suffix. At the end, when the market collapsed, they lost most of their funds.

  • The first strategy to make trading a part-time gig is to start early. For my part, I started trading when I was 25 years old. I consider this a little late. A look at some of the most successful traders shows that they started trading in their teens. Billionaire Ken Griffin who started Citadel investments started his fund in his college dormitory when he was 19 years old. George Soros, the tycoon who broke the bank of England started his fund when he was 18 years and so did Buffet and Steve Cohen. The earlier you start, the better it is for you because you are at a position to make mistakes.
  • The second strategy is to take time to learn the fundamentals of trading and investing. The unfortunate thing about most new traders is that they don’t take the long route to learning. They deposit money in their brokers’ account and then start buying things that other traders are buying. They forget that most of these traders and investors have spent decades learning how to trade. Ultimately, they lose money when the stocks or assets they are buying collapse. Therefore, before you start trading, make sure that you take time to read intensively for a while. It will help you avoid making simple mistakes.
  • Third, you need to learn about the economy and what moves the market in the long term and short term. By having a good understanding about the economy, you will be able to get inside the minds of other traders, investors, and analysts. Remember that the performance of the economy plays a very integral part on the movements of the market. A good place to start is by reading or watching a video created by Ray Dalio of Bridgewater Investors on how the economic machine works.
  • Fourth, you need to practice and test your strategy. This is another important step that many traders ignore. They just start trading without testing their strategy. Ultimately, they will lose money. Therefore, it is very important for you to practice and test the strategy for a period of not less than two months.
  • Finally, you should start trading as a part time job. This will help you master the art of trading while you are still employed or while you are at your work place. If you are still employed, remember to work as if nothing changed. This is because you want a good recommendation from your boss. Only quit your job after making sure you know how to trade and how to protect your trades.

Simple Strategies to Make Trading a Full-Time Gig – Useful Tips:


Communication Post del 29 agosto

Release: Non-Displayed Swap Order Type

Day Trade The World™ is proud to announce that Friday, August 25, 2017, we released a new order type for EDGX in NY, NQ, and AM.

This order type is “Non-Displayed Swap”, which can be found under the EDGX Destination for Pegged Midpoint orders. Your traders will need to change the type from “Regular” to “Non-Displayed Swap”.

This order type can execute against Post-Only orders, in which case it will always remove liquidity. These orders receive priority over other hidden orders, if there is an incoming Post-Only order that it could match with.

For more information, read the BATS EDGX Non-Displayed Swap document.

If you have any questions or comments, please create a mojo.

CP del 29 agosto

New Destination Release for NY, NQ, & AM

August 14, 2017, Day Trade The World™ released the following destinations for the BATS gateway. These destinations are available for the AM, NQ, and NY markets.

ALLB: Routes to BATS Book, then other BATS exchanges
RDOT: Routes to BATS Book, then DRT and NYSE
ROOC: This order type automatically participates in auctions on halted symbols
ROUZ: This order type routes to BATS Book, then DRT
TRIM2: This order type routes to BATS Book, BYX Book, DRT, Boston Exchange, EDGA, and IEX
DRT stands for Dark Routing Technique, which means it is routed through dark pools which offer price improvement and lower fees.
For more information about these order types, read our Order Type Reference Guide or the BATS Routing Strategies document.

If you have any questions or comments, please create a mojo.

Blog del 28 agosto

Top Risks That Traders Must Always Focus On

Top Risks That Traders Must Always Focus On – Introduction

I have written about the risks that traders expose themselves to before. Still, I feel that I have not covered the topic adequately. In fact, the topic is so broad and important that it should be at the fingertips of all traders. In the past, I have written about the need to always have a stop-loss and the need to always have small trades open. In this article, I will highlight the top risks that you should always think about when opening a trade.

  • Environmental Risks

To many people, the environmental risks are not in their mind every time they open a trade. Many of them, especially the newbies, don’t see the relationship between the environment and their trades. However, the environment is probably the most important thing that traders should always think about. For example, the recent events in Texas provide the best opportunity for one to understand the environmental issues.

The hurricane in Texas and the floods that followed have huge ramifications for traders. This is because they expose traders to asset classes that might be affected. For example, Texas is close to the Gulf of Mexico which is home to some of the biggest refineries in the United States. Closure of the refineries can positively impact the oil prices in the world. Gas prices can also move higher when there are such events. With the refineries shut and road network and airports shut, the transport companies that operate in the area are affected. In addition, the retailers that are shut can lead to lower share prices.

  • Political risks

Politics is very important in the global financial environment. This is because politicians are tasked with developing policies that impact the social and economic well-being of countries. For example, in the United States, politicians are tasked with coming up with the budgets. They are also tasked with coming up with tax and regulation policies. Therefore, when there is an election, investors expect two things. First, they expect status quo to remain. This is where the government in place remains which means that the policies will not change. Secondly, they expect a new government to come in. In case of a new government, they anticipate new policies that could impact the financial market.

  • Economic risks

As traders, we are faced with economic risks all the time. In fact, economic data from around the world is released every day. A strengthening economy means that it is safer to invest in those countries while economies that are declining are an indication of a weak trading environment. In many cases, economists and analysts have their expectations before the data is released. For example, if the unemployment rate in the United States in July was 4.7%, they might anticipate the August one to be about 4.6%. If the real numbers that are released are 6%, then the market will react in a negative way. The markets will fall and assets like gold will rise. Therefore, as a trader, you should always have in mind the prevailing market conditions.

  • Security Risks

As a trader, the security risks are very important and should always be at the back of your mind. To many traders, we are living in dangerous times with increased terrorism risks. However, the world has always had security risks. Remember, in the past century, we have seen two world wars, the cold war, and smaller wars. We have also seen the terrorism events in different parts of the world. Today, we are seeing heightened risks in the Korean Peninsula. When such risks arise, the market is poised to fall as investors rush to the safe havens. However, they also create opportunities in the defense industry where defense contractors are expected to rise as more demand for their goods is created.

Top Risks That Traders Must Always Focus On – Useful Tips:

  • To discover more, please, visit Investopedia;
  • More interesting information on the matter on MCBinary;
  • Another useful reading on Schwab.