Building Your Trading Technology

If you want to be a successful trader there are two things that you should never forget. The first is that it is a business, your approach must be serious and you will need a trading plan. The second one, however, is to use any advantage you can get. And one of the biggest advantages comes in the form of technology. After all, it has come a long way.

1. The Old WayTrading Technology Old Way

In recent history, in order to place an order you had to use your phone and call the broker. Your broker would then call the floor trader and he is the one who would actually trade. The floor broker had to be physically at the exchange. However, as you can see, that process lasts. In fact, it was not that rare for the price to change significantly in this time. And you wouldn’t even know what happened. After all, you had no live information.

2. The Evolution

On the other hand, today’s technology will allow you to trade so much more effectively it is almost incredible. In fact, you no longer have to have a broker to trade. You have the opportunity to do it from your home. The computers are far superior to what we had back then, there are markets that exist solely online and you have direct access to trading. Now, more than ever before, an independent trader can compete with institutional traders. You even have highly advanced stock simulators which you can use to test out your systems.

3. The ComputerComputer

Your computer is going to be the main tool you will use. If you can afford it, you should definitely have a designated trading computer. After all, all of the research, testing and trading will go through that unit. Alternatively, if you are using your regular computer to trade make sure you are protected. Any viruses or malware might cost you a lot.

4. The Specifications

While there is a bit of browsing to do, your tasks will be demanding. For that reason, you will want a powerful computer. Get the fastest processor you can afford and a reasonably powerful memory. Getting a second monitor can also be very helpful. With it, you will be able to monitor multiple charts and markets. Remember, a separate window for order entry should always be available if the situation requires immediate action.

You should also be prepared for power outages. Get a UPS and have your phone at the ready. In the case of a power outage, you might need to call a broker. Not to mention that if your phone is good enough, you can use it to trade.

5. Internet Connection

This should go without saying, you have to have a stable connection to the Internet. And not only stable, you want it to be fast as well. The market is moving faster than ever and you do not want to miss out on an opportunity because you were waiting for a page to load. Paying extra for a faster connection will probably pay out.

6. The Software

Now, there are three tasks your computer will have to do for you to be useful. It will need to Test your plans, analyze the market and execute the orders. To expand on this: The analyzing software will do wonders. Depending on your style, you will use the EOD (end of day) analysis or real-time. The backtesting is something that was, up to recently, only available to select few. Now, however, anyone can do it. And even more, newer systems offer multivariable optimization so that your systems can be accurately tested. And, lastly, you will need to have at least one entry interface.

7. Apps

Nowadays, there is an application for anything. And the market is not an exception. There are apps for news, price charts, analysis and realtime movement. Being proficient in the use of these will definitely help you with your goals.

Is it Possible to Make a Living by Trading Stocks

When it comes to trading stocks, it can look very appealing to beginners and outsiders. The money that can be made is incredible and the lifestyle of some traders attracts individuals who are looking for an escape from the daily grind. Many people would love to quit their day jobs and learn how to become a day trader if they had the chance. But is this actually possible?

With the development of technology and because the cheap software that is now available. It is possible for average Joe’s to get into trading on the stock market with minimal upfront cost and knowledge. Of course, if you are see success when you first start trading, you need to have the investments and the knowledge, otherwise the stock market will eat you up. This article will go through the ways in which you can get involved with the stock market and how it is possible for you do it full time with the right information and tech.

What Options Do You Have?

With the advancements in technology and online brokers, you can now trader full-time without an impressive education or the necessary connections. Before, you would have had to go to an expensive college and would have had to know some of the individuals already working on the trade

Developments in IT and software now make it completely possible for people to quit their jobs and craft the lifestyle they want. However, there are also a number of considerations to make before you get involved in trading, as it is not an easy-to-play game.

There are two options you can take when it comes to working independently and full-time when it comes to trading. You can either trade solo or use proprietary firms.

Day Trading Solo

This is the preferred method to get into day trading and is the main method that people first have when they think of independent trading. The ability to now trade form home is a direct result of the advances in technology. You can now have access to the charts and stocks from a laptop, which can work from anywhere in the world with an internet connection. This option is flexible and works around your time, which is why it is the true trading dream.stocktrading

The main issue with this option is that it happens to be the option with the largest investment. Unless you go with discount online brokers, you will have to pay a large sum of money to trade on the stock market. A minimum equity requirement of $25,000 is set and this has to be maintained in order to trade. As well as equity, you also need the equipment and computer power to make sure your trades are secure. The last thing you want is your computer failing when you have just placed an order.

Using Proprietary Firms

Although trading independently is the dream, many individuals will join a firm because of their low commission fees and training programs. This is the alternative to working home and essentially throws you into the pit with other successful traders. The benefit with this method is that you’ll be spending firm money and the risk will be managed externally. They will teach you and advise you on trades and you will get a percentage of the net earnings.

Working for a firm is a great way to get started but many firms do require you have some educational knowledge or experience in the field before you’re hired. In some cases, the firm may allow you to work from home but this is rare.

Should You Day Trade?

Working as a full-time trader is a great job and you can earn a lot of money if you’re good at it. There are two options available to you if you want to trade full-time and you now don’t need a fancy education or network to get involved. Trading is difficult and you need to assess your character before you get involved. This is truer for individuals who are solo trading, as the capital used will be from your bank account.

Key Characteristics of Hedge Funds

As you probably already know, hedge funds have many similarities with mutual funds. In order to be able to tell the difference, you would have to learn about the key characteristic of the hedge funds, so that you can tell them apart.

Find out how to detect the hedge funds and the whole procedure will become extremely easy to you.

No Regulations

The most important characteristic is that hedge funds are not regulated. There are some specific limitations to the things that they can do. They have a specific number of investors and the fact that they cannot be advertised to the public. Therefore, an experienced investor must be in place where he can be properly informed and build up a thorough strategy.


This is why many investors consider hedge funds to be quite risky. You should also know that hedge funds are not being overseeing by the state regulator, as with any other investment status. Therefore, you need a proper due diligence to help you out.


Keep in mind that hedge funds are not required to report their positions to the general public or to the regulatory agency. Of course, the investors are always trying to get as much transparency as possible. However, the truly experienced and talented managers do not want to reveal the positions. If this is your current state, you have a choice, and you can make an investment either way.

Money Managers

money-managersHedge funds managers were also some extremely talented guys who could manage their way around so much money. They made their own moves and produced the best returns for them and their clients. Of course, they will charge you an enormous fee for their consultation and services. Many great investors have followed one single manager after he went on his own way. Nowadays, there are many money managers to the market. This is why you have to be extra careful when you are in search for a talented hedge fund manager.

Fund Strategy

Many hedge funds can follow the same, certain strategies that can guarantee you that everything will go as promised. Hedge funds may combine short selling strategies with bullish plays to manage risk. The hedge funds used to have a certain strategy that everyone should follow in order to make the highest profit possible. However, with the extreme rise of hedge funds, you are now free to follow your very own strategy.

This, of course, means that if you are an experienced fudge manager that handles stock investments, you can now seek out some new fixed income investments as well. You can leave the US borders and easily expand your investments to other countries too. Of course, most managers will stick with what they know and will not experiment. But if you do it right, foreign investment can be something really good for you.

Take a look at these characteristics in order to better understand the differences and the key points to hedge funds. If you are an investor or a manager, you need to know as many details as possible in order to seek transparency.

How to Read a Company’s Income Statement

Whether you’re receiving income statements for your company or creating them yourself, they’re notorious as complicated and scary. But they don’t have to be. Here’s a simple guide of how to read a company’s income

The Main Terms and Their Meanings

Perhaps the most daunting aspect is the terminology, but here’s the basic breakdown.

  • Statement of Income, Statement of Earnings, Statement of Operations, Statement of Operating Results = Income Statement.
  • P&L Statement = Profit & Loss Statement = Income Statement
  • Gross = the profits before dedications
  • Net = the profits after dedications
  • Net Income, Net Earnings, Earnings = final profit (since Statements rarely, if ever never, use the term “profit”).

Multi-Step vs. Single-Step

Close-up-US-income-tax-formDepending on the size and complexity of your business, your income statement can take two forms – multi-step, where there are more expenses and points of income calculated, and single-step, which is more refined. To see the differences and their terms, read here, but for now, let’s cover the real heart of your statement.

The Structure

The Statement will begin by listing the business and the period of time the statement concerns.
Below this will be the body – where the numbers game begins. Read from top to bottom, starting with Sales Revenue and ending with Net Income, which is essentially how much money you started out with and how much is yours by the end.

Along the way, deductions will be made to cover:
Income Tax Expense.
Cost of Goods Sold (= manufacturing).
Administrative, Selling, and General Expenses (= employee wages, advertisement, legal fees, insurance premiums, etc.).
Research and Development (which made be included in the above category, depending on if you have a multi- or single-step Statement).
It’s important to note that these deductions will not be characterized by parenthesis, minuses, or any similar symbols. Instead, the Gross Income will always be followed by a deduction. After which, a strong line will separate the profit into another section, where it will be accompanied by an additional deduction. The purpose behind this is to constantly draw your eye downward to the final Net Income.

At the end, the Net Income will likely be underlined, put in bold, or have a different font type. This is why it’s called “the bottom line.”

The Real Purpose Behind Income Statements

It’s important to remember these Statements are designed to give you a very brief but very crucial insight. They will not go into detail on how broad or narrow the deductions are, or how simple or extensive your profits are.marketanalysis

The Most Important Part to Watch

While each line offers valuable insights, the most crucial of them all is the Cost of Goods and Sales Revenue line. This shows you how much it cost to manufacture the products sold versus how much was actually made, before further deductions are counted. Since the Cost of Goods will likely be the largest expense you have, keeping a close eye on any spikes and evaluating ways to lower this price will give you the most pleasing Net Earnings in the next statement.
The profit after the Cost of Goods deduction will be known as a Gross Margin; always watch the Gross Margin.

What is Most Commonly Grouped Together?

Income Statements often become more confusing when expenses are lumped together, but it’s a common practice to improve efficiency. The most common combination is in the Operating Costs. Rather than itemizing Administrative, Selling, and General Expenses, your Statement will likely put them into that single umbrella term.