Trading Systems (Part I)

By Ahmad Hassam

At one point in your trading career that might come soon rather than later, you would want to switch over to a mechanical trading system. Using a mechanical trading system not only helps traders to make decisions and increase profits but it also provides great psychological comfort to the traders.

You will realize the necessity of switching over to the systems trade in order to lower the psychological pressure experienced when making every market transaction. You will find most of the trader using a trading system approach to trading. Some of them may use a discrete trading system while others prefer a mechanical trading system.

The mechanical trading system set of rules may be translated into a computer program for automated trading. However, the mechanical trading system lacks fundamental analysis capacity.

The trading system then generates trading signals that can be used by traders having access to the trading system. The creator of such a mechanical trading system then becomes just another user of the trading system monitoring the computer generated signals.

Many traders over their trading careers develop their own trading systems. Besides the traders using their own trading systems, there are now many actively developed trading systems for sale as computer programs. These trading systems may be taken as grey and black boxes. Their prices might vary from a few hundred dollars to hundred of thousands of dollars.

The most significant thing about these programs is that the traders should be able to accomplish transactions in accordance with the signals generated by the trading system. Sometimes theses trading systems are developed for big banks and corporations.

However, it is very difficult for a mechanical trading system to cope with different market conditions. This is the most serious flaw in these trading systems. When the market conditions change, these trading systems start generating erroneous trading signals. Majority of the successful individual traders use self developed mechanical trading systems.

For example, many trading systems that are satisfactory in trending conditions become highly ineffective in nontrending environment. Change of market behavior leads to negative results from a previously effective trading system which obviously would require replacement.

The most common disadvantage of these trading systems is the negative balance between the profitable and unprofitable trades. Many trading systems now depend on complex mathematical formula which is not understandable by the trader if the trader is not the author of the trading system.

Obviously the trading system can only be profitable in the long run if the ratio of the profitable trades is higher than the non-profitable trades. In other words the average profit of each profitable transaction is greater than the average loss of each unprofitable transaction.

Making correction in any mechanical trading system in the process of the trade is almost impossible. The trader must accurately and unconditionally follow the trading system without making any attempt to adjust it to the market conditions. - 23208

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. Discover a Revolutionary Forex Robot Trading System. Read about a Forex Trading System with an ROI of 3000% per month.

Logic In Investment Strategies

By Gnifrus Urquart

I've been an active investor for about 20 years of my life. In using either my tried and tested strategies, or trialing new ones, one thing I have realised is that the more an investment strategy makes logical sense, the more successful it tends to be.

There are so many strategies I've tried, I have lost count. And there are at least as many which I've let go without trying. There are just too many. I found a quick fire way though which helps disregard the strategies which are useless, so you can trial the ones which are worth trialing. Its logic. Look at the logic of your trading strategy and see if there are holes in it. You'll be amazed by the number of strategies with big logical holes.

Its quite possible that these strategies, in their wholeness work quite well. But the problem is that if you are trading a strategy which has holes in it, at some stage you'll come up against a real life situation where the strategy has no answer. Then you'll be on your own and you'll need to make a decision outside the strategy. This can be an educated guess, to an intuitive judgment call, to a flip of a coin.

Personally I think that making decisions like this, decisions which are outside the logic of an investment or trading strategy, is gambling. Its not a good situation. Sure you may make money with this gamble, but you could lose it too. Its no different than blackjack. A robust and complete trading strategy should take these gambles away from you. There should be no guesses. You should just plan the trade and then trade the plan.

Also, the point about trialing a strategy is that you are finding out whether it will make consistent returns over the fullness of time. The point about trading a strategy is that you know it makes consistent returns over the fullness of time. If you have had a guess mid way through the strategy, you cannot be confident its the strategy or your guess which is making the money. You will need to start again.

So if someone presents you a trading strategy, go through the logic with a fine tooth comb. See if you can come up with scenarios which may happen in real life, which the strategy deos not cover. If you can think of some, try to get answers for these scenarios before you start trading with real money. Because believe me, if such scenarios exist, as soon as you put money down they will come up. I think 2007 - 2009 taught us all that.

And once you are happy with the logical analysis you have applied, don't forget to dummy trade for a while too. In dummy trading you will probably find a number of scenarios you never thought of. This gives you the chance of ensuring the strategy deals appropriately with them too, without risking any money. Good luck. - 23208

About the Author:

After many years of profitable trading, Gnifrus Urquart enjoys reviewing his favorite trading strategies and offering general trading advice

Berlin Property - Invest in the Capital of Europe

By Sofie Vincent

The popularity of investing in Berlin property is on the rise, there is a continuously growing number of prospective buyers and investors researching and learning about the large financial returns from Berlin investment property from this quickly growing business venture.

In Germany there has been an economic increase rate of 2.5 percent that was posted in the year 2006; this has caused Germany to be at its highest level to at its highest level of confidence in about 15 years. The country of Germany is having a great time of economic revival due to its strong export market and rising housing price index, which makes it and very attractive time to invest there.

There has been a steady increase of investors in Berlin after years of economic sluggishness, predominantly on the eastern part of the country and particularly in Berlin, which has kept the prices of properties relatively low. The mortgage outlook in the country has been encouraging, with the government easing up on mortgaging policies, as a lot of Germans opt to buy their own homes instead of just renting them.

Even throughout the year 2007, the economy has steadily grown by 2.5 percent and now we begin to see that housing prices have begun to rise slightly. Since commercial property and office spaces are very low in cost there have been many European and British investors setting up offices and headquarters there and continual pour money into Berlin. When the Berlin wall fell, the city entered the race with many other larger and advanced cities for economic development like Munich and Frankfurt to name a couple. However there is a particularly unconventional occurrence that is happening in Berlin since property prices are substantially lower in the capital the in less major cities of Germany Berlin investment property has become increasingly attractive.

The districts of Charlottenburg and of Mitte have become the choosiest investment properties, the properties in these districts are some the best deals in highly valued property across the continent. However, in just a few short years the prices of the properties will increase at a very high several times what they are worth now.

There is very serious interest in the growth of Berlin investment property because of the high returns investors have gotten back from the original investment. In the case of Schlosspark-Carre it is supported by a ten-year rental guarantee by certain groups of banks, which in turn has made it one of the most attractive investments across the whole continent. Along with the ten year guarantee it also has a ten-year maintenance and modernization plan, and also added onto to that is free rental management of the investment properties that are up for sale.

In terms of population, which is the backbone of any structured economy, Berlin has a stable population of 3.4 million people, or almost the same population of three cities; Frankfurt, Munich, and Hamburg; combined, making it the largest populated city in the entire country.

There were 1.8 million households with 1.8 persons living in each household at Berlin in the year of 2003. Over the past few years the numbers has increasingly raised very steadily and it is suspected by 2025, the number of households in the city should reach the 2 million mark. This spread out over eighteen years will be an increase annually of 8,400. This expanding population would start a large movement of investors investing in property at Berlin, which will cause local residence trouble in getting mortgages for their houses and would have to switch to renting a home.

This would happen by foreign investors purchasing high yield properties in Berlin and then reselling them to the locals for a decent profit, and Berlin would be the place to do this since it has the essential ingredients for a great property market venture.

The Advantages Of A Berlin Investment Property

Berlin has a very liquid rental base market, unlike other investment centres across the globe. A surprising 87 percent of the population, or close to 3 million people, have opted to rent their homes instead of purchasing them for ownership. The vacancy rates of rental apartments and homes are at a very low 3.4 percent during the latter part of 2008. This gives a very wonderful opportunity to investors in purchasing 'buy-to-let' apartments and properties, as it assures them of consistent and profitable rental income.

Another great thing about Berlin investment property is the clear-cut information that the German authorities will give to potential investors in this area. Information like prices on property, sales, rental rates and returns on investments so that the potential investors might have can know what decisions to make within the choices of their investments. - 23208

About the Author:

Learn more about the process of finding the best Berlin Apartments for sale #1. Stop by the Berlin Property Teams site where you can find all about property for sale in Berlin #2 and why many people see Berlin as the next big place to be investing in property.

Getting the Price Right for Success in Real Estate Sales

By Jason Myers

Real estate investing normally entails selling at some time. This cost setting is what will identify how fast the house will sell. But how do you get this cost right?

For majority of house sellers, enlisting of the appropriate cost is dependent on how much they think the house is worth. But as it has been determined with this process, the odds of making it right are very small to zero. Sure, the laws of probability asuures you a chance in making it right by sheer approximation but that almost never occurs.

For the greatest deal, you are required to do one thing, and that is a house check. You need to hire a professional to make the value approximation of the home and provide details to you with it. That will give you the edge of pricing the home. These individuals are very precise in their dealings and with all concerns being made, as with the recent trends in the real estate market, they will deliver a nearly precise figure of just how much your property is worth inside and out.

There are a number of instances wherein you may not be joyful with the figure, but you are more than welcome to make improvements that will elevate the price to a higher number that you can be contented with. You may invest in remodeling the house, redoing the paint jobs and swapping a thing or two, up to the time you feel like the general value has increased.

The second thing you can do is to wait till the house selling season arrives, but with the unpredictable financial rotations, you would not be guaranteed of that actually occurring.

When marketing your house, you must not even consider competing with foreclosed homes because their prices are much lower and attempts to match them would only bring about loss. - 23208

About the Author:

As the housing crisis bottoms we'll have plenty of one in a lifetime real estate investing opportunities. You may also want to read our articles about home refinancing so you'll have funds to invest!

Cash For Gold Review

By Chris Lee

There are occasions when people cannot decide whether they should sell off their holdings of gold in lieu of cash. A few of such occasions are born out of sheer necessity, whereas others are due to sudden financial requirements. Gold has been accepted as the metal of the kings, for a long period of time, and it has also been the metal of choice for making jewelry.

Apart from this gold is also one of the best conductors of electricity and is hence used in the semiconductor industry for plating the connectors of electronic equipments like transistors and integrated circuits. A country's currency's value is evaluated against the stocks of gold held in reserve by the government of that country. All these determine the value of gold in the international market. However, the prices of gold tend to fluctuate ever so often.

If you have studied this fluctuation trend carefully you might have observed that when the prices of stocks rise, the prices of gold falls and vise versa. You should time your sale in such a way that you get the maximum exchange rate if you want to dispose off your stock of gold and want to get cash in lieu of it. Study the bullion market carefully and try to find out a pattern.

There are periods in the year when the price of gold rises and there are periods when the prices of gold falls. This pattern happens each year without fail apart from exceptional occasions where there have been dire financial crises all over the world, like in the year 2008. Study these figures carefully and time your sale in such a way that you gain the maximum cash per ounce of gold that you hold.

In a number of Asian countries, gold is considered as an auspicious metal and is purchased during festive and marriage seasons. This is when the prices of this yellow metal tend to rise and you should hold on to your stock of gold and sell them off during such occasions to get the maximum amount of cash for your stock of gold. However, if you need the cash temporarily and are sure that you shall be able to return back the same, along with a nominal interest, it is recommended that you take a loan against your stocks of gold. You can be sure that the price of gold shall never fall drastically. - 23208

About the Author:

Chris Lee is a freelance writer and loves to write on a wide range of topics including Get Cash for Gold and many more.