Author Archives: Ahmad Hassam

Options trading can be profitable if done correctly. Many people take the plunge in options trading without any training or understanding about the different options contracts that they can trade. In the end they don\'t have a clue when the options value starts going against them. Now for options buyers this option unlike futures limits their maximum liability to the option premium they had paid at the time of buying the options contract. The options market has caught the fancy of many investors and this is not surprising. The beauty of options is embedded in its very name. You have the options but not the obligation to buy or sell stocks at a given price by a given time. Continue reading →

Many beginning investors get confused when they realize that it is possible to make money when the stock falls in price. In practice, shorting a stock is as easy as buying stocks once you get hang of it. When the market is falling, investors sell short a stock with the goal of profiting from the fall in the price of that stock. Continue reading →

The New York time between 3:00 PM EST to 7:00 PM EST is best suited for scalping with the counter trend strategy. Off hours between 3:00 PM and 7:00 PM EST is when all the world banks are closed. The U.S. banks are closing their doors and the Asian banks have not yet opened. This is a great time to scalp the market using a counter-trend strategy, because no larger banks are moving money (i.e. the markets) at that time. Just as with the London close, there is no set way in which the New York afternoon market plays out. On more active days where prices have moved significantly, the lower liquidity can cause additional outsized price movements. So traders just need to be aware that lower liquidity conditions tend to prevail and adapt accordingly. Continue reading →

Swing trading means that your trade can run for several days as long as your profit targets are not met and the trend does not reverse itself. Swing traders believe in the saying, Trend is your friend. Most of the day traders end up being swing traders. A swing trader may have started as a day trader. Either they scaled out of a portion of the position, set a stop loss objective and kept the trade running as the market kept moving in the desired direction. Continue reading →

Stock index futures like the Dow Futures or the S&P 500 Futures are traded for speculation as well as hedging purposes. Stock-index futures are by far the largest category of futures contracts traded as a percentage of the total number of futures contracts traded. The dominance of index futures clearly speaks of the major role that stock-index futures play in risk management for the entire stock market. Continue reading →

Aging Trend: This is the period of consolidation as the trend comes to maturity. Volatility tends to decrease at this stage of the trend as the momentum of the trend exhausts itself. This is the period where lot of profit taking will take place. Continue reading →