Posts Tagged ‘trading’

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How To Use Excel For Trading

Wednesday, August 12th, 2015

Excel is widely used by hedge funds and professional traders to manage trades, calculate P&L, compute buy and sell signals, and much more. These capabilities are available to the average trader, many of whom already use charting software to help with their trade strategies, often with limited success. Including Excel in your trading workflow process can deliver high value in terms of profitability, discipline and consistency. There are a few things you need to learn, but it is achievable with a little effort and the benefits can be very significant to your bottom line.

There are many ways to use Excel for trading, and your first consideration should be narrowing down your intended use of the tool. Will you use it to compute trading signals? Is your interest importing data automatically into Excel? How about calculating profits, drawdowns, risk and other analytics? Do you have many open positions you need to track? Would you like to integrate Excel with a charting platform? Are you interested in automating your workbooks with VBA to increase speed and accuracy?

Bringing price and volume data into a spreadsheet automatically is one way to implement Excel for trading. This uses DDE links to a price data database, either an internal or vendor provided database. DDE links are efficient and can capture fast moving prices (with certain limitations relevant to algorithmic trading). Importing price and volume data into Excel with web query functionality is an alternative to DDE links. This works if you want to capture a smaller volume of prices or economic data from websites like Yahoo Finance, Google Finance, etc. You can also import data into Excel using the Data from Other Sources function. This connects to SQL Server, MS Analysis Services, XML files and ODBC — this is a good option for the technically minded.

Using Excel for trading is highly dependent on data. Importing prices and fundamental data into Excel automatically is a great first step to implement Excel for trading. In fact, not much else can be achieved until you import data, so this is a basic foundation step. There are multiple ways to do this. DDE links can be used to import data from a data vendor. Your broker\’s API can be used to connect to the actual prices your broker uses. Internal or vendor provided databases can be connected using SQL or web queries. How you implement the data import will have a lot to do with your strategy and the data types you want. For automated intraday trading with fast moving prices a DDE link is best. The Data from Other Sources function in Excel uses SQL Server, XML files or ODBC to connect to a database if you have one internally at your office or home. Web queries can work for end of day and fundamental quarterly type data. Economic data comes out infrequently so speed is not an issue.

Best practices of Excel for trading involve planning your spreadsheet workflows and relationships so everything works together correctly and you can find what you need when you need it. You have a choice here of building a multiple spreadsheet environment or creating a single workbook with lots of tabs. The prior approach is modular and tends to work well because each separate workbook is for a specific purpose, small, and easy to manage. The downside is you may need to manage lots of links and Excel links have a tendency to break and get corrupted. Big workbooks with lots of sheets can be useful in Excel for trading since you have everything in one place. However, Excel tends to bog down and the files get huge when you start using more than 10,000 rows of data, charts, and multiple tabs together. It can also be a bit risky to have your whole daily trading operation in one file. Just make sure you back up your files in an external location every day!

These ideas should help you get started using Excel for trading to improve your trade processes and increase profits with less risk.

Want to learn more about Excel for trading? Visit this site for a FREE GUIDE on building trading models in Excel.

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Weekly Options Trading Strategies

Tuesday, December 18th, 2012

One way to trade weekly options that could be considered ‘less risky’ – at least when compared to other similar ways of trading – is to go out and purchase a LEAP option – use that as the foundation for the trade – then start to sell weekly options against it – similar to how one might trade a covered call trade.

Some option traders and investors call this sort of options trading method a covered write – or a synthetic covered call – and while they are correct that’re similar except for the simple fact that with this particular trading method the required margin – or upfront invested capital can be much, much less. When you’re using stock for this type of strategy, you must invest the whole amount to buy the underlying stock which can be a significant investment. But if you are simply using options – either regular options or the much longer dated options such as LEAP options – your upfront investment can be much less.

Trading LEAPS along with Weekly Options

When you break the word LEAPS down you find that it stands for: ‘long-term equity anticipation securities’. These trading vehicles can have life spans from a couple of months to many months and in some cases even years. Another interesting point regarding these particular trading vehicles is that in actuality they are not even ‘options’ – but in fact they are actually ‘securities’.

One way to think of LEAPS is to think of them as leasing options rather than purchasing them. When you are using LEAPS you can benefit from the movement in stocks in a similar way as if you owned the stock – only without having to put out as much money and with more more leverage.

AAPL Example

Let’s imagine a scenario where trader A wishes to take up a new long position in the stock AAPL – the only problem is that he doesn’t have the amount of cash needed to purchase the stock as it is so expensive. An alternative for trader A is to instead of purchasing the stock – just buy several long LEAP call options for far less money than what it would have cost him to buy the stock – yet he still is able to profit from a move in AAPL – and if purchased correctly, he could profit just as much as if he had the stock and perhaps even more.

Another potential scenario is buy the LEAP as in the example above – but then to use the LEAPS in conjunction with weekly options – using the LEAP as a ‘stock replacer’ – and essentially building an option trading position that is very much like a covered call trade. In this type of a set up, the LEAP position would act as the long (or short) stock – and then the trader would begin to sell weekly options against the LEAP position – and this could potentially be done many times in a row – up to 52 times in the year – all the while pumping out cash flow from the sold weekly options. What is even better with this scenario becomes apparent when you compare what you could make with a similar ‘stock based’ covered call play versus this type of LEAP surrogate stock weekly options trade – where the returns on the LEAP version is far, far better than the possible returns with the stock based scenario.

To Discover more about weekly option strategies , click over to to this weekly options trading site where you can learn all about this tactic for generating reliable monthly inflow.

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Trading Puts and Calls With Weekly Options – Taking Advantage of Rising Volatility

Friday, June 22nd, 2012

With puts and calls there is a little known option trading strategy that can provide consistent profits from markets that seem too wild and choppy to use the usual strategies like iron condors, calendars, and credit spreads. This strategy works best in crazy markets unlike the standard option income strategies such as the iron condor, the calendar spread, credit spread, etc.

This strategy is initially set up to profit no matter what the market winds up doing. The set up for this trade can profit regardless of what the stock or index being used winds up doing – if it moves up, a gain is made – If it moves down, a gain is made – and then, when a profit has been realized, the trader can immediately lock in that profit and ‘re-set’ the position so that it will profit again regardless what happens from that point forward.

Similar to a straddle, when using this strategy, we don’t care what the market ends up doing. Up or down, it doesn’t matter. If the market goes up – that’s great. If it goes down – that’s great too. And the bigger the moves, the better.

Then, when a move has occurred and a profit has been realized in the position, using an easy to follow set of rules, the trader can perform an adjustment that immediately lock in that profit while setting up the position to profit again no matter what the underlying winds up doing. And this can be done over and over again – continually scalping profits out of the trade.

One of the most frustrating things to directional traders is when a trade actually goes in their direction, making them profit, only to immediately revers and go the other way, wiping out their gains, and perhaps even then dipping lower putting them into losses.

Gamma Scalping eliminates this. And once again, using the method used to lock that profit in, positions the trade back to it’s starting point – where if the underlying continues moving in the same direction – or stops and returns back to where it came from – MORE profits can continue. And if the underlying continues the move – or heads back to where it started from – MORE profits continue.

Gamma Trading is a great tool to have in the stock and option traders toolbox and especially in extremely volatile times this strategy can be a real asset to help generate super sized profits.

And along with being stress free and profitable – using puts and calls explained in this way is fun too.

To find out more about the butterfly spread trading option strategy, visit this Butterfly Spread Training Site for scads of free training videos, examples, and reports on how to fittingly start off, exit, manage and adjust puts and calls examples Strategies to create a consistent monthly returns.

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Factors Behind Changes In The Price Of Gold

Friday, February 10th, 2012

Gold has always been a smart investment selection for ages and historical figures tell us the fact that the price of gold has long been rising continuously year after year. The price tag of gold for an ounce of gold, nonetheless, may act erratically from time to time and financial commitment in gold is proven to have messed up a considerable number of folks financially. You’ll find lots of variables which affect the cost of gold for an oz of gold. Getting a clear perspective of these variables and focusing on how they affect the cost of an ounce of gold may help you in hedging against unstable times. Within this post, we look at the most beneficial means to invest in gold and to hedge to protect against price variances.

You’ll find two broad ways in which you may invest in an oz of gold: either by buying physical gold or by investing in gold stock. Each type of financial commitment features its own benefits and drawbacks. With paper gold (gold financial commitment through stocks), you will not be worried about taking good care of the safety of the gold. Having said that, physical gold, in the sort of coinage and bars, is far more liquid and may be traded without documentation. Therefore, the sort of financial commitment is the first important thing that impacts the cost of an oz of gold. Yet another important reason for the variances in the cost of gold is the existing market condition. Desire and supply controls the general market environment have an effect on the cost of gold.

Gold price might be indicated with regards to US dollar. In essence, there’s an inverse connection between the cost of US dollar and value of an oz of gold. Gold is regarded as a relatively safe financial commitment over paper money principally due to the fact the supply of gold can’t be heightened or diminished to suit market circumstances. Therefore, any time you’ll find money variances or money wars, folks tend to place their money in gold to hedge against these money shifts, because this may run the price of gold up. Therefore, you should really have a knack for distinguishing dollar variances and money to acquire the most profit from your own financial commitment in an ounce of gold.

Even when you’re a professional trader, it is possible to make a tidy profit on gold. You should really invest in pure gold, like gold coinage, if you need to make a tidy return on your own financial commitment. The demand for gold will almost always be around as well as supply will almost always be limited. Therefore, you’ve got an extremely excellent opportunity of getting money on your own financial investment. It’s really a question of how long you hold onto your own gold reserves as well as current price of gold per ounce of gold.

Many commodity markets also regulate the price of gold. Asset buying and selling is performed at the existing price of gold so you will need to learn the way to get cues from commodity and futures prices to understand the price of gold. There’s no fixed relation amongst the two, nonetheless, almost all professional dealers think that the price of gold might be influenced directly with the retail price of critical commodities such as crude oil.

With this particular guidance regarding the price of gold, we are positive you are prepared to go for it in gold financial investment. Keep an eye open for whatever information relevant to marketplace volatility and remember, any awful news for the marketplace is usually beneficial to the price of gold.

Learn more about price of gold. Stop by Candace Goods’s site where you can find out all about ounce of gold and what it can do for you.

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Studying The important points on CFD Technical Trading

Monday, November 7th, 2011

Every trader is abreast by having exactly how the Contracts for Difference or CFDs perform. Nonetheless, a more innovative subject that most of the folks do not know is actually the specifications of exactly how the technical trading works. Well, it is actually just simple however it can easily not be described fully if it is going to not be compared using the philosophy of necessary trading.

On the one hand, the essential trading is regarded on the more detailed study or analysis of a business as well as it is partners, control as well as even it is financial as well as non-financial performances. What this indicates is actually that the elemental analysis when it pertains to CFD trading will certainly begin by viewing the financial statements and other governing parameters that will certainly inform the investor or trader something about the other party.

Moreover, conducting the essential trading calls for the investor to take a look on the balance sheets, as well as cash movement as well as income statements of the company. It has actually to be interpreted and this interpretation will definitely be made use of whether a financial transaction is worth the danger and hard earned cash or not. In phrases of the time horizon, the elemental analysis in the occupation of CFD trading takes a reasonably longer term type of approach. I said this because investors use this in analyzing the market.

On the other hand, when it comes to the technical trading in the contracts for difference (CFDs), this strategy is more focused on the direction of the fees and all the nitty-gritty as well as specific little things in the market. This are going to include different actions like the study of the historical market day as well as foremost costs as well as the aspect of the volume. Hence, it is the opposite of the elemental analysis since it does not include the subject of the fundamentals of a business because these are actually already accounted in the fee of the stocks.

In terms of the time horizon, the technical trading is more frequently being made use of in financial transactions with week, day or even minute-long trading. It is actually in this light that numerous professionals in this specialty that this technical trading technique is the one extra proper for trading. We are not telling you that the essential trading is not for trading, however it is the more fitting term that shall be actually utilized and aimed for committing rather than trading.

So, when it comes to the technical and details of the technical analysis, doing this are going to really need an investor to begin viewing the charts and other statistical devices. These tools are incredibly necessary and a trader should know all of these because there is actually no manner that he or she can easily be actually effective in this field if he or she may not grasp their primary thoughts. Aside from that, those devices are going to all be utilized countless times along the process of technical trading, which suggests they are actually predictable. Moreover, these are going to all be actually handy when projecting what will most likely take place in a specified market or the particular instruments that you are trading like in CFDs, for instance.

Uncover the actual specifics on CFD Guide and what exactly you should know concerning CFD Trading Tips nowadays!

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