Posted by investor on March 10, 2010 under Markets | 
Most people when they hear about the pound going down, as it has gone down sharply recently, will either think that exports will be cheaper or going abroad on holiday will be more expensive. Of course it also means something more fundamental. A falling currency means that every citizen of that country is losing money. It is the equivalent of lowering your wage when the business is in trouble, it may be better than any of the alternatives but it is nothing to celebrate (although the stock market at the moment will celebrate any news for any reason, until it doesn’t).
However it is possible to make money on the fall through either spread bets or contracts for difference. This is done through shorting the pound, or going long on another currency such as the euro or the dollar.
A contract for difference means that an investor can essentially trade with someone who believes that the pound will be higher. In this way when the pound goes down then the potential gain will grow.
On the other hand a spread bet can be another good way of betting on a falling pound. This is done through looking at the current spread offered on the pound to dollar rate or the pound to euro rate in the next week, next month or next six months. Spread bets are far better suited to more short term bets, for example looking at a rebound in the pounds’ value rather than a longer term bet looking at the fundamentals.
And if you think that the pound is currently undervalued and bound to go up? Well you simply do exactly the opposite.
Posted by investor on March 9, 2010 under Book Reviews |
The Zurich Axioms is a classic. In fact it’s the first investment book I ever read from cover to cover. It’s also got a very easy to read style. I was fourteen when I read it. This isn’t as odd as it sounds as Max Gunther claims to have been thirteen when he first made money on the market.
The Zurich Axioms aims to tell a small time investor what they need to do to become rich in the markets by showing them practical behaviours and attitudes that they need to develop in the shape of 12 major and 16 minor axioms.
He has some strong tastes. For example he believes that not risking money on the markets is stupid, over the long run you’ll just get poor. He also compares “Chartism” (what we now call technical investing) to astrology in its predictive power, and I think he favours astrology. Although he doesn’t make it explicit he’s a perfect market follower, thinking that all the information is in the price so the best thing to do is to trade on your gut feeling, limit your losses and ride your wins.
He is a proud contrarian. His tenth axiom is “disregard the majority opinion, it is probably wrong”. He’s also not a fan of any predictive model, not just technical analysis, as the future can’t be predicted. He hates diversification, which he believes to be a bad thing for an investor as it’s a rather expensive way of reducing risk, which is not the point of going into the stock market.
The style is either engaging or unbelievable. It’s written in a way familiar to readers of American self-help books. Its folksy style may very well irritate, but it makes it an easy read, and considering the concepts that he’s dealing with that is quite a feat.
Posted by investor on March 8, 2010 under Spread Betting Brokers |
ProSpreads offers traders a fast and reliable way to spread bet the major indices, commodities and currencies. This is done through the ProSpreads trading platform which provides the same functionality as Direct Market Access. This advanced trading functionality has numerous advantages and attracts the serious speculator who is looking for that extra edge when tackling today’s financial markets.
The ProSpreads platform is unique in that it provides users with the same functionality used by banks and brokerages. Direct Market Access is where a market participant is able to access the underlying market directly and compete with all other participants. As ProSpreads directly references its prices from the underlying markets it can offer extremely tight spreads and you will never be re-quoted. As long as the underlying market price is available, the spread bet price will be available.
The ProSpreads platform offers a number of advanced trading functions, including 4 different ways to trade and extremely fast execution with orders filled in a fraction of a second. DMA functionality enables you to see all the underlying bids and offers outside the market spread. This price transparency means you can view all the orders above and below the underlying market, which is a useful tool when gauging potential support and resistance. In addition to the benefits of DMA functionality and the ProSpreads platform, profits generated from spread betting are free from capital gains tax in the UK*.
The ProSpreads team has extensive experience in the financial markets and offer a dedicated support team and dealers desk. There is a demo account available along with seminars, webinars and one-on-one demonstrations enabling potential clients to see the platform in action and understand its numerous advantages.
*Tax laws may be subject to change and depend on the individual circumstances of each client.