Swing Trading

The book I read to research this post was Swing Trading For Dummies by Omar Bassal which is a very good book which I bought from kindle. Swing Trading is similar to day trading but with the latter you aim for quick gains of a lesser amount often carried out in the same day, with the former you look for bigger gains over a period of time. You use methods like fundamental analysis & technical analysis to analyze the stock market or what ever else you invest in and ideally you make a profit. Something I did read in another book is things like the stock market can be unpredictable you have to remember the people deciding whether to buy or not to buy are only human and sometimes they can inexplecably go up or down against the trend of what they should do. When there is a strong dollar generally US industry does well & when there is a weak dollar generally commodities because they have to be imported and they are priced in dollars do well. Swing trading can be share dealing, commodities or ETF's or even other things. A lot of understanding swing trading is understanding charts especially candle stick charts which were originally used in Japan to track the price of rice. Obviously things like penny shares are best avoided and you want to make an educated guess when trading so minimize the risk. Don't forget you can get a return of 50% if you bet on black or red in a casino but only have a 50% chance of getting it right. The risk is too great and you don't want your trading to go the same way. You have to be reasonably sure the market is going to react the way you want. Even if stocks go down you can still make money by shorting the stocks which means you sell your stock and agree to buy stock on a certain date. Of course afterwards the stock has to go up in price and in the intervening period has to go down or you will end up owing money. I did enjoy reading this book and it is an interesting subject. 

Exchange Traded Funds

The book I read to research this post was Exchange Traded Funds for Dummies by Russell Wild which is a very good book which I bought from Kindle. Exchange Traded Funds are also called ETF's. The golden rule in investing is diversify so for example you wouldn't just invest in technology companies. ETF's are a good way to diversify as they are normally in a variety of companies. You shouldn't invest in ETF's in one company as a rule. You need a brockerage company, some of the more established ones are TD Ameritrade & Fidelity. Some of the better brokers will advise you of what to invest in also ask if there are any freebies, for people investing a large amount it isn't unheard of for them to give away a free laptop so it pays to ask. It's best to invest in funds in developed countries like the UK, USA, Japan & France. Stocks are more volatile in developing countries. It's worth mentioning sometimes you will come across newsletters that claim a certain company is advising about ETF's and is always successful. Every adviser has downturns in there investments. The law on financial newsletters is the same as with the tabloid ie that it's a form of free speech, basically that they can say anything. There's normally a service charge to an ETF that has to be paid annually which is normally a fraction of one percent of the stock. If you are doing more than a few trades a month that is too many, a good ETF is generally a long term investment certainly longer than 12 months. Finally as I was saying at the beginning you should diversify your investments you should invest in a variety of things and certainly not just ETF's.

Commodities

The book I read to research this post was Commodities for Dummies by Amine Bouchentouf which is an excellent book which I bought from Kindle. When trading in commodities it's not only when the price goes up that you make money. You can gamble on the price going down. You hand over a set amount of money & agree to invest it in that commodity on a set date. I am going to look at some of the commodities you can invest in. Before that I ought to mention if there is a natural in an area that produces that item, which does seem to happen a lot nowadays you may see the market fluctuate & may lose money, so don't invest more than you can afford. The number one commodity not surprisingly is oil & you can make a lot of money investing in this. A couple of things that influence crude are if it contains a lot of sulphur it limits how useful it is. An oil containing little sulphur is referred to as a sweet crude. Also if they can make a lot of products from it they call it a light crude & if it's thicker & they can't they call it a heavy crude. Both of these types are useful because they can make different products from the two types. You will hear North Sea Oil referred to as a sweet light crude. Particularly in China & the USA coal is a huge commodity. In America more than 50% of their power stations use it. China is heavily involved in steel production which requires coke which is made from coal. Steel is a commodity & China is the worlds biggest producer. An interesting story is when David Carnegie was in charge of a huge steelmaking conglomerate he used to focus on upgrading their equipment when steel prices were low & because everyone used to upgrade when prices were high he used to get it done cheaply. That's a practise many companies do today. Coffee is a huge commodity but is of course subject to the weather. Gold is a good commodity & I bet you didn't know most gold in circulation is recycled because it's very rare. Platinum is even rarer than gold & is very resistant to tarnishing. Silver used to be used a lot in photography which of course now is mostly digital but still remains popular. Zinc is used in stainless steel & is one of the most sought after metals as a result. Palladium is used in making catalytic converters for motor vehicles so I think the potential is obvious. Aluminium is the 2nd most used metal in the world behind iron. I think I've covered the major commodities but there's lots more like natural gas & even frozen pork belly which is used to make bacon.