As many day traders are attracted to relatively volatile stocks, their beta value can often provide a fascinating insight into the future. A stock’s beta measures the share price volatility/market risk compared to other indexes or even stocks. While many traders look towards more “modern” complicated technical trading strategies, a simple measure of historical volatility can be very useful.
For the vast majority of investments, the days of holding certificates and filling out stock transfers have long gone. Instead, shares are now acquired through an electronic trading system and registered electronically to assist clearing services in speedy settlement. However, this prompts the question, how secure are your safe custody assets?
You can use numerous different tactics when investing, including technical analysis, momentum, and many more. However, one tactic is often misunderstood and sometimes described as immoral and unethical – short selling.
As a trader, it is essential not to let your heart rule your head and emotion sneak into your investment decisions. While we know this in theory, putting it into practice can be very different. So, is investment all about buying and selling empty boxes?
The concept of commission-free trading has been around for a few years now, prompting many investors to ask how brokersmake their money. If they are charging no commission, where do they get their income and is this to the detriment of clients?
There’s no doubt that the introduction of the Internet has changed the way that many investors operate. For example, we have seen a considerable increase in execution-only clients, with short-term traders and day traders able to deal directly with market order books. The ability to self-manage your investments is easy in theory, but there are still several practical issues to consider.
While this is something of a tongue in cheek comment, how often do you hear those with positive returns mention relative performance? In some ways, the relative performance measurements can be a way to cast losses, but relative outperformance, in a more positive light. At first glance, maybe relative performance is more appropriate for long-term investors? However, on reflection, how do short-term traders measure their returns?
Whether a short-term trader or long-term investor, it is easy to take what we have today compared to years gone by for granted. Original trading systems were the exact opposite of low latency execution and low touch execution. Oh, how times have changed!
Day traders and short-term traders tend to focus on multiple,relatively small gains, repeated over a period of time. The constant investment of a growing investment pool can have a significant impact on long-term returns, even on relatively small monthly returns. This is similar to the principle of interest on interest, a strategy used by credit card providers. So what do we mean?
There are many different strategies you can take concerning investment, but the two most basic are passive and active. While these are very different strategies, trade execution and low latency execution services are still very important.