Currency trading has become a big deal lately. I wouldn’t call it a fad but it sure feels like it with forex brokers springing up at every corner. If you’re going to be heavily involved in trading currencies, then a forex broker is certainly an asset, but most investors and stock day traders simply don’t need the hassle of opening up a new trading account if they want to just dabble a bit in currencies.

The Canadian Dollar ETF which is traded under the ticker symbol FXC is a pretty heavily traded ETF that can be the platform to enter the currency trading market. Why did I choose FXC? Well, one reason is because it trades very in tune with the natural resources market (being that Canada is blessed with many of these resources). Having a currency ETF trade with something tangible and something the average investor can grasp is certainly a good starting point.

Another reason why the Canadian Dollar ETF is a good trading vehicle is because the news that comes out of Canada is pretty easy to access and the economy is very stable for the most part. You won’t get any massive day-to-day swings like you would with some other wold currencies and that is certainly a positive when you are trying to learn how the currency market works.

Now, I’m not saying that trading the actual currency isn’t better after you learn the ropes, but when first starting out I’d definitely stick to a stable ETF. Trading currency involves massive leverage and even the slightest swing can put a big dent in your capital. Because the Canadian Dollar ETF is, well, an ETF, you’ll most likely only be able to leverage it 3 to 1 on margin. And the swings are pretty low (rarely does it move more than 0.75% in a trading day) that it can provide just enough “excitement” and chance for profit, but without the risk of getting shell shocked.

So in closing, I highly recommend the Canadian Dollar ETF for traders who want to dabble or learn about currency trading. As always, good luck!

The price of silver seems to have stabilized since the abrupt fall in May but uncertainty still remains in that market so it’s probably a good idea for you as a trader to learn how to short silver using ETFs. This will give you another weapon in your trading arsenal to take advantage of sudden movements in the commodity.

The simplest and easiest way how to short silver is by using the iShares Silver Trust ETF which trades under the symbol “SLV” and the price of it correlates to the daily movements in the silver market. There are a couple drawbacks to shorting silver using  this ETF. The first of which is that your broker may not have the shares available for you to short. The second of which is that this method is a more safe platform to short silver and you will not maximize your profits during abrupt movements down in silver.

The latter drawback may not be one at all if you want to play it safe and trade slow and steady like many traders like and even should do. But if you want to maximize your profits should silver tumble, then you should look into trading the ProShares UltraShort Silver ETF which trades under the ticker symbol “ZSL”.

The ZSL ETF is a 2x UltraShort trading vehicle which means that the price of it will fluctuate twice as much as the daily percentage change in silver. So if silver goes down by 5% in one day, the ZSL ETF will rise 10%. This provides you with maximum leverage in shorting silver.

However, while the ZSL leverage is a nice way on how to short silver, it does have its own share of drawbacks. The biggest one being is that it gets reset daily so you may notice that the value deteriorates quite quickly should silver rise. This is something that should always be kept in mind when trading 2x or 3x ETFs.

I hope this article was useful and helped you learn how to short silver using ETFs. Good luck.

That said, there are ways that you can be making money with penny stocks but they are far from easy. The trick is to never fall in love with the hype and the “glorious” results or expectations about the company you are trading. There is a reason why these stocks are priced at a fraction of a penny, and it’s not because they are going to be multi-billion dollar companies. But the story these stocks tell, whether via their management, PR firms or investors is one which can lead many novice traders to believe that they’ve stumbled on the new hot thing.

I’ll tell you this. Making money with penny stocks involves not falling in love with penny stocks. You need to ride the wave up and get off at the first sign of trouble, which is usually the breaking of support. Only the “hot” penny stocks should be traded on any given day. The others don’t get much movement and you may end up sitting with one in your portfolio for weeks on end before any movement happens.

Finding the “hot” penny stocks involves scanning through the % gainers and volume leaders on any given day. This will help you prune your trading list to a few stocks that you can keep an eye on and go from there. Always remember to exercise discipline when getting involved with this type of stock. The people who trade these and the companies that market them have only one goal: To separate you from your money.

Making money with penny stocks is not impossible but it certainly isn’t the get-rich-quick dream that many of these marketers try to sell the public.

Many people like to point to the fact that computer and algorithmic trading makes up such a huge part of the daily volume traded and that in turn could result in a massive crash. While I’m far from an expert of the subject of computerized trading, I would venture to guess that this same software that’s set to sell at certain points is also programmed to buy. Granted if a stock market crash happens, these programs may not register buy signals but neither you nor I know that.

Another thing to keep in mind is that the government plays such a big role in today’s stock market that it will probably step in to stem any stock market crash that is happening. Say what you want to say about their actions in 2008/09 but the government’s interference with the free market system did place a safety net below the stock market.

A stock market crash makes for a good story in the media and in 2011 we have so many different sources in our ears that the hype of crash rumors can spread like wildfire but it’s important to remember that hype is just hype, and more often than not, it doesn’t live up to expectations. As a stock trader you should always have an exit plan but it should be based on your own trading strategy not some crazy stock market crash rumors and hearsay. Also, it’s important to keep in mind that massive declines in a day or two are quite rare. But if the fears of such an event keep you up at night, maybe it’s better to lighten the load in your portfolio and take a more defensive stance, at least until you start feeling about about the market’s future.

Over the years, I’ve read many stock blogs where the writer shared his trading profits and losses with his/her readers. And let me tell you this: most of their day trading income wouldn’t even cut it when it came to paying the bills and living comfortably. I’ll share some of these I remember from memory with your right now.

The first day trader I ever came across was a fellow who traded out of a prop firm. He was a scalp trader and was battling with the markets on a daily basis. His usually day trading income on a monthly basis ranged between $3000-$5000 most months. He did have a few months that were below $2000. I’m not sure what happened to him as he quit writing his blog but he did seem frustrated with the way things were going.

Another day trader I followed was a young guy who was in college and was learning trading on the side. His day trading income ranged between a profit of $300 to a loss of $300 most days.  He ended up quitting after a year or so after he couldn’t get into the black consistently.

The third trader I followed traded out of a prop firm. He also posted results from other traders in the office. Now, the trader himself usually made about $5000 a month in profit after all was said and done. The crazy numbers were posted by his office mates. There were a few of them that made 6 figures a month easily. On wild market days, I also saw him post that some traders made $50,000+ in one day. That’s far from the norm, though.

I’d say that the average trader, who knows what he is doing and has a mid-figure account to trader with, should be able to net $5000-$10,000 a month. Starting out, though, your day trading income expectations should be much more tame. If you net a $1000 or $2000 a month in your first year of trading, then you’d be making more than the average day trader starting out.

Day trading for a living is pretty hard. It can take its toll on your both mentally and financially, especially when you are first starting out. There is a pretty big learning curve that most day traders don’t get past. To be honest with you, it will probably take at least 5 years (if not more) before you are confident enough in your day trading to actually consider it your profession.

Day trading for a living from home posses its own challenges. The first of which is that you aren’t in tune with other traders as much as those who trade in an office. However, with the internet and the social sites that have evolved around trading, this is less of a factor than it was even five years back. Online, though, has its own roadblocks as you may find yourself with too many voices sharing their opinion, leaving you overwhelmed and unfocused. So it really depends on your personality if you should get yourself involved in online interaction.

But back to the topic at hand, day trading for a living is not for everyone. It requires a good mental attitude and great discipline. The amount of discipline you have when it comes to cutting your losers, following your strategy, and maintaining patience will greatly factor in whether your day trading will turn out to be a successful venture or not. In my opinion, it is possible to become a successful day trader from home but the odds are certainly stacked against you. I’d say only about 10% of those who set out to do this for a living actually earn  enough over the long term to not have any other secondary jobs.

If you are one of those people setting out to day trade for a living, the best advice I can give you is to have a plan and stick to that plan. That means that you should only enter and exit trades based on your plan rather than the emotions of the moment. Good luck!

However, chances are, that you will be unable to scoop up any shares in the open market since this is going to be a hot one with lots of interest on Wall Street. Unless you move some heavy numbers with your trading account (and your broker gets an allotment of the IPO to sell to its customers), you’ll most likely be left out in the cold.

Fear not, though, because there may still be an opportunity to make money on the Groupon IPO, even if you do not get in on the initial deal.

First thing is first, there’s no harm in trying to get in on the initial deal, so give your broker a call and say you want in. The worst they can say is “no”. Most likely, they’ll give some excuse that may or may not be a lie. If you do get in on it, sell as soon as you can because you’ll most likely hit a homerun.

Now for the general public who aren’t privileged to exclusive IPO deals and still want to now how to buy Groupon IPO, the truth is that you’ll have to buy it when it hits the market. This means that you’ll be paying up, but that doesn’t mean that you can’t make money.

As we’ve witnessed with IPO’s like LNKD, a stock can still rise substantially even if it opens up higher than the initial price. The trick is to be very nimble and not chase the price. If you are going to buy Groupon IPO on the open market, you need to understand that they’ll be lots of euphoria and quick movements in price. Iin my opinion, if you buy the dips and keep your stop-loss tight, you’ll be able to net a few dollars here and there per trade. But my advice to you is to refrain from trading the first 10-15 minutes the Groupon IPO goes live. You need to see a clearer picture on the chart in order to make your move. That’s the only smart way to go about trading such a hot IPO.

Now, as far as the actual prospects for the company go, I’d say that a $30 billion valuation that’s bandied about is quite lofty. They are the king of the deal sites right now but with so many competitors springing up, it may be hard to sustain the growth and market share that Groupon currently has. Here’s a good read on this subject. That’s my two cents, anyway.

Good luck with your trading and hopefully you’re able to get in on the initial offering.

One of the most drastic declines this year in the stock market has been Research In Motion (RIMM). In just a few months, the stock fell down drastically from $70.54 to its closing price of $38.98 this past Friday. The questions beg to be asked: “Is is time to buy RIMM, yet?”; “Where’s the bottom for RIMM?”

Well, I’ll try to answer the question for you using the chart and some analytical experience that I’ve learned over my years of trading. Let’s take a look at the 3-year chart of RIMM below to see what’s going on.

As you can see by the chart above, the recent decline has been quick and drastic. In fact, it looks like RIMM hasn’t had a solid up week since the free fall started. There’s been lots of negative news priced in as the company has been losing its market share in the smartphone  segment and also losing market share in the smartphone OS segment. Most analysts have lowered their target price on RIMM, with some notable analysts having the target price as low as $35. Most, however, still see it trading in the $40′s by this time next year.

Frankly, I don’t usually give much credence to analyst opinion as they’re always behind what the market is actually doing, but I like to point their opinion out with RIMM currently because the overall mood around the stock is pretty darn low. This can be a positive as all the bad news seems to be priced in. However, there hasn’t been a massive flush-out of stubborn longs yet, in my opinion. Until that happens it’ll be hard for RIMM to reach a bottom.

On the technical side of things, the stock recently broke through its $42.50 support and nosedived quickly after that happened. At this point, the $42.50 price will serve as pretty heavy resistance so I don’t think you should be expecting the price to rise above that anytime soon. Looking at the chart right now, the next support level is at $35.00. In my opinion, if RIMM Trades down around the $35.00-36.00 level, that would be a good time to buy it as it should mark a near-term low for RIMM.

Right now, with the price being at $39.00, and the resistance being at $42.50, it’s not an optimal time to get in, in my opinion, of course.

The world of OTB traded stocks is littered with landmines and you must educate yourself to help avoid these penny stock scams that are out there. One of the most popular and most common penny stock scams is the “pump and dump”. At its core, this strategy is used by traders to get the public excited about a penny stock and then when buying reaches a fever pitch, they pull the rug from underneath everyone and the stock drops like a waterfall.

Most pump and dump schemes involve someone buying up a penny stock slowly over the course of a few weeks or even months at rock-bottom prices. Once the person/company has accumulated enough shares to match their greed, that same person buys advertising that talks up the stock. The unsuspecting public buys into the hype in the ads and then buys into the actual stock. While this is one of the oldest penny stock scams going, it’s also the one that works more often than not.

It works because people’s greed gets the best of them. When they read a glowing review or hot tip online about a penny stock and then see it start rising by 1000%+, people get crazy and don’t want to miss out on such a drastic move. This intensifies the buying and creates an even more dramatic rise in the stock. However, the buying is just temporary and after a few days (or sometimes, hours), when there are no more buyers the stocks sink. The original person behind the initial hype sells all his shares all the way up and all the way down, resulting in huge percentage gains.

There’s only one way to avoid penny stocks scams such as this one and it’s: DO NOT BELIEVE WHAT YOU READ!

In the world of penny stocks, everything you read should be taken with a grain of salt. Any glorious prognostications about the long term prospects of a penny stock are most times than not, all lies. If you want to participate in the ride up of a penny stock that’s engaging in a parabolic rise, then do so by getting in and out of the stock quickly. Because sooner or later — and most times, sooner — the same penny stock will collapse eventually.

So don’t be fooled by these penny stock scams like the pump and dump. Keep your sanity and your money safe by trading only what you know and not on some advertising lingo that’s meant to attract your greedy side.

With the prolonged bull market in gold, some people see the rise as being unsustainable and thus there’s been an increase in people wanting to learn how to short gold. The easiest way to short gold is by purchasing an Exchange Traded Fund (ETF) whose price corresponds directly to the spot price of gold. There are two popular short ETFs that deal with shorting gold but before I share them with you, I have to warn you about their drawbacks.

Both of the ETFs that short gold on the stock market are Double Inverse ETFs (or 2x, for short). This means that whatever the price movement of gold is on a single day, the price of each ETF will move by 2x the percentage of the move. That’s good news if you are on the right side of the trade, but if you are on the other side, your equity can melt away quite quickly. This is because these funds reset every day. As you’ll see from the example below, this is important because the price can depreciate quite quickly on big moves or slowly during grinding time price movements.

Let’s say you buy the 2x inverse ETF and pay $10, and then the price of gold moves down 5% in next day. The ETF will be worth $11 ($10 + 10%  – $11). Now, say the next day the price of gold goes up the same amount (5%). Your 2x inverse ETF will now be worth $9.90 ($11 – 10% = $1.10). Now, say the next day it goes down 5% again (the ETF goes down 10% because it’s 2x) and your 2x inverse ETF is now worth $8.91 ($9.90 – 10% = $8.91). Keep in mind that the lower the price of the inverse ETF goes, the harder it will be for it to go back up. And eventually, the endgame on each of these inverse ETFs is massive percentage losses. These inverse ETFs should only be used as short-term trading vehicles.

2x Short Gold ETFs

With that said, here are the 2x Short ETFs which will answer your question of how to short gold via the stock market:

• Symbol: GLL – ProShares UltraShort Gold
• Symbol: DZZ – DB Gold Double Short ETN

There’s no difference between GLL and DZZ other than the fact that they are products from different companies. They should trade in tandem with very minor deviations. However, you may want to keep an eye on the differences in the bid/ask spreads to help ensure that you maximize every penny and percentage point with your trading.

Once again, I can’t stress enough that these are to be used for short-term shorting of gold and not as a long-term investment. I hope you found this article on how to short gold using ETFs useful. Good luck with shorting gold, if that’s what you choose to do!