Your Questions About Paper Trading Futures

Donald asks…

How to start investing and buying stock?

I’ve been getting a lot of money lately and I want to start investing and buying stock. I’m only 13. Is that old enough to start buying stock? I’ve just wanted to learn and practice so I can prepare for the future.

John answers:

In North America you must be 18 to open a brokerage account but you can have a parent open a custodian account for you ad when you turn 18 the assets in the account can be moved to an account in your name,
13 is not too young to start learning about the markets, I started at the age of 11 which was a long time ago, but I’ve been in the market ever since.

Before you spend $0.01 on any investment, you must know what you’re doing, why you’re doing it and how to do it. Before you invest in any security, the first investment you should make is in yourself, and the best investment you can make is by educating yourself.

Start your education by learning why you should invest and the importance of being able to make your own decisions or how the pro’s make theirs.
Here is some reading material that can get you started in the right direction,
Beating the Street by Peter Lynch
Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea
From Riches to Rags, by I.C. Freeley
How to Make Money in Stocks” by William O’Neil
24 Essential Lessons for Investment Success by William O’Neil
The Intelligent Investor, by Benjamin Graham
Common Stocks, Uncommon Profits, by Philip A. Fisher
One Up on Wall Street by Peter Lynch
Stocks for the Long Run, by Jeremy Siegel
The Interpretation of Financial Statements by Benjamin Graham
The Lazy Person’s Guide to Investing by Paul B. Farrell
Trading for a Living, by Alexander Elder
Uncover the Secret Hiding Places of Stock Market Profits by Joel Greenblatt.
What Works on Wall Street by James O’Shaunessey
You Can Be a Stock Market Genius by Joel Greenblatt
Your Money and Your Brain by Jason Zweig

Get into the habit of making daily visits to some websites like MSN Money and Yahoo Finance. (http://moneycentral.msn.com/home.asp , http://finance.yahoo.com/

Other website that can provide instructions and help with procedures and terminology are Investopedia – http://www.investopedia.com/
Visit some of the more professional websites like Zacks Research – http://www.zacks.com/ Smart Money – http://www.smartmoney.com/ Schaeffer’s http://www.schaeffersresearch.com/ Investors Business Daily – http://www.investors.com/default.htm?fromad=1
Naveller – http://navelliergrowth.investorplace.com/portfolio-grader/
Some of these web sites will have advertisers who are worth looking into also. And remember, if they offer free information, get it.

Attend all the free seminars you can, just be careful and don’t get pressured into anything you really don’t want or need. Most schools offer courses in finance and economics, but very few will have courses on the mechanics of the investment markets, if they do try taking the course. You may want to consider on-line courses, the New York Institute of Finance use to have such courses. Try to get some fee information from the stocks exchanges they all have (had) free booklets, SIAC and some of the regulators (FINRA SEC MSRB CBOE) may provide some free literature.

And when you think you want to invest/trade, try some paper trading to test your skills without spending you money http://simulatorinvestopedia.com/ and/or
http://www.tradingsimulation.com/

You at least have made the right decision to start investing, this is the first big step and it won’t be your last. Keep taking those steps forward and along the way never take the advice from people that are not in the market or try to tell you not to invest.

Good luck on your journey, study hard and you’ll invest well.

David asks…

I come from advertising and I want to switch into the hospitality industrie. How do I do this?

I’ve moved to the caribbean and the majority of jobs are tourism related, thats also where more money is. Or at least, so they say. How can I transform myself into a member of this trade? And how do I convince future bosses, that I’m worth a try?

John answers:

The hospitality industry is very much so about personality. They want people who are people-pleasers and go getters. Someone who people like to be around. Prove yourself to be just that. Also I would see about getting certified. Many certifications only take a couple of months. And hospitality is very broad. You can work in a hotel as a concierge, a sales and marketing coordinator (if you do banquet sales or handling then you have to get food safety certification, it can be a good job though). You can also do event planning. I would look at some of the job descriptions that I am interested in in the hospitality industry and compare them to your own experiences in the work place and outside. Also, call the people who you are interested in working for or go in person because this is a case where you want them to see you for your personality not what you are like on paper. Another good thing to do is to NETWORK! If people like you, they’ll hire you. Hang out at some of the trade shows or convention areas. I know if sounds kind of strange but I ahve seen it work. Good luck!

Nancy asks…

What are good topics for research in the field of economics?

Just for my future reference.

Thank you very much.

John answers:

I. THE TOPIC
It depends on which fields of economics or issues you’re interested in. For starters, determine which of the two general fields interest you more (macro vs. Micro).

Another way to look at is which of the electives offered in my university interested me. These point you to the more specific fields of economics, including but not limited to public finance, development economics, international finance or trade, labor economics, health economics, happiness economics or behavioral economics, etc. (do try to read on them if you haven’t taken them).

You could also look directly at issues you’re interested in:
– If you’re interested in the economics of population, you may want to test if overpopulation is related to poverty variables
– If you’re into finance, you may want to test if stock market performance is a useful indicator for development (e.g. Are there relationships between the stock market index and any of these: GDP, exchange rate, inflation, and other development variables)
– If you’re into labor economics, you can try to empirically test if raising the minimum wage is good or bad (as a starting point, refer to past papers on this).

You can also try to test other topics and theories discussed in the literature:
– For example, you could try testing the law of supply and demand to a specific market and commodity. You’ll just need complete data and mastery of simultaneous equation models, though.
– Other interesting topics (finance) include the so-called January effect (in the stock market), the so-called parity conditions (e.g. Purchasing power parity and interest parity. Are they applicable to the country you live in? For a more challenging topic, you can try combining the parities. Refer to papers which use Johansen cointegration for more details).
– You can also empirically test the models they discuss in typical economics classes (ex. IS-LM, Keynesian consumption function, etc.).

II. ECONOMETRICS AND OTHER METHODS
If you’re into econometrics, try refering to econometrics textbooks (e.g. Koop, Gujarati, Stock & Watson, Wooldridge, Asteriou & Hall, etc.). They usually have some interesting examples which you can expand into a paper. They also allocate a chapter or an appendix for giving tips on econometric projects.

It’s not necessary to use econometrics all the time, though. You can also go into game theory, input-output economics, or even simple correlation or trend analysis of data or graphs (if you’re working for a thesis, though, your adviser might not allow something too simple). If you’re into game theory, one nice application is analyzing some oligopoly (say, the oil industry) using past game theoretic models (e.g. Bertrand model, Cournot model). Some other nice methods include cost-benefit analysis and impact evaluation.

III. EMPIRICAL DATA
Another thing to consider is the availability of data on your topic (assuming you’re into empirical research. Another option is theoretical research, i.e. Develop your own theories, but that would be more difficult unless if you are a PhD already). Another nice thing about empirical research is you just need to put data into software (e.g. Excel, GRETL, E-VIEWS, GNU R, etc.) and then the software does the quantitative analysis for you, you just have to summarize the relevant theory, method, results, express it qualitatively in a paper, and then discuss its policy implications.

In addition, you need to determine which type of data you want (time series vs cross section vs panel data).If you’re into time series econometrics, I particularly recommend reading on these topics: Granger Causality and Cointegration. Then just choose relevant countries and/or a set of variables to compare using real data you find. You can be as creative as you can (but be realistic) in the formulation of your topic.

IV. OTHER PAPERS AND EXPERTS
Here’s one other tip: Refer to other working papers and/or journal articles (Search online or go to a library). Note that these are also your starting point for a review of literature section or chapter for your paper (if you want to or are required to include one).

If a theoretical paper interests you (for example, Mundell’s 1961 Paper on Optimum Currency Theory), try to test it empirically (for example, is an ASEAN monetary union feasible?).

If an empirical paper interests you, you can just try to apply the paper to a different case and/or time frame. In other words, do tweaks on the topic and/or method of the paper. For example, I found papers which combine purchasing power parity and interest parity using the Johansen cointegration test interesting. But these were mostly papers on US and European countries, so I used Asian countries for my thesis.

Lastly, look for experts (i.e. Your past and present economics professors) and ask for help. Better if you look for a professor who shares the same interest as you.

Sandy asks…

Hi! The question drilling my mind is – How to make big money on Internet, Forex or Stock market?

I am computer technician. My ads in different news-papers. I repairing comps, cleaning from pop-ups, viruses, re-intalling and stuff like that. I own my very little business and thinking about How to expand that opportunity and looking for extra income stream.

John answers:

Hi,

Actually froex and stock markets are not so dangerous as many people talk. Just few simle rules:
1. Market always is right
2. Follow the market.
3. Don’t be greedy.
4. Always use stop loss accordingly to money management rules.

Those books will help you to find way how to trade:
Market Wizards by Jack D. Schwager;
Technical Analysis by Jack D. Schwager;

Comprehensive Course on The Wave Principle by A.J. Frost and Robert Prechter;

Candlestick Charting Explained- Timeless Techniques for Trading Stocks and Futures by Gregory L. Morris;

Trading Chaos – Applying Expert Techniques to Maximize Your Profit by Bill M. Williams;
New Trading Dimensions by Bill M. Williams
Trading Chaos II by Bill Williams – Maximize Profits with Proven Technical Techniques by Justin Gregory-Williams and Bill M. Williams

If you are interesting I could introduce you to one brokerage company in Austria that allows to trade from same account currency (forex), commodities, metals and cfd on shares. Total 500 instruments available; spread from 1 pip. If you open trading account under my referral I provide you for free with trading techniques that I successfully use for several years.

Currency (forex) trading is attractive because it is very high income and you could trade from any place in the world and at any time from Sunday night to Friday night.

If you are interesting and/or have any question please do not hesitate and pm or e-mail me (press on my name).

Good luck!

Charles asks…

What prevents the poor from living sufficiently?

I have to write a research paper on a national, state, or international policy that prevents poor people from living self-sufficiently.(Examples are welfare limits that prevent people from going to school or international trade laws that hurt poor nations.)

Besides the two examples I can’t think of anything else. Or even if I did use an example I can’t find any information on either. I’m desperate for help!

John answers:

Multi million dollar corporations, the legal system, lawyers and taxes. The poor have and always will be the targets for money grubbing legal con artists. The law was designed to prevent the middle class and poor from being able to protect themselves, because if you can’t pay to be heard in a court of law, which the average citizen can’t, you won’t be, which means the wealthy always win. 😉
Reality t.v. Take a look at what the future holds. We are all just collateral damage to the wealthy. So if you have ever held an infant in your arms that has come from a poverty stricken home, remember, he/she is nothing more than collateral damage. This is just one example, things like this happen all over America, and after thousands of deaths, the survivors are usually awarded a few hundred thousand dollars out of the billions these corporations make every year.
Http://www.burningthefuture.org/

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