Recent content by Elvis Picardo

Definition A currency war is an escalation of currency devaluation policies among two or more nations, each of which is trying to stimulate its own economy. Currency prices fluctuate constantly in the foreign exchange market. However, a currency war is marked by a number of nations...

So you've racked up thousands of dollars in paper profits on your favorite stock simulator and are now ready to take the big step from virtual trading to the real thing? Lest you think that making the transition will be an easy process, be aware that trading in the real world is an entirely...

The most important financial center in the world? A fabled place of silver spoons and golden parachutes? A hub of cut-throat capitalism? Or all of the above. Wall Street is many things to many people, and the perception of what it really is depends on who you ask. Although people’s views of Wall...

The average person experiences the value of currency as fairly stable from day to day. The price of a cup of coffee every morning is around $1.50, the fixed-interest car payment and mortgage are the same every month, and for a salaried worker, even the paychecks are identical. The fact that the...

Have you ever had to endure the tedium of listening politely to a loquacious individual at a party brag about the killing he made through investing in stocks or the stunning returns his little-known investment manager generated? If you’ve wondered whether there’s a way to get in on the action...

Value investing is an investment discipline that was popularized by Benjamin Graham through his seminal books like Security Analysis published in 1934 and The Intelligent Investor in 1949. Value investing seeks to identify undervalued stocks that are trading below their intrinsic value, and...

Futures and options are both derivative instruments, which means they derive their value from an underlying asset or instrument. Both futures and options have their own advantages and disadvantages. One of the advantages of options is obvious. An option contract provides the contract buyer the...

Exchange-traded funds (ETFs) are ideal for beginning investors because of their many benefits likes low expense ratios, abundant liquidity, wide range of investment choices, diversification, low investment threshold, and so on.These features also make ETFs perfect vehicles for various trading...

The Securities and Exchange Commission (SEC) refers to a "penny stock" as a security issued by a small company that trades at less than $5 per share, and which is generally quoted over-the-counter, for instance on the OTC Bulletin Board or OTC Link (formerly known as the "pink sheets"). Penny...

With the upsurge of investor interest in high-frequency trading (HFT), it is important for industry professionals to come up to speed with HFT terminology. A number of HFT terms have their origins in the computer networking/systems industry, which is to be expected given that HFT is based on...

Algorithmic trading (or "algo" trading) refers to the use of computer algorithms (basically a set of rules or instructions to make a computer perform a given task) for trading large blocks of stocks or other financial assets while minimizing the market impact of such trades. Algorithmic trading...

Active traders often group themselves into two camps: the day traders and the swing traders. Both seek to profit from short-term stock movements (versus long-term investments), but which trading strategy is the better one? Below, we explore the pros and cons of day trading versus swing trading...

Traders generally buy and sell securities more frequently and hold positions for much shorter periods than investors. Such frequent trading and shorter holding periods can result in mistakes that can wipe out a new trader's investing capital quickly. Here are the 10 worst mistakes made by...

The colossal size of the global foreign exchange (“forex”) market dwarfs that of any other, with an estimated daily turnover of $5.35 trillion, according to the Bank for International Settlements’ triennial survey of 2013. Speculative trading dominates commercial transactions in the forex...

A “Risk Reversal Strategy” offers a big potential pay-off for very little premium. While risk reversal strategies are widely used in the forex and commodities options markets, when it comes to equity options, they tend to be used primarily by institutional traders and seldom by retail investors...