Mock Trading

29 Jan 2008

Investing in CPO futures or CPO investment is one of the best way to make money. To certain people, it is a mechanism to create wealth provided if you are on the track. It is also a business opportunity whereby you could operate the business right from your home.

What is mock trading ? After you have had your account open, it is time for you to start trading but what happens if you fail ? So before proceeding to actual trading, it is better for you to practice a trial trading. This is an offline trading which the risk of investing is completely nil. It is good for beginners to test their trading skills and also to try any new trading techniques, if any. You could also open an account in the website for an online mock trading practices and you are allowed to do the trading for free of charge.

As mentioned earlier, after you have open your account at a brokerage firm and a website where you can view the real time price of the futures, you could practise doing either "buy" or "sell" position. When you are ready , then you could do the real trading with a high level of confidence. Should you pose with any problems you could always consult your broker for further information.

Further readings ;

http://www.mocktrading.com/
http://www.hedgestreet.com/
http://www.learninvesting.com/

Getting Started

Saturday - 26 Jan 2008

Once you have decided to invest your own hard-earned money into a futures market, your next course of action is to open up an account. In Malaysia, opening an account is relatively easy and not that troublesome. In fact the profits which you acquire from futures or stock tradings are tax-free and not subjected to any government tax. This is done primarily as to encourage foreign investment in Malaysia.

There are a number of futures brokerage firms in Malaysia and majority of them operate in Kuala Lumpur, the capital city of Malaysia. All you have to do is to pay a visit to a brokage firm of your choice and deposit a sum of money. The amount of deposit depends on the requiremet by the firm and it varies from each other. Basically, the minimum amount deposited is around RM5000 and you are allowed to trade immediately. If you happen to make a loss, then you are allowed to trade until your money decreases to a minimum of RM2000. That would mean you are only allowed to trade for RM3000.Before choosing the right brokerage firm, it is suggested that you choose the brokerage firm which entitles you to access to its website whereby viewing of the real time price fluctuation of the contracts are available. Currently, there are two brokerage firms which provide this facility and the service is free for the account holder. Besides that, you could also subscribe to an investment company which provides a real time quote prices for a small fee.
Once an account is open, you could start immediately right from your home. All you have to do is to view the prices of the contracts, say CPO April contract, on your computer and when you decide to open a position either to buy or sell, you could simply give a call to your broker and place your position. If you decide to close your position, again you could call your broker and state your position. If you make profits and you intend to withdraw them or a portion of it, you can instruct your broker to do so and your money would be deposited in the bank of your choice on the next very day. Currently there are a number of foreign banks which have their operation in Malaysia such as Bank of America, Citi Bank, Standard Chartered and Hong Kong Shanghai Bank. This is a good business/investment opportunity for almost everybody and if you have a lap top or note book, you can trade almost anywhere in the world!

This form of business opportunity does not require you to have a proper office, save money on your petrol, no need to go through conggested traffic jam and etc....Most importantly, you do not have to have any physical products to sell and there are always ready buyers and sellers out there.


FCPO Brokerage firms :

http://www.rhbinvestmentbank.com/
http://www.ambg.com.my/
http://www.bursamalaysia.com/
http://www.kenanga.com.my/

Real time quotes :

http://www.thenextview.com/


AmFutures Sdn Bhd -

Bursa Malaysia

In Malaysia, the trading of futures contracts are conducted in Bursa Malaysia, just like CBOT ( Chicago Board Of Trade ) in US. With the advancement of internet services, one can view the fluctuation of the market price ( real-time price ) throgh his own computer at home without having to presence himslf in Bursa Malaysia or any brokerage firm. The products which are traded in Bursa Malaysia include;

* FCPO - Crude Palm Oil Futures
* FPKO - Crude Palm Kernel Futures
* FKLI - Kuala Lumpur Index Futures
* FKB3 Futures
* USD CPO Futures
* FMG3 - Malaysian Government Secutities Futures

From the above, the CPO and FKLI are the most popular futures among the investors and are traded heavily on daily basis.
CPO's contract size is 25 metric tons with a minimum price fluctuation of RM1 per metric ton. The trading hours are from 10.30 a.m. to 12.30 a.m and 3.00 p.m. to 6.00 p.m. in the evening.The contracts expire on 15th day delivary month.

Why CPO?

Malaysia is the largest supplier of palm oil in the world and eventhough Indonesia is catching up to be the next world's producer of palm oil, the palm oil produced by Malaysia is said to be off the highest quality.The nearest competitor to palm oil is the soybean oil which are produced largely by the US. Any movement of the price of the soybean oil would have an impact on the price of the palm oil and vise versa. They are said to be inter-related.

The advantage of futures trading especially the CPO is the potentiality of making huge profits ( losses as well) in a short time. At the present situation, the market price of CPO is relatively high that is around RM3000 and the fluctuation of the price is between 30 points to 100 points per day ( between RM30 to RM100 .e.g. If you make a profit of 50 points, your profits would be RM1200 per lot after deducting the brokerage cost ). With proper strategies , anybody who would like to involve himself in this form of investment would take advantage of this current market situation immediately. In fact this is the right time to invest as you can do day-trade which means you can buy and sell the futures ( or vise versa ) with out having to bring forward to the next day. Unlike stock market where short selling ( sell now and buy later to make profits ) is not allowed, the futures market practise two ways of trading ; Buy now and Sell later and also; Sell now and Buy later.

Further readings ;

http://www.bursamalaysia.com/
http://www.commodities.sgcib.com/

Futures Investment

If you are thinking seriously of venturing into a business of your own, then investing in commodities or futures is a great idea.Commodities or futures investment is a form of business opportunity for unemployed, home maker, retiree, student and those who want to have a second income.Many people have become very rich when it comes to investing in futures. It is one of a few investment vehicles where an individual with a limited capital can acquire profits in a relatively short time.Due to the fact that many investors lose their money, probably about 80% of them,the reputation for commodity trading investment has a bad reputation.Futures trading is only risky if you want it to be risky. If you treat your investment as a business,instead of a casino, the risk can be kept to a minimum level and the returns are excellent.

What are commodities?

The history of commodity trading originated back to Japan in the 18th Century. The commodities involved were rice and silk. In US, the trading of commodity started in 1850s with the introduction of cotton, corn and wheat.Commodities are the actual physical products such as corn, palm oil and oil. Futures , as in stocks and equities in stock market, are the contract of the commodities.The process of trading of commodities is known as futures trading.When you trade futures you do not own the commodities, instead you own the contract for a limited period of time. You are actually speculating or forecasting on the future price of the commodity. Contract is an agreement by two parties who agree to transact physical commodities for delivary at a particulr price at a later date.

In Malysia, if you are to trade futures, say CPO ( Crude Palm Oil), you would have to trade it in Bursa Malaysia, just like CBOT in US. Firstly, you have to have an account open with a sufficient cash deposit with a brokerage firm. Secondly, you can place an order either to buy or sell through a broker in the brokerage firm. Any transaction which incurs profits or loses will have to borne by you.Before involving yourself in a futures investment, you have to educate yourself with a good understanding of the market and the strategies adopted. You can place a position at what level that may interest you but if you fail, you may have to take delivary of truckload of crude palm oil to your house.

Further reading;

http://www.oxfordfutures.com/
http://www.insidefutures.com/
http://www.patterntrapper.com/
futurestradingcharts.com