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Ask Anna Your Trading Questions

Hello, and a very warm welcome to another of my financial trading and investing sites, where I hope I will be able to continue to answer all your trading and investing questions. As many of you know, I used to provide this service using email and simple forms on each site, but in the last few months the level of spam has increased dramatically, at times making it very difficult to identify genuine questions. As a result I have now moved to this site which is very secure, and provides a spam free way for me to receive and answer your questions.

All you need to do to ask a question is to to complete the simple form below with your email address, and I will then get back to you with the answer, along with posting the details here for others to read. Please don’t forget that in addition to reading my answers, you are also welcome to comment on these if you have a different view or perhaps disagree with something I have said.

As always, I hope you find the site both useful and informative and I look forward to receiving your questions as before. Please do keep them coming in and as always I will try to answer them as quickly as possible. Thank you all for your continued support and good luck with all your trading and investing – kind regards Anna

anna 87 Comments

Comments

  1. Marina says:

    Hi Anna,
    Could you please explain the Risk Reversal in FX Options on the example of [13:40 GMT September 6] 1M R/R 3M R/R 1YR R/R
    [EUR/USD] [1.2880] 0.8/1.3 EP 1.3/1.8 EP 1.8/2.2 EP

  2. John says:

    Hi Anna.

    Just wanted to say, great sites(s)… Why so many?
    It is boring; solo trading isn’t it. Is that why so many sites?

    I used to live near you. Now out in Surrey. And full time trading.

    Warm regards.

    John.

  3. anna says:

    Hi John
    Many thanks for your kind comments. Sites have grown out of my own trading & more interesting than keeping a plain trading diary (which is highly recommended!). Full time trading can be very lonely although having too much information & news can be just as bad. It has to be a balance between tuning out market noise & trusting your own judgment. At the moment David (husband, webmaster & all round genius) and I are in Italy and probably won’t be back in the UK until the end of the year. We are working with mobile internet which can be a bit flaky – when this happens we have the perfect excuse to schlepp down to the marina, have a drink & just watch the world go by!!

    Good luck & stay safe.
    Anna

  4. xavier gobin says:

    Hello Anna,
    Could you explain how the Rollover trading goes on.Have a good holiday.

  5. Lindy Pawsey says:

    Hi Anna,

    I would like to start trading on line but have found that as an Australian citizen living legally in the USA with a social security number that i can’t set up an account with Trade king. Can you please advise where I can set up an online account?

  6. Nan says:

    Hi Anna

    I found your site some months ago , and find it to be very interesting.
    I live in the caribbean and I am not exposed to a number of things , however I would really like to learn how to trade currency.
    I am reading through the road maps and other articles on the site. I think I learn quicker through hands on training.

    Do you do personal mentoring?

  7. Scott Stewart says:

    Anna, can you help a new trader understand why the indicators, i.e. moving avgs. macd ,stoc. etc. are different in relation to the stock price on a chart when you change from daily to weekly to monthly time frames?
    thanks

  8. Jouni Sormunen says:

    Hello!

    First I want to thank you for your website helping beginner traders out.
    Second, I wnat to tell a bit about myself. I am a Finnish English language and culture student, looking to be a teacher, and I got interested in trading when I started looking for ways to make some cash to add to my poor students budget. Particularly I got interested in binary options as they yield up to 80% profit in as little as 30 minutes if you guess the markets direction correct.
    Before I dare to make any bets with real money however, I want to learn everything there is to know about the markets, so I can hopefully have some kind of an edge in betting the markets. I hope that you will help me with useful information about the currency and commodities markets of which you are an expert. I have some questions for you and if you have some useful information which might allow me to predict market movements more accurately, please tell me.

    1. I presume that the price of currencies moves up when someone is buying and down when someone is selling, how much the graph moves is determined by how many players or how big players are doing the trades at any given time, am I correct?

    2. I have watched three currency pairs now for a few days and I think I´ve found a pattern ( I need to watch more and verify this before I can trust it). I noticed that the GBP/JPY, EUR/JPY and USD/JPY all went down during the morning hours Finnish time (about 4-5 pm Japanese time), so the Yen was gaining in relation to these currencies during the Japanese workday and after 12am Finnish time (10am British time) the graph started moving back up again over the hours as banks ans stock exchanges opened in Europe and closed in Japan. Have you noticed similar patterns in other currencies? If you have please tell me, for if I can locate a regularly occurring pattern that can be somewhat depended upon, I can bet on it and make some cash to fund my exchange student period and other things. If you have any information on things that occur regularly during business weeks, please inform me, I would be very interested.

    3. This is how I made some fake cash in the demo mode of my binary options trading account, I guess it was beginners luck or something, but not bad for a first day ever of trading. I watched the price of oil and suddenly in a space of a few minutes the price dropped some 250 points if I remember correctly (I also made a note of it that oil price can infact change so dramatically so fast) and I placed my binary option above call near the bottom of the spike and then hoped for it to climb above it and it did, it rose back to about the average level in a few minutes and stayed there until the clock reached half past and the option expired, so I won. This kind of “spike hunting” is a good strategy I think, because an above average change in the price will mostly be counter-acted, so a rise will be followed by a fall and a fall by a rise. Can you tell me anything useful about these commodities (these three commodities are offered for binary option trading by my on-line broker) Gold, Crude Oil, Copper. Are there any patterns I can rely on? What are the major factors affecting prices ( I realize that there are thousands of factors at play but what are the major ones?)?

    4. How much can a single player move the graph, how many points? For example, if a large bank sells all of its Yens all at once, how many points could I expect the graph to go down?

    5. I read somewhere that so called “news days” are bad for trading, I think thursday was mentioned as a news day on the Forex markets. What happens on these days, can you tell me about them, should I avoid these days or what? Is the market unpredictable on these days?

    6. How much is the average movement range in currencies in a time period of 30 minutes to 1 hour? 100 points? How much movement is considered average and how much is considered sluggish or above average?

    7. How much movement in a currencys rate results in an intervention by a very large player such as a central bank or a national bank? 500 points? 1000 points?

    8. Do you have any tips or pointers for me? What to watch out for? What to avoid and be careful about? Do you have any book recommendations or websites that would prove useful in learning about the markets?

    Thank you for your help.

    -Jouni Sormunen, Finland

  9. anna says:

    Hi Nancy

    Many thanks for your kind comments which are much appreciated. unfortunately I do not offer personal mentoring at the moment due to a lack of time I’m afraid, but this is something I am thinking of offering in the future as I have been asked by many other people. As you can appreciate it involves a huge commitment by both parties and mentoring only works if the chemistry is right and both can work together. In addition, many people do not have the personal character traits to make good traders due to the emotional aspects of trading and being able to accept a loss, which many traders find extremely hard. Anyway, may I wish you every success with your trading and if I can help in the future do keep in touch – kind regards Anna

  10. Robert says:

    Hi Anna, Many thanks for your generousity. I’m an elderly person who knows NOTHING about trading at all. Where can I find out what the basic terninology means??? ” Long? Short? Stop? etc???” I cannot find this simple beginning ANYWHERE. Until I can understand this I can’t understand anything – and I’m a university graduate – meaning I can grasp relatively complicated concepts. Does anyone remember how it was for you before you knew anything? Anyway I have been advised to have a look at gold and silver and that has an appeal – as a way to protect what capital I have and perhaps to trade? I’m having a giggle at this as it seems so lame but of course it’s hard to move when you can’t find where the beginning of the road is! Anyway thanks again for your website as it gives real encouragement to a tentative beginner such as myself. In case I lost the plot there ( it’s 2:15 am here in Hawaii ) I’m looking for a source of the most basic tuition. Help? Be well and prosper, Robert.

  11. anna says:

    Hi
    Hi Jouni

    Many thanks for taking the time to place a comment on my website & I will do my best to give you some answers.

    Currency pairs move up and down for a variety of reasons. However, in order to understand the dynamics you need to have an understanding of both the fundamental and broader economic pictures which dictate currency strength or weakness. In addition currency markets are manipulated, either overtly or covertly. At present we have the Bank of Japan intervening, China determined to keep its currency weak and the US weakening the US dollar via its QE programme. Finally, of course, you have the dear broker who will manipulate his price feed to take our your stops when markets react (or over react) to incoming news.

    Q2. With regard to patterns, sadly there are no fixed relationships or correlations that work all of the time – the pairs (and markets) are in a constant state of flux – and whilst something may work today it may not work tomorrow. You mention the Japanese Yen which is a risk based currency & along with the dollar is perceived as a safe haven & you therefore need to understand bond markets, equities & treasury yields before you can trade any of the Yen pairs.

    Q3. With regard to commodities, there is one thing they all have in common, namely that once a trend has started it will tend to run for some time and the same is true in the forex market. Intraday trading in either forex or commodities is almost impossible and not something I personally recommend for a beginner.
    Q4 Forex markets move on a combination of sentiment, fundamental news & flow (ie volume). Some traders do indeed only trade the news, generally waiting for a so called “fade” where the market reacts to the news, you then wait 10 mins or so & the market will usually continue in its original direction.
    Q5.There is no particular good or bad day – you just need to be aware of when news releases are about to happen & be prepared for the consequent volatility.
    Q6. With regard to average ranges a news item such as the nfp may move the euro dollar 100 pips or more in a few minutes but in general most pairs trade in 100 – 150 range in a day. You just have to watch & calculate yourself over a period of time.

    Q7. Depends on how much a central bank is willing to use – the Japanese intervened when the usd jpy was at 83 but gave up.

    Q8. Aside from my own websites I suggest you look at fxstreet or subscribe to the FT. When and if you open a broker account try to make sure they are a true ECN broker which will reduce the chance of your broker trading against you in the market. Binary options are safer as your downside risk is limited and known before you enter the trade and do not rely on leverage, so better for a beginner – you might also look at fixed odds which is another variant of binary betting.

    Hope the above helps & good luck with your trading – regards Anna

  12. Maureen says:

    Dear Anna,

    Thanks for your time and the opportunity to ask you some questions. Mine is a simple one as I am new to this.

    What is the simplist trading to start with? I have heard some people say foreign exchange, gold, stock etc.

    I would be grateful for your help. Wow! you have a lot of information available to us. I was thinking of going to Forex traders called knowledge to action when I found you. Thank God for women like yourself.

    I look forward to hearing from you.

    Kind Regards

    Maureen Opene

  13. Ms.Babs says:

    Hi Anna,
    I have come upon your site by googling “female option traders.”
    I have been working in the financial markets since 1997.
    I have worked in invesment banking and hedge funds and prop traded.
    I am on my way to starting my own fund.
    I wanted to ask you if you want to be my mentor.
    I know you are not offering professional mentoring due to lack of time but my expectations from a mentor differ from what people normally expect from a mentor.
    Like I have mentioned I am well rounded as far as the financial markets are concerned and I am not looking for a mentor who will hold my hand and lead me through subjects and strategies.
    The mentor I am looking for is preferably female like me and is more like a role model than a mentor.
    This means I wouldn’t be bothering my “mentor” with questions but rather watch them perform and read about their comments and analysis.
    My site is not up yet, and I will let you know when it’s up so you can have a look.
    best regards,

  14. Hi Anna,

    One of my students pointed me to your page.

    I could not find a page on you site with contact detail, so I’m writing
    here.

    Would you kindly send me an email so that I can respond to it
    in order to ask you a few q’s about your speaking availability, etc.?

    Thank you, Anna.

    Norman Hallett, Founder
    The Disciplined Trader Intensive Program

  15. Edward M. Wolpert says:

    Hi, Anna.

    I enjoyed your website. Would you please send me some details on record keeping for options trades, long and short?

    Thanks.

    Ed

  16. paul says:

    Hi Anna,

    Like yourself i am a fellow ‘graduate’ of the Albert Labos school of trading!!! It was an interesting time to say the least, but for a number of reasons, despite some reasonable successes paper trading, i never traded with real money for very long.

    Well my personal situation has now changed, and i once again want to have a proper crack at trading. I have found your site insightful, and clearly you have progressed drom the days of AL! I just have a couple of questions for you if you would be kind enough to answer:

    -What is the best source trading tools for volume data
    -What are the relative merits of using a traditional broker over a financial spread company

    I wish you continued success, it is nice to hear that some people have made a success out of trading after meeting Albert.

    Paul

  17. Edward D. Sykes says:

    Dear Anna,
    I have wanted to trade for a long time but have never had the time or courage, I am now retired, ex HGV driver. I read your article in I think it was My Weekly magazine some time ago and became very interested in japanese candlesticks.
    I have no idea where to start.
    Do I need a broker or can I go direct on the internet ?
    How do I find the trades I want to look at?
    How do I find the candlestick charts for those trades?
    I have a small investment with axaframlington health which I have had for a few years but I would like to trade on a more regular basis with smaller amount of money.
    Yours, Ted.

  18. dave says:

    Hi Anna We have a simple question for you is there a MT4 platform that will allow us to trade the daily indices like FTSE100, note daily not future indices. Many Thanks Dave

  19. Thomas says:

    Hi Anna,

    Been trying to understand Volume Spread Analysis while looking at the stock HEL.V. Today 02/22/2011, 5 Times the trading volume with little price movement.

    I suspect that we need to wait for a confimation signal to determin the finial direction?

    Your thoughts? And thanks in advance,

    Thomas

  20. anna says:

    Hi Thomas – many thanks for your comments and I have just checked this stock for you – which I believe is Helix Ventures if I have the correct ticker! On the daily chart the stock is trading below both the 100 and 200 day moving averages and looks very bearish. As far as I can see from the current volume the insiders dumped this stock back in late 2009, having sold out at 1.06. The volume for the stock is very small, so if you are thinking of buying in any quantity please remember that when you come to sell, there may not be the market liquidity to allow you to get out of the market, and in selling your stock you may force the price down against your own positions. In summary, not one I would buy personally until I saw the market makers buying in volume prior to a rally, which is not the case at the moment, so I would expect to see the stock fall further in due course – hope this helps and many thanks once again – regards Anna

  21. anna says:

    Hi Dave – apologies for the delay in replying and many thanks for your enquiry. Unfortunately I have no idea but would suggest that you contact Metatrader direct who may be able to help. Alternatively why not use futures such as mini Dow as an alternative? – Hope this helps and many thanks once again – Anna

  22. Lovell says:

    Hi Anna,

    I was browsing the internet and came across your wonderfully informative site. I am looking for an experienced currency options trader for an institutional account. I currently trade equity options. While I have spoken to traders as various give-up banks ABN-AMRO and and a few of the places the ex traders from their set up, I have only spoken to one currency options guy. It was years ago and he was head of currency options at B of A.

    Are you working with a firm? If not, could you refer me to someone who actually understands currency options and the strategies available to provide principal protection and cashflow.

    There are no bad days in the options market.

    Regards,

    Lovell

  23. isabelle fournier says:

    Hi Anna,
    By any chance would you know what is the most efficient way to find out what warrants are available for trading on the U.S market? Is there a list? Some way to search it on the internet?
    Thank you.

  24. Sarah says:

    Hi, I am looking to get into options. I have been doing research and have a few stocks that I am finally ready to buy. My problem is that I cannot find decent online stockbroker service to trade options in – most of them i.e. E-trade are for U.S. residents. Could you suggest one please? most recommendations come from U.S advisors and again not much good in the U.K.

    Pls help – it would be nice to hear from someone living in the U.K as I’ve spent a good deal of time working on this and now that i’m finally getting there. I am getting frustrated not being able to find an online service to work with!

    Thanks

  25. Walter Owens says:

    Dear Anna,

    I am a 74 yr old going on 75.
    I have been trading stocks and options for 3+years.

    I am familiar with bid and ask premiums on options – but when it comes to writing calls and calculating returns,do you use the ask or the bid premium ? , in determining what you will receive.

    I also read your “how to write a covered call”
    In your 3rd para you say “If all the contracts are fulfilled and yours is left-so be it” . What is meant by so be it ? Are there any consequences ?.

    You also mention MCD as an example, I couldn’t find the example.

    I also thank you in advance should you answer and don’t know where you find the time to answer everyone.

    Walt

  26. Edward D.Sykes says:

    Dear Anna,
    I am reading your page on money management, STOP LOSS. Could you please explain the part that says — never use whole numbers or round numbers etc.
    Thanks. Ted.

  27. Alex says:

    Hi Anna,

    I was reading your advice on record keeping strategies and I was wondering whether you keep your stock records, options records, and other investments such as CD’s or Bonds all in the same book or if you have a separate one for each.

    Also, thank you for sharing your stock spreadsheet, that has helped me immensely, could you also share your additional sheets as well? I’m trying to create a comprehensive system for myself that will be simple to update and simple to come back to when necessary. Thanks so much!

    -Alex

  28. I Harvey says:

    Anna

    Can you direct me to a site which lists brokers who will execute option writing contracts ? I have found several client brokers who do not deal online and their fees are extremely high. I am an active full time stock trader online but my current broker does not handle options. I have also been told that the broker will need to hold the shares which are the subject of a covered position …is this normal practice ?

    Kind Regards

    IH

  29. Rich says:

    Hi Anna,

    Your site(s) are absolutely brilliant! Really informative and well written.

    I would be extremely grateful if you could help with my query – I’m thinking of writing covered calls but I’m concerned / confused about the tax implications. I live and work in the UK but most info online is aimed at the US.

    I’ve read that the money generated from the calls will be treated as income (not CGT). As a higher rate tax payer this would be very unattractive. I’ve also read that if the shares get called away then the upside and options premium both fall under CGT. Please can you clarify the situation? The easiest solution would be to trade the covered calls on stock in an ISA but this does not seem possible.

    I look forward to your reply. Thank you for your help.

    Kind regards,

    Rich

  30. demosco says:

    Hi Anna, I must commend you for the good work you are doing on your websites and its been of tremendous help to new traders like me .I have been trading the forex markets for exactly one year now and have been demo trading to test some strategies but recently i have found the volume spread analysis to be a very logical way to read market moves actually it was a further reseach on VSA that lead me to your site .BUT I have some questions for you on volume spread analysis
    Is there a volume data for the forex market and how relevant is the strategy to the forex markets
    Do you trade the forex markets using VSA .
    If you do ,what is the source of your volume information.that you employ
    Does the strategy works well with currencies crosses ,like GBP/CHF,GBP/NZD etc.
    will you recommend the strategy to forex traders despite the fact that forex is not traded at a regulated exchange and reliable volume data can be difficult if not impossible to get.G
    Many Thanks for you help .God bless
    Regards

    demosco

  31. Steve says:

    Dear Anna,

    I have just come across your excellent website and was wondering if you could give me some advice.

    I am a newby to day trading. I want to start with £500. Is this possible and could you give me some tips to invest it?

    Kind regards,

    Steve.

  32. john says:

    Hi Anna,

    Just discovered your great website today. 20/11/2011

    One question i can never get a satisfactory answer to is what percentage per month can one expect to make from trading full time? i.e. if you’re a competent trader not a beginner or an intermediate.

    Let’s say you’re trading capital is only £10,000 and you strictly use money management and adhere to the 1% rule £100 max loss per trade and on some trades you might go up to 2% but NEVER more than 3%

    Would we be looking at 10% 20% or less than this? Perhaps more than this? Sometimes?
    I understand one can have losing weeks even months but i would love to get an idea of what is reasonable.

    Many Thanks
    John

  33. pravin says:

    hi anna
    I would like to know what could be the best position on future trading on silver for these days.

  34. tony wayne cummins says:

    hi anna. i need some help.i have traded forex (gbp v usd) about 2 yrs a go .l lost quite a lot of money £3000.my date of birth is 10 june 1971 ..18.30 lambeth london, uk. someone said im a pisces because my d.o.b and name adds up to 7..neptune.am i suitable for trading.if so which is best for me to trade i.e forex commodities oil(neptune) or stocks /shares. i tried casinos i.e what about poker??.help much needed.thanks.

  35. Istiaque Ahmed says:

    ,

    Dear Anna,

    I really like your website and blog which are very resourceful, practical and beneficial.

    Regarding Volume Spread Analysis (VSA) , I would like to ask you one question that is if I know the event/ inside news/corporate announcement earlier than public know then would it be wise/safe to buy when strength just appear on down-bar in a down trend market and sell when upthrust appears on up trend market with out considering the series of tests in downtrend and no supply during up trend. Please reply me as early as possible. Your help will be really appreciated.

    Wish you all the best.

  36. Gordon Clyde says:

    Hi Anna,
    Love your Covered Call website. Lucid and wise. I’m now a believer.
    You recommend Interactive Brokers but their services do not extend to managing portfolios just executing. Is there anyone out there you could recommend to reliably and economically manage sizeable Covered Calls portfolio of old mentally indolent investor?
    regards, Gordon

  37. Yaa Yeboah says:

    Dear Anna,

    Great websites! And I am gaining in knowledge and understanding of options quite quickly. I would now like to open an options trading account. You have recommended Interactive Brokers highly and offered an introduction. I would be very grateful if you could provide me with such an introduction as I am ready to begin trading options.

    I look forward to hearing from you.

    Thank you and very best wishes.

    Yaa.

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