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Archive for July 14th, 2010

Over the last 10 years, broadband internet access speeds have increased so dramatically that it is hard to believe that it used to take a few minutes to open simple web pages. In some countries, like Japan and France, internet access speeds of over 50 Megabits per second are the average. A few years ago, in Sweden, the fastest internet connection speed was recorded at an astonishing 40 Gigabits per second. With these speeds it is difficult to imagine a time with only dial-up connections available.

Although broadband connections speeds are always increasing; the limiting factor to the attainable speeds is a country’s telecommunications infrastructure. By using copper cables installed for telephone use, broadband initially was able to offer connection speeds massively increased from dial-up connections, though what is needed now is an optical cable system that can transfer data at rates far higher than any copper connection can achieve.

One particularly resourceful way of increasing broadband speeds is by using current electrical power lines to send data. Because internet data is transferred at a different frequency than electricity, the power grid of a country can be utilized to also connect people to the internet. However, there is at least one issue that needs to be overcome if it is going to be a success. Recent test have shown that when data is transmitted through overground, poorly insulated cables, the broadband data transfer can disrupt nearby radio signals, particularly those that are used by amateur radio operators. It could be possible, though, for a broadband connection to be established just by plugging into an electrical outlet and enjoying possible access speeds of up to 200Mbps.

One of the most hotly anticipated technological advances in broadband access is WIMAX, also called 4G. WIMAX could potentially offer users a maximum data transfer rate of 70 Megabits per second, a vast improvement from 3G standards. and something that could eventually instigate the demise of plug-in broadband.

Satellite technology is currently being used for many purposes, not least of which is by watching television channels. It is actually possible for broadband internet data to be transmitted and received through current satellite communication systems. Although the costs of the hardware needed to receive the data are quite high (around $3000 fitted), the possible speeds that could be produced are lightning quick even by today’s standards. The maximum advertised speeds is reported to be around 375 Megabytes per second, compared to BPL figures of a possible 25 Megabytes. If and when the cost of initiating a satellite broadband access system is reduced somewhat, the take up would surely be huge.

To sum up, don’t worry if you are still finding that your broadband connection is not quick enough for your needs, the future holds some impressive advances in technology that will mean the end of blank white screens and video buffering.

Why is a trading plan important? A trading strategy is the center of your business. Without a business plan most businesses will be unsuccessful, exactly the same philosophy applies to trading plans.

A well defined and executed trading plan will will let you remain flexible whilst being disciplined.

What exactly is a trading plan?
A good trading plan is a guideline to assist you to make good trading decisions.

It is made up of of two fundamental parts:

1. Trading system or method for buy/sell alerts
2. Money management parameters

Developing a trading plan is usually very time consuming, this is the reason lots of people usually do not bother. In far too many cases the instant gratification of trading simply overwhelms the trader.

A trading plan does not have to be complicated, in fact it is usually better not to be so.

An illustration of a minimal trading plan is:
“Buy 1000 share CFDs in Google on open the day after my entry criteria has been met.”

You could potentially follow this every day and never have to think very hard. That is in itself a bonus. It means it is easy to follow and straightforward to stick to.

Professional trading plans are almost always more complicated than this. Why? Because to trade professionally you have got to be able to convince people to part with their money. This is naturally not always easy!

The sort of questions that a professional will be asked when they start raising money to trade with will include questions like:

1. How will you trade?
2. What kind of system will you use?
3. Which markets will you trade?
4. How much will you risk?
5. How much can you lose?
6. What can you reasonably expect to make?
7. How much are your trading expenses?
8. How will you prevent yourself from losing all the money invested?
9. How much will you risk at once?
10. What number of markets will you trade?
11. What is going to be your usual hold time?
12. How will you minimize losses?

These appear to be easy questions, but be honest with yourself and write the answers down.

Elements of a trading strategy
Trading plans can be very personal things. If one system worked for everybody then the markets would naturally cease to exist, which is why they do not. A couple of pointers that will help you select a trading system include:

1. Disregard the “secret” systems, they do not work
2. You might have different systems for several markets, steer clear of this if possible
3. Your system doesn’t have to be mechanical, many would argue mechanical systems cannot work
4. Should have the flexibility for being long and short
5. It should have a money management plan to help you control risk

Perhaps the best advice is to purchase something used by pros and figure out how to trade it. Pros know that the best systems to trade exhibit a number of simple characteristics:

1. Possess a positive expectancy of making money
2. Adapt to different markets
3. Have clear entry and exit rules
4. Are not overly optimized
5. Utilize effective capital management rules

These types of systems are inherently nice to trade as there is a clear understanding that in the long run they make money. They do however need some effort to learn how to trade them, which tends to discourage some traders.

To discover out how you to build a successful trading plan for Contracts for Difference you will need to read our CFD trading guide. Once you have decided on a trading strategy you will need to choose a CFD broker that can help you apply your strategy.