Sunday, August 7, 2011

How to Profit from falling stocks, using plus500 free trading platform.

Hi everyone, Last week I was schocked about the stock market. I was Going down faster then the financial crissis a few years ago. Normally there is a steady stream of stocks that rise or keep at the same level. But last week all the great stock markets are showing a downfall. There seems to be some trust issues with the euro country’s. the united states having problems with there triple A rating. And they have to borrow money. This means some pensions or trust funds are losing there value. The stock market is changing every second, minute, or day. Even in the weekend things can happen witch could have influence on the stock market opening on Monday. We all know that when we buy stocks, we anticipate that the stock will rise and we will profit from that stock rising. In this article I will explain how you can Profit From Stocks That Are Going Down.

I like to trade online with plus500, Plus500 is an online trading platform for trading CFDs in forex, stocks, indices, ETFs and commodities. Each CFD category has its own easy to use tab.

Opening an account was completely painless and so was withdrawing and depositing money.

I could choose between credit cards, money transfer or e-money such as moneybookers or paypal.

With Plus500 you can trade with as little as $100 with 1:50 leverage.

Everyone can start trading with plus500, you don’t have to get accepted by a bank, or a great and expensive firm that will do the trading for you. No need to deposit large amount of money to start trading. There are no hidden fees. Or Cost per transaction. You can start with a demo account until you think you got the hang off it. Then continue with real money.

The Platform accesses real time quotes from the world’s major financial markets and is very responsive. Dealing limits available include standard entry limits, stop loss limits, profit limit, trailing stop, and market orders. All limits are guaranteed too unlike some of their competitors. Trading was very straightforward with the option to choose either the desktop application or the web-based platform (which I can use with my i-Pad and smart-phone).

Everyone can install this software in there own language.

onlinecfdtrading.blogspot.com

If you are reading this on my blog look to your right. there are the links. The best thing is that they have an unlimited demo account that is totally free !

I personal encourage every trader to use it. Even if you are an experienced trader, you can use the demo mode to try out new strategies. Read my other blog-posts for the introduction of the software, and to learn about the monopoly money.

How can you profit from falling stocks?

Well this is really simple, you will Short the stock.

This means that you Sell the stocks before you buy them. Using plus500 this is really simple to do, If you installed the software, then follow me. (Use the demo account).

This article will wonder around the internet while you are reading this. I cant tell you witch stock to buy or Sell at this time. I doesn’t matter. The clue is that if you believe that for example. The Oil prices will drop. You can make money by shorting them.

Like the actual price is about a 100 dollar a barrel. We Short (=sell) lets say 10 barrels. total(1000,-) then when the price is dropped to about 90 dollar a barrel we buy them. (close the option) this will cost us in total 900,-. In this example we made us 1000 — 900 = 100,- dollars. That is a 100 dollar profit, because the stock dropped. If the stock was rising say until 104,- then because we shorted the stock we will still need to buy them. we will loose 10x 104 = 1040 — 1000 = 40 dollar.

Lets try this in plus500. Look trough the tabs to find the Oil. I have it in the popular Tab.

You see that there are two option to choose from Short and Buy, If i believe the prices go up I would click on buy, and buy the stock. In this article I will go for Short To start shorting the stock. The Actual price is 87,15 dollar a barrel. Lets say that I have 2500,- dollars in my account, with the plus500 leverage system I can Short 344 barrels.

Because Oil has an leverage of 1:12, this means my 2500 dollar is good for 12 times 2500,- dollar on the market. So I Can short 12*2500= 30.000,- dollar. divided by 87,15 = about 344 barrels. When you put this in the box it automatically shows how much money you need to have on your account. You will also see that you can check two boxes. One is called Closing by Profit

And the other one is called Closing by Loss.

This is where you can set your estimate. In the graphics these lines will become visible. I suggest that you set the range by Profit to-where you think the stock is going to drop.

In this example I choose a safely dollar. I think it will drop to 86,15. This means if we would Short the stock until 86,15 i make 344 times 1 dollar = 344,- dollar. If you check this box. The option will automatically close when the oil price goes below this setting. You don’t have to close (of course) but the software can do this for you. If you don’t close you can profit more, as long as it drops. But Remember to Close as soon as you think the stocks are going up again.

I suggest you try this with Plus500 in your demo account. so it won’t cost you any money.

See how it works. Experiment with the different Options.

onlinecfdtrading.blogspot.com

For the software click here!

Or click on one of the banners, plus500 is also giving away some extra trading money, free to your account.