3 Proven Swing Trading Strategies

Swing trading refers to the trading on the basis of fluctuations or swings in the market. So what is swing? A swing is depreciation or appreciation in the value of a currency pair in the market. Simply put, swing is a upward or downward Trend in the value of something. The best way to profit from swing trading is by exiting before the opposing pressure sets in. Typically, opposing pressure refers to traders who are trying to sell their stock, currency pair etc. So it is best to exit before a down swing, or enter at an upswing. So keeping this core idea in mind, here are 3 swing trading strategies for swing trading.

Stuck In A Box

This is usually done when the prices of the stock or currency pair is stuck inside a range. Here, what you can do is, let the price fall below the lowest point. This way, after sometime, the trend will start to reject the lower prices. This rejecting trend of lower prices will increase the price of the stock or currency pair and you can exit at a high point. As a swing trader, the aim is to exit before a downtrend, and hence it is important to review previous similar data. If previous data shows resistance, it is best to exit at the highest point achievable.  

Catch The Wave

This is generally used when the market is on an upswing or an uptrend. Again, the idea is to ride the wave and exit before the opposing pressure sets in. An upswing has 2 portions: a small wave of depreciation followed by a long wave of upswing. It is best to exit before the upswing at a particular stage succumbs to traders who are looking to sell (the opposition pressure).

Fade The Move

This is usually a riskier way to go about swing trading, but it is profitable if you know what you are doing. This is also done on an upswing that can drastically contrast and fluctuate and therefore a riskier path is better. Fluctuations are difficult to predict, but it is possible to do so with the help of previous charts and graphs. This can really up your chances of exiting right before traders decide to sell. Since the idea is to fade before the upswing, it is one of the best ideas to go for in a fluctuating swing trade....

25 May, 2020 No comment

Five myths about insider trading

The thing about insider trading is that the definition of its legality can be ambiguous in various countries, but what is it anyway? Insider trading is buying and selling of a company's stock by anyone, who has anyhow access to the non-public information. This information can be turned out to be important during the investment. If the information is still non-public, it can be deemed as illegal. Access to the exclusive non-public information gives the insider advantage in the investment and allows him/her to influence the company stocks.

Regulation:

The popularly held belief is that you need regulation. There is however no security like that. A corporation can come out of regulation and allow the insiders to continue trade. If the state succeeds in enforcing the regulations more extremely, there is no other way around it.

Impact:

Due to the presence of Insiders in the market, no harm is caused to the market makers. They don’t need to manage or adjust their spreads to brace for the impact. So, the myth of charging more is nothing but a myth, but to start with, trading is not a Second game.

Insider trading serves no valuable reward function:

The bonuses come out of shareholders' pockets and there is no doubt about that. To encourage innovations like finding lightning in a bottle, and more hard is to devise an efficient compensation plan. Having awarded people indulging in Insider trading is always a boon. Any type of trading pushes the price in the right direction, the only thing to know about the step is that – whether it was right or wrong?

Criminalization:

The right to trade information can be restricted in many ways, however, this is not to create any impact on the corporate employees, who are paid decent sums to compensate for their losses. Options like an increase in executive salaries, bonuses, and stock options have been there for a longer period. As the governments across the world tighten their grip over the markets, this will surely have an impact on Insider Trading also.

Definitions:

The law is dependent on State definitions. However, neither Congress nor SEC has stated or defined “insider information”. IN matters of legality, there are no red zones to fall to be included in the violation area. Having said that, the laws are subject to change, and ambiguity is just a matter of years.

Conclusion:

Insider information gives the Insider a radical advantage in trading. With this advantage, you can influence the stocks of the company. A typical Insider can make more profit than usual traders as he has access to the information that is not public. This is termed as illegal in some countries as the advantage seems to be unfair to other traders who don’t have access to such information. Insider traders are also a legal affair in companies where corporate Insiders sell and buy shares within their company with the security laws.  However, it’s advisable and wise to research Insider trading before going forward with it.  ...

05 May, 2020 No comment

Insider Trading Rules That Do Not Apply To Congress

What is Insider Trading?

Insider Trading involves the trading of a public company’s stock by someone who has inside information which is not available to the general public about that particular stock. This knowledge is usually known only to the high ranking officials of a particular company. This information is known as insider information and is only legally available to the highest-ranking corporates of a company. However, it is illegal to be found in the hands of other officials inside the company or if a public person knows about it.

Do Members of Congress Know the Stock Rates and Can They Use This Information?

The Stop Trading On Congressional Knowledge (STOCK) Act prohibits members of Congress from using insider information for personal gain. However, the members of Congress, as individuals, are allowed to trade. It is possible for members of Congress to note stock rates before they increase or decrease. Ine disadvantages public stockholders and increases distrust among the general public.   However, there is a clear dilemma here. It is quite difficult to make out if Members of Congress use non-public information for the stock market exchange. Just because the Stop Trading On Congressional Knowledge Act prohibits the members of Congress from using non-public information for stock exchange does not mean they don't. There is often a large amount of money on the line, and the risk of getting caught is very low. A study conducted by the New York Times suggested that almost a quarter (or 25%) of all public company deals involve some kind of insider information. The Security and Exchange Council (SEC) can only do so much with so many resources, and so, they pursue the cases large enough or those that they consider legally viable. Also, the legal system may take years to arrive at litigation regarding cases like these.   On February 13, 2020, Senator Richard Burr, chairperson of the Senate Intelligence Committee, sold a large number of his shares, gathering something between $628,000 and $1.72 million USD. Roughly a week later, the market crashed. Senator Kenny Loeffler started selling her personal holdings on January 24, the day after an all-Senate meeting. Interestingly, her husband is the chairperson at the New York Stock Exchange. The most frustrating part is that they can simply say that they got lucky and get away with it.  

CONCLUSION

So like stated before, it is quite difficult to convict members of Congress for insider trading. The only way to stop insider trading is by prohibiting Congress members from stock trading....

01 June, 2020 No comment

Overview of the law of Insider trading

There have been various laws to regulate the trading but due to various complications, either they never saw the light or were never implemented as it was supposed to be. The history goes as far as 1934 when the first law was passed, but the recent developments have been appreciable especially by the Obama administration that took radical steps to combat Insider trading. With the passing and signing of the STOCK law into the legislation, it allowed for a whole new dimension in the trading market.

What is Insider trading?

Insider trading is regarded as an unfair means to gain an advantage in trading. It uses the information that is non-public and helps to gain the advantage. This information is very crucial in influencing stock prices. Having said that, there can be a difference between legal Insider trading and illegal Insider trading. The legal trading involves corporates and employees of a company trading equities.

Insider trading Act

The Insider trading act is known as Stop Trading on Congressional Knowledge (STOCK) act. The act was brought in by the Obama administration in 2012 to combat Insider trading within the Congress. It doesn’t exempt anybody from the law and also puts ethical obligation son the vice-president as well as the President. The laws make it illegal to share non-public information that has the capacity and power to influence stock prices. Though the rules in the United States are strict, this can be different in a country like Japan but as the United States tries to hold its grip on the market, it can be expected that other countries will follow the suit.

Will the insider trading information be expanded?

The legal definition of Insider trading is a broad one that allows it the flexibility to be expanded. As situations may arise in the future, the current laws of Insider trading seem to be flexible enough. Though there is a variation on how the law applies to the congress which can be attributed to a legal loophole that is currently there, in general, the law is strict in its application and doesn’t spare anyone.

Falling for it:

Dealing in securities can be complicated but one needs to be sure that the information that they are receiving doesn't violate any agreement. In case of a doubt whether the information is public or not, it’s better to consult authorities. Trading under legal boundaries is beneficial in the long run.  

Violation:

The STOCK Act is severe in its application that doesn’t even spare the top-level executive employees. Though the law can be misinterpreted due to some legal loopholes in some situations, it is one of the well-thought-out legal regulations. However, as the US government is tightening its hold on the market and the need to regulate the activities arise, the Stock act is likely to go through changes when the market fluctuations make the Act smooth in the future.

Conclusion:

The Stock act prohibits the trading of non-public information for personal profits. However, there is a difference as to what constitutes illegal and legal Insider trading, and based on that, the law applies.  ...

20 April, 2020 No comment

What is Insider trading and how to avoid it?

Insider trading is an advantageous form of trading. In other words, it’s the buying and selling of stocks by a person that has access to information that is not public. This information can be used to influence trading decisions as well as manipulate prices. Though there is a certain restriction in some countries, the other places can be ambiguous. Depending upon the country you live in, the laws can change. However, in the US, the recent law passed in 2012 restricts not only Congress but also puts ethical obligations on Vice-president and the President on the sharing of the information.

What is Insider trading?

The legal definition of Insider trading is broad and its flexibility is what will help Congress to expand it. To put it in layman’s terms, it’s the buying and selling of Company stocks by an individual who has access to any material information that non-public. This information can highly affect the value of stocks in the market. It gives the trader an advantage against other traders.

Why is it illegal?

Nobody is immune to the Insider trading laws in the US which prohibits insider trading by the Congress, executive-level employees as well as outs restriction on the president also. The Stock act was passed by the Obama administration on April 4, 2012, to combat Insider trading. It’s considered unethical and unfair to other traders as the they have access to the non-public information that will run ahead in the market. However, the law applies to everyone, the way it applies to the Congress differs. This is an unintentional legal loop where all other laws have created a whirlpool. The flexibility of the STOCK law will surely help Congress to expand it in the coming future. Though there can be a variation in other countries where the regulations can be strict and even in some places it can be ambiguous.

How to avoid it?

You need to be careful when dealing with securities. Don’t indulge in behavior that may provoke the other person to reveal confidential information while you are conducting a trade or if you are unsure whether the information is public or not, contact the authorities. Check your sources of information before you conduct a trade. You can be a holder of confidential information, make sure not to accidentally or intentionally get it out. Trade under the legal boundaries and educate your team to do the same. This will keep you in the legal circle and help you grow with trading.

Conclusion:

Insider trading laws in the US are very strict. Though the initial law was passed in 1934, the recent one came in 2012. There is a however different application so the law, but as far as avoiding is concerned, one should be careful not to accidentally indulge in it. This can be only be done when the traders are aware of not just the law but also is careful what sort of information is he receiving....

10 May, 2020 No comment

What is Insider trading and why is it illegal?

Insider trading allows the Insider to have an advantage at his trading. This is simple words is the selling and buying of the company stocks by any person who has access to non-public information about the stocks? What is non-public information? This is any information that has the power to influence the value of company stocks and has not been made public. This information can be acquired by anyway. However, some laws prohibit and combat Insider trading, there is also an issue of Corporate trading where employees of the company use the information at their disposal which is completely legal.

What is Insider trading?

The legal definition of what constitutes Insider trading and not is broad and with the passing of the Stock Act in 2012, the law is likely to be expanded by the congress. However, to define Insider trading in the simplest of terms is that it is the buying and selling of company stocks by any person that has any sort of access to a piece of information that is yet to make public. This information can help them in manipulating the Stock values and keeps them one step ahead of the market. It gives the investor a unique advantage.

Why is it illegal?

Corporate Insider trading is justified somewhere to some extent, but as for the US is concerned, it’s prohibited. The Stock Acct makes it illegal. It’s considered unfair to the other traders as the Insider has access to information that nobody has hence given them an advantage in the market. Though there are strict rules in the US, there can be leniency in countries like Japan. It’s until recently that rigid regulations were passed by the Obama Administration and the Insider trading was brought under the law.

What is the Stock Act?

The Stop Trading on Congressional Knowledge (STOCK) Act was passed on April 4, 2012. It puts some serious restrictions on Congress, executive employees for use of any non-public information to make personal profits. This applies to President and Vice-president also who are required to follow some ethical code also. The act was specifically brought in to combat Insider trading. However, as the Act is yet to take its full force, it’s likely to be extended as the definition is pretty broad and flexible which allows the congress to expand it at their will.

Conclusion:

Insider trading has remained a part of business, but as the trading revolutionized, so did the need to regulate it. The initial law to prohibit Insider trading was passed in 1934, though there were occasions where the need arose, the radical reform law was passed into law by the Obama Administration in 2012. Apart from the prohibition, it also puts ethical obligations on the President as well as the Vice president. The Stock Act is likely to be expanded as the legal definition of Insider trading allows the flexibility and broadness to the law to be applied in a broader sense....

15 April, 2020 No comment

What is the Stock Act?

The Stock Act was passed into law in 2012, but what is it anyway? The act prohibits insider trading by congress and other employees. This means they can’t use the non-public information for their profit. Having said that, it also puts restrictions on the president, just in case, he has such access to any non-public information. The Act lays down guidelines for the Congress members to follow in terms of Stocks and bonds. The law doesn’t exempt any member from legal prosecution just in case there was a violation however the regulations can be a little different than the local public.

What is the Stock Act?

Stock Act was passed by Barack Obama on April 4, 2012. The main purpose of the law was to regulate and discourage Insider trading. The law prohibits the use of non-public information for any individual profit. This applies to Congress as well as the government employees. The Stop Trading on Congressional Knowledge (STOCK) Act applies to every member of congress and violation will lead to serious consequences. It also puts restrictions on President, Vice-president, and other executive-level employees who might have any access to non-public information. The act plays a central role in combating Insider trading.

What is Insider trading?

The definition of Insider trading, if put in the simplest words would be buying and selling a company’s stock by a person who has access to any sort of non-public information. Until and unless, the information is public, it’s prohibited. This exclusive access to the non-public information can help influence the company's stock at an unimaginable extent. It plays a central role in investment as it gives the investor a unique advantage to manipulate the circumstances in his/her favor. Though there is an exception to corporate Insiders to some extent who can trade stocks of their company.

Why is it illegal?

The definition of legality depends. Corporate trading is an activity that can be justified to some levels, but the question of being legal is obvious. An insider has access to information that has not yet been public. This gives him an advantage in influencing the stock values. It’s is considered unfair to the other traders who don’t have such information and lag behind. This access helps him to earn more profit in the market and thus makes him run ahead. Insider trading has been there for a long time but it’s only recently that it has been banned.

Conclusion:

The US Congress didn’t ban Insider trading until 1934 when it passed its law, but recently Obama administration passed the STOCK Act and signed it into the law in 2012. This prohibits congress as well as other government employees to use non-public information for their benefits. Apart from that, it also puts ethical restrictions on the President, Vice-President, and other executive-level employees of the government. The artificial capacity of the insider to manipulate the Stocks has been the prime reason to prohibit Insider trading and with the US passing the law, many countries have also followed the suit.    ...

25 April, 2020 No comment

What’s the reasoning behind members of Congress and their staff being exempt from Insider trading laws?

Members of Congress are not exempt from the Insider trading laws, though the application can be carried out a little differently. This can be defined as a legal way or a loophole. Take it anyway. The STOCK act applies to everyone; from the executive level employees to Congress members, it also puts ethical restrictions on the Vice-President as well as the President. The rules vary from country to country, but in the US, the passing of the STOCK Act has been a positive step.

Are the members of Congress and their staff being exempt from the Insider trading law?

The answer is no. No one is immune to the law, however, the way law applies can make a difference. This is considered a legal loophole. The information that is traded is supposed to be kept confidential however that doesn’t happen, and to whom, members of Congress have a duty of confidentiality whether or not they have any material information that is yet to be made public. This information can highly impact and manipulate Stocks. In the context of Insider trading, there are debates about whether the Speech and Debate Clause of the U.S. Constitution protects Congress against Insider trading. This can be simply defined as a legal loophole.  

What is the Stock Act?

Stock law was passed by the Obama administration on April 4, 2012. It was signed into law to combat Insider trading. Apart from prohibiting and restricting Congress from Insider trading, it puts restrictions on executive-level employees and also ethical obligations on President as well as the Vice-President. Stop Trading on Congressional Knowledge (STOCK) Ac makes it illegal to trade any information that’s yet to be made public, and until and unless, it’s not in the public domain, it’s prohibited.

Why is it illegal?

In some countries, it’s ambiguous but in the US it’s prohibited thanks to the STOCK act. The legality is justified as the Insider has access to the exclusive information that gives him/her an advantage in influencing the value of company stocks. This is considered unfair as many of the traders will not be able to have that information and will lag. Though it has been a part of the business, but only recently serious regulations were brought in by the US government to combat Insider trading for real. The Stock Act passed by the Obama Administration is one of that.

Conclusion:

The stock law was passed in 2012 by the Obama Administration and the sole purpose of this law was to combat and restrict Congress to indulge in Insider trading. This applies to the President, the Vice president, executive employees, and the Congress and restricts them from making any sort of individual profit by access to any non-public information. However, the way it applies to Congress in case of violation or other matters a lot. Though the law doesn’t exempt anybody, some serious legal loopholes are a matter of debate.    ...

01 May, 2020 No comment

Why Congressional Insider Trading Is Legal

Americans pride themselves in their impeccable system of government where no one is above the law, not even the lawmakers themselves. However, looking a little deeper into the reality of the situation, it is clear that there is a disparity in the same. US senators and lawmakers have always been a cut ahead than the average American citizen when it comes to the stock trade. The stock market does not crash immediately; it takes some time for the company and the board members to decide on the value of the stock. The lawmakers or senators are also part of the meetings that decide these, and therefore they have insider information on the issue. Insider information is the information about a company's stock or other important non-public information that is limited to only the highest-ranking corporates of the company. If this information is used for personal gain, it will create regional distrust in the people of the country and in public shareholders.

So Why is It Not Illegal Then?

That is the interesting part. Insider trading as of 2012 has been banned by the STOCK (Stop Trading on Congressional Knowledge) act. It was passed by the then President Barack Obama, and it was aimed at White collar crime in Washington. It dictated strict disclosure terms and regulations regarding congressman buying and selling securities for congressmen. At first, it worked perfectly, with members of the Congress posting that reads on a searchable database online. However, close to one year after the passing of the STOCK Act, an amendment was made removing the online disclosure clause. You can still see the working of a particular representative's portfolio by going to the basement of the Cannon House office building in Washington DC. It is in a printed format and can still be considered a public disclosure statement. Also, it is very difficult to distinguish between insider trading and pure luck. And most congressmen get away with insider trading by saying so. However, there was a case where Martha Stewart was convicted. She was not found guilty of insider trading, because she presented an alibi and said it was pure chance, but she had lied about one of the details and was convicted for that instead. So it is clear that insider trading goes on even though it is technically illegal.  

CONCLUSION

As stated before, it is quite difficult to know if insider trading goes on. Maybe it might be luck, or maybe it isn't, but the statistical analysis of the situation does not give congressmen the benefit of the doubt. So the only way to tackle this problem is by either making the stock trade traceable for Congressmen or banning it completely.    ...

20 May, 2020 No comment

Will Congress expand the Insider trading prohibition?

US Congress has passed many laws to regulated and brings Insider trading under the law. The first law to prohibit Insider trading was passed in 1934, but it fell out of fashion as the country struggled with many things initially. However, with the Obama administration passing the law in 2012, there has been the anticipation of expansion. The law puts quite some restrictions not just on simple traders but on Congress, executive-level employees as well as the president. With the trading market growing day by day, the things inside and outside are supposed to change. As it records its transformation, the laws regulating and restricting certain things will surely change.  

What is Insider trading?

Insider trading is considered unethical as it gives the Insider an advantage over other traders. To put it in simple words, Inside trading is the buying and selling of Company stocks by any person who has access to any non-public information about the stocks. This information helps a lot in directing the investment and gives them an upper hand in the whole market. There are laws and regulations regarding the use of public information and as long as it’s not public, it is prohibited. Though there are Corporate insiders who are connected with Insider trading as well.

What is the Stock Act?

Stop Trading on Congressional Knowledge (STOCK) Act was passed on April 4, 2012. This was brought in to restrict Insiders trading by the Obama Administration. Apart from the prohibition it puts on Congress, it also restricts the president. So what is it? The law prohibits the use of any non-public information for personal profits. The law applies to the whole Congress, executive-level employees, and also puts restrictions on President as well as Vice-President. Until and unless, the information is made public, its use is prohibited. The Act as of now plays an important role in combating Insider trading in the US , however, there are different rules and regulations in other countries regarding Insider trading.  

Will the insider trading information be expanded?

The information can be obtained by theft, bribery, or espionage; by a violation of any federal law, by conversion, misappropriation or unauthorized and deceptive taking of information, and by breach of any personal relationship or trust. However, there is no statue to what constitutes Insider trading and what doesn’t. As far as the state definition is considered, it is quite broad and Congress will certainly use it to expand the law. The best part about the law is its flexibility through which it can also be applied to unprecedented situations as they may arise in the future.  

Conclusion:

There is no legal definition to Insider Trading as it is hard to know how the information was acquired, but there are strict regulations to combat it. The current law allows Congress to use its flexibility to expand and it is a sure thing to expect that the law will be expanded as the situation arises in the future....

15 May, 2020 No comment