All about investment

By: Daniel Jones

If you are looking to spread bet on coffee then there are a few facts that you should note.

1)The two main types of coffee that are traded are Robusta and Arabica

a.Robusta is generally traded on the London International Financial Futures and Options Exchange (LIFFE)
b.Arabica is generally traded on the Intercontinental Exchange (ICE)

2)Arabica Facts

a.Arabica is also known as Coffea Arabica or Coffee “C” when referring to coffee futures
b.When Arabica coffee cherries ripen they fall to the ground and spoil
c.Arabica accounted for around 60% of world coffee production. Brazil and Colombia produce the majority of the world’s Arabica supply

3)Robusta Facts

a.Robusta is also known as Coffea canephora and Conillon
b.It is considered to be of a lower grade than Arabica. It has twice the caffeine and produces an inferior taste
c.The Robusta plant is easier to take care of and has lower production costs. When its coffee cherries ripen they remain on the plant
d.The Robusta plant is less susceptible to disease than Arabica
e.The Robusta plant can grow in areas where Arabica cannot
f.Robusta accounts for approximately 40% of global coffee production. Vietnam and Indonesia produce 50% of the world’s Robusta

4)According to the International Coffee Organisation (ICO), last year saw coffee production down 7% to 118,000 million bags

5)Coffee is measured in 60kg bags

6)As Anthony Grech of IG Index recently reported “It is also important to note that the production of both coffee types, as with any agricultural commodity, is primarily dependent on weather conditions, harvesting practices and disease. Therefore monitoring these variables, particularly in the major coffee producing countries, will provide an understanding of coffee supply and its intrinsic value, when compared with demand”

7)Key players in the market are Procter and Gamble, Kraft, Nestle and Sara Lee. Together this ‘Big Four’ buys most of the world’s raw coffee. Therefore monitoring the buying habits of these companies would help provide a better understanding of coffee demand. From a micro perspective, marketing and profit margins and also play an important role in driving demand

8)You can spread bet on both Arabica Coffee “C” and Robusta with spread betting companies like WorldSpreads and IG

9)Note that coffee is traded in US dollars. That means one of the biggest factors affecting the price is the exchange rate, just like Crude Oil and Gold. Because coffee is traded in US Dollars then, all things being equal, Coffee will tend to follows the dollar exchange rates. If the Dollar goes down against the Euro, the price of Coffee should go up and vice versa.

10)Finally, it is worth noting that demand for coffee is considered to be price inelastic. This means that when coffee prices increase, individuals do not proportionally reduce their coffee consumption, and when coffee prices decline, consumer demand for coffee does not proportionally rise to any great extent


Before you start trading coffee note that spread betting carries a high level of risk to your funds. You can lose more than you initially invest. It may not suit all investors. Only speculate with funds that you can afford to lose. Ensure you understand the risks and seek independent financial advice if and when necessary.

Based in the heart of London’s financial district, Daniel Jones is a professional commentator for some of the leading financial spread betting websites.



Investments Article Source: http://www.eArticlesOnline.com

by Stephen Bigalow

Buy Gold

Next to oil, gold is probably the best known asset in commodity trading. Gold was the impetus for America's westward expansion in the mid-1800's and its place in the American economy was secured when the United States adopted the gold standard in the 1970's. Gold has always been a valued commodity and that is still true today. Successful traders are finding that buying gold can be both a profitable investment and a strong economic hedge in today economy.

Looking To Trend

Buying gold, like buying other commodities, tends to be cyclic in its pricing. Upward trends attempt to continue to go up while downward trends try to keep moving down unless something changes their course. Even a beginner trading commodities knows that this is a common part of trading, kind of investment's law of inertia. After a phenomenal period of success that ended with people buying gold at over $800 per ounce in the early 1980's, its price has seen other peaks and valleys; today's gold seems to be ready for another upward run as speculators begin forming investment strategies to buy gold.

Fighting Inflation

As the US economy has been passing through yet another unstable period, gold has been holding basically steady or slightly rising in price. Because the US dollar and the price for buying gold are inversely connected, the weak dollar is a very good indication of a likely bull market in gold. This is also the reason that many people use gold as a sort of hedge fund investing against inflation.

The idea of another "bull market" in gold isn't really surprising. The price for buying gold has seen gains against the US dollar over the past couple of years but has been somewhat flat against other currencies. The upturn against the US dollar tends to indicate that the previous low period is over and the asset is ready for a run; if anything, the results against the dollar are more of an indictment of the weakness of the currency and not an indication that the run on gold has started. This suggests that now is the time to make a strategy to buy this valuable commodity. Commodities trading strategies look for such opportunities to find the profits that make trading these assets, whether buying gold, oil or corn futures so lucrative.

How To Look For Movement

The key to successful trading when buying gold or any other commodity is research. Technical analysis and charting create the information that allows such investment opportunities to be exposed. The key to the whole process is finding the best way to analyze the movements of various commodities. The best way to find those opportunities is using Japanese Candlesticks. Because much of the success lies in the ability to see a trend before it happens, a system like Candlesticks is the perfect tool.

Most people think of bar charts when they think of chart formations. The formations that come from simple bar charts simply don't give you a big enough picture. Knowing the opening and closing price for buying gold is helpful, but it doesn't' tell you anything about what kind of volatility that occurred nor does it suggest anything about future movements. Japanese Candlesticks can give you that kind of information. Looking to buy gold? Knowing what happened yesterday is an important part of looking for a trend. What will happen tomorrow is more important to you than what happened yesterday. Because of Candlestick pattern formations, you can not only see what happened yesterday or last week, you can successfully analyze what is likely to happen tomorrow or the next day.

Conclusion

If you want to buy gold, how well do you think you could do if you could see three days into the future? Many experts will tell you that Candlestick trading will give you that ability. Now is a great time to look into buying gold and the best way to take that look is with Japanese Candlesticks.


About the Author

http://www.candlestickforum.com/PPF/Parameters/1_21_/candlestick.asp A site dedicated to stock market investing using Japanese Candlesticks