It is extremely important to have investments. Without some money set aside for retirement, you will never be able to enjoy your golden years. Social Security will likely be depleted within the next 30 or 40 years, so you should not be depending upon the U.S. Government to take care of you when you retire. Besides, Social Security does not even pay enough to help senior citizens live comfortably. So, you need to invest your money wisely, perhaps aggressively, in order to grow your portfolio to a level that will adequately support you after you retire, and you need to start while you are still young.
You need to ask yourself the following question when deciding in what you are going to invest: What is your investment risk tolerance? Answering this question will enable you to develop your entire investment strategy. Are you going to put all of your money into variable securities, like stocks? Are you going to balance your portfolio with a mix of stocks and fixed-income securities (like certificates of deposit or other money market instruments, etc.)? Should you buy bonds? Should you invest in an annuity?
Answering these questions can be difficult and time-consuming, but necessary nonetheless. When evaluating your risk tolerance, you should first consider what type of person you are. If you like to take risks, then invest accordingly. If you hate to take chances, then play it safe. Also, you need to assess what your long-term goals are. Do you want to make a lot of money, or just enough to retire on? Do you have kids that you will one day want to send to college or provide other financial support to?
We will now set forth an appropriate investment strategy for each different risk tolerance, beginning with high-risk tolerance. If you are not afraid of losing money and do not have any kids or other responsibilities weighing you down, then you might consider putting together a very aggressive portfolio. In this case, you should have a portfolio that consists of mostly equities (stocks). The stocks you select should be companies that have the potential to grow tremendously. The higher the risk, the higher the potential reward. Though you should still keep some of your money invested in blue-chip companies with stable finances, you should put a great deal of your money in new companies, hedge funds, and perhaps junk bonds. You should consult with a financial advisor when looking for the right hedge funds or junk bonds in which to invest.
What if you have a medium risk tolerance? Well, for those of you that fall in the middle, the answer is simple. You should have a balanced portfolio. You need to have a mix of stocks, bonds, and fixed-income securities. You may want to set aside a very small amount of money for speculative investments such as the aforementioned hedge funds, penny stocks, or perhaps derivatives, but most of your money should be allocated towards a mix of stable small-cap, mid-cap, and large-cap stocks, government and corporate bonds, and fixed-income securities.
Finally, for those of you who are extremely risk averse, you need to compose a portfolio that consists of mostly high-yield government bonds and certain money market instruments that pay a decent interest rate. You should also invest in corporate bonds issued by companies with a high credit rating, and stocks of companies that consistently pay dividends (dividend income will help to offset any losses in the share price of the stock).
I hope this information will assist you in making your investment decisions. Formulate a plan to set aside a certain percentage of your income for investing on an annual basis and start while you are still young. The earlier you begin, the more money you can potentially make down the road. Using your risk tolerance, select a portfolio that meets your needs, and you should do fine
by Jim Pretin
Friday, December 15, 2006
Understand Fundamental Analysis to Succesfully Trade the Forex Market
Fundamental analysis is considered to be the opposite of technical analysis, and both are used in the Forex market. Fundamental analysis considers the intrinsic value of an investment when making a decision as to its future activity. There are some who feel that this is an excellent method of making decisions in the Stock market as a lot of data can be gathered and studied concerning the value of a Company. But, they ask, how can a Nation have an intrinsic value?
The answer is fairly simple. The economy of a country goes through a basic business cycle, and there are a lot of indicators available to the investor to measure where a particular economy is at any given time. The analysis would involve matching the stage of the cycle with its impact on the value of its currency. The normal economic cycle consists of periods of inflation and deflation with peaks and troughs in between. Certain indicators such as the GDP, CPI, and current prime interest rates can give a good idea of the stage of the economy at any given time.
Each of these indicators would tend to impact currency valuation in different ways, and sometimes would even vary from country to country. In the United States, rising interest rates are normally associated with currency deflation, for example, and it is factors such as this that are the heart of fundamental analysis. This analysis can become quite detailed, but the focus remains on the country and its economy. Every factor that impacts the country and its economy can play a role in the value of the currency, and understanding these factors are the tools the fundamental analyzers uses to guide their investment strategy.
by John Chen
The answer is fairly simple. The economy of a country goes through a basic business cycle, and there are a lot of indicators available to the investor to measure where a particular economy is at any given time. The analysis would involve matching the stage of the cycle with its impact on the value of its currency. The normal economic cycle consists of periods of inflation and deflation with peaks and troughs in between. Certain indicators such as the GDP, CPI, and current prime interest rates can give a good idea of the stage of the economy at any given time.
Each of these indicators would tend to impact currency valuation in different ways, and sometimes would even vary from country to country. In the United States, rising interest rates are normally associated with currency deflation, for example, and it is factors such as this that are the heart of fundamental analysis. This analysis can become quite detailed, but the focus remains on the country and its economy. Every factor that impacts the country and its economy can play a role in the value of the currency, and understanding these factors are the tools the fundamental analyzers uses to guide their investment strategy.
by John Chen
The 6 Best Times Of The Day To Trade A Stock
1. Post-opening buying: Let's say a stock rises 5 percent or more during the opening and there's no news about it. Typically, the stock will fall off after 30 minutes of trading. Why? Market makers may be trying to open the stock at an artificially high price to sell off excess inventory they've acquired the day before. However, if the stock doesn't fall after 30 minutes of trading, it's liable to continue rising for the rest of the day. Tactic: Buy at 1/16 above the day's high after the opening. Set a stop at 1/16 below the day's low.
2. Post-opening selling: The opposite of the above strategy. When a stock opens lower on no news, it could be that sell orders from nervous investors have piled up since the close of trading the day' before. Sometimes market makers open the stock artificially low, to draw in more panic sellers. This allows them to accumulate shares, because market makers as a rule buy on price declines and sell on price increases. After 30 minutes, the stock usually recovers in price and normal trading begins. The market makers profit by selling the inventory they've accumulated at the lower price. However, if the stock continues to drift lower after 30 minutes, chances are it'll decline more during the course of the day. Tactic: Sell short at 1/16 below the low of the day; set a stop at 1/16 above the day's high.
3. Playing the spread: This one's really simple. Buy at 1/16 above the bid. Sell at 1/16 below the ask. The strategy works best with non-volatile stocks where the spread is at least 3/8 of a point. When successful, you make a quarter point per trade, or $250 on 1,000 shares. You can also short the spread by selling short at 1/16 below the ask and covering at 1/16 above the bid. Problem is, it's not always possible to get in and out at these levels. Market makers may easily spot what you're doing and adjust prices so they blow you out. Often day traders try this tactic several times during the day before they succeed.
4. Grinding: Another relatively simple tactic. Follow the message threads at, for instance, Silicon Investor for a particular stock. When everyone is screaming that the stock is going to make a move, jump in with the mob. Be content with an 1/8 or 1/4 point. Then get out before the rush.
5. Fading the market: With this contrarian strategy, you buy into weakness and sell into strength. That is, you buy stocks with small percentage declines relative to the market. You're hoping they'll gain when the market reverses. Hold off buying until the stock trades above its opening. Reason: Previous buyers of the stock will sell to prevent loss, thus driving the price down in the short term.
6. Shop the final hour: Stocks often ease off their highs of the day during the last hour of trading. Why? Because day traders and market makers seek to exit their positions and lock in profits. A price downturn often occurs during the last hour of trading as many seek to exit their positions. This downward momentum can create some lucrative short-selling opportunities.
by Larry Potter
2. Post-opening selling: The opposite of the above strategy. When a stock opens lower on no news, it could be that sell orders from nervous investors have piled up since the close of trading the day' before. Sometimes market makers open the stock artificially low, to draw in more panic sellers. This allows them to accumulate shares, because market makers as a rule buy on price declines and sell on price increases. After 30 minutes, the stock usually recovers in price and normal trading begins. The market makers profit by selling the inventory they've accumulated at the lower price. However, if the stock continues to drift lower after 30 minutes, chances are it'll decline more during the course of the day. Tactic: Sell short at 1/16 below the low of the day; set a stop at 1/16 above the day's high.
3. Playing the spread: This one's really simple. Buy at 1/16 above the bid. Sell at 1/16 below the ask. The strategy works best with non-volatile stocks where the spread is at least 3/8 of a point. When successful, you make a quarter point per trade, or $250 on 1,000 shares. You can also short the spread by selling short at 1/16 below the ask and covering at 1/16 above the bid. Problem is, it's not always possible to get in and out at these levels. Market makers may easily spot what you're doing and adjust prices so they blow you out. Often day traders try this tactic several times during the day before they succeed.
4. Grinding: Another relatively simple tactic. Follow the message threads at, for instance, Silicon Investor for a particular stock. When everyone is screaming that the stock is going to make a move, jump in with the mob. Be content with an 1/8 or 1/4 point. Then get out before the rush.
5. Fading the market: With this contrarian strategy, you buy into weakness and sell into strength. That is, you buy stocks with small percentage declines relative to the market. You're hoping they'll gain when the market reverses. Hold off buying until the stock trades above its opening. Reason: Previous buyers of the stock will sell to prevent loss, thus driving the price down in the short term.
6. Shop the final hour: Stocks often ease off their highs of the day during the last hour of trading. Why? Because day traders and market makers seek to exit their positions and lock in profits. A price downturn often occurs during the last hour of trading as many seek to exit their positions. This downward momentum can create some lucrative short-selling opportunities.
by Larry Potter
Currency Trading The Foreign Exchange (Forex) Market
Trading, in general, is a great "business" opportunity. But why is currency trading the forex market the greatest of them all.
Did you know that the forex (foreign exchange) market is 30 times larger then all other US markets combined.
Did you know that trillions of dollars are traded on the forex. And, no, it's not all traded by huge banks making huge trades and huge currency exchanges.
Truth is a great deal of currency trading is done by speculators, which is how the majority of small investors are defined. You wait for a good opportunity to present itself and you jump into the forex market.
Forex trading, like all other trading, is about timing and money management. However, trading currency on the foreign exchange does come with some very unique characteristics.
No slippage on your stop orders, guaranteed fills regardless of the size of your orders, 24 hour trading 5 days a week. These are all amazing benefits not offered by any other market in the world.
This is why so many traders are drawn to the forex. The recognize that by using the same skills they are learning to trade equities, or futures, or bonds, they can be trading the forex and make an exponentially greater amount of money.
Now, it is not suggested that you drop everything that you are doing and go invest every dollar you have in a market that is new to you. You should, of course, educate yourself and make certain that all the proper steps are taken to ensure your success.
Only you can determine when you are ready to take the plunge into forex trading with real money. Until then, trade a demo account, eliminate all risk and build your skills.
You're probably thinking that demo accounts are worthless since they don't mimic live trading very accurately, but in the case of currency trading the forex, you would be wrong.
The demo accounts mimic live foreign exchange trading perfectly. There is no trade that you will get on a demo account that you wouldn't get on a live account. So there really is no reason to make any live trades until you can consistently make money trading a demo account.
This is a lesson that you will be thankful for 3 months from now. After going through your second or third $10,000 demo account, you will realize how valuable this advice really is.
So, take your time, get educated and join the world of successful currency traders. The foreign exchange (forex) market is waiting for you.
by Eddie Yakubovich
Did you know that the forex (foreign exchange) market is 30 times larger then all other US markets combined.
Did you know that trillions of dollars are traded on the forex. And, no, it's not all traded by huge banks making huge trades and huge currency exchanges.
Truth is a great deal of currency trading is done by speculators, which is how the majority of small investors are defined. You wait for a good opportunity to present itself and you jump into the forex market.
Forex trading, like all other trading, is about timing and money management. However, trading currency on the foreign exchange does come with some very unique characteristics.
No slippage on your stop orders, guaranteed fills regardless of the size of your orders, 24 hour trading 5 days a week. These are all amazing benefits not offered by any other market in the world.
This is why so many traders are drawn to the forex. The recognize that by using the same skills they are learning to trade equities, or futures, or bonds, they can be trading the forex and make an exponentially greater amount of money.
Now, it is not suggested that you drop everything that you are doing and go invest every dollar you have in a market that is new to you. You should, of course, educate yourself and make certain that all the proper steps are taken to ensure your success.
Only you can determine when you are ready to take the plunge into forex trading with real money. Until then, trade a demo account, eliminate all risk and build your skills.
You're probably thinking that demo accounts are worthless since they don't mimic live trading very accurately, but in the case of currency trading the forex, you would be wrong.
The demo accounts mimic live foreign exchange trading perfectly. There is no trade that you will get on a demo account that you wouldn't get on a live account. So there really is no reason to make any live trades until you can consistently make money trading a demo account.
This is a lesson that you will be thankful for 3 months from now. After going through your second or third $10,000 demo account, you will realize how valuable this advice really is.
So, take your time, get educated and join the world of successful currency traders. The foreign exchange (forex) market is waiting for you.
by Eddie Yakubovich
Investment Advice: Follow these Tips to become a Successful Trader
Many people trade in stock market with high level of knowledge to analyze the market movements. But they don't earn much return, why? Because, they can't control themselves; In other words, they don't know how to control their emotions.
If you learn these tips and use them truly, you'd be more successful than before.
#1- Set a Goal in your mind
I believe this rule is very important for doing each work, not only trading. When you set a clear goal in your mind, your subconscious starts automatically working to achieve that goal. But consider that your goal must be realistic and attainable. For example at first, try to earn $1000 each month then when achieve that, increase your goal.
#2- Losing Trades are Part of Trading
It is important to keep in your mind that losing trades are part of trading. You should learn to feel comfortable when take a loss. However, you should try to get out of losing trades on time; I mean that you have to exit of losing trades not very soon and not very late.
#3- Use Stop Orders
Using stop orders are a must. When you use them, you control and manage your losses. Many people don't use stop orders, they say:"when we use stop order the market will hit our stop order and then immediately the direction of market changes". This is not an acceptable reason, because the market may be going down and you lose a lot of money.
People who don't use stop orders, aren't sure about their prediction and don't want to accept that they may make mistake.
#4- Take the Profit
When you got a decent profit, take your profit. A good way is to lock your stop order in profit. This is called trailing stop orders. Also trailing stop orders is a good way to prevent losses, in this way when got some profits, trail your stop order to the same price where you got in the market.
#5- Be Patient
Many traders when lose money in a trade, tend to get the money back immediately in next trade, But this puts them in a bad situation and likely causes them make another wrong decision. After a losing trade, don't decide immediately to get back the money. Review your wrong trade and try to find your mistake.
#6- Make your own Rules
Write a list of rules that must to follow them. Loser people trade without any rules. So, write a list of your rules and stick to apply them. Review the rules always, and try to keep them in mind. In bad situations, take a look at the rules and consider whether the rules need to be improved or you forget to use one of them.
by Mostafa Soleimanzadeh
If you learn these tips and use them truly, you'd be more successful than before.
#1- Set a Goal in your mind
I believe this rule is very important for doing each work, not only trading. When you set a clear goal in your mind, your subconscious starts automatically working to achieve that goal. But consider that your goal must be realistic and attainable. For example at first, try to earn $1000 each month then when achieve that, increase your goal.
#2- Losing Trades are Part of Trading
It is important to keep in your mind that losing trades are part of trading. You should learn to feel comfortable when take a loss. However, you should try to get out of losing trades on time; I mean that you have to exit of losing trades not very soon and not very late.
#3- Use Stop Orders
Using stop orders are a must. When you use them, you control and manage your losses. Many people don't use stop orders, they say:"when we use stop order the market will hit our stop order and then immediately the direction of market changes". This is not an acceptable reason, because the market may be going down and you lose a lot of money.
People who don't use stop orders, aren't sure about their prediction and don't want to accept that they may make mistake.
#4- Take the Profit
When you got a decent profit, take your profit. A good way is to lock your stop order in profit. This is called trailing stop orders. Also trailing stop orders is a good way to prevent losses, in this way when got some profits, trail your stop order to the same price where you got in the market.
#5- Be Patient
Many traders when lose money in a trade, tend to get the money back immediately in next trade, But this puts them in a bad situation and likely causes them make another wrong decision. After a losing trade, don't decide immediately to get back the money. Review your wrong trade and try to find your mistake.
#6- Make your own Rules
Write a list of rules that must to follow them. Loser people trade without any rules. So, write a list of your rules and stick to apply them. Review the rules always, and try to keep them in mind. In bad situations, take a look at the rules and consider whether the rules need to be improved or you forget to use one of them.
by Mostafa Soleimanzadeh
8 Steps for Business Screening for Value Investing Approach
8 Steps for Business Screening for Value Investing Approach
1) Consistent historical sales & profits growth (minimum 10% yoy for profits, 5% year on year for sales) - Use the Share Investment Guide or Annual Reports for this screen.
2) Consistent high Return on Equity (> 15%, min 10%) - Use the Share Investment Guide or Annual Reports for this screen.
3) Net cash position or low debt ( less than a single year net operating cash flow) - Use the Annual reports. Check 1 year's operating cash flow vs total debt.
4) Business model is easy to understand. Read through the Annual reports and ensure that the business model can be understood from our perspective.
5) Management has integrity and is open, honest and fair towards minority shareholders. Ensure that observable actions are above board, and preferably get in contact with top management for a sense. Does not take any actions that only favour the top management(eg.Getting an excessive salary as compared to peers in the industry)
6) Management displays intelligent asset allocation behaviour. The profits and cash obtained are intelligently ploughed back into the business. Some examples would include avoiding expensive acquisitions to expand, a sound dividend policy that allows cash for shareholders and enough for expansion.
7) Industry Sector supports doubling of sales & profits every 5 years. Sector is able to allow the business to double sales & Profits every 5 years. Look out for rising industries that may replace the sector based on a different paradigm.
8) Business has a sustainable competitive advantage. Examples of Competitive advantage: The business should either be top 1 or 2 in its particular industrial niche. It could also have a great brand. It can also be consistently the most cost effective in its industry.
Valuations for businesses
1) PEG Ratio (<>0.8). This would mean one is acquiring a business that is very cash rich and that the valuation is supported by the cash in the company's vaults.
4) Consistent Net Dividend Yield (> 10%). This would mean that the business is very likely a cash generation machine.
by Ken Chee
1) Consistent historical sales & profits growth (minimum 10% yoy for profits, 5% year on year for sales) - Use the Share Investment Guide or Annual Reports for this screen.
2) Consistent high Return on Equity (> 15%, min 10%) - Use the Share Investment Guide or Annual Reports for this screen.
3) Net cash position or low debt ( less than a single year net operating cash flow) - Use the Annual reports. Check 1 year's operating cash flow vs total debt.
4) Business model is easy to understand. Read through the Annual reports and ensure that the business model can be understood from our perspective.
5) Management has integrity and is open, honest and fair towards minority shareholders. Ensure that observable actions are above board, and preferably get in contact with top management for a sense. Does not take any actions that only favour the top management(eg.Getting an excessive salary as compared to peers in the industry)
6) Management displays intelligent asset allocation behaviour. The profits and cash obtained are intelligently ploughed back into the business. Some examples would include avoiding expensive acquisitions to expand, a sound dividend policy that allows cash for shareholders and enough for expansion.
7) Industry Sector supports doubling of sales & profits every 5 years. Sector is able to allow the business to double sales & Profits every 5 years. Look out for rising industries that may replace the sector based on a different paradigm.
8) Business has a sustainable competitive advantage. Examples of Competitive advantage: The business should either be top 1 or 2 in its particular industrial niche. It could also have a great brand. It can also be consistently the most cost effective in its industry.
Valuations for businesses
1) PEG Ratio (<>0.8). This would mean one is acquiring a business that is very cash rich and that the valuation is supported by the cash in the company's vaults.
4) Consistent Net Dividend Yield (> 10%). This would mean that the business is very likely a cash generation machine.
by Ken Chee
Sunday, December 10, 2006
Explaining the Money Market
The Money Market is the financial market for short-term borrowing and lending, usually up to a time span of thirteen months. This contrasts with the capital market for longer-term funds that feature within the Market.
This is the place where banks lend to and borrow from each other, short-term financial instruments, for instance certificates of deposit or enter into agreements, repurchase agreements are taken place.
It provides short to medium term liquidity aspect element within the global financial system. Money Market derivatives include forward rate agreements and short-term interest rate futures.
The Market is a subsection of the fixed income market. We usually think of the term fixed income as being synonymous to bonds. In reality, a bond is just one sort of fixed income security.
The difference between the Money Market and the bond market is that the money market specializes in very short-term debt securities that is debts that mature in less than one year time span. Money investments can also be termed as the cash investments because of their short maturities.
Money Market securities are essentially IOUs issued by governments, financial institutions and large corporations. These instruments are very liquid and are considered unusually safe. As they are extremely conservative, Money Market securities offer significantly lower returns than most other securities.
Comparing the Money Market with the Stock market
The major difference between the Money Market and the stock market is that most Money Market securities trade in very high denominations. This, in turn restricts access for the individual investor.
Furthermore, the Money Market is also a dealer market, which means that firms buy and sell securities in their own accounts, at their own risk. Comparing this to the stock market where a broker receives commission to act as an agent, while the investor takes the risk of holding the stock.
Another characteristic of a dealer market is the lack of a central trading floor or exchange. Deals are transacted over the phone or through the use of electronic systems.
These accounts and funds pool together the assets of thousands of investors in order to buy the securities on their behalf. However, some Money Market instruments like the Treasury bills can be purchased directly and if you fail to acquire that, they can be acquired through other large financial institutions with direct access to these types of markets.
Understanding the Money Market better
There are tons of different instruments within the markets that are offering various returns at various risks, which is an aspect element within the sections that take a look at the major Money Market instruments.
Also a better-known place for large institutions and government to manage their short-term cash needs is the Money Market. However, individual investors have access to the market through a variety of different securities.
These types of markets specialize in debt securities that mostly mature in less than one year. These securities are very liquid, and are considered very safe and as a result, they often offer a lower return than other securities. The easiest way for consumers to gain access to the Money Market is through a mutual fund.
Some terms that are used in the this markets are the T-bills, which are short-term government securities that mature in one year or less from their issue date and are considered to be one of the leading safest investments - they do not provide a fantastic return.
Another term that is used in the Money Market is a certificate of deposit, which is a time deposit with a bank. Annual percentage yield takes into account compound interest, annual percentage rate does not.
Certificate Deposits are safe, but the returns aren't wonderful, and your money is tied up for the length of the deposit. Commercial paper is an unsecured, short-term loan issued by a corporation. In the Money Market returns are higher than T-bills because of the higher default risk.
The banker's acceptances are negotiable time draft for financing transactions in goods. They are new in international trade and are commonly only available to individuals through the funds.
The Eurodollars are U.S. dollar-denominated deposit at banks outside of the United States. The average Eurodollar deposit is very large and the only way for consumers to invest in this market is indirectly through a Money Market fund.
Hence, we can now understand that a Money Market can surely make a difference in the financial matters of a country.
by William Smith
This is the place where banks lend to and borrow from each other, short-term financial instruments, for instance certificates of deposit or enter into agreements, repurchase agreements are taken place.
It provides short to medium term liquidity aspect element within the global financial system. Money Market derivatives include forward rate agreements and short-term interest rate futures.
The Market is a subsection of the fixed income market. We usually think of the term fixed income as being synonymous to bonds. In reality, a bond is just one sort of fixed income security.
The difference between the Money Market and the bond market is that the money market specializes in very short-term debt securities that is debts that mature in less than one year time span. Money investments can also be termed as the cash investments because of their short maturities.
Money Market securities are essentially IOUs issued by governments, financial institutions and large corporations. These instruments are very liquid and are considered unusually safe. As they are extremely conservative, Money Market securities offer significantly lower returns than most other securities.
Comparing the Money Market with the Stock market
The major difference between the Money Market and the stock market is that most Money Market securities trade in very high denominations. This, in turn restricts access for the individual investor.
Furthermore, the Money Market is also a dealer market, which means that firms buy and sell securities in their own accounts, at their own risk. Comparing this to the stock market where a broker receives commission to act as an agent, while the investor takes the risk of holding the stock.
Another characteristic of a dealer market is the lack of a central trading floor or exchange. Deals are transacted over the phone or through the use of electronic systems.
These accounts and funds pool together the assets of thousands of investors in order to buy the securities on their behalf. However, some Money Market instruments like the Treasury bills can be purchased directly and if you fail to acquire that, they can be acquired through other large financial institutions with direct access to these types of markets.
Understanding the Money Market better
There are tons of different instruments within the markets that are offering various returns at various risks, which is an aspect element within the sections that take a look at the major Money Market instruments.
Also a better-known place for large institutions and government to manage their short-term cash needs is the Money Market. However, individual investors have access to the market through a variety of different securities.
These types of markets specialize in debt securities that mostly mature in less than one year. These securities are very liquid, and are considered very safe and as a result, they often offer a lower return than other securities. The easiest way for consumers to gain access to the Money Market is through a mutual fund.
Some terms that are used in the this markets are the T-bills, which are short-term government securities that mature in one year or less from their issue date and are considered to be one of the leading safest investments - they do not provide a fantastic return.
Another term that is used in the Money Market is a certificate of deposit, which is a time deposit with a bank. Annual percentage yield takes into account compound interest, annual percentage rate does not.
Certificate Deposits are safe, but the returns aren't wonderful, and your money is tied up for the length of the deposit. Commercial paper is an unsecured, short-term loan issued by a corporation. In the Money Market returns are higher than T-bills because of the higher default risk.
The banker's acceptances are negotiable time draft for financing transactions in goods. They are new in international trade and are commonly only available to individuals through the funds.
The Eurodollars are U.S. dollar-denominated deposit at banks outside of the United States. The average Eurodollar deposit is very large and the only way for consumers to invest in this market is indirectly through a Money Market fund.
Hence, we can now understand that a Money Market can surely make a difference in the financial matters of a country.
by William Smith
Explaining Penny Stocks
Penny Stocks are amongst the most uncertain and unpredictable investments you can easily make in today's financial markets. With appropriate decision management techniques, nevertheless, you can easily gain the benefits of the enormous percentage swings these explosive stocks have to offer, without putting your entire investment account at risk.
Of course, inexperienced Penny Stocks traders obtain burnt every single day investing in stocks, but where does all that cash go then? Well, the answer can be quite simple as in Smart money, Hedge Funds, market Making Firms, and believe it or not, even consumers just like you!
Penny Stocks mostly have market caps under $500M and are considered extremely speculative, particularly those that trade on low volumes over the counter. The Securities and Exchange Commission warns that, Penny Stocks may trade infrequently, which means that it may be difficult to sell Penny Stocks shares once you own them.
Because it may be difficult to find quotations for certain stocks, they may be impossible to accurately price. Investors in the field of Penny Stocks should be prepared for the possibility that they may lose their whole investment.
Many Wall Street firms simply do not feel that it is very necessary to dispel the myths floating around about stocks. Instead, they would rather exploit these misconceptions for their own benefit. For this reason, the information super highway that allows many individual investors to make their own knowledgeable and unprejudiced decisions remain strictly compromised when it comes to Penny Stocks.
Thousands of Penny Stocks see more active trading each day than 1000's of stocks listed in the local newspaper, but for some reason they never make it to the presses.
Mercifully, there is now an actively pursuing positive change for low priced equity traders by the diffusion of timely Micro Cap Stock market Analysis, Unbiased Coverage for individual stocks, and immediate access to the same information that has been available to Blue Chip market timers for years.
Well! In addition to offering the webs most sought after online information sheet for Real Micro Cap Stocks, Penny Stocks Daily also offers the free daily analysis of the Over the Counter Bulletin Board and Pink Sheets Markets, Penny Stocks under $1.00 listed on the glorious NASDAQ, AMEX and more.
By subsequent followings of these broad liquidity and price statistics on a day-to-day basis, one can gain a better feel of the overall markets, and therefore make better trading decisions.
Now, you have the new Dow Jones Industrial Average to detect market strength and weakness in Blue Chip Stocks, also you can easily know if you or someone you know are being a contraire or a trend follower in the under followed markets for stocks.
Well with studies you simply will not find out anything elsewhere. Also, be sure to review out the wide array of informative and tutorial articles on everything from Micro Cap Basics and Risk Management to strategies and ideas that you may not have thought of.
Eventually, for Penny Stocks be sure to review the extensive Frequently Asked Questions areas no matter where and it is most important to understand if you are in your investing decision-makings.
How to understand how liquid Penny Stocks are?
In the world of stocks, to know how many shares there may be beneficial is necessary and always keeping that in mind is critical. Here, do not screen for stocks that are potentially being sold short, but know that short sellers are certain buyers at some point or the other, and are a natural part of any monetary instrument.
Here to watch out for, are a huge percentage of the company shares being sold short, which would potentially raise the notion of unprotected short selling. This is when dishonest investors can sell shares on the splendid open market that cannot even exist aspect element within the Penny Stocks market.
This is noticeably not good for everyone those who are involved in stocks, and the SEC and congress are beginning to take steps towards combating this activity.
Nobody can guarantee the accuracy of the number of shares outstanding that are posted, and in many of the cases, companies can also issue shares in a way that is quite intangible, and there is an admittance that there will often be more issued, especially when the stock price goes up in dealing with Penny Stocks.
Never forget that the company is not selling these shares directly to the public, but is rather, issuing them to different corporations and persons for representing some sort of service or purchase, and they in turn can sell them to the open market dealing in Penny Stocks.
by William Smith
Of course, inexperienced Penny Stocks traders obtain burnt every single day investing in stocks, but where does all that cash go then? Well, the answer can be quite simple as in Smart money, Hedge Funds, market Making Firms, and believe it or not, even consumers just like you!
Penny Stocks mostly have market caps under $500M and are considered extremely speculative, particularly those that trade on low volumes over the counter. The Securities and Exchange Commission warns that, Penny Stocks may trade infrequently, which means that it may be difficult to sell Penny Stocks shares once you own them.
Because it may be difficult to find quotations for certain stocks, they may be impossible to accurately price. Investors in the field of Penny Stocks should be prepared for the possibility that they may lose their whole investment.
Many Wall Street firms simply do not feel that it is very necessary to dispel the myths floating around about stocks. Instead, they would rather exploit these misconceptions for their own benefit. For this reason, the information super highway that allows many individual investors to make their own knowledgeable and unprejudiced decisions remain strictly compromised when it comes to Penny Stocks.
Thousands of Penny Stocks see more active trading each day than 1000's of stocks listed in the local newspaper, but for some reason they never make it to the presses.
Mercifully, there is now an actively pursuing positive change for low priced equity traders by the diffusion of timely Micro Cap Stock market Analysis, Unbiased Coverage for individual stocks, and immediate access to the same information that has been available to Blue Chip market timers for years.
Well! In addition to offering the webs most sought after online information sheet for Real Micro Cap Stocks, Penny Stocks Daily also offers the free daily analysis of the Over the Counter Bulletin Board and Pink Sheets Markets, Penny Stocks under $1.00 listed on the glorious NASDAQ, AMEX and more.
By subsequent followings of these broad liquidity and price statistics on a day-to-day basis, one can gain a better feel of the overall markets, and therefore make better trading decisions.
Now, you have the new Dow Jones Industrial Average to detect market strength and weakness in Blue Chip Stocks, also you can easily know if you or someone you know are being a contraire or a trend follower in the under followed markets for stocks.
Well with studies you simply will not find out anything elsewhere. Also, be sure to review out the wide array of informative and tutorial articles on everything from Micro Cap Basics and Risk Management to strategies and ideas that you may not have thought of.
Eventually, for Penny Stocks be sure to review the extensive Frequently Asked Questions areas no matter where and it is most important to understand if you are in your investing decision-makings.
How to understand how liquid Penny Stocks are?
In the world of stocks, to know how many shares there may be beneficial is necessary and always keeping that in mind is critical. Here, do not screen for stocks that are potentially being sold short, but know that short sellers are certain buyers at some point or the other, and are a natural part of any monetary instrument.
Here to watch out for, are a huge percentage of the company shares being sold short, which would potentially raise the notion of unprotected short selling. This is when dishonest investors can sell shares on the splendid open market that cannot even exist aspect element within the Penny Stocks market.
This is noticeably not good for everyone those who are involved in stocks, and the SEC and congress are beginning to take steps towards combating this activity.
Nobody can guarantee the accuracy of the number of shares outstanding that are posted, and in many of the cases, companies can also issue shares in a way that is quite intangible, and there is an admittance that there will often be more issued, especially when the stock price goes up in dealing with Penny Stocks.
Never forget that the company is not selling these shares directly to the public, but is rather, issuing them to different corporations and persons for representing some sort of service or purchase, and they in turn can sell them to the open market dealing in Penny Stocks.
by William Smith
Wall Street: Where Money Grows
When working, I listen to Bloomberg Television. Commentators and guests banter about the stock market, the Federal Reserve, interest rates, corporate stock, and national news. The day changes, the news is similar, but never trumpery.
As interesting as daily stock market news is to me, I often wonder if market reports matter when most investors are too busy and distracted to pay attention. Investors stay-tuned for the closing market averages; if the market is up, all is right with the world. If the market is down, "I'm in it for the long haul." If the market cascades unexpectedly, investors second-guess investment decisions.
"Buy! says the Bull" "Sell!", says the Bear. Who is Right? Stock and bond trading is a tug-of-war between the Bears and the Bulls (similar to the Democrats and the Republicans): one group sees what's right, the other group sees what's wrong. Both are opportunists.
If too many become Bulls, the suspicious Bears salivate; when the Bear corrals the Bull, the Bulls know their time is near. Bear traders see the glass half-empty; bull traders see the glass half-full. Together, they make a "market" where stocks, bonds, mutual funds, options, commodities, and derivatives are traded. The Bull and the Bear each get it right, but seldom at the same time; that's how markets are made.
"Securities markets are a fast-moving, glamorous, complex, multi-billion-dollar business." The largest located in New York, London, and Tokyo and and the emerging markets located in Sao Paulo, Karachi, and Jakarta, and they all have a history.
In the 13th century, a small group of investors issued 96 shares of the Bazacle Milling Company in Toulouse, France. Trading paper for grain did not catch French imagination (or anyone's) until the 18th century and the beginning of the Industrial Revolution.
* The 1700's brought innovation and advancement: 1712 - Thomas Newcomen patents the atmospheric steam engine. * 1756 - John Smeaton invents hydraulic cement. * 1769 - Nicolas Cugnot invents the motorised carriage. * 1775 - Alexander Cummings invents the flush toilet (thank God). * 1778 - Oliver Pollock, a New Orleans businessman, creates the $ symbol * 1798 - Income tax introduced by British parliament (but of course)
New York Stock Exchange investors started "ringing the trading bell" in 1790. A 12 foot high wooden stockade separated that "trading floor" from the British and the Indians. On May 12th, two years later, 24 traders and merchants met under a Buttonwood tree at 68 Wall Street to sign the "Buttonwood Agreement" that empowered them to trade securities for commission. Their agreement is the first of many for the NYSE.
Essentially, stock market entrepreneurs sold paper in place of commodities. Trading cows, land, or lumber became too cumbersome. Further, selling a companies "paper" raises capital for the company, and gives ownership to the investor. Farmers harvest the grain, "listed " companies process and investors hope they do it right so they can shop for groceries.
The French voiced what every investor sometimes feels: if you cannot hold it in your hand, ownership is risky, while local farmers did not like big city highfalutin ideas. Holding a tangible object may be at the root of all risk concerns. Don't make a promise, take me to the store so I can have "it".
On Friday afternoons, I would visit my 82 year-old grandfather. Grampa would sit in his sun porch while I asked him questions about his youth. He owned a lumberyard and believed in tangible goods. I was working for Merrill Lynch at the time, and we always talked about the stock market. One day he said, "The stock market is filled with thieves and hoodlums. It is not as safe and predictable as real estate."
On his first point, I could not agree; on Grampa's second point, I would agree that many folks have more value in their real estate (home) than their stock market portfolio. However, real estate prices are contracting, and the stock market is up today. Further proof you should own a little of both because it's all about asset allocation.
by A Raymond Randall
As interesting as daily stock market news is to me, I often wonder if market reports matter when most investors are too busy and distracted to pay attention. Investors stay-tuned for the closing market averages; if the market is up, all is right with the world. If the market is down, "I'm in it for the long haul." If the market cascades unexpectedly, investors second-guess investment decisions.
"Buy! says the Bull" "Sell!", says the Bear. Who is Right? Stock and bond trading is a tug-of-war between the Bears and the Bulls (similar to the Democrats and the Republicans): one group sees what's right, the other group sees what's wrong. Both are opportunists.
If too many become Bulls, the suspicious Bears salivate; when the Bear corrals the Bull, the Bulls know their time is near. Bear traders see the glass half-empty; bull traders see the glass half-full. Together, they make a "market" where stocks, bonds, mutual funds, options, commodities, and derivatives are traded. The Bull and the Bear each get it right, but seldom at the same time; that's how markets are made.
"Securities markets are a fast-moving, glamorous, complex, multi-billion-dollar business." The largest located in New York, London, and Tokyo and and the emerging markets located in Sao Paulo, Karachi, and Jakarta, and they all have a history.
In the 13th century, a small group of investors issued 96 shares of the Bazacle Milling Company in Toulouse, France. Trading paper for grain did not catch French imagination (or anyone's) until the 18th century and the beginning of the Industrial Revolution.
* The 1700's brought innovation and advancement: 1712 - Thomas Newcomen patents the atmospheric steam engine. * 1756 - John Smeaton invents hydraulic cement. * 1769 - Nicolas Cugnot invents the motorised carriage. * 1775 - Alexander Cummings invents the flush toilet (thank God). * 1778 - Oliver Pollock, a New Orleans businessman, creates the $ symbol * 1798 - Income tax introduced by British parliament (but of course)
New York Stock Exchange investors started "ringing the trading bell" in 1790. A 12 foot high wooden stockade separated that "trading floor" from the British and the Indians. On May 12th, two years later, 24 traders and merchants met under a Buttonwood tree at 68 Wall Street to sign the "Buttonwood Agreement" that empowered them to trade securities for commission. Their agreement is the first of many for the NYSE.
Essentially, stock market entrepreneurs sold paper in place of commodities. Trading cows, land, or lumber became too cumbersome. Further, selling a companies "paper" raises capital for the company, and gives ownership to the investor. Farmers harvest the grain, "listed " companies process and investors hope they do it right so they can shop for groceries.
The French voiced what every investor sometimes feels: if you cannot hold it in your hand, ownership is risky, while local farmers did not like big city highfalutin ideas. Holding a tangible object may be at the root of all risk concerns. Don't make a promise, take me to the store so I can have "it".
On Friday afternoons, I would visit my 82 year-old grandfather. Grampa would sit in his sun porch while I asked him questions about his youth. He owned a lumberyard and believed in tangible goods. I was working for Merrill Lynch at the time, and we always talked about the stock market. One day he said, "The stock market is filled with thieves and hoodlums. It is not as safe and predictable as real estate."
On his first point, I could not agree; on Grampa's second point, I would agree that many folks have more value in their real estate (home) than their stock market portfolio. However, real estate prices are contracting, and the stock market is up today. Further proof you should own a little of both because it's all about asset allocation.
by A Raymond Randall
Welcome To The World Of Investment
The word Investment is very commonly used nowadays. But to understand it accurately you should know that Investment is an act or contract that obtains or increases enduring economic links with an existing institution or one that has to be formed.
Everyone knows that in todays era Investment is important. But, how do you know the correct Investment moves that could be right for your personal needs and goals.
The concept of Investment
A good Investment can be a well-coordinated suit and sports jacket for some or may be buying a piece of land or may mean anything to any person. But Investment is a term with several closely related meanings in finance and economics, related to saving or deferring consumption.
An asset is typically purchased, or similarly a deposit is made in a bank, in hopes of getting a future return or interest from it. Literally, the word Investment means the action of putting something in to somewhere else.
The most important exception for the purpose of investment is the acquisition of interest in land, which is governed by both statutory and customary law. The judiciary that comprises both the lower courts and the superior court.
The major difference within the use of the term investment in economics and finance is that economists are known usually as referring to a real Investment. Case in point a machine or a house but financial economists typically refer to a financial asset money that is put into a bank or the market which can then be new to buy a real asset.
The world of Investment can seem to be mind-boggling for a beginning investor and the amount of information required to be consumed can appear daunting. So how does one decide what kind of security to invest in?
Considering the point, would you choose stocks, bonds or some combination of investments? Or could you invest in mutual funds? How do you choose a particular fund, stock or bond? How do you assess the risk to your money? Well! Seems confusing right.
Undoubtedly, the most commonly new Investment service is buying and selling stocks. Since only licensed brokers are allowed to trade stocks, an individual who wants to buy or sell a stock is required to work through a broker.
Individual brokers work for financial services companies known as brokerage houses. In general for Investment purposes, there are two main types of brokerages, the most commonly known full service broker and the more recently developed discount broker.
Since prices of things are rising, doesn't it make sense to enjoy now rather than save and consume later when we will obtain less for the same money?
Yes, if we are going to keep money under the carpet.
No, if we are going to do proper Investment and the rate of interest is higher than inflation rate. So if inflation is 5% and we obtain 8% return, the money successfully grows 3%. Hence a year later, we will enjoy more than what we would enjoy in most cases, if you or someone that understands and has expert knowledge spent now.
This is the concept of delayed gratification a type of Investment thought of for the future. Usually taxes are the biggest expense. But you could also watch out for loads in mutual funds, any fee you pay to your Investment advisor, subscription to Investment magazines, demat your Investment account charges.
In most cases, if you or someone that understands and has expert knowledge are investing one lakh a year and its most important to understand if you are paying 5000 as a fee to your advisor and its much more important to understand if you are successfully paying 5% entry load, your chances of this portfolio beating a well diversified AAP, compliant portfolio over the long term is almost nil.
What could you prefer: Rs 10,000 right now or Rs 10,000 five years from now?
Common sense tells us that we could take Rs 10,000 today because we know that there is a sure time value of money. The Rs 10,000 received now provides us with a better chance to put it to work immediately and earn a sure return on it.
A single rupee today is worth more than a single rupee Investment a few years down the line. Given this, households that have surplus funds highlight within the form of savings want to have Investment in those funds so that the value of the funds over the years does not go down.
There are various forms of Investment at the availability of people. These include real assets like a house, an auto, a television, or financial assets like stocks in companies, bonds, units of funds, et cetera.
Traditionally, term deposits in banks, post office savings schemes, bonds and common stocks are the most accessible forms of Investment available to the investors. Term deposits, post office savings schemes and bonds give a fixed return over a period of time.
Investors would usually want their Investment in an asset, which gives them maximum return on their Investment. However, life is not as simple as that. Different assets come with different risk profiles. So choose correctly.
by William Smith
Everyone knows that in todays era Investment is important. But, how do you know the correct Investment moves that could be right for your personal needs and goals.
The concept of Investment
A good Investment can be a well-coordinated suit and sports jacket for some or may be buying a piece of land or may mean anything to any person. But Investment is a term with several closely related meanings in finance and economics, related to saving or deferring consumption.
An asset is typically purchased, or similarly a deposit is made in a bank, in hopes of getting a future return or interest from it. Literally, the word Investment means the action of putting something in to somewhere else.
The most important exception for the purpose of investment is the acquisition of interest in land, which is governed by both statutory and customary law. The judiciary that comprises both the lower courts and the superior court.
The major difference within the use of the term investment in economics and finance is that economists are known usually as referring to a real Investment. Case in point a machine or a house but financial economists typically refer to a financial asset money that is put into a bank or the market which can then be new to buy a real asset.
The world of Investment can seem to be mind-boggling for a beginning investor and the amount of information required to be consumed can appear daunting. So how does one decide what kind of security to invest in?
Considering the point, would you choose stocks, bonds or some combination of investments? Or could you invest in mutual funds? How do you choose a particular fund, stock or bond? How do you assess the risk to your money? Well! Seems confusing right.
Undoubtedly, the most commonly new Investment service is buying and selling stocks. Since only licensed brokers are allowed to trade stocks, an individual who wants to buy or sell a stock is required to work through a broker.
Individual brokers work for financial services companies known as brokerage houses. In general for Investment purposes, there are two main types of brokerages, the most commonly known full service broker and the more recently developed discount broker.
Since prices of things are rising, doesn't it make sense to enjoy now rather than save and consume later when we will obtain less for the same money?
Yes, if we are going to keep money under the carpet.
No, if we are going to do proper Investment and the rate of interest is higher than inflation rate. So if inflation is 5% and we obtain 8% return, the money successfully grows 3%. Hence a year later, we will enjoy more than what we would enjoy in most cases, if you or someone that understands and has expert knowledge spent now.
This is the concept of delayed gratification a type of Investment thought of for the future. Usually taxes are the biggest expense. But you could also watch out for loads in mutual funds, any fee you pay to your Investment advisor, subscription to Investment magazines, demat your Investment account charges.
In most cases, if you or someone that understands and has expert knowledge are investing one lakh a year and its most important to understand if you are paying 5000 as a fee to your advisor and its much more important to understand if you are successfully paying 5% entry load, your chances of this portfolio beating a well diversified AAP, compliant portfolio over the long term is almost nil.
What could you prefer: Rs 10,000 right now or Rs 10,000 five years from now?
Common sense tells us that we could take Rs 10,000 today because we know that there is a sure time value of money. The Rs 10,000 received now provides us with a better chance to put it to work immediately and earn a sure return on it.
A single rupee today is worth more than a single rupee Investment a few years down the line. Given this, households that have surplus funds highlight within the form of savings want to have Investment in those funds so that the value of the funds over the years does not go down.
There are various forms of Investment at the availability of people. These include real assets like a house, an auto, a television, or financial assets like stocks in companies, bonds, units of funds, et cetera.
Traditionally, term deposits in banks, post office savings schemes, bonds and common stocks are the most accessible forms of Investment available to the investors. Term deposits, post office savings schemes and bonds give a fixed return over a period of time.
Investors would usually want their Investment in an asset, which gives them maximum return on their Investment. However, life is not as simple as that. Different assets come with different risk profiles. So choose correctly.
by William Smith
Tuesday, December 05, 2006
The Gap Stock Trading Technique
My trading style consist of one search everyday after the markets are closed. I do a search of stocks that increased a minimum of 500% + above the average trading volume. From there I only look at the ones that were positive for the day. Then I check the charts of these stocks to see if they gapped up for the day. The gap up has to be bascially an all time high or a few years all time high. It is better if there is a base prior to these gaps. If it is uptrending that is ok. Then I check the news once I narrowed it down to see if there was postive related news. There must be positive related news. The news must be better than expected, highest quarterly earnings, or anything similar. That is it in a nutshell folks. Usually, I start the day with about 50-70 stocks. Then it is narrowed down to 30 or so. Finally, after reviewing the charts I get anything from 0-4 that made the cut. Most days I recieve 0, which is fine because on the days I find something it is all good.
Buying and Holding:
If there is one I like and would buy; I try to put an order in for the next day. How long do I hold these stocks when I buy. I hold for a little as 5 weeks, but I'm seeing better returns in about 10 weeks. Once in a stock I watch it to see if it can hold a 10 DMA line. I won't sell unless it goes below the 50 DMA or if it goes down to fill the gap. Even if it is at the 50 DMA and I have some gain I'll hold till I find the next stock I think will be a winner.
----------------------
My Trading Technique
Although there are many different trading styles and techniques that have been used to great effect by many different ( sometimes very rich) traders, it is not really a good idea to keep on trying out different techniques for different stocks and just hope that "if it worked for them, it will work for me". To make a system successful you need to know what you are doing. I do not mean that you need to understand it as it is written by the person that is giving you the information. I could easily red Bill Gates's story about how he had an idea and thought that it would work. I could follow every step that he did and make all of the same decisions, but would I make the same kind of profit that he has? I think that (although it is a nice idea), I would be lucky to break even. But why can I not replicate his success? Because the market conditions are different and what will work has changed.
But even in the financial markets, just because someone has had success with a system, that does not mean that the same system will make you the same money. Although it sounds as though this should be possible, the facts do not bear it out. If it was this easy then everyone that read Warren Buffets book and applied it in the way that he does, would make the same amount of money. The reason that they do not is not the fault of the system, but of the choices that people make when they use the system and their reaction to the conditions that are prevailing in the market at the time. Most of the well known trading systems are well tried and work well. That is the reason that they are well known. After all if they did not work then no one would bother with them. But it does show you that there are many ways (with apologies to those of you with pets!), to skin a cat. The reason that different traders are successful with different systems is because they have learned how to make a system work for them.
The trading system that I use is not complicated and if you learn it well and how you can use it in reaction to market changes, then you can use it to make a great deal of money. It is a very simple system and because of that, there is less room for error. But you still need to get to know it and how it works, so that you are able to read the markets with these tools so you make the right choices.
The system uses a search of the days trading as it's basis. Each day you need to make a search of the days trading and the stocks that have had the best increases. You need to do this after that market are closed so that you get a consistency of results that are not affected by the trading that happens after you have looked the stocks, when you are still researching others. So wait until the markets are closed and then start your research and then all of your results will be consistent.
You need to do a search for stocks that grained at least 500% above the average trading volume of the rest of the market. Do not look at the stocks that were just under this or were close to it. Just look at the stocks that were 500% above the trading volume average. This will mean that you can get a good consistent result that you can analyze. From the stocks that you find, just look at the ones that were positive for that day. Make sure that you follow this carefully. If there is a stock that looks good, but does not fulfill this criteria then do not do not use it. If you are going to follow a system, then you need to follow it properly to make sure that it works and that you are not changing it by adding things that may affect the final answer.
You also need to check the variables to see if they gapped up for the day. You make sure that this is not just a one day thing you need to check that this is an all time high. This will make sure that you are on the right track. Even if it is not then you might still be able to use it but you need to make sure that it is a definitive movement and is not just a market shift that will get set back the next day. You need to make sure that the move is fundamental. If it is not an all time high then you should make sure that it is the best that it has been for a few years. You need to make sure that the move is positive, so it is much better for these purposes if there is actually a good base to the stock before any of these gaps occurred. And if the turn is upward, then that is also a good indicator.
Next you need to do some research to make sure that the result that you have found is actually real and that there is a good basis for the change in the values and that the are not going to suddenly drop. The best way to do this is by checking the news about the stock. This is a good way to find out if there is a reason for the move and to work out if it is likely to continue the trend or not. You need to find some positive news about the stock to justify the price, so that you know that it is not just a blip. You need to find something that is positive, such as better than expected earnings. Any good news that might mean that the price rise is consistent with an actual increase in the real, or perceived, value of the stock.
That is really the basis of this system of trading. It is simple to learn, but very effective as there are few things that even a beginner can get wrong. The trick is to learn the best places that you can do your research accurately. If you find a stock that fulfill the criteria on the figures but is not bourne out by the news then leave it. There is always another that will. Usually The day begins with around 50-70m stocks, but as you begin to use the system you will find that this is reduced to around 30 or so. When you review the charts and make all of the decisions dispassionately and based on the system, you usually end up with nothing.
This is not a problem if you are not left with anything at all. You are not doing this to buy for the sake of it and if there is no stocks that are suitable then you need to wait until there are. Do not think of it as a lack of profit, think of it as a good way of avoiding loss. And when you do find a potential profit maker, then you will know that there is a good reason to buy and that you are very likely to make a profit.
When find something that is good, then you should try to buy as soon as you are able to. If it is possible, then you should try to put in an order for it the very next day so that you do not miss out on any profit. When you buy you need to make sure that you only keep them for as long as it is profitable to do so. Very often you can hold on to them for as little as 5 weeks. But very often it is better you take a bit longer than this to make sure that you get the most from it. Do not try to go for the quick profit when, by delaying a bit, you might make a lot more. Very often you need around 10 weeks to make sure of a good profit.
A good indicator of this is if the stocks able to keep a 10 DMA line. It is not usually a good idea to sell unless it goes below a 50 DMA line. But if it reduces to fill the gap then that may be good. But even if the stock is at 50 DMA and there is already some profit in it, then it might be a good idea to keep it until you find the next stock that looks profitable according to the system.
This system is a very simple way to find the best profitable stocks and to make sure you avoid the potential loss makers. But if you decide to use this system then you need to make sure that you follow it well and do not allow you own opinions to cloud your view of what are the best stocks to buy. That way you will be more likely to make a good, consistent profit.
By: John Smith
Buying and Holding:
If there is one I like and would buy; I try to put an order in for the next day. How long do I hold these stocks when I buy. I hold for a little as 5 weeks, but I'm seeing better returns in about 10 weeks. Once in a stock I watch it to see if it can hold a 10 DMA line. I won't sell unless it goes below the 50 DMA or if it goes down to fill the gap. Even if it is at the 50 DMA and I have some gain I'll hold till I find the next stock I think will be a winner.
----------------------
My Trading Technique
Although there are many different trading styles and techniques that have been used to great effect by many different ( sometimes very rich) traders, it is not really a good idea to keep on trying out different techniques for different stocks and just hope that "if it worked for them, it will work for me". To make a system successful you need to know what you are doing. I do not mean that you need to understand it as it is written by the person that is giving you the information. I could easily red Bill Gates's story about how he had an idea and thought that it would work. I could follow every step that he did and make all of the same decisions, but would I make the same kind of profit that he has? I think that (although it is a nice idea), I would be lucky to break even. But why can I not replicate his success? Because the market conditions are different and what will work has changed.
But even in the financial markets, just because someone has had success with a system, that does not mean that the same system will make you the same money. Although it sounds as though this should be possible, the facts do not bear it out. If it was this easy then everyone that read Warren Buffets book and applied it in the way that he does, would make the same amount of money. The reason that they do not is not the fault of the system, but of the choices that people make when they use the system and their reaction to the conditions that are prevailing in the market at the time. Most of the well known trading systems are well tried and work well. That is the reason that they are well known. After all if they did not work then no one would bother with them. But it does show you that there are many ways (with apologies to those of you with pets!), to skin a cat. The reason that different traders are successful with different systems is because they have learned how to make a system work for them.
The trading system that I use is not complicated and if you learn it well and how you can use it in reaction to market changes, then you can use it to make a great deal of money. It is a very simple system and because of that, there is less room for error. But you still need to get to know it and how it works, so that you are able to read the markets with these tools so you make the right choices.
The system uses a search of the days trading as it's basis. Each day you need to make a search of the days trading and the stocks that have had the best increases. You need to do this after that market are closed so that you get a consistency of results that are not affected by the trading that happens after you have looked the stocks, when you are still researching others. So wait until the markets are closed and then start your research and then all of your results will be consistent.
You need to do a search for stocks that grained at least 500% above the average trading volume of the rest of the market. Do not look at the stocks that were just under this or were close to it. Just look at the stocks that were 500% above the trading volume average. This will mean that you can get a good consistent result that you can analyze. From the stocks that you find, just look at the ones that were positive for that day. Make sure that you follow this carefully. If there is a stock that looks good, but does not fulfill this criteria then do not do not use it. If you are going to follow a system, then you need to follow it properly to make sure that it works and that you are not changing it by adding things that may affect the final answer.
You also need to check the variables to see if they gapped up for the day. You make sure that this is not just a one day thing you need to check that this is an all time high. This will make sure that you are on the right track. Even if it is not then you might still be able to use it but you need to make sure that it is a definitive movement and is not just a market shift that will get set back the next day. You need to make sure that the move is fundamental. If it is not an all time high then you should make sure that it is the best that it has been for a few years. You need to make sure that the move is positive, so it is much better for these purposes if there is actually a good base to the stock before any of these gaps occurred. And if the turn is upward, then that is also a good indicator.
Next you need to do some research to make sure that the result that you have found is actually real and that there is a good basis for the change in the values and that the are not going to suddenly drop. The best way to do this is by checking the news about the stock. This is a good way to find out if there is a reason for the move and to work out if it is likely to continue the trend or not. You need to find some positive news about the stock to justify the price, so that you know that it is not just a blip. You need to find something that is positive, such as better than expected earnings. Any good news that might mean that the price rise is consistent with an actual increase in the real, or perceived, value of the stock.
That is really the basis of this system of trading. It is simple to learn, but very effective as there are few things that even a beginner can get wrong. The trick is to learn the best places that you can do your research accurately. If you find a stock that fulfill the criteria on the figures but is not bourne out by the news then leave it. There is always another that will. Usually The day begins with around 50-70m stocks, but as you begin to use the system you will find that this is reduced to around 30 or so. When you review the charts and make all of the decisions dispassionately and based on the system, you usually end up with nothing.
This is not a problem if you are not left with anything at all. You are not doing this to buy for the sake of it and if there is no stocks that are suitable then you need to wait until there are. Do not think of it as a lack of profit, think of it as a good way of avoiding loss. And when you do find a potential profit maker, then you will know that there is a good reason to buy and that you are very likely to make a profit.
When find something that is good, then you should try to buy as soon as you are able to. If it is possible, then you should try to put in an order for it the very next day so that you do not miss out on any profit. When you buy you need to make sure that you only keep them for as long as it is profitable to do so. Very often you can hold on to them for as little as 5 weeks. But very often it is better you take a bit longer than this to make sure that you get the most from it. Do not try to go for the quick profit when, by delaying a bit, you might make a lot more. Very often you need around 10 weeks to make sure of a good profit.
A good indicator of this is if the stocks able to keep a 10 DMA line. It is not usually a good idea to sell unless it goes below a 50 DMA line. But if it reduces to fill the gap then that may be good. But even if the stock is at 50 DMA and there is already some profit in it, then it might be a good idea to keep it until you find the next stock that looks profitable according to the system.
This system is a very simple way to find the best profitable stocks and to make sure you avoid the potential loss makers. But if you decide to use this system then you need to make sure that you follow it well and do not allow you own opinions to cloud your view of what are the best stocks to buy. That way you will be more likely to make a good, consistent profit.
By: John Smith
The 5 Worst Stock Investment Strategies
Most investors approach the stock market with the wrong frame of mind. But it's not their fault. They've been conditioned to follow investment strategies that simply lead them in the wrong direction towards financial disaster.
So to prevent YOU from making the same mistakes, I'm going to lay out all the horrible investment strategies for you so that you don't make the same mistakes as everyone else, and start on the correct path to wealth in the market.
You're Not Going to Get Rich Quick
Nearly all beginning investors, along with a great number of "veterans," have the mentality that they're going to strike it rich. Well that's great, that's optimistic, but they expect it to happen right away. This is probably the worst investment strategy you can have…because it isn't an investment strategy!
They're assuming that they can beat the system and crack the code of the stock market that investors have been struggling to find for years! The tortoise is going to runs laps around the hare in this one, guys. What you need to do is develop an investment strategy that can work for you over the long run.
Don't Gamble
The majority of investors don't know when to buy low and sell high. This is one of the basics, but people continue to follow hot "investment strategies" and "trends" to strike it rich. In gambling, it's not about the big take. Good poker players, for example, make the most with their good hands and lose the least with their bad ones. Here's an investment strategy: play big, but play smart.
What's So Great About Your "Insider" Tip?
So many investment strategies are abandoned for the "insider tip" that guarantees millions. But here are some questions to think about…How many people have heard this tip before you? Has the investment strategy been circulating for long? And who did you hear it from? If this insider information was given to you by a friend instead of a listed company director, you're not going to have that great of an edge. If this hot and quick investment strategy has been around for a while…it's not going to be very quick any more and has probably lost its magic.
The Suicidal "Set and Forget" Investment Strategy
Holding onto your stocks for extended periods of time is just going to bring trouble. Stashing stocks away so that they can grow and mature into some rewarding fund later in life is NOT going to bring profit. There are too many things that can go wrong, with the company or the actual market, to create beneficial odds for yourself by using this old investment strategy.
Do You Really Know When to Buy or Sell?
Not knowing what to do, being unsure of yourself, and investing blindly will kick you out of the market before you know what hit you. This is an information age. There are investment strategies, techniques, and dozens of ways to analyze EVERYTHING. Use them. Study up. Don't just sit there with your eyes closed making the best guess you can come up with. Create an investment strategy that works for you. Stay on top of your game and more importantly…your money.
Joe Harris provides all the proven stock market investing tools you need to succeed today, including investments in the gold market. For details visit his site:
Stock Investing
By Joseph Harris
So to prevent YOU from making the same mistakes, I'm going to lay out all the horrible investment strategies for you so that you don't make the same mistakes as everyone else, and start on the correct path to wealth in the market.
You're Not Going to Get Rich Quick
Nearly all beginning investors, along with a great number of "veterans," have the mentality that they're going to strike it rich. Well that's great, that's optimistic, but they expect it to happen right away. This is probably the worst investment strategy you can have…because it isn't an investment strategy!
They're assuming that they can beat the system and crack the code of the stock market that investors have been struggling to find for years! The tortoise is going to runs laps around the hare in this one, guys. What you need to do is develop an investment strategy that can work for you over the long run.
Don't Gamble
The majority of investors don't know when to buy low and sell high. This is one of the basics, but people continue to follow hot "investment strategies" and "trends" to strike it rich. In gambling, it's not about the big take. Good poker players, for example, make the most with their good hands and lose the least with their bad ones. Here's an investment strategy: play big, but play smart.
What's So Great About Your "Insider" Tip?
So many investment strategies are abandoned for the "insider tip" that guarantees millions. But here are some questions to think about…How many people have heard this tip before you? Has the investment strategy been circulating for long? And who did you hear it from? If this insider information was given to you by a friend instead of a listed company director, you're not going to have that great of an edge. If this hot and quick investment strategy has been around for a while…it's not going to be very quick any more and has probably lost its magic.
The Suicidal "Set and Forget" Investment Strategy
Holding onto your stocks for extended periods of time is just going to bring trouble. Stashing stocks away so that they can grow and mature into some rewarding fund later in life is NOT going to bring profit. There are too many things that can go wrong, with the company or the actual market, to create beneficial odds for yourself by using this old investment strategy.
Do You Really Know When to Buy or Sell?
Not knowing what to do, being unsure of yourself, and investing blindly will kick you out of the market before you know what hit you. This is an information age. There are investment strategies, techniques, and dozens of ways to analyze EVERYTHING. Use them. Study up. Don't just sit there with your eyes closed making the best guess you can come up with. Create an investment strategy that works for you. Stay on top of your game and more importantly…your money.
Joe Harris provides all the proven stock market investing tools you need to succeed today, including investments in the gold market. For details visit his site:
Stock Investing
By Joseph Harris
Tuesday, November 21, 2006
How to Choose a Forex Broker
The decision of which brokerage firm is best for you is as important in the Forex market as it is in the Stock Market. The way of evaluating the various firms differs slightly between the two markets, however.
Forex trades do not involve commissions, but they do have what are known as spreads, which is the difference between the price a currency can be purchased and the price for which it can be sold at a given point in time. This spread (which is expressed in "pips") is how the brokerage makes its money, so it serves the same purpose for them as a commission. You can be pretty certain that the spreads vary between brokerage firms just as widely as commissions do in the Stock Market, so investigate this carefully before making your selection.
Most brokerages dealing with the Forex market are involved with large financial institutions where the funds are available to provide sufficient leverage for their clients. It is still important to make sure your firm is reliable. They should be registered as a FCM (Futures Commission Merchant), and regulated by the CFTC (Commodity Futures Trading Commission).
Most firms offer widely varied packages of tools that assist you in making trading decisions and understanding the market better. They provide information and research that is available to you in many different formats. It is wise to take a little time to study these tools, and to find the ones that are most helpful to you. They are going to end up being very important and you need to be comfortable with them.
Look for a firm with a wide variety of account and leverage options. The ability to use the Forex market's advantages in leverage is one of the things that makes it the most attractive to you as an investor, and you want to have the maximum flexibility here. Although there are a few unethical firms operating, a few references and inquires should be able to identify them. This selection process is worth a little effort and an investment of time. It is an investment that is going to the most likely to pay off.
by John Chen
Forex trades do not involve commissions, but they do have what are known as spreads, which is the difference between the price a currency can be purchased and the price for which it can be sold at a given point in time. This spread (which is expressed in "pips") is how the brokerage makes its money, so it serves the same purpose for them as a commission. You can be pretty certain that the spreads vary between brokerage firms just as widely as commissions do in the Stock Market, so investigate this carefully before making your selection.
Most brokerages dealing with the Forex market are involved with large financial institutions where the funds are available to provide sufficient leverage for their clients. It is still important to make sure your firm is reliable. They should be registered as a FCM (Futures Commission Merchant), and regulated by the CFTC (Commodity Futures Trading Commission).
Most firms offer widely varied packages of tools that assist you in making trading decisions and understanding the market better. They provide information and research that is available to you in many different formats. It is wise to take a little time to study these tools, and to find the ones that are most helpful to you. They are going to end up being very important and you need to be comfortable with them.
Look for a firm with a wide variety of account and leverage options. The ability to use the Forex market's advantages in leverage is one of the things that makes it the most attractive to you as an investor, and you want to have the maximum flexibility here. Although there are a few unethical firms operating, a few references and inquires should be able to identify them. This selection process is worth a little effort and an investment of time. It is an investment that is going to the most likely to pay off.
by John Chen
The 5 Worst Stock Investment Strategies
Most investors approach the stock market with the wrong frame of mind. But it's not their fault. They've been conditioned to follow investment strategies that simply lead them in the wrong direction towards financial disaster.
So to prevent YOU from making the same mistakes, I'm going to lay out all the horrible investment strategies for you so that you don't make the same mistakes as everyone else, and start on the correct path to wealth in the market.
You're Not Going to Get Rich Quick
Nearly all beginning investors, along with a great number of "veterans," have the mentality that they're going to strike it rich. Well that's great, that's optimistic, but they expect it to happen right away. This is probably the worst investment strategy you can have...because it isn't an investment strategy!
They're assuming that they can beat the system and crack the code of the stock market that investors have been struggling to find for years! The tortoise is going to runs laps around the hare in this one, guys. What you need to do is develop an investment strategy that can work for you over the long run.
Don't Gamble
The majority of investors don't know when to buy low and sell high. This is one of the basics, but people continue to follow hot "investment strategies" and "trends" to strike it rich. In gambling, it's not about the big take. Good poker players, for example, make the most with their good hands and lose the least with their bad ones. Here's an investment strategy: play big, but play smart.
What's So Great About Your "Insider" Tip?
So many investment strategies are abandoned for the "insider tip" that guarantees millions. But here are some questions to think about...How many people have heard this tip before you? Has the investment strategy been circulating for long? And who did you hear it from? If this insider information was given to you by a friend instead of a listed company director, you're not going to have that great of an edge. If this hot and quick investment strategy has been around for a while...it's not going to be very quick any more and has probably lost its magic.
The Suicidal "Set and Forget" Investment Strategy
Holding onto your stocks for extended periods of time is just going to bring trouble. Stashing stocks away so that they can grow and mature into some rewarding fund later in life is NOT going to bring profit. There are too many things that can go wrong, with the company or the actual market, to create beneficial odds for yourself by using this old investment strategy.
Do You Really Know When to Buy or Sell?
Not knowing what to do, being unsure of yourself, and investing blindly will kick you out of the market before you know what hit you. This is an information age. There are investment strategies, techniques, and dozens of ways to analyze EVERYTHING. Use them. Study up. Don't just sit there with your eyes closed making the best guess you can come up with. Create an investment strategy that works for you. Stay on top of your game and more importantly...your money.
by Joe Harris
So to prevent YOU from making the same mistakes, I'm going to lay out all the horrible investment strategies for you so that you don't make the same mistakes as everyone else, and start on the correct path to wealth in the market.
You're Not Going to Get Rich Quick
Nearly all beginning investors, along with a great number of "veterans," have the mentality that they're going to strike it rich. Well that's great, that's optimistic, but they expect it to happen right away. This is probably the worst investment strategy you can have...because it isn't an investment strategy!
They're assuming that they can beat the system and crack the code of the stock market that investors have been struggling to find for years! The tortoise is going to runs laps around the hare in this one, guys. What you need to do is develop an investment strategy that can work for you over the long run.
Don't Gamble
The majority of investors don't know when to buy low and sell high. This is one of the basics, but people continue to follow hot "investment strategies" and "trends" to strike it rich. In gambling, it's not about the big take. Good poker players, for example, make the most with their good hands and lose the least with their bad ones. Here's an investment strategy: play big, but play smart.
What's So Great About Your "Insider" Tip?
So many investment strategies are abandoned for the "insider tip" that guarantees millions. But here are some questions to think about...How many people have heard this tip before you? Has the investment strategy been circulating for long? And who did you hear it from? If this insider information was given to you by a friend instead of a listed company director, you're not going to have that great of an edge. If this hot and quick investment strategy has been around for a while...it's not going to be very quick any more and has probably lost its magic.
The Suicidal "Set and Forget" Investment Strategy
Holding onto your stocks for extended periods of time is just going to bring trouble. Stashing stocks away so that they can grow and mature into some rewarding fund later in life is NOT going to bring profit. There are too many things that can go wrong, with the company or the actual market, to create beneficial odds for yourself by using this old investment strategy.
Do You Really Know When to Buy or Sell?
Not knowing what to do, being unsure of yourself, and investing blindly will kick you out of the market before you know what hit you. This is an information age. There are investment strategies, techniques, and dozens of ways to analyze EVERYTHING. Use them. Study up. Don't just sit there with your eyes closed making the best guess you can come up with. Create an investment strategy that works for you. Stay on top of your game and more importantly...your money.
by Joe Harris
Saturday, November 18, 2006
Investment - Can You Do Without It?
It is hard to imagine if anyone is living without money and it is equally hard to imagine if humans are living without investing in someway or the other. In plain language, investment means the act of investing or laying out money or capital in an enterprise with the expectation of profit. But at the same time the term investment also means money that is invested with an expectation of profit.
Investment is closely related with earning money and employing it to earn more by its virtue of its inherent multiplication factor. It is this character of money (read investment) which drives people invest in various asset types in which they are comfortable with. As a general rule, it is not quite natural for the novice investors to pursue high return investment categories as they perceive the high element of associated risk is beyond their control.
The Big Question: Could You Do Without Investment?The answer is rather simple as everyone from top down has wanted to invest in one asset or the other. The more conventional the asset type is more the investors and thus investment. Let me detail this out for you.
Traditional investments like investment on gold and land have never let down the investors although rate at which they appreciated was below par till recently. But come to think of it; the simplicity of prediction matrix and non volatile nature of their class made them the darlings of one and all.
Current Investment Scenario
The current investment arena is extremely wide and intricately interdependent. The simplest investment by far, the savings account, contributes to the pool which bank draws from, for advancing loans to a variety investors. Thus the return on your investment (savings) is connected to the return the bank expects. Floating rate of interest is one of the manifestations of this interdependence
Investment Options for You
It is impractical to attempt to list out all investment types. However the following are the representative types which apply to all economies.
1. Investment on stocks and securities
2. Investment in money market instruments
3. Investment in mutual funds
4. Investment in ventures
5. Investment in insurance
Speculative Investment
It is difficult to foretell how and why people make investment decisions. Also it is not true that investors play safe every time. Speculating a higher than usual and short term profit is none too unusual tendency with some. Such an investment type is classified as speculative investment. Although it beats logic, it goes by gut feeling of investors. Many stock investment and real estate speculators have made big time money taking tremendous risk.
By NamSing Then
Investment is closely related with earning money and employing it to earn more by its virtue of its inherent multiplication factor. It is this character of money (read investment) which drives people invest in various asset types in which they are comfortable with. As a general rule, it is not quite natural for the novice investors to pursue high return investment categories as they perceive the high element of associated risk is beyond their control.
The Big Question: Could You Do Without Investment?The answer is rather simple as everyone from top down has wanted to invest in one asset or the other. The more conventional the asset type is more the investors and thus investment. Let me detail this out for you.
Traditional investments like investment on gold and land have never let down the investors although rate at which they appreciated was below par till recently. But come to think of it; the simplicity of prediction matrix and non volatile nature of their class made them the darlings of one and all.
Current Investment Scenario
The current investment arena is extremely wide and intricately interdependent. The simplest investment by far, the savings account, contributes to the pool which bank draws from, for advancing loans to a variety investors. Thus the return on your investment (savings) is connected to the return the bank expects. Floating rate of interest is one of the manifestations of this interdependence
Investment Options for You
It is impractical to attempt to list out all investment types. However the following are the representative types which apply to all economies.
1. Investment on stocks and securities
2. Investment in money market instruments
3. Investment in mutual funds
4. Investment in ventures
5. Investment in insurance
Speculative Investment
It is difficult to foretell how and why people make investment decisions. Also it is not true that investors play safe every time. Speculating a higher than usual and short term profit is none too unusual tendency with some. Such an investment type is classified as speculative investment. Although it beats logic, it goes by gut feeling of investors. Many stock investment and real estate speculators have made big time money taking tremendous risk.
By NamSing Then
Thursday, November 16, 2006
Trading Without a Mentor is Like Flying Blind
Bill Gates, the richest man in the world, often talks about his mentor Warren Buffet, who just happens to be the world's most successful investor. It is well documented that Buffet was mentored by famed investor Benjamin Graham who is known as the father of value investing. Many businesses have formal mentor programs as its benefits have been proven over and over. Successful people often mention that a prime reason of their achievement was having a mentor. So, if the Gates and the Buffets of world have mentors, so shouldn't you have one? I would like to suggest that trading without a mentor is like flying blind.
I can imagine the reaction of many readers. They are saying, "That sounds good, but where in the h..... am I, an individual trader, going to find a mentor - smart a...." I can understand that response. If you worked on Wall Street, I imagine that it wouldn't be much of a problem. There you will find many like-minded traders that could be called upon to serve as your mentor, but how about on Main Street? How many successful traders do you know? I know a few who have tried, but I don't know of many that have been able to survive for more than a couple of years. The market is brutal and it takes no prisoners. Also I believe a successful mentorship requires a like-minded trading philosophy. There are some aspects that transcend trading styles, but how much can a day trader learn from a value investor? So, the probabilities of personally knowing a like-mind successful trader that could serve as your mentor are pretty slim.
So, what are your alternatives? If you know Warren Buffet well enough to ask him to be your mentor - you probably wouldn't be reading this article. However, he has written numerous books. So, by studying his works you could develop a rather one-sided mentorship. I am willing to bet that even if you purchased all of his books; he still wouldn't take your phone calls.
I have heard of trading coaches that you can hire. At least since you are paying them, they will take your phone calls - but probably not before 4:30 PM. I can't imagine a trader being distracted during market hours with your problems. Your distraction could cost them much more than they could charge you. I have never looked into such programs, but I would think that they could be valuable.
The ideal trading mentor is probably not practical for most. I have settled for a pseudo-mentor approach. So, what does that mean? I believe that there are three criteria for a trading mentor. He or she must be successful, must have a like trading philosophy and be "somewhat-available." The "somewhat-available" is why I call it a pseudo-mentor relationship.
Over the past 5 or 6 years I have tried to force-fit different trading services into this concept of a pseudo-mentor. It is quite easy to find newsletter writers that claim to be successful. Matter of fact, I have never heard one claim to not be. The beauty of the market is that it is measurable. If the newsletter is claiming to be the greatest thing since sliced bread, it won't take long to determine if they are only blowing smoke. Also like-minded services are easy to find. There are newsletters for day traders, trend traders, momentum traders, fundamental investors, contrarian investors, all styles are covered. The difficulty is availability. Most aren’t available. Most won’t return your emails. Most only want a one-way street. That’s almost like reading Buffet’s books. However, the newsletters are more frequent, weekly or monthly, thus having a higher impact on your daily trading.
To addresses the availability, you can try an online trading room. No, I am not talking about Yahoo message boards. Online trading rooms are legitimate trading services where the leaders exchange ideas and provide assistance to others. It is not like having a personal mentor that is available only for you, but you can bounce ideas off of someone before making the plunge.
For the past two years, I have been using Jack Chan’s trading service that fits between a newsletter and on-line trading room. He provides almost daily updates as well as email support. For me, this is perfect. I don’t need much hand holding, but I do have questions on occasion that he answers quite promptly. These questions are typically quite focused, so he is not going to help you develop a trading philosophy. He is also not a financial advisor so he won’t help with portfolio allocations and such. However, if you are thinking about shorting and his cycle indicators have just turned up – he will advise against doing that.
So, how does Jack stack up versus my three requirements? First, he is successful. I have used his service for two years and can attest to his success. Secondly his trading philosophy is consistent with mine. He is a trend trader and only trades Gold, Oil and Technology stocks. I trade those as well as Base Metals and Water stocks. Finally, he is "somewhat available." His email service serves me well. This is not the classic mentoring relationship, but it beats flying blind.
By Michael Dawson
I can imagine the reaction of many readers. They are saying, "That sounds good, but where in the h..... am I, an individual trader, going to find a mentor - smart a...." I can understand that response. If you worked on Wall Street, I imagine that it wouldn't be much of a problem. There you will find many like-minded traders that could be called upon to serve as your mentor, but how about on Main Street? How many successful traders do you know? I know a few who have tried, but I don't know of many that have been able to survive for more than a couple of years. The market is brutal and it takes no prisoners. Also I believe a successful mentorship requires a like-minded trading philosophy. There are some aspects that transcend trading styles, but how much can a day trader learn from a value investor? So, the probabilities of personally knowing a like-mind successful trader that could serve as your mentor are pretty slim.
So, what are your alternatives? If you know Warren Buffet well enough to ask him to be your mentor - you probably wouldn't be reading this article. However, he has written numerous books. So, by studying his works you could develop a rather one-sided mentorship. I am willing to bet that even if you purchased all of his books; he still wouldn't take your phone calls.
I have heard of trading coaches that you can hire. At least since you are paying them, they will take your phone calls - but probably not before 4:30 PM. I can't imagine a trader being distracted during market hours with your problems. Your distraction could cost them much more than they could charge you. I have never looked into such programs, but I would think that they could be valuable.
The ideal trading mentor is probably not practical for most. I have settled for a pseudo-mentor approach. So, what does that mean? I believe that there are three criteria for a trading mentor. He or she must be successful, must have a like trading philosophy and be "somewhat-available." The "somewhat-available" is why I call it a pseudo-mentor relationship.
Over the past 5 or 6 years I have tried to force-fit different trading services into this concept of a pseudo-mentor. It is quite easy to find newsletter writers that claim to be successful. Matter of fact, I have never heard one claim to not be. The beauty of the market is that it is measurable. If the newsletter is claiming to be the greatest thing since sliced bread, it won't take long to determine if they are only blowing smoke. Also like-minded services are easy to find. There are newsletters for day traders, trend traders, momentum traders, fundamental investors, contrarian investors, all styles are covered. The difficulty is availability. Most aren’t available. Most won’t return your emails. Most only want a one-way street. That’s almost like reading Buffet’s books. However, the newsletters are more frequent, weekly or monthly, thus having a higher impact on your daily trading.
To addresses the availability, you can try an online trading room. No, I am not talking about Yahoo message boards. Online trading rooms are legitimate trading services where the leaders exchange ideas and provide assistance to others. It is not like having a personal mentor that is available only for you, but you can bounce ideas off of someone before making the plunge.
For the past two years, I have been using Jack Chan’s trading service that fits between a newsletter and on-line trading room. He provides almost daily updates as well as email support. For me, this is perfect. I don’t need much hand holding, but I do have questions on occasion that he answers quite promptly. These questions are typically quite focused, so he is not going to help you develop a trading philosophy. He is also not a financial advisor so he won’t help with portfolio allocations and such. However, if you are thinking about shorting and his cycle indicators have just turned up – he will advise against doing that.
So, how does Jack stack up versus my three requirements? First, he is successful. I have used his service for two years and can attest to his success. Secondly his trading philosophy is consistent with mine. He is a trend trader and only trades Gold, Oil and Technology stocks. I trade those as well as Base Metals and Water stocks. Finally, he is "somewhat available." His email service serves me well. This is not the classic mentoring relationship, but it beats flying blind.
By Michael Dawson
Tuesday, November 14, 2006
Forex? What is it Anyway?
The currency trading (FOREX) market is the biggest and the fastest growing market on earth. Its daily turnover is more than 2.5 trillion dollars, which is 100 times greater than the NASDAQ daily turnover.
Markets are places to trade goods. The same goes with FOREX. The Forex goods (or merchandise) are the currencies of various countries. You buy Euro, paying with US dollars, or you sell Japanese Yens for Canadian dollars. That's all.
How does one profit in Forex?
Very simple and obvious: buy cheap and sell for more! The profit is generated from the fluctuations (changes) in the currency exchange market.
The nice thing about the FOREX market, is that regular daily fluctuations, say - around 1%, are multiplied by 100! (in general, Easy-Forex™ offers trading ratios from 1:50 to 1:200). If, for example, the exchange rate of "your" pair of currencies increased by 0.6% in the last 4 hours, your profit will be 60% on your investment! Such can happen in one business day, or in a few hours, even minutes.
Moreover, you cannot lose more than your "margin"! You may profit unlimited amounts, but you never lose more than what you initially risked and invested.
You can implement your choice (the pair of currencies, the volume amount) under any direction to which the market is moving, and yet make profit. It does not matter whether the exchange rate is going up or down: you can always decide to buy Euro and sell dollar, or vice versa - buy dollar and sell Euro. You don't have to physically possess certain currencies in order to perform "buy" or "sell" with them.
How do I start?
Register (Easy-Forex™ offers the simplest and quickest registration process, no obligation); deposit your first trading "margin" amount (credit cards are welcome, only by Easy-Forex™); start trading.
It can't be simpler or easier than that. Need help? We'll provide you with 1-on-1 training and service, as much as necessary (Easy-Forex™ offers real people service, live, in your own language).
How do I trade Forex?
You select the pair of currencies with which you wish to make a Forex deal. You determine the volume (the amount of the deal). You deposit the "margin" (collateral needed to facilitate the deal. Usually - only a very small portion of the whole deal, say: 1% or 1:100).
Before you finally activate the deal, you can still "freeze" it for a few seconds. That enables you to either change the terms, or accept it as is, or altogether regret the whole idea. The "freeze" feature is a unique service by Easy-Forex™.
When your Forex deal is running (you hold an "open position"), you can monitor its status and check scenarios online, whenever you wish. You may change some terms in the deal, or close it (and cash the profit, if any, or minimize the loss, if any). Moreover, Easy-Forex™ lets you determine a "take-profit" rate, with which the deal will close automatically for you, when and if such rate occurs in the market. Meaning: you do not have to stay near your computer when you hold open positions.
Want to know more? Want to get on-line training? Register here (simple, quick, no obligation), we'll be glad to guide you, every step of the way.
by Henry Carlow Jr
Markets are places to trade goods. The same goes with FOREX. The Forex goods (or merchandise) are the currencies of various countries. You buy Euro, paying with US dollars, or you sell Japanese Yens for Canadian dollars. That's all.
How does one profit in Forex?
Very simple and obvious: buy cheap and sell for more! The profit is generated from the fluctuations (changes) in the currency exchange market.
The nice thing about the FOREX market, is that regular daily fluctuations, say - around 1%, are multiplied by 100! (in general, Easy-Forex™ offers trading ratios from 1:50 to 1:200). If, for example, the exchange rate of "your" pair of currencies increased by 0.6% in the last 4 hours, your profit will be 60% on your investment! Such can happen in one business day, or in a few hours, even minutes.
Moreover, you cannot lose more than your "margin"! You may profit unlimited amounts, but you never lose more than what you initially risked and invested.
You can implement your choice (the pair of currencies, the volume amount) under any direction to which the market is moving, and yet make profit. It does not matter whether the exchange rate is going up or down: you can always decide to buy Euro and sell dollar, or vice versa - buy dollar and sell Euro. You don't have to physically possess certain currencies in order to perform "buy" or "sell" with them.
How do I start?
Register (Easy-Forex™ offers the simplest and quickest registration process, no obligation); deposit your first trading "margin" amount (credit cards are welcome, only by Easy-Forex™); start trading.
It can't be simpler or easier than that. Need help? We'll provide you with 1-on-1 training and service, as much as necessary (Easy-Forex™ offers real people service, live, in your own language).
How do I trade Forex?
You select the pair of currencies with which you wish to make a Forex deal. You determine the volume (the amount of the deal). You deposit the "margin" (collateral needed to facilitate the deal. Usually - only a very small portion of the whole deal, say: 1% or 1:100).
Before you finally activate the deal, you can still "freeze" it for a few seconds. That enables you to either change the terms, or accept it as is, or altogether regret the whole idea. The "freeze" feature is a unique service by Easy-Forex™.
When your Forex deal is running (you hold an "open position"), you can monitor its status and check scenarios online, whenever you wish. You may change some terms in the deal, or close it (and cash the profit, if any, or minimize the loss, if any). Moreover, Easy-Forex™ lets you determine a "take-profit" rate, with which the deal will close automatically for you, when and if such rate occurs in the market. Meaning: you do not have to stay near your computer when you hold open positions.
Want to know more? Want to get on-line training? Register here (simple, quick, no obligation), we'll be glad to guide you, every step of the way.
by Henry Carlow Jr
Keys to Trading Success: Know Thyself
This past weekend, I spent several hours perusing some older trading texts and noticed that there were several chapters that applied more today than when they were written decades ago. Those were the chapters dealing with the psychology of trading and the traits make one successful.
Successful trading hinges on your psychology and the bottom line is that if you don't know who you are, nobody else does either. The chances of you becoming a successful trader are pretty remote.
Trading is an occupation where you must be a realist. Dreamers need not apply.
The list of traits that make up a successful trader isn't very long but it is complete. Think about the traders you know. Which ones are successful? Which ones aren't?
The traits that make up successful traders are:
1. They are rugged individualists. I'm not talking about Grizzly Adams here. What I'm talking about here the type of person who stands on their own 2 feet. They don't need a support group behind them giving their self-esteem a boost. 2. They are determined. Successful traders have a strong will. Trading is a difficult business and has a lot of ups and downs. People who lack the will to succeed won't. You must stick it out through the good and the inevitable bad times. 3. They are loners. What I mean by this is that the successful trader doesn't ask for a lot, especially favors. Quiet contemplation is a key to success. They have a job to do and they get it done. Not a lot of fanfare - that type of stuff. 4. Successful traders are avid readers (to a fault). They read everything that they can get their hands on related to trading, investing and current affairs. It doesn't stop there - they also read in a lot of unrelated fields as well. 5. Successful traders are adept analysts. Not in the fundamental or technical sense. They have the ability to step back and analyze their actions. What's going right and wrong? How can I improve? This kind of thinking allows a trader to be pro-active instead of re-active. 6. In the same vein, successful traders are meticulous record keepers. The keep daily trade sheets, daily journals and post trade books. The ability to study past trades (both good and bad) can't be overstated. 7. Successful traders aren't bashful about asking others for their opinions. Gathering information from other sources allows you see the other side of the coin. Perspective matters. In the end, the only opinion that matters is the one belonging to our trader. The decision to make the trade (or not) rests with them and only them. 8. When it comes to talking about trading, successful traders are pretty tight lipped. If they talk about it at all, it's to gain insight into what went wrong and how to fix the problem. I like to pick the brains of other traders. What's working for them? Have they ever encountered what I did wrong and if so, how did they fix it? 9. The final trait that all successful traders have is that the buck stops with them. They accept total responsibility for everything that they do and they never make excuses.
In my lifetime, I've never met a natural born trader. I have met natural born gamblers, but that's a topic for another day. All of the traits that a trader needs to be successful can be learned and acquired with a little effort.
In the end, successful trading is about knowing yourself, pursuing the truth and expecting the best.
by R.A. Christy
Successful trading hinges on your psychology and the bottom line is that if you don't know who you are, nobody else does either. The chances of you becoming a successful trader are pretty remote.
Trading is an occupation where you must be a realist. Dreamers need not apply.
The list of traits that make up a successful trader isn't very long but it is complete. Think about the traders you know. Which ones are successful? Which ones aren't?
The traits that make up successful traders are:
1. They are rugged individualists. I'm not talking about Grizzly Adams here. What I'm talking about here the type of person who stands on their own 2 feet. They don't need a support group behind them giving their self-esteem a boost. 2. They are determined. Successful traders have a strong will. Trading is a difficult business and has a lot of ups and downs. People who lack the will to succeed won't. You must stick it out through the good and the inevitable bad times. 3. They are loners. What I mean by this is that the successful trader doesn't ask for a lot, especially favors. Quiet contemplation is a key to success. They have a job to do and they get it done. Not a lot of fanfare - that type of stuff. 4. Successful traders are avid readers (to a fault). They read everything that they can get their hands on related to trading, investing and current affairs. It doesn't stop there - they also read in a lot of unrelated fields as well. 5. Successful traders are adept analysts. Not in the fundamental or technical sense. They have the ability to step back and analyze their actions. What's going right and wrong? How can I improve? This kind of thinking allows a trader to be pro-active instead of re-active. 6. In the same vein, successful traders are meticulous record keepers. The keep daily trade sheets, daily journals and post trade books. The ability to study past trades (both good and bad) can't be overstated. 7. Successful traders aren't bashful about asking others for their opinions. Gathering information from other sources allows you see the other side of the coin. Perspective matters. In the end, the only opinion that matters is the one belonging to our trader. The decision to make the trade (or not) rests with them and only them. 8. When it comes to talking about trading, successful traders are pretty tight lipped. If they talk about it at all, it's to gain insight into what went wrong and how to fix the problem. I like to pick the brains of other traders. What's working for them? Have they ever encountered what I did wrong and if so, how did they fix it? 9. The final trait that all successful traders have is that the buck stops with them. They accept total responsibility for everything that they do and they never make excuses.
In my lifetime, I've never met a natural born trader. I have met natural born gamblers, but that's a topic for another day. All of the traits that a trader needs to be successful can be learned and acquired with a little effort.
In the end, successful trading is about knowing yourself, pursuing the truth and expecting the best.
by R.A. Christy
Friday, November 10, 2006
Why Choose Forex Trading Over Stocks Trading
Forex trading holds significant differences to stocks trading. Understanding these differences will aid a trader in deciding the right market to enter. Forex trading itself has several advantages over stocks trading and is ideal for the beginner and individual small investors.
1. Low Transaction Costs for Forex Trading. There are no hidden fees for forex brokers as they are not paid by the traditional commission based fees. The fee paid to the forex broker is calculated directly from the trade in the form of the bid ask spread. In forex trading, the spread is the difference in how much you pay for a currency and how much you sell it for. This spread is commonly expressed in "pips" or points.
2. Forex Trading is a 24 Hour Market. Forex trading can be done anytime of the day, the forex market is open for business twenty-four hours a day. This is considered a huge advantage for individual small investors who are just starting out forex trading in their spare time. This allows forex traders to juggle their schedule around their trading opportunities; they can schedule their forex trading when it is convenient for them.
For those of you who are night owls and prefer to trade at 1am, then forex trading is just right for you. Depending on where you stay, there are banks opposite the globe open for you to trade.
3. Fast Trade Execution and High Liquidity in Forex Trading Trading forex means that you are trading in cash. No other form of investment has more liquidity than cash and as such, trades are executed almost instantly. There is no lag time in forex trading.
4. Having Leverage and Margin in Forex Trading One of the significant advantages that forex traders have is the ability to trade on margin. This gives them a huge leverage in their trading and presents the potential for extraordinary profits with relative small investments. Let's take for example; with a forex broker that allows a margin of 100:1, you can buy $100,000 in currency with only a small $1,000 deposit. A word of caution for the uninitiated, leverage can go both ways and may lead to large losses if you are not careful.
5. Forex Trading Requires Only a Small Sample to Study. Stocks trading present thousands upon thousands of stocks to trade. Small and large companies, international companies, newly issued IPOs etc. It is highly impossible to follow them all.
Forex trading, on the other hand, presents only seven major currencies to follow so that you can devote more time to each of them. Many successful forex traders do not even trade in all seven major currencies; they just choose three or four and master them to achieve success in forex trading.
6. No Bear Markets in Forex Trading. In forex trading, since you can trade either short or long, you will be able to make money whether the prices go up or down, that is if your predictions are accurate of course.
7. Forex Market is Not Easily Influenced. The forex market is so amazingly huge that no one individual, bank, fund or government body can influence it for a long period of time. Forex trading is the opposite of stocks trading where one negative television appraisal of a company's stock could possibly send it into a tailspin.
Based on the above advantages, forex trading is a clear winner for the beginner and individual small investors. If you are deciding on a form of trading to enter and master, then forex trading is the choice for you.
by Duncan Lee
1. Low Transaction Costs for Forex Trading. There are no hidden fees for forex brokers as they are not paid by the traditional commission based fees. The fee paid to the forex broker is calculated directly from the trade in the form of the bid ask spread. In forex trading, the spread is the difference in how much you pay for a currency and how much you sell it for. This spread is commonly expressed in "pips" or points.
2. Forex Trading is a 24 Hour Market. Forex trading can be done anytime of the day, the forex market is open for business twenty-four hours a day. This is considered a huge advantage for individual small investors who are just starting out forex trading in their spare time. This allows forex traders to juggle their schedule around their trading opportunities; they can schedule their forex trading when it is convenient for them.
For those of you who are night owls and prefer to trade at 1am, then forex trading is just right for you. Depending on where you stay, there are banks opposite the globe open for you to trade.
3. Fast Trade Execution and High Liquidity in Forex Trading Trading forex means that you are trading in cash. No other form of investment has more liquidity than cash and as such, trades are executed almost instantly. There is no lag time in forex trading.
4. Having Leverage and Margin in Forex Trading One of the significant advantages that forex traders have is the ability to trade on margin. This gives them a huge leverage in their trading and presents the potential for extraordinary profits with relative small investments. Let's take for example; with a forex broker that allows a margin of 100:1, you can buy $100,000 in currency with only a small $1,000 deposit. A word of caution for the uninitiated, leverage can go both ways and may lead to large losses if you are not careful.
5. Forex Trading Requires Only a Small Sample to Study. Stocks trading present thousands upon thousands of stocks to trade. Small and large companies, international companies, newly issued IPOs etc. It is highly impossible to follow them all.
Forex trading, on the other hand, presents only seven major currencies to follow so that you can devote more time to each of them. Many successful forex traders do not even trade in all seven major currencies; they just choose three or four and master them to achieve success in forex trading.
6. No Bear Markets in Forex Trading. In forex trading, since you can trade either short or long, you will be able to make money whether the prices go up or down, that is if your predictions are accurate of course.
7. Forex Market is Not Easily Influenced. The forex market is so amazingly huge that no one individual, bank, fund or government body can influence it for a long period of time. Forex trading is the opposite of stocks trading where one negative television appraisal of a company's stock could possibly send it into a tailspin.
Based on the above advantages, forex trading is a clear winner for the beginner and individual small investors. If you are deciding on a form of trading to enter and master, then forex trading is the choice for you.
by Duncan Lee
Wednesday, November 08, 2006
What All Newbies Should Know About Forex Trading
Over the years, forex trading has rapidly become one of the hottest topics around town as a way for people to invest their money and get rich. But how does a beginner know if forex trading is right for them and that it will be a safe investment? Here are some crucial elements of forex trading that anyone interested should know about even before attempting it.
Forex trading (some call it FX trading), is actually short for foreign exchange trading. Forex trading is quite different from options, commodities or stocks trading. Among the investment realm, it is the easily the largest market in the world and promises huge profits for the brave investors.
Simply put, forex trading is just the selling and buying of currencies between different nations. Unlike commodities or stocks trading, money is not used to purchase a certain commodity or stock. You either lose or make money depending on the exchange rate between a pair of currencies in forex trading.
One of the main differences of forex trading is that the investment is not made in a single company or a band of companies. Forex trading is actually an investment in the economic wellbeing of a country. In forex trading, you are laying a bet that the general economy of one nation will improve with respect to that of another nation.
Let us use an example where you are trading between the US Dollar and the Japanese Yen. Your analysis of the situation appears to indicate an increase in the value of the US Dollar and therefore a rise in its price while the Japanese Yen will drop in value. You then decide to execute a trade to buy US Dollars and sell Japanese Yen. If your analysis is accurate and your predictions come true, then the US dollar will rise in value while the Japanese Yen drops and you will make a profit!
You may now be asking: "Is that all there is to forex trading?" Unfortunately, the truth is it is not as simple as that. Fluctuations in the value of different currencies are incredibly hard to forecast because there are many factors that can contribute to changes in exchange rates. An important aspect to remember in forex trading is that you are always trading in pairs of currencies. You will always be buying one currency and selling another, thus in order to make an accurate prediction, you must look at both nation's economy and not just one of them.
Of course, there is no need to restrict yourself to trading only one pair of currencies in forex trading. The forex market offers dozens of currencies to choose from, but if you are just beginning in forex trading has only started out, it is highly recommended that you trade the seven major currencies first:
USD - US Dollar
GBP - British Pound
EUR - the Euro
CHF - Swiss Franc
JPY - Japanese Yen
CAD - Canadian Dollar
AUD - Australian Dollar
A good advice for individual investors is to concentrate their forex trading on just these seven major currencies. Gaining a strong understanding and knowledge of the economic wellbeing of these countries as well as their currency trends will allow you to become a master of forex trading.
By Duncan Lee
Forex trading (some call it FX trading), is actually short for foreign exchange trading. Forex trading is quite different from options, commodities or stocks trading. Among the investment realm, it is the easily the largest market in the world and promises huge profits for the brave investors.
Simply put, forex trading is just the selling and buying of currencies between different nations. Unlike commodities or stocks trading, money is not used to purchase a certain commodity or stock. You either lose or make money depending on the exchange rate between a pair of currencies in forex trading.
One of the main differences of forex trading is that the investment is not made in a single company or a band of companies. Forex trading is actually an investment in the economic wellbeing of a country. In forex trading, you are laying a bet that the general economy of one nation will improve with respect to that of another nation.
Let us use an example where you are trading between the US Dollar and the Japanese Yen. Your analysis of the situation appears to indicate an increase in the value of the US Dollar and therefore a rise in its price while the Japanese Yen will drop in value. You then decide to execute a trade to buy US Dollars and sell Japanese Yen. If your analysis is accurate and your predictions come true, then the US dollar will rise in value while the Japanese Yen drops and you will make a profit!
You may now be asking: "Is that all there is to forex trading?" Unfortunately, the truth is it is not as simple as that. Fluctuations in the value of different currencies are incredibly hard to forecast because there are many factors that can contribute to changes in exchange rates. An important aspect to remember in forex trading is that you are always trading in pairs of currencies. You will always be buying one currency and selling another, thus in order to make an accurate prediction, you must look at both nation's economy and not just one of them.
Of course, there is no need to restrict yourself to trading only one pair of currencies in forex trading. The forex market offers dozens of currencies to choose from, but if you are just beginning in forex trading has only started out, it is highly recommended that you trade the seven major currencies first:
USD - US Dollar
GBP - British Pound
EUR - the Euro
CHF - Swiss Franc
JPY - Japanese Yen
CAD - Canadian Dollar
AUD - Australian Dollar
A good advice for individual investors is to concentrate their forex trading on just these seven major currencies. Gaining a strong understanding and knowledge of the economic wellbeing of these countries as well as their currency trends will allow you to become a master of forex trading.
By Duncan Lee
Forex trading made simple
The Forex market is a non-stop cash market where currencies of nations are traded, typically via brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets and traders' investments increase or decrease in value based upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events. The investor's goal in Forex trading is to profit from foreign currency movements. Forex trading or currency trading is always done in currency pairs. A problem with Forex trading have been that the platforms where you trade have been very difficult to use and understand, and not really user friendly for new traders. Quite recently however a new platform has seen the light of day that I believe will revolutionize this industry and open Forex trading to millions of new people worldwide. Pip Forex is the easiest, most original way to trade currencies you have ever seen. I believe its revolutionary simplicity will redefine forex trading - finally making forex accessible to anyone willing to take a few risks in order to generate profits. Why is Pip Forex so revolutionary?
Simplicity:
Unlike every other trading platform on the market, if you have 7 minutes to spare, you can learn how to trade currencies with Pip Forex. This unprecedented level of simplicity means that you can take advantage of the potential for profit from the world's most dynamic market more quickly than ever before. Transparency
One of the most revolutionary aspects of Pip Forex reveals itself in the way you trade. Traditionally, forex is traded on "margin". This means that you trade much larger sums than you actually have in your account, which causes confusion and uncertainty - and that has however been eliminated with Pip Forex. With Pip Forex, you decide how much you want to pay for each movement in the markets in real money. This means that if you decide to trade a Pip Price of 10, you are trading USD10 per Pip movement
Originality:
The makers of Pip Forex wanted to create a trading system that was completely unique to the tired world of forex. This originality is central to the success of Pip Forex and is one of key the reasons why people who are serious about making money through trading are turning to Pip Forex instead of traditional forex and spread betting.
by Martin L. Wear
Simplicity:
Unlike every other trading platform on the market, if you have 7 minutes to spare, you can learn how to trade currencies with Pip Forex. This unprecedented level of simplicity means that you can take advantage of the potential for profit from the world's most dynamic market more quickly than ever before. Transparency
One of the most revolutionary aspects of Pip Forex reveals itself in the way you trade. Traditionally, forex is traded on "margin". This means that you trade much larger sums than you actually have in your account, which causes confusion and uncertainty - and that has however been eliminated with Pip Forex. With Pip Forex, you decide how much you want to pay for each movement in the markets in real money. This means that if you decide to trade a Pip Price of 10, you are trading USD10 per Pip movement
Originality:
The makers of Pip Forex wanted to create a trading system that was completely unique to the tired world of forex. This originality is central to the success of Pip Forex and is one of key the reasons why people who are serious about making money through trading are turning to Pip Forex instead of traditional forex and spread betting.
by Martin L. Wear
Saturday, November 04, 2006
How to Minimize Risks in investment
In Today's dynamic economy, a great number of individuals want to use their money to generate income or profit by investing into different activities. But most of these people do not know how to invest wisely; as a result they lose their hard earned money badly.
As every investment involves risk, it is important to learn techniques and strategies that minimize the risk associated with investment. The most effective way of minimizing the risk is diversification. Diversification involves spreading your portfolio over well researched investment opportunities.
There are different ways to diversify your portfolio: Diversify among asset class, Diversify globally, diversify by sector and Diversify by style.
Here is how to diversify your portfolio among three asset classes:
1.Investing in Stock Markets
Stock market involves buying shares in a particular company. When you buy a share, you become a share holder of the company. If the company gets high earning, you receive cash dividends proportional to your initial investment. If the company suffers loses during a year, you may not receive any profit. At the same time, if the company decides to expand its business with its profit, there is a possibility that you may not get your profit for that period.
The best way to invest in stock markets is through Brokerage Company. You pay the purchase of the shares and the commission for the broker's services. Brokers can also sell your stock shares if you are willing to sell your stock.
You can earn large profits over a long period of time. But it involves a risk. Stock values change continually and often very large. As a result you do not have assurance that you will get back your initial investment. A business recession or poor company management may reduce the company earning power. As a result people may not show interest to buy stocks from the company. At this moment, your share value may drop, and if you decide to sell your stock there is a probability of lose.
One way of minimizing risk is buying combination of stocks from different industries. Always avoid investing in single stock.
2.Bonds
Bonds are less volatile as compared to stocks, mostly they provide regular income. If your are more concerned with safety of your investment, it is recommended to allocate more of your portfolio towards US government or insured bond investment rather than stocks.
3.Short Term investment
Short term investment includes money market accounts and Certificate of Deposit. Compared to Stock markets and bonds, they yield small profits. They may also provide little protection against rapid inflation. But these kinds of investments usually offer insured principal.
To summarize, to minimize the risks associated with investment, you should always diversify your portfolio over well researched asset class. It is also important to diversify with in each asset class. Be advised that: the safest investments with the lowest returns are government bonds and certificate of deposits.
by John David
As every investment involves risk, it is important to learn techniques and strategies that minimize the risk associated with investment. The most effective way of minimizing the risk is diversification. Diversification involves spreading your portfolio over well researched investment opportunities.
There are different ways to diversify your portfolio: Diversify among asset class, Diversify globally, diversify by sector and Diversify by style.
Here is how to diversify your portfolio among three asset classes:
1.Investing in Stock Markets
Stock market involves buying shares in a particular company. When you buy a share, you become a share holder of the company. If the company gets high earning, you receive cash dividends proportional to your initial investment. If the company suffers loses during a year, you may not receive any profit. At the same time, if the company decides to expand its business with its profit, there is a possibility that you may not get your profit for that period.
The best way to invest in stock markets is through Brokerage Company. You pay the purchase of the shares and the commission for the broker's services. Brokers can also sell your stock shares if you are willing to sell your stock.
You can earn large profits over a long period of time. But it involves a risk. Stock values change continually and often very large. As a result you do not have assurance that you will get back your initial investment. A business recession or poor company management may reduce the company earning power. As a result people may not show interest to buy stocks from the company. At this moment, your share value may drop, and if you decide to sell your stock there is a probability of lose.
One way of minimizing risk is buying combination of stocks from different industries. Always avoid investing in single stock.
2.Bonds
Bonds are less volatile as compared to stocks, mostly they provide regular income. If your are more concerned with safety of your investment, it is recommended to allocate more of your portfolio towards US government or insured bond investment rather than stocks.
3.Short Term investment
Short term investment includes money market accounts and Certificate of Deposit. Compared to Stock markets and bonds, they yield small profits. They may also provide little protection against rapid inflation. But these kinds of investments usually offer insured principal.
To summarize, to minimize the risks associated with investment, you should always diversify your portfolio over well researched asset class. It is also important to diversify with in each asset class. Be advised that: the safest investments with the lowest returns are government bonds and certificate of deposits.
by John David
Making Your Own Investment Decisions
Most people have a broker that makes all of their investment decisions for them. They rarely even look at their portfolio to see what it contains, and they review their account statements only once per year, because their goal is for their account to grow in the long run.
However, you should not rely on your broker to do everything for you, because most stockbrokers have many clients, and do not pay close enough attention to your account to make the small trades here or there that can really help you maximize your return, or get out of a stock that is weighing down your portfolio so that money can be transferred into something else that would be more remunerative. Simply put, your broker or financial advisor does not make the necessary short-term investment decisions to maximize the performance of your account. You need to become familiar with each stock you have in your portfolio so that you can make decisions on your own in the short-term, while still relying upon your financial advisor to structure your portfolio with a mix of the right instruments (stocks, bonds, money market, etc.) to help you make money in the long run.
To make your own investment decisions, you need to review the most recent balance sheet and income statement for the company, as well as some other important statistics. You can access these reports online on any stock quoting website. Simply enter the ticker symbol for the company you want to evaluate, and then there should be a link to their income statement and balance sheet on that page.
When looking at the balance sheet, compare the assets for the current reporting period to the previous period. Did the assets, such as revenue from sales, increase or decrease? Check the liabilities from the previous period as well. And, you should check whether shareholder equity has increased or decreased. This is important to you as an investor because shareholder equity is the true worth of a company to its shareholders. If the balance sheet does not have shareholder equity listed, simply subtract the total liabilities from the total assets to arrive at the number.
When looking at the income statement, you should look at the earnings figures. The earnings figures are listed at the bottom of the income statement. Have earnings increased or decreased since the previous income statement was issued? If there is a decrease, what is the reason? Is it because the company is struggling, or is it because of some non-recurring expense they had to pay that will not affect their earnings in the future? Earnings are important to you as an investor because a portion of this money is paid out to the shareholders in the form of a dividend.
Next, there are a few statistics that you should evaluate which are also listed on the profile for the company when you look them up online. The two most important statistics to look at are the P/E ratio and the PEG ratio. Typically, you can find these numbers under the statistics section for the company.
The P/E ratio is the price-to-earnings ratio. It is calculated by dividing the price for one share of stock by the earnings per share. Most companies have a P/E ratio between 15 to 25. Some companies trade at P/E ratios as high as 70 or higher, such as Google. If a P/E ratio is very high, the stock might be overvalued, meaning it could come down in price in the future. But, a high P/E ratio often means that the company is expected to grow its sales and earnings significantly in the future, so investors are willing to pay more than the stock is currently worth because the price will be justified in the long run, and the company will be able to pay larger dividends when its earnings increase.
A low P/E ratio could mean that a company is undervalued, meaning that the stock price will likely go up in the future. However, a low P/E ratio could mean that investors are abandoning the stock because future sales and earnings are expected to decrease. When evaluating the P/E ratio, you need to assess the overall situation and future sales expectations in order to properly interpret what the P/E means for you as an investor.
The other important statistic, perhaps more important than the P/E ratio, is the PEG ratio. The PEG is the price-to-earnings growth ratio. It is calculated by dividing the P/E ratio by the annual earnings growth per share. This ratio helps you to ascertain whether the company is growing its earnings enough each year to justify the current price of the stock. If a company is not growing its earnings at all, then the stock will not go up. If the earnings are growing significantly each year, then the price of the stock will rise accordingly. Since earnings growth is the real impetus behind an increase in the price of a stock, the PEG is probably the best tool for evaluating whether the stock has hit the wall or will continue to increase. If the PEG is less than 1, the stock will likely continue to go up. If the PEG is much higher than 1, then the stock might go down. However, a high PEG could mean that a company is expected to grow tremendously in the months and years ahead.
I hope this information will help you make your own investment decisions. Try to set aside some time to review each stock that you have in your portfolio, and then use the procedures outlined in this article to examine the value of the stock. This will help you grow your investments much more in the long run than if you rely solely on your broker or financial advisor to do all the work for you.
by Jim Pretin
However, you should not rely on your broker to do everything for you, because most stockbrokers have many clients, and do not pay close enough attention to your account to make the small trades here or there that can really help you maximize your return, or get out of a stock that is weighing down your portfolio so that money can be transferred into something else that would be more remunerative. Simply put, your broker or financial advisor does not make the necessary short-term investment decisions to maximize the performance of your account. You need to become familiar with each stock you have in your portfolio so that you can make decisions on your own in the short-term, while still relying upon your financial advisor to structure your portfolio with a mix of the right instruments (stocks, bonds, money market, etc.) to help you make money in the long run.
To make your own investment decisions, you need to review the most recent balance sheet and income statement for the company, as well as some other important statistics. You can access these reports online on any stock quoting website. Simply enter the ticker symbol for the company you want to evaluate, and then there should be a link to their income statement and balance sheet on that page.
When looking at the balance sheet, compare the assets for the current reporting period to the previous period. Did the assets, such as revenue from sales, increase or decrease? Check the liabilities from the previous period as well. And, you should check whether shareholder equity has increased or decreased. This is important to you as an investor because shareholder equity is the true worth of a company to its shareholders. If the balance sheet does not have shareholder equity listed, simply subtract the total liabilities from the total assets to arrive at the number.
When looking at the income statement, you should look at the earnings figures. The earnings figures are listed at the bottom of the income statement. Have earnings increased or decreased since the previous income statement was issued? If there is a decrease, what is the reason? Is it because the company is struggling, or is it because of some non-recurring expense they had to pay that will not affect their earnings in the future? Earnings are important to you as an investor because a portion of this money is paid out to the shareholders in the form of a dividend.
Next, there are a few statistics that you should evaluate which are also listed on the profile for the company when you look them up online. The two most important statistics to look at are the P/E ratio and the PEG ratio. Typically, you can find these numbers under the statistics section for the company.
The P/E ratio is the price-to-earnings ratio. It is calculated by dividing the price for one share of stock by the earnings per share. Most companies have a P/E ratio between 15 to 25. Some companies trade at P/E ratios as high as 70 or higher, such as Google. If a P/E ratio is very high, the stock might be overvalued, meaning it could come down in price in the future. But, a high P/E ratio often means that the company is expected to grow its sales and earnings significantly in the future, so investors are willing to pay more than the stock is currently worth because the price will be justified in the long run, and the company will be able to pay larger dividends when its earnings increase.
A low P/E ratio could mean that a company is undervalued, meaning that the stock price will likely go up in the future. However, a low P/E ratio could mean that investors are abandoning the stock because future sales and earnings are expected to decrease. When evaluating the P/E ratio, you need to assess the overall situation and future sales expectations in order to properly interpret what the P/E means for you as an investor.
The other important statistic, perhaps more important than the P/E ratio, is the PEG ratio. The PEG is the price-to-earnings growth ratio. It is calculated by dividing the P/E ratio by the annual earnings growth per share. This ratio helps you to ascertain whether the company is growing its earnings enough each year to justify the current price of the stock. If a company is not growing its earnings at all, then the stock will not go up. If the earnings are growing significantly each year, then the price of the stock will rise accordingly. Since earnings growth is the real impetus behind an increase in the price of a stock, the PEG is probably the best tool for evaluating whether the stock has hit the wall or will continue to increase. If the PEG is less than 1, the stock will likely continue to go up. If the PEG is much higher than 1, then the stock might go down. However, a high PEG could mean that a company is expected to grow tremendously in the months and years ahead.
I hope this information will help you make your own investment decisions. Try to set aside some time to review each stock that you have in your portfolio, and then use the procedures outlined in this article to examine the value of the stock. This will help you grow your investments much more in the long run than if you rely solely on your broker or financial advisor to do all the work for you.
by Jim Pretin
Worldwide Investment Distortions in Stocks, Real Estate Markets
Today an investor needs to be aware of and cautious about the distorted worldwide investment climate that exists thanks to the policies since 2000 of the US Federal Reserve System and the departed chairman Alan Greenspan.
Mr Greenspan thought that the answer to all financial problems was simply to create more money. But not by actually producing more goods and providing services but by the unchecked sheer power of the money creation tools of the magical United States Federal Reserve system. Without going into all of the details in this short article the money was created out of thin air without any backing whatsoever. And not a little of it, enormous liquidity was provided under the chairman's rein.
In fact, Greenspan was essentially giving away money for free as he and the Federal Reserve lowered rates far below the inflation rate. No wonder so many people and corprations took on a boat load and a half of debt.
The unprecedented creation of liquidity in the US financial system attempted to cover up the effects of the towering twin trade and fiscal deficits sustained by the US and to prop up and to enhance the performance of a basically weak economy that in recent years has had its' manufacturing base severely eroded as jobs move overseas or simply vanish.
Only blatant changes made in the economic number reporting statistics, very creative accounting practices, and the enormous artificial expansion of the money supply kept the US economic numbers from looking as they truly are; which are sub par performance levels for the weakest economic recovery on record.
In the short run Mr Greenspan's management of the US money creation machine seemed to have been successful. The real estate market worldwide exploded with "values" reaching sky high levels. Stock markets worldwide benefited from large amounts of the excess liquidity finding its way into stocks.
Home owners were able to extract huge amounts of cash from their homes by refinancing and by taking out home equity loans and then use the proceeds to purchase all manner of consumer goods, thereby boosting the economy.
With borrowed funds so readiliy available and the government encouraging people to go deeper into debt the allocation of capital was seriously mismanaged in the US. Most of the excess liquidity flowed into consumer goods, housing, and stocks instead of expanding the nations productive capacity and repairing crumbling infrastructure.
Unfortunately, the root causes of the US's poor performance with trade and fiscal deficits were not addressed. They are still out of control and are clearly unsustainable. One not so fine day the devil will demand his due. That day is probably not so far away as a number of nations, including Russia and the Chinese have began to slowly adjust their exposure to US dollars. An unexpected financial crisis of any sort could swiftly cause a stampede out of the dollar with unfortunate consequences for investors worldwide.
The big question now is can such bubbles in values that the excess liquidity brought to world investment markets be slowly deflated or we at risk of a sudden collapse of values right across the investment spectrum? The answer to that question is not at all clear as of this date, October 27, 2006.
However, when we look at history, the outlook of returning to the mean of long term investment trends without serious incident is not good. Bubbles have never ended calmly and without pain and a great deal of stress and suffering on many investors and financial institutions.
So what should a prudent investor do? IMHO the best thing is to keep things very simple and come back to cash and gold. Converting inflated assets of all classes of investments to a ratio of cash and gold that you feel comfortable with should put one into great shape for the next ten years or so.
After all you will be selling out at or near all time highs in most markets and at least preserve the wealth that you have accumulated thanks to Alan and company at a time when the investment cycle may suddenly reverse with disastrous results for those greedy folks who decide to go for the final little bit of return.
Being in cash with at least modest holdings in gold as an insurance policy has never been as attractive as it is right now. Forget why the TV talking heads say. They are for the most part overpaid teleprompter readers and actors who will only get you into trouble if you take their always bullish advice.
Remember, that no one in the history of the world ever went broke selling out at or near market highs but plenty of folks have been totally ruined by overstaying markets and then freezing into inaction as values collapse.
Be a good investor and let the other guy get the last buck or two that's on the table. After all, in order for you to liquidate at near all time highs there have to be folks out there who still think that values will increase further from grossly inflated levels.
by Gerald Greene
Mr Greenspan thought that the answer to all financial problems was simply to create more money. But not by actually producing more goods and providing services but by the unchecked sheer power of the money creation tools of the magical United States Federal Reserve system. Without going into all of the details in this short article the money was created out of thin air without any backing whatsoever. And not a little of it, enormous liquidity was provided under the chairman's rein.
In fact, Greenspan was essentially giving away money for free as he and the Federal Reserve lowered rates far below the inflation rate. No wonder so many people and corprations took on a boat load and a half of debt.
The unprecedented creation of liquidity in the US financial system attempted to cover up the effects of the towering twin trade and fiscal deficits sustained by the US and to prop up and to enhance the performance of a basically weak economy that in recent years has had its' manufacturing base severely eroded as jobs move overseas or simply vanish.
Only blatant changes made in the economic number reporting statistics, very creative accounting practices, and the enormous artificial expansion of the money supply kept the US economic numbers from looking as they truly are; which are sub par performance levels for the weakest economic recovery on record.
In the short run Mr Greenspan's management of the US money creation machine seemed to have been successful. The real estate market worldwide exploded with "values" reaching sky high levels. Stock markets worldwide benefited from large amounts of the excess liquidity finding its way into stocks.
Home owners were able to extract huge amounts of cash from their homes by refinancing and by taking out home equity loans and then use the proceeds to purchase all manner of consumer goods, thereby boosting the economy.
With borrowed funds so readiliy available and the government encouraging people to go deeper into debt the allocation of capital was seriously mismanaged in the US. Most of the excess liquidity flowed into consumer goods, housing, and stocks instead of expanding the nations productive capacity and repairing crumbling infrastructure.
Unfortunately, the root causes of the US's poor performance with trade and fiscal deficits were not addressed. They are still out of control and are clearly unsustainable. One not so fine day the devil will demand his due. That day is probably not so far away as a number of nations, including Russia and the Chinese have began to slowly adjust their exposure to US dollars. An unexpected financial crisis of any sort could swiftly cause a stampede out of the dollar with unfortunate consequences for investors worldwide.
The big question now is can such bubbles in values that the excess liquidity brought to world investment markets be slowly deflated or we at risk of a sudden collapse of values right across the investment spectrum? The answer to that question is not at all clear as of this date, October 27, 2006.
However, when we look at history, the outlook of returning to the mean of long term investment trends without serious incident is not good. Bubbles have never ended calmly and without pain and a great deal of stress and suffering on many investors and financial institutions.
So what should a prudent investor do? IMHO the best thing is to keep things very simple and come back to cash and gold. Converting inflated assets of all classes of investments to a ratio of cash and gold that you feel comfortable with should put one into great shape for the next ten years or so.
After all you will be selling out at or near all time highs in most markets and at least preserve the wealth that you have accumulated thanks to Alan and company at a time when the investment cycle may suddenly reverse with disastrous results for those greedy folks who decide to go for the final little bit of return.
Being in cash with at least modest holdings in gold as an insurance policy has never been as attractive as it is right now. Forget why the TV talking heads say. They are for the most part overpaid teleprompter readers and actors who will only get you into trouble if you take their always bullish advice.
Remember, that no one in the history of the world ever went broke selling out at or near market highs but plenty of folks have been totally ruined by overstaying markets and then freezing into inaction as values collapse.
Be a good investor and let the other guy get the last buck or two that's on the table. After all, in order for you to liquidate at near all time highs there have to be folks out there who still think that values will increase further from grossly inflated levels.
by Gerald Greene
Day Trading for a Living - How lucrative it is?
Day Trading for a Living - How lucrative it is?
Have you ever thought about becoming a day trader? Is day trading for a living a lucrative field? What about the risk that is associated with day trading?
If you are at all interested in becoming a day trader and day trading for a living, then read on. There is a lot of information out there for day trading. Everybody has their own formulas and everybody will want to give you advice. Some of this advice will be worth it and some will not.
Let me be the first to give you some advice. Make sure you feel comfortable with your investments and make sure that you trust your gut instinct. Do not risk more money than you can afford to lose, at first, just to be safe. Take your time building up your portfolio and give yourself time to learn the trade.
This is a very lucrative field and there are many millionaires that have made their money by trading stocks, currency, bonds, and investing in mutual funds. The most successful day traders have a strong balance between short term investments and long term investments.
There are a few risks to consider before you start investing. There is always the possibility of losing money, and most successful day traders make mistakes and lose money at some point. It is a numbers game. You have to have strong long term investments that are going to produce nice gains over a 10 year period.
You will also want to have strong short term investments, but allow for some chance and mistake in this area. So what if you lose a few dollars in one short term investment, the next one might be the one that you triple your money on. As long as you come out ahead in the end you will be successful.
by Benjamin Ehinger
Have you ever thought about becoming a day trader? Is day trading for a living a lucrative field? What about the risk that is associated with day trading?
If you are at all interested in becoming a day trader and day trading for a living, then read on. There is a lot of information out there for day trading. Everybody has their own formulas and everybody will want to give you advice. Some of this advice will be worth it and some will not.
Let me be the first to give you some advice. Make sure you feel comfortable with your investments and make sure that you trust your gut instinct. Do not risk more money than you can afford to lose, at first, just to be safe. Take your time building up your portfolio and give yourself time to learn the trade.
This is a very lucrative field and there are many millionaires that have made their money by trading stocks, currency, bonds, and investing in mutual funds. The most successful day traders have a strong balance between short term investments and long term investments.
There are a few risks to consider before you start investing. There is always the possibility of losing money, and most successful day traders make mistakes and lose money at some point. It is a numbers game. You have to have strong long term investments that are going to produce nice gains over a 10 year period.
You will also want to have strong short term investments, but allow for some chance and mistake in this area. So what if you lose a few dollars in one short term investment, the next one might be the one that you triple your money on. As long as you come out ahead in the end you will be successful.
by Benjamin Ehinger
Online electronic day trading - 3 basic tips
Online electronic day trading - 3 basic tips
Are you ready to start day trading online? Online electronic day trading is becoming more and more popular and there is a lot of money to be made day trading. Are you ready to begin trading online and making money? Here are my 3 basic online electronic day trading tips.
Day trading tip #1 - Balance your portfolio.
I know you have probably heard this over and over again. It is very true though. You must have a balanced portfolio. You need to think about the money you are going to be making today and the money you are going to want to make in the long future.
Balance your portfolio by using mutual funds, currency trading, stocks, and bonds. Use both short term and long term investing. It is a good thing to have a few long term investments with large stable companies that split on a regular basis.
Day trading tip #2 - Don't be afraid to take a few chances Most successful day traders have taken a few losses here and there, but they are not afraid to take a chance. Even if you take a loss every once in a while the gains you can experience when you take a chance will outweigh your losses.
Day trading tip #3 - Do your research and know your investments
In order to take chances and make smart investments you should always do full research of the companies you are investing in. Look into their past, present, and their future plans. You need to know what you are investing in and what type of management team the company has.
Use these three tips, that I have given you to start making money day trading. Remember to always be studying the market and the companies you want to invest in. The better you know your investments and possible investments, the better your decisions will be, and the more money you will make.
by Benjamin Ehinger
Thursday, November 02, 2006
Forex (Foreign Currency Exchange Market) has been used by international banks and large investment companies for years to make millions of dollars. Ho
Forex (Foreign Currency Exchange Market) has been used by international banks and large investment companies for years to make millions of dollars. However, with easy access to the Internet, it is now possible for anyone to take advantage of this powerful tool and make money the same way large institutions do, even with minimal startup funds at hand.
Even experienced investors seem mystified by Forex and have very little understanding of it. Forex is not much different from the Stock Market, often the same or similar techniques can be used to trade currency as is used to trade stocks and commodities. What make Forex so mysterious is the lack of available information and opportunities of training.
I have listed 10 good reasons why I prefer Forex to the Stock Market or any other investment option and why any individual, or small investor, should look at getting involved with Forex:
1. A 24 hour market. You don't have to worry about running out of time because the Forex is open 24 hours a day, nearly all week.
2. Huge liquidity. Have you ever got stuck trying to get rid of some stocks or options? With Forex, there are always buyers, thousands of them!
3. No commission on your trading. This is specially important for individuals with small amount of money to invest. When using other investment vehicles the cost of the investment is often prohibitive no matter how attractive the investment itself is. Brokerage and other government fees can easily eat up your profit even before you completed a transaction. With Forex, there are no brokerage, government etc fees involved.
4. Low transaction costs. Typically less than 0.1%!
5. No middleman. The investor is dealing directly with the Market.
6. Instantaneous transactions. Forex is fully computerised and transaction can be completed in as little 2 seconds. The investor does not have to wait for trade confirmation to arrive by email, worst yet, by post. All 'paper-work' is in electronic format, easily viewed, search, analysed.
7. Huge leverage yet low margin. Both increase your profit. In most cases leverage of 10:1 to 100:1 is the rule not the exception.
8. Minimal startup requirements. Again very important for individual or small investors. With Forex it is possible to start trading with as little as $300.00 dollars!
9. Easy access to the Market and your accounts, online, 24/7. Since Forex is completely computerised, anyone with Internet access can trade online and easily access their account and trading history. Most trading platforms allow the user to export this information to other third party software for storage, graphing, analysis etc.
10. No insider trading. Because of the way Forex is 'de-centralised', it is almost impossible for anyone to fraud the system.
I could go on for ever about Forex, it is an amazing tool for investors and also a very exciting opportunity for individuals. I hope you'll catch the fever, too.
Submitted by Ference
Even experienced investors seem mystified by Forex and have very little understanding of it. Forex is not much different from the Stock Market, often the same or similar techniques can be used to trade currency as is used to trade stocks and commodities. What make Forex so mysterious is the lack of available information and opportunities of training.
I have listed 10 good reasons why I prefer Forex to the Stock Market or any other investment option and why any individual, or small investor, should look at getting involved with Forex:
1. A 24 hour market. You don't have to worry about running out of time because the Forex is open 24 hours a day, nearly all week.
2. Huge liquidity. Have you ever got stuck trying to get rid of some stocks or options? With Forex, there are always buyers, thousands of them!
3. No commission on your trading. This is specially important for individuals with small amount of money to invest. When using other investment vehicles the cost of the investment is often prohibitive no matter how attractive the investment itself is. Brokerage and other government fees can easily eat up your profit even before you completed a transaction. With Forex, there are no brokerage, government etc fees involved.
4. Low transaction costs. Typically less than 0.1%!
5. No middleman. The investor is dealing directly with the Market.
6. Instantaneous transactions. Forex is fully computerised and transaction can be completed in as little 2 seconds. The investor does not have to wait for trade confirmation to arrive by email, worst yet, by post. All 'paper-work' is in electronic format, easily viewed, search, analysed.
7. Huge leverage yet low margin. Both increase your profit. In most cases leverage of 10:1 to 100:1 is the rule not the exception.
8. Minimal startup requirements. Again very important for individual or small investors. With Forex it is possible to start trading with as little as $300.00 dollars!
9. Easy access to the Market and your accounts, online, 24/7. Since Forex is completely computerised, anyone with Internet access can trade online and easily access their account and trading history. Most trading platforms allow the user to export this information to other third party software for storage, graphing, analysis etc.
10. No insider trading. Because of the way Forex is 'de-centralised', it is almost impossible for anyone to fraud the system.
I could go on for ever about Forex, it is an amazing tool for investors and also a very exciting opportunity for individuals. I hope you'll catch the fever, too.
Submitted by Ference
Risk Investment Analysis
In a quality investment guide risk assessment, a key principle, will be addressed. If we are to be successful in our investment endeavors and to ensure that we have a portfolio that is going to provide us with consistent rewards we must fully understand risk and how it applies to our personal character as well as our portfolio structure. Risk is something that we deal with in almost every aspect of our life. And we as a society are very aware of risk and do many things to reduce risk in our lives. We will purchase health, auto and life insurance. We make sure that all our children are using seat belts and helmets under certain conditions. We will check out the prospective of a company before submitting a resume. There are many more things I can point out but what is amazing is that a majority of the time when it come to investing we do not complete an investment risk assessment. So many investors fail to identify or measure the risk involved, instead they look for the maximum rewards. In fact this is one of the biggest mistakes that is made by investors both novice and experienced. A portfolio should not be structured around the maximum reward instead it should be structured around the highest amount of reward with the least amount of risk. A portfolio built on a strategy of highest return vs. lowest risk is what leads to a successful portfolio that will help you accomplish your personal investment goals. This is why rather then focus on maximum returns the smart investor focuses on Return vs. Risk. But part of that formulation is also understanding what risk is and knowing what your personal risk tolerance is when structuring your portfolio. Total risk assessment has several variables when undertaking an investment risk analysis of one's portfolio. There is the risk of the asset allocation that we are all aware or heard about but there is also your personal characteristics that are a very important factor as well. How much you can personally afford to lose will not be the same as say your son. Also how much risk you can emotionally tolerate will not be the same as the next individual.
There is a web site that is discussed in Successful Online Portfolio Management that is totally committed to identifying and placing a measurement on investment risk. And the best part about this site is that it is absolutely free. The name of the site is RiskGrades and its URL is "http//:www.RiskGrades.com" it is an absolute must for any investor no matter what hisher investment skills are. Riskmetrics is the term used for providing investors with updated daily risk measurement information for all traded financial assets. And the solutions to your risk characteristics can be solved through utilization of the RiskGrades web site.
The RiskGrades web site contains three very valuable tools that every tool-kit should contain.
1 - A risk management online free e-course that is divided into 3 modules
I- Identifying Risk
II- Measuring Risk
III- Managing Risk
Each module takes about 45 minutes and can be taken online at the RiskGrades web site.
2 - A risk-profile-quiz that will help you understand your own personal risk tolerance. This is a very quick quiz that is also taken online at the RiskGrades web site.
3 - Portfolio risk measurement software that you can use to analyze the risk of your portfolio.
There is a web site that is discussed in Successful Online Portfolio Management that is totally committed to identifying and placing a measurement on investment risk. And the best part about this site is that it is absolutely free. The name of the site is RiskGrades and its URL is "http//:www.RiskGrades.com" it is an absolute must for any investor no matter what hisher investment skills are. Riskmetrics is the term used for providing investors with updated daily risk measurement information for all traded financial assets. And the solutions to your risk characteristics can be solved through utilization of the RiskGrades web site.
The RiskGrades web site contains three very valuable tools that every tool-kit should contain.
1 - A risk management online free e-course that is divided into 3 modules
I- Identifying Risk
II- Measuring Risk
III- Managing Risk
Each module takes about 45 minutes and can be taken online at the RiskGrades web site.
2 - A risk-profile-quiz that will help you understand your own personal risk tolerance. This is a very quick quiz that is also taken online at the RiskGrades web site.
3 - Portfolio risk measurement software that you can use to analyze the risk of your portfolio.
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