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Forex Myths

2008-01-16T08:49:00.001-08:00

Don’t Believe These Forex Myths!
95% of traders lose when trading currencies and they don’t need to – in many cases they believe various myths that are spread by vendors, using hyped advertising copy which appeals to greedy and naive traders to buy courses and forex trading systems, which simply don’t work.
Below you will find the six common myths that cause the bulk of currency traders to lose and if you believe any of them - you will lose too.

1. You should always be in the Market
Many traders love excitement, and their view is, if they are in the market they will catch the big move. Well they may - but chances are they won’t.

The really big trends only come a few times a year in each currency - and you should stay out the market until they come, otherwise you will take losses, as you will be trading low odds trades, with little chance of success.

You don’t earn a reward in currency trading for effort or how often you trade – you earn your reward from being right.

Be selective in your trading and you will see your profits soar.

2. Diversification Reduces Risk
Diversification simply dilutes your profit potential if you have a small currency account.
You catch a big move, and your other trades lose, or give you only marginal profits, reducing your overall profitability.

You need to have confidence to go for the big moves, when they occur, and hit them hard with as much as you can afford.

Currency trading success is all about taking calculated risks when the odds are in your favor.
If the trade looks good, then you need to have the courage and conviction to go for it and risk as much as you can afford.

3. Day Trading Makes Money
This is perhaps the biggest myth in currency trading – Forex day traders DON’T make money!
Many vendors spread this myth, as it makes a good story.

It’s a good story and they make their money from course sales NOT trading.

All short-term volatility is random – prices can and do move anywhere in a day and support and resistance levels are meaningless.

In forex day trading you 100% guaranteed to lose over time as you cant get the odds in your favor – PERIOD.

4. Predicting is the Correct Way to Make Profits
Trying to PREDICT where prices are going to top and bottom will see you lose.
Why?

Because, you are relying on hope and guessing and that’s not a good way to make money in any venture, especially currency trading.

The only way to trade is to wait for the market to CONFIRM a trend is under way, and then execute your trading signal.

You will not buy the bottom or sell the high, but you can’t do that anyway, so there is no point in trying.

By trading with price momentum on your side, you have the odds in your favor.

So Remember:
Don’t predict confirm all your trading signals with momentum before you enter a trade and trade with the odds.

5. Buy Low sell high Is The Best Way To Make Money
This point is related to the above. You cannot do it as you are involved in prediction. Always keep this point in mind:

Most big trends start from new market HIGHS NOT market lows.

So if you fail to trade these moves you will miss a lot of the best moves waiting for pullbacks that never come.

6. Markets Move Scientifically
Again this is related to the myth of predicting currency moves.

You will see many vendors saying they can trade market tops and bottoms with scientific accuracy – RUBBISH!

If markets moved to a scientific theory, we would all know the price in advance and there would be no market!

It’s the difference of opinion and unpredictability of price direction that makes a market – this is common sense.

Despite the above, many Forex traders still believe in scientific theories such as - Elliot Wave and The Fibonacci Number Sequence.

These theories don’t work and never will.

Elliot made no money from his theory and neither will you.

As for the Fibonacci number sequence – This was devised in the 12th century, to solve a problem to do with the copulation of rabbits and has nothing to do with finance.

Leave the above theories to the dreamers and traders who believe it’s easy to make money.
When you trade you are involved in trading odds NOT certainties, don’t believe anyone who tells you otherwise.

7. Markets are the Same Today as they Were Hundreds of Years Ago
No there not!
Trends now are much more volatile than they were even 50 years ago.
Why?

Today, with the Internet, price information and news reaches traders in a split second.
This increases volatility as everyone has the same information at once - and everyone tries to enter and exit the market at the same time.

This was not so even 20 years ago - the trends are still there, but volatility is much higher - traders get the direction of the trend right, but they find themselves stopped out by the volatility of the market and watch as the trade they were stopped out goes on to pile up huge profits.

How often has this happened to you?
It happens to all Forex traders.
Dealing with volatility, is one of the major challenges of any trader wanting to develop a successful Forex trading strategy.

8. You Can Buy Success From Someone Else
You cannot buy success from someone else.
Some vendors can help you but success comes from within.
Even if you follow someone’s advice, always make sure you know the logic it’s based upon.

You need to do this to have the confidence and discipline to stick with your trading plan when you hit a losing period

In conclusion, someone can help you achieve currency trading success but you need to know how and why their methods and not follow them blindly.

The above myths are commonly accepted - avoid them or you will join the majority of traders that lose in currency trading.

Forex News - a Tip For Massive Gains and an Opportunity Right Now

2008-01-16T08:43:00.000-08:00

The true value is about 80.00 a barrel. Every time sentiment has pushed it up toward the psychological $100.00 we have sold it - look at our other articles.

If you would sold on the last two pops to this level, you will have seen the decline is $20,000 based upon 1 contract.Its only sentiment that drove prices up - greed and fear drove the market NOT Supply and demand.

A CURRENCY TRADE EXAMPLE
Now let's look at a currency that is overbought and a huge profit to be made. The euro against the dollar is the trade. Regular readers again will know that 1.50 is the psychological number that traders want to target. 1.50 is too high just like $100 in crude is. This is simply sentiment driving prices near these levels and the euro will not trade above this level in our view.

The last time it got up we sold (see our other articles) and said it would target 1.46 it did and that's a tidy 600 pips profit. It's up testing the highs again - but the bad news for the dollar is discounted in the price and its now only greed and fear driving the euro. All the arguments you here for dollar weakness are discounted: A 50 bps rate cut, a housing market in trouble, sluggish growth etc and there is no more bad news that's not known.

Now throw into the equation that the euro zone has problems of its own (which traders seem not to bothered about) and you could see a break in the dollars favour. How far?We expect the dollar to trade back to 1.46 and if this level gives way target 1.40 The majority don't agree with us (they didn't in crude either) but we won't let that bother us, were sticking with our euro short view to give us another thumping profit.

When looking for extreme bullish or bearish news to break a price always get confirmation of weakening momentum on your forex charts, so you are trading the reality and not getting in to soon. Will Rogers once said:"I only believe what I read in the papers" He was joking but many traders simply take it as gospel when a news story says the dollar is going to fall into oblivion. Hold your head, look at the facts and if prices gone too far to soon, get ready to trade against the losing herd. Can you do the above? Of course you can - it simply means standing back, examining the facts and then looking for trading signals on your forex charts.

Key Terms To Stock Market

2008-01-08T08:25:00.000-08:00

Market Capitalization
A company's market capitalization (or "market cap") is calculated by taking the number of outstanding shares of stock multiplied by the current price-per-share. It is the amount of money you would have to pay if you bought every share of stock in a company.

The price that an investor pays for a security. This price is important, as it is the main component in calculating the returns achieved by the investor.

For example, if an investor buys XYZ at $35, then this would be the purchase price. When looking at the return on the investment, the investor would compare the purchase price of $35 to the price the investment was sold at or the current market price for XYZ.

Share
Certificates representing ownership in a corporation. Shares are also known as stocks or equities.

P/E Ratio
The P/E ratio is how much money you are paying for $1 of the company's earnings. If a company were currently trading at a P/E of 20, an investor would be paying $20 for $1 of earningsThe P/E looks at the relationship between the stock price and the company's earnings. You calculate the P/E by taking the share price and dividing it by the company's EPS.

In other words, if a company is reporting a profit of $2 per share, and the stock is selling for $20 per share, the P/E ratio is 10 because you are paying ten-times earnings [$20 per share dividend by $2 per share earnings = 10]In general, a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. However, the P/E ratio doesn't tell us the whole story itself. It's usually more useful to compare the P/E ratios of one company to other companies in the same industry, or to the market in general, or against the company's own historical P/E.

It would not be useful for investors using the P/E ratio as a basis for their investment to compare the P/E of a technology company (high P/E) to a utility company (low P/E) as each industry has much different growth prospects.

Price / Earnings To Growth - PEG
RatioA ratio used to determine a stock's value while taking into account earnings growth. The calculation is as follows:PEG Ratio = Price to Earnings ratio / Annual EPS GrowthPEG is a widely used indicator of a stock's potential value. It is favored by many over the price/earnings ratio because it also accounts for growth. Similar to the P/E ratio, a lower PEG means that the stock is more undervalued.

Keep in mind that the numbers used are projected and, therefore, can be less accurate. Also, there are many variations using earnings from different time periods (i.e. 1 year vs. 5 year). Be sure to know the exact definition your source is using.

Short Selling
The selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold short. Selling short is the opposite of going long. That is, short sellers make money if the stock goes down in price.

Beginner Stock Market Tips

2008-01-08T08:23:00.000-08:00

You can handle your new investments in the stock market by getting a good broker who you trust, by reading and studying up about it - which includes learning lots of economic thought or you can dive into it without adequate information and get creamed. And no one wants their beginner stock market to result in them losing lots of money.

The point of this article is to help you to the next level and show you what this amazing subject has to offer.

The unruly is, as rapidly as you beginning your beginner stock market you will be practically bombarded by guidance. You can get ironic hurriedly if you invest here, you can make money practically risk limitless if you buy that book. It is all nonsense. Your beginner stock market is no safer than someone bedside’s stock market and each knows at slightest one self who is an practiced at the stocks and has still full a tremendous dive. No one wants that to transpire, but you're no different from someone besides just because you're just beginning. Don't be a mark. Don't let your beginner stock market front you to pecuniary ruin.

Investment clubs can grant some help with being a beginner in the stock market because they can put you in feel with a group of people who might be more weathered and experienced at investment. That can give you the competitive verge you must, by allowing you to profit from the gear that they already know.

Seminars can also be valuable for your beginner stock market, but memorize there is no wealth without risk. They are regularly gifted wealth without risk at these tutorials, but that is completely bogus any effort involves risk, and your beginner stock market is one of the riskiest of them all, so memorize: a tutorial which promises wealth without risk is perhaps a dodge and should be avoided. Bond to your books of classical and then useful economics, and rapidly you will be investing like a pro. Your beginner stock market will be a bizarre fancy of the previous as you are swept up by ever compounding investments haulage you away to fancy lands of unchecked and unimagined wealth. That is, if you are blessed. But for now, keep fancying, and keep studying, and keep developing your beginner stock market selection.

Principles Of Investments In The Stock Market - Part 1 Of 4

2008-01-08T08:20:00.000-08:00

People have been asking me lately if they should invest in the Philippine stock market or not. Majority of them also wanted to know how they should start. I am not sure if they are really serious about it. They could just be curious considering that it is all over the news that the stock market's performance is very positive.Investing in the Philippine stock market is not for the faint hearted.

As an investor you must have expectations as to how much you are going to earn for a certain vehicle of investment. Such is expectation is measured in terms of how much your money will grow at a certain period of time. (Most usually this is measured in interest per annum) Because the Philippine Stock market is in its all time high for several months now, people think that they should join the band wagon. They do not even understand the basic principles involved nor do they understand how the stock market works. I am not saying that you should be an economist before you should invest in the stock market.

What you should understand is that you must know the basic principles involved first before you can achieve a level of success in investing in the stock market. Fortunes are made on the Stock market. But take note that huge losses are also incurred. Those who just plunge into the stock market without a grasp of the basic principles of investment end up convincing themselves that the stock market is no good at all, does not make them any money and finally quit after some time.

Before I would even begin to tackle the ins and outs of the how to invest in the Philippine stock market you should first understand the basic principles of investment in order that you might enjoy trading and possibly succeed in the stock market. I will be discussing ten of them. We will discuss the first one here. The other points will be tackled on coming articles. If you wish to see the entire article please visit my blog.

1.) You must realize that the stock market is just another vehicle of investment - There are several investment vehicles where you could place your money. One is not more superior than the other. They have their advantages and disadvantages, but this will not be discussed in depth here.

In economic parlance, the stock market is categorized as belonging to the "Capital Markets." Even in the Capital market category there are different types of investment vehicles. You have several alternatives here. Aside from the stock market, you could place your investment in pension funds, bonds, insurance, real estate, time deposit accounts different types of savings.

It is important to know this because it will help you determine whether or not you should invest in the Stock Market considering that there are other alternative vehicles of investment in the Capital markets.Bear in mind that each vehicle of investment has their own advantages and drawbacks. The secret here is not to place all of your eggs in one basket. Even if most of my investments are in the Capital Markets, I diversified by placing investments in the stock market, bonds through mutual funds, pension, deposits and insurances.

Forex Foreign Exchange Spreads

2008-01-02T08:37:00.000-08:00

Forex trading is one of the most popular and fastest growing financial trading opportunities. Exchange rates for currencies in the forex market are quoted as 'bid/ask' rates. The difference between the purchase (ask) and the sale (bid) rates is called the 'spread'. Forex spread is one of the most important single parameter to make the difference between a successful and losing trading.

Forex spread is expressed in percentage in point (pip) which is the smallest measure of price move. For example, if the currency pair EUR/USD is trading at 1.3000 and then changes to 1.3020, the pair is said to move by 20 pips. A pip in most currencies is 1/10,000 of an exchange rate, but in USD/JPY, it is 1/100.

The bid/offer spread is the difference between the buying (bid) and selling (offer) price. The ask price is the immediate execution prices for quick buyers or traders and bid price is for quick sellers.

In forex market brokers generally do not charge any commission from you. But they get their money by charging you a spread. As the spread is the difference between the bid price and the ask price for any currency being traded, the broker adds this spread onto the price of the trade and keep it as their fee for service.

Therefore, for you, lower the pips and spreads, higher the forex profits. If the spread is big, you have to pay more when you buy and get less when you sell. Forex spread is charged only on one side of the transaction, usually on the "buy" side of the trades. So, as a forex trader your aim should be to buy low and sale high.

If the quote between EUR/USD is said to be 1.2222/5, the spread equals 3 pips (5-2). Although it seems to be small, forex spread difference of one pip can make significant difference in your profit. You may find the difference to be as high as 25% on your trading costs.

Therefore, we advise you to choose a low spread forex broker. Most brokers offer different spreads for different currencies. For the most popular currency pairs like the EUR/USD or GBP/USD, you get the lowest spreads, while less popular currencies are traded with higher spreads.

The forex trade can also vary with the type of your account and volume of trades. But there are brokers who offer same spread to all accounts and any trade volume. You can even opt for fixed foreign exchange spread, but they are generally higher than floating spreads.

It should always be remembered that spread is the difference between bid prices and ask prices as determined by the free market and therefore can never be guaranteed. Spreads are generally tighter when there is good market liquidity but it widens as liquidity goes down. Find a forex broker, who is honest and transparent with the operations. Make sure there is no hidden spread and the execution is fast and accurate.

Spot Forex Trading Part 3: Parallel And Inverse Analysis

2008-01-02T08:35:00.000-08:00

This article is Part 3 of a series of 9 articles dedicated to help anyone to trade the foreign exchange.

Very few spot forex traders conduct any form of parallel and inverse analysis of the major pairs and exotics to determine the best way to trade the forex on a day-to-day basis. Even though it would be nearly impossible to trade the forex successfully not knowing where the overall strength and weakness was in the spot forex across multiple pairs.

Lets look at some examples. Many people like to trade the GBP/USD they spend countless hours losing sleep waiting to trade this pair even when no trend or parallel/inverse confirmation is available. Losses occur. They could increase their odds dramatically by setting up some entry rules and examples like the ones shown below.

Only buy the GBP/USD if the GBP/CHF and GBP/JPY are strengthening as well. This would be parallel confirmation on the GBP strengthening across the board.Only buy the GBP/USD if the EUR/USD is strengthening and the USD/CHF is weakening. This would be confirming the entry with two other pairs and across the board weakness in the USD. In either situation you have confirmed the entry with at least two other pairs. Both of these entry rules would include a stop order, and you can enhance the rules further by examining the EUR/GBP for weakness. This is inverse confirmation.

But this is not what traders do. They want to trade the GBP/USD so badly that they manufacture a trade, or the they want to use indicators, or trade the news. This is a mistake and is equivalent to betting or gambling. There is no logic to support the entry, the forex works in a logical way. Lets look at some other examples. Lets say you prefer to hold carry trades and prefer to trade the GBP/JPY, you could set up rules for entry as follows:
Only buy the GBP/JPY if the GBP is strong across the board based on parallel and inverse pairs, or only enter the GBP/JPY if the GBP/USD and USD/JPY are both strengthening somewhat or a lot.

In the second scenario the GBP/JPY will slingshot upward at a very fast pace.Or another scenario is to only buy the GBP/JPY if the EUR/JPY, CHF/JPY and AUD/JPY are all strengthening as well, in this case the USD is not in the picture because of across the board weakness in the JPY. Either way you have confirmed the entry with other pairs.Another example would be to buy the USD/CAD only if the EUR/CAD and AUD/CAD are also strengthening.

Similar rules can be applied to any major or exotic pair and easily monitored upon entry. In the case of the three CAD pairs, if you also do a careful analysis of support and resistance, you can trade the pair with the most potential rather than just trading the USD/CAD.

But this is not what traders do, they get stuck trading the same pair and wind up justifying a trade when a trade is not there. These trade entries are not based on logic they are based on emotional needs. This leads to losses. The forex works in a very logical process and you must let the logic work for you. Stop looking at indicators and start looking at other pairs to support your entries, these are the best indicators available.

Across the board strength and weakness in groups of pairs occurs weekly in the forex. But if you search the internet far and wide you will see that it is rarely and in fact never discussed by traders, analysts, and trade planning services charging hefty monthly fees. People are too busy looking at indicators and absolutely no discussion of the market forces governing the spot forex ever occurs.

It is very rare if nearly non-existent for one forex pair to move strong without other pairs to confirm the move. This is true for any major or exotic pair. If you are stuck trading the same pairs while other pairs and exotics are making strong moves its time to look at all of the pairs every night then pick the best opportunities based on parallel and inverse analysis.

In order to trade the spot forex daily and weekly, you must analyze 15-20 pairs every day to determine the current market forces, this will lead to less entries, more logical entries, and better confirmation of entries when the movement starts. Parallel and inverse analysis is the logic behind the spot forex.

Forex Day Trading And Scalping - A Guaranteed Way To Lose Your Money Quickly

2008-01-02T08:33:00.000-08:00

I have been involved in trading forex for 25 years and still amazes me how many people think forex day trading or scalping makes money - it doesn't its simply the dumbest way to trade and will lose you your money. Let's examine why.

Countless millions of traders trade trillions of dollars each day and it is impossible to determine what this mass of people will do within such a short time span as a day or a few hours.

Support and resistance levels are meaningless, as volatility can and does move prices anywhere in a day session. If you don't believe me lets look at the proof.

The first question you need to ask yourself is if forex day trading really did make money why is there no real track record of gains to show the success? There are thousands of day trading systems promising gains and none of them have a real track record - what do you get? A lot of hype and a track record that is simulated (not traded for real) in hindsight (knowing the closing prices). Here is the normal one you will see which is a CFTC standard one:"cftc rule 4.41 - hypothetical or simulated performance results have certain limitations. unlike an actual performance record, simulated results do not represent actual trading.

Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

Put the above disclaimer on a track record and you can say anything you want and vendors do. They appeal to lazy or greedy traders and the trader buys and gets a guaranteed loss and the vendor makes a guaranteed profit from the sale. Day trading is simply the dumbest way to trade and sensible knowledgeable people fall for it all the time - maybe the don't stop to think or simply miss the disclaimers when they buy these systems. You can if you want to prove me wrong try and find a track record ( that's real dollars and audited) I saw one day trading system show his bank balance of evidence of his success - success in selling day trading courses, NOT trading that's for sure!

So if you find one be sure to let me know. I have been looking for a day trader to prove me wrong for 25 years and I Haven't found a long term track record of profits and know I never will. So avoid day trading and pick another method that will help you gain currency trading success by trading the odds.

Forex Education - 3 Vital Tips To Make Money Fast In 2008

2008-01-02T08:31:00.000-08:00

As we turn into the New Year it's a good time to make changes and take action - if you are trader who is not doing well or a potential trader then these 2 tips will help you make money fast not just in 2008 but at anytime and they should be a cornerstone of your forex education.

The first point I want to make needs serious thought 95% of traders lose money not because they can't learn forex trading (anyone can) but because they believe certain myths and commonly accepted wisdoms that are wrong.

The tips below are not conventional but don't let that worry you the bulk of traders don't make money so being in the minority is good so here are your 3 tips

1. Be Patient Trade Less
Many traders think the more they trade the more they will win but this is simply not true in forex trading in fact the opposite is true - the more you trade the greater the chances are you will lose. You don't get paid for the effort or amount of trades you make - you get paid for being RIGHT that's it. I know traders who trade every day and make nothing and others who trade a few times a year and make over 100% annualized gains!

The majority of novice traders believe the day trade and make money myth and that's all it is a myth. Day traders don't make money period. If you don't believe me, try and find a real track record on a day trading system and you will be looking for ever. You have to catch the big high odds moves and they can ONLY be spotted by looking at longer term data and data within a day is meaningless. If you like the buzz of trading you will lose - if you are patient and wait for high odds trades you will win.

2. Diversification
You will have heard it countless times diversify; don't put all your eggs in one basket etc. On a small account of $1,000 or less you don't have enough to diversify and make big gains at the same time. All diversification does is dilute gains - wait for the big moves and load them up with as much as you can afford.

3. Take Bigger Risks
You will hear many give you the advice of only risking a maximum of 2% on a trade - well on 1,000.00 that's $20 you won't make much doing that!Wait for the good trades and load them and risk up to 20% on a small account. You can only diversify and risk less per trade if you have enough cash and that's $10,000 + if you don't you need to risk more - period!4. Have Courage Learn to accept big gains! Hang on you may say all traders can do that because that's why their trading currencies.

They are - but they don't understand accepting a big gain is harder than taking a loss. Why? Because as soon as a trader sees a profit he wants to take it and the bigger it becomes the harder the temptation is to resist. As open equity swings keep eating his open profit it becomes too much and he snatches a mediocre or minor gain. What happens next? The trade goes on to make 10,000 20,000 or more and he's not in.

If you want to make money you need to have courage and accept that open equity will eat into your profits and have confidence to hold for a bigger longer term gain. If you want to make more money from your forex trading and you are starting off with a small account make the above part of your forex education and you will see your profits increase dramatically.

Forex Education - No Trading Experience, 2 Weeks Training To Millions In Profit

2008-01-02T08:27:00.000-08:00

This story is about a famous experiment in 1983, when trading legend Richard Dennis wanted to prove anyone could learn to trade so he taught a group of people who had never traded before then set them off to trade - the result? They made $100 million in 4 years. There is a lot you can learn from this story and use in your own forex education.

The turtle experiment proved ANYONE can become a successful trader, with the right Forex education and everything about trading can be specifically learned by anyone with the desire to succeed.

This is Of course true - but still 95% of traders lose their money and the turtle experiment can give you an insight into why and how you can enjoy currency trading success.

The Experiment
The people Dennis selected represented a variety of different people of all ages, both sexes and from all walks of life including:An actor, security guard, a couple of professional card players, an auditor, a boy fresh from school and a female exchange clerk - so a diverse group of people! They then went on to make annualized 70% returns and make $100 million and many went on to become trading legends.

Dennis taught a Trend Following simple trading methodology - but also the confidence and the discipline to follow it through periods of drawdown, to long term currency trading success.

What You Can learn
The reason most forex traders fail is simply they cannot adopt the right mindset to succeed. Having a sound method is only part of the equation for success - you must have the confidence and the discipline to follow your system through draw down periods to win longer term. If you can't follow your method with discipline, you really have no method at all.

Dennis proved that a simple system that traders could understand, applied with discipline, could lead anyone to success and he was proved right. This logic of course still applies today.

The way to make money in forex trading is based upon the following:
A Simple Logical Method + Understanding of It = Confidence = Discipline = Forex Success.

Most traders however use methods that are not logical with good examples being day trading or scientific methods, or they follow someone else. Of course if you use a method that's not logical you stand no chance but if you try and follow someone else without believing or testing their logic you will fail as well. You are going to get losses (don't let anyone tell you won't) and its here the correct mindset is so important your discipline is based on confidence and you need this to stick with your method.

Discipline is vital to success and this is based upon inner knowledge and understanding.The turtle experiment is part of trading history, the story should act as inspiration to anyone who wants to learn currency trading and enjoy currency trading success. It imspired me to start my trading career 25 years ago and has inspired countless traders over the years, as it shows that anyone has the oportunity to achieve success if they learn the right knoweledge. If you understand the above then you to could become a successful trader and make the income you desire from trading global forex markets.

Forex Trading - 6 Character Traits That Cause 95% Of Traders To Lose

2008-01-02T08:23:00.000-08:00

Forex trading is all about having the right method but also the right attitude. Here we will look at 10 character traits that the losing 95% of traders have and if you want to enjoy currency trading success you need to avoid them.

Here they are in no particular order of importance.

1. I am not responsible
A symbol of losers - they think success will come with no effort on their behalf and blame everyone else for their failure from the tip they got from friend, newswire or broker, to the market being against them. These people make up a surprising amount of the losing majority and they fail to see that no one can give them success but themselves. Instead of seeing this they do the following.

2. I Like to take expert advice
If you do be very careful as most of the people who put themselves out as experts on the net are anything but - their marketing companies and have never traded in their lives. Again a vast amount of traders buy systems with unbelievable track records and then are surprised when they fail in real time (they never look at the disclaimer that says the track record is a simulation and not real). If something looks to good to be true it probably is and this is very true in forex trading.If you follow an expert and have not done your homework on the logic they base their views on, then you are unlikely to have the confidence to follow their method with discipline when it hits a losing period. If you don't follow a method with discipline then you have no method at all.

3. I don't like being wrong
Well in forex trading your going to be wrong a lot of the time, as only you can be wrong and the market price is always right - no matter what you or I think. Most traders hate taking a loss and looking stupid but the markets do that to everyone and even the best traders lose at times. If you try and argue with the price and justify your position, you will run up losses and lose and your emotions will take over.

4. I deserve to win I am smart
I have met some very clever people in forex trading and the majority of them lose - if you think that being smart helps you then it won't. In forex trading you get paid for being right with your trading signal that's it and it's a fact that the best forex trading systems are simple. They work far better than complicated ones as they have fewer elements to break. Clever people tend to over elaborate their trading and think the more they put in the more they get out but this does not apply in forex trading. If you want to make money keep it simple and remember forex trading is probably 20% method and 80% mindset.

5. I am not a patient person
If you are an anxious or nervous person then you are unlikely to win at forex trading. You need patience to wait for the right opportunities and you need patience to hold positions through short term volatility to bigger profits. If you are an anxious trader you will probably let your emotions get the better of you trade too much, engage in revenge trading etc and lose.There of course other losing traits but the above are very common ones and hold anyone of them and you will lose.

Forex trading is not hard to learn anyone can do it but most fail because they don't realize that correct mindset is the key to success. To be successful at forex trading you need to rely on yourself, have a deep understanding of why your method works, so you can have the confidence to apply it with discipline. If you understand the above you can avoid these common losing traits and get a mindset for forex trading success.

Different Kinds Of Bonds

2008-01-02T08:21:00.000-08:00

Investing in bonds is highly insured, and the returns are most often extremely credible. There are four basic Kinds of bonds on tap and they are sold through the Government, through corporations, state and local governments, and foreign governments.

The paramount thing about bonds is that you will get your initial investment back. This makes bonds the flawless investment vehicle for those who are new to investing, or for those who have a low risk resistance.

The United States Government sells Treasury Bonds through the Treasury Department. You can procure Treasury Bonds with maturity dates ranging from three months to thirty years.

Treasury bonds include Treasury Notes (T-Notes), Treasury Bills (T-Bills), and Treasury Bonds. All Treasury bonds are acclaimed by the United States Government, and tax is only owing on the interest that the bonds earn.

Corporate bonds are sold through public securities markets. A corporate bond is mainly a company selling its debt. Corporate bonds most often have high interest rates, but they are a bit risky. If the company goes belly-up, the bond is valueless.

State and local Governments also sell bonds. Contrasting bonds issued by the federal government, these bonds altogether have higher interest rates. This is because State and Local Governments can indeed go bankrupt contrasting the federal government.State and Local Government bonds are free from income taxes even on the interest. State and local taxes may also be waived. Tax-free Municipal Bonds are common State and Local Government Bonds.

Buying foreign bonds is manifestly veritably difficult, and is often done as part of a mutual fund. It is often remarkably risky to invest in foreign countries. The safest type of bond to buy is one that is issued by the US Government.

The interest earned might be much less, but again, there is completely little or no risk involved. For first-rate results, when a bond reaches maturity, reinvest it into another bond.

The Bubble Really Does Not Burst

2008-01-02T08:18:00.000-08:00

"The bubble has bursted." You hear it stated whenever any investment market has been doing so well for so long and then all of a sudden is not a hot thing anymore. It happened during the internet/tech boom of the late 90's. It happened recently with real estate throughout the United States. It happens to just about every market at one time or another.

The internet/tech boom that we all recall, when just about everyone and their friends were throwing a majority of their money into technology stocks is a great example. Companies that we never heard of and had no idea how they even made their profits, suddenly became our favorite investments. Why not? Every other technology and internet stock was sky rocketing. After all the internet and computers were our future. When there is a wave, and your friends are surfing it, you're going to do the same thing. Investing in companies that were internet related was the "cool" thing to do.

When people see their friends and family making a fortune in a certain market, they tend to not want to be left out. I'm sure you know many people who invested in certain internet stocks that they had no clue whatsoever what the company actually did. Unfortunately these companies were relying mostly on their hype which caused their stocks to soar even though their earnings were not up to par. A few experts began looking at these companies P/E ratios (price per share divided by earnings per share), which showed that most of them were extremely overpriced. Companies that are considered to be "high growth companies" are usually allowed to have higher P/E ratios. However there was no proof that these companies were growing at a large enough rate to off set the high P/E's.

After these experts started criticizing certain internet stocks with extremely high P/E ratios, we saw the stocks for these companies fall enormously. In turn some of these companies were forced to go out of business, signaling a not so good future for similar companies. The bubble didn't really burst. The market didn't just collapse all at once, but it was a gradual process which took months. This is the business cycle in a micro economical sense. The sub market (internet technology) began to fall on a steeper then normal slope. People who had made literally millions in the stock market were now in the negative.

The same thing happened in the real estate market just recently (2006/2007/2008). Real Estate everywhere was soaring. Homes that were selling for just $300,000 in 2000 were going for over $600,000 in many markets just a year or two later. People took out mortgages that had arms on them, and invested their money in real estate. What these people were expecting was that the market would continue to go up for years to come, and that they would be able to sell for a significant profit before the mortgage arm would kick in. What these people didn't take into consideration is that real estate, just like any other investment market, has a cycle of it's own. What goes up much come down, and come down it did.

In this case again, the bubble didn't simply burst either. It rather deflated like a basketball with a slow leak in it. Slowly people could not afford to pay their mortgages because their rate increased (due to the arm). As their rate increased so did the rates of other investors. The price of real estate leveled off, so these people could not sell their investments for a profit. This began happening on a massive scale, and these investors had no choice but to sell at a price lower then they paid in order to make their mortgage payments.

This happens in just about every investment market. There is always hype when things are good, and people jump in at this point. There is a saying "Buy low, sell high", yet even the people that say this all the time buy when prices are high because of this hype. Usually when something seems too good to be true it turns out it is. Remember that. The Bubble will eventually deflate no matter what!

Matching Stocks And Strategies With Your Goals

2008-01-02T08:06:00.000-08:00

Various stocks are out there, as well as various investment approaches. The key to success in the stock market is matching the right kind of stock with the right kind of investment situation. You have to choose the stock and the approach that match your goals. Before investing in a stock, ask yourself, “When do I want to reach my financial goal?” Stocks are a means to an end. Your job is to figure out what that end is or, more importantly, when it is. Do you want to retire in ten years or next year? Must you pay for your kid’s college education next year or 18 years from now? The length of time you have before you need the money you hope to earn from stock investing determines what stocks you should buy.

Dividends are payments made to an owner (unlike interest, which is payment to a creditor). Dividends are a great form of income, and companies that issue dividends tend to have more stable stock prices as well. Every investor has a unique situation, set of goals, and level of risk tolerance. Remember that the terms large-cap, mid cap, and small-cap refer to the size (or market capitalization, also known as market cap) of the company. All factors being equal, large companies are safer (less risky) than small companies.

Investing for the Future
Are your goals long term or short term? Answering this question is important because individual stocks can be either great or horrible choices, depending on the time period you want to focus on. Generally, the length of time you plan to invest in stocks can be short term, intermediate term, or long term.

Investing in stocks becomes less risky as the time frame lengthens. Stock prices tend to fluctuate on a daily basis, but they have a tendency to trend up or down over an extended period of time. Even if you invest in a stock that goes down in the short term, you’re likely to see it rise and possibly go above your investment if you have the patience to wait it out and let the stock price appreciate.

Investing for a Purpose
When the lady was asked why she bungee jumped off the bridge that spanned a massive ravine, she answered, “Because it’s fun!” When someone asked the fellow why he dove into a pool that was chock-full of alligators and he responded, “Because someone pushed me.” Your investment in stocks shouldn’t happen unless you have a purpose that you understand, like investing for growth or investing for income. Even if an advisor pushes you to invest, be sure that your advisor gives you an explanation of how that stock choice fits your purpose.

An elderly lady who had a portfolio brimming with aggressive- growth stocks because she had an overbearing broker. Her purpose should’ve been conservative, and she should’ve chosen investments that would preserve her wealth rather than grow it. Obviously, the broker’s agenda got in the way. Stocks are just a means to an end. Figure out your desired end and then match the means.

Understand How the U.S. Economy Works

2007-12-29T09:35:00.000-08:00

This is in contrast to Microeconomics which looks at production and prices within specific markets.

When Macro-economists study an economy, they look at 3 major variables. These are output, the unemployment rate, and the inflation rate.

1. Output is the level of production in an economy as a whole. The measure of aggregate output in the U.S. is known as the Gross Domestic Product, or GDP. It can be thought of from 2 different perspectives, production and income.

From the production side: GDP is the value of the final goods and services produced in an economy during a given period. GDP is also the "value-added" that all the businesses added to the economy during a given period.

From the income side: GDP is the sum of incomes in the economy during a given period. This is the income or revenue that a business (a) is left with as profit, (b) pays to the government as taxes, and (c) pays to employees as wages.

2. The unemployment rate is the proportion of workers in an economy who are not employed but are seeking work. The total labor force is a combination of people who are working plus those who are not working but want to work.

In the U.S., the Bureau of Labor Statistics conducts the Current Population Survey or CPS. It interviews about 50,000 households each month to determine if the adults are employed.

The survey classifies an individual as employed if they have a job at the time of the interview and as unemployed if they don't have a job but have been actively seeking a job within the prior 4 weeks.

If someone isn't working and doesn't want to work, they are not counted as part of the labor force.

So the unemployment rate is the number of unemployed people seeking work divided by the total labor force. The lower the unemployment rate, the more people are working, and this results in higher economic output.

3. Inflation is a sustained rise in the general level of prices. The inflation rate is the rate at which the average price of goods in an economy increases over time.

And deflation is the rare opposite, a sustained decline in price levels. Deflation is also called negative inflation.

Here are some more economic scenarios: hyperinflation is extreme inflation and stagflation is when inflation gets combined with economic stagnation.

Macro-economists measure the cost of living by the consumer price index, or CPI. The CPI has been used since 1917 and is published monthly. It gives the cost in dollars of a specific list of goods and services over time.

U.S. Bureau of Labor Statistics employees actually visit over 22,000 locations in 85 cities to see what's happening to the prices of products on the CPI list such as cars, gas, clothing, food, etc.

As an index, the CPI is set equal to 1 in the base period chosen. This is so its level has no particular significance. The current base period are the years 1982 to 1984, thus the average for the period 1982 to 1984 is equal to one.

In the year 2000, for example, the U.S. CPI was 1.71. This means that when comparing prices for similar products, they were 71% higher in 2000 than they were in the time period 1982-1984.

When demand rises, this is called a Boom and it leads to inflation. Follow this:

When consumer demand increases, the goal of production is, of course, to keep up with that consumer demand. This entails paying workers overtime or hiring additional workers to beef up output. All this extra work means that labor costs rise because more people are being paid to do the work. These increased labor costs are passed on to the consumer in the form of higher prices. And higher prices, as we've said, are the definition of inflation.When demand falls, this is called a Recession and it leads to deflation. Follow this:

When consumer demand falls, workers get laid off or have their working hours cut back. If production needs decrease, fewer workers are obviously needed to fill the decreases in demand. The decreased labor costs are passed on to the consumer in the form of lower prices. Companies must reduce their prices to stay competitive in a shrinking marketplace. And lower prices are the definition of deflation.

Recession is a period of negative GDP growth. The time frame for a recession is debated. Many macro-economists insist that negative growth must last for at least 2 consecutive quarters.

Others define recession more loosely, as a significant decline in growth that lasts more than a few months. A sustained recession is called an economic depression."

A creative economy is the fuel of magnificence." -Ralph Waldo Emerson (1803-1882)

Finding a System to Day Trade the Futures Market

2007-12-29T09:29:00.000-08:00

When I first became interested in trading Futures I had no idea as to where to go to get information about trading. I didn’t know anyone that traded the Futures Market. In fact when I talked to anyone about Futures all I heard was “don’t trade Futures, it’s way too dangerous, you will lose everything you own”. Indeed you can lose money fast in the Futures market, but you can also make money fast because the leverage is fantastic and that’s what interested me. I knew I had to have a good system, but where would I go to find one.

At that time brokers would send you information, and maybe they still do, from various Exchanges about different trading strategies and how one might use them in a particular Futures Market. Well, this information looked pretty good! All I had to do was get a charting service and I was on my way.

I guess I wasn’t as bright as the person that gathered the information for the booklets because I simply could not make these indicators work for me. Surely someone was trading successfully using this information I thought, otherwise why would they publish the booklets. With this thought in mind I felt I just needed more information.

Books had to be the answer. Like I said previously, I guess I was not very bright because after reading thirty or forty books thoroughly, some two and three times, and having applied the techniques learned from the books, I was not able to trade profitably on a consistent basis. I’m sure some are capable of using these techniques to trade successfully, but I was not able to do so. While having a book burning party a few years ago, I decided to keep one book to remind me of my experience. It’s on my bookshelf and I glance at it once or twice a year to keep this experience fresh in my memory. There may be some great books out there that show you how to trade successfully on a consistent basis, but unfortunately I never found one. I wasted years on this endeavor.

By this time computer trading was getting popular. I received an advertisement about a program where I could actually write my own system and back test it to get results before actually trading it. Wow! This was great and it was only $4,500.00. They advertised anyone would be able to program this thing. Well they must have meant anyone with the exception of me. I wasted hundreds of hours trying to write programs unsuccessfully. I didn’t know the program language and I wasn’t able to get enough information to learn it so I decided to be intelligent about this situation and bought another program at only half the price of the first one. I was able to write a few programs that produced very well in back testing, if one could stand twenty point stops in the S&P. I really liked this idea but finally had to admit that it was not going to give me what I was searching for.

For years now I had been studying charts every single day plus weekends and evenings.

Of course I was aware that all indicators, strategies, systems etc. started with price. None of these things can be made without price moving first. Price can’t be wrong because it is what it is, therefore it is always right. So I decided to put all of my energy into the study of charts, or price and its movement, and finally I found it. It was right there in front of me all these years and I just didn’t see it. After another year or so of perfecting entries and exits and how to read where price should go, and if it would continue on or turn at that point, I finally had a system. This system will give you profits consistently. I found that price will tell you where it is going and where it is likely to turn, and if it doesn’t turn there it will tell you in advance that it will likely continue.

I had a hard time learning to trade without a mentor. It actually took years of commitment, hard work, and a lot of wasted money. If you are new to trading Futures, or any market, and you don’t have a mentor with a good system that will give you consistent profits, then by all means that should be your first endeavor. It is said that 90% to 95% of everyone trading in the futures market loses. Make sure you’re in the 5% to 10% that are winners. Jim Canter is a S&P 500 e-mimi day trader and the developer of the Precise Day Trading System. For more information see http://www.futurecommodityonlinetradingsystem.com

Managing key information

2007-12-29T09:24:00.000-08:00

When planning an information management strategy, there can be an overwhelming volume of documents and other content to address.

Within even a single business unit of a typical organisation, thousands of documents are created in a given year. While it would be desirable to have all of these managed to the same high level, this is clearly impractical.

In practice, however, there are certain types of documents that need to be managed more tightly, while others can be ignored (at least in the short term).

This briefing identifies some key categories of documents that should be targeted as part of information management projects, and discusses a number of practical approaches that can be
taken.

Identifying key information
While thousands of documents are created within an organisation, many of these do not warrant close attention as part of an information management (or document management) project.
Instead, our experience in organisations has shown that there are three main categories of key information within many organisations:

Key corporate information
Information shared within an organisation
Information communicated externally
This is not an exhaustive list, but it does provide a starting point for identifying which information should be managed more rigorously within an organisation.

Key corporate information
There is some information that is clearly important within an organisation, such as corporate policies, strategic plans and annual reports. Key corporate information may also include reports generated to meet regulatory or legislated requirements.
This information is generally well-recognised, and is often already the focus of document and records management projects. That being said, there are many situations where even this important information is poorly managed.

Information shared within an organisation
In many cases, this is the most important information to manage. Where documents are used by multiple teams or business units, they must be stored and communicated in a way that is recognised and understood by all groups.

For example, multiple teams may be involved in delivering a large project. This requires a clear file structure, and a consistent naming of key documents.

Information communicated externally
It is often very important to closely track information that is communicated to external stakeholders, or to the public as a whole. This ensures consistency of communications, as well as mitigating the risks of disseminating incorrect information.
There are often serious consequences to having multiple areas of the organisation sending out inconsistent information, or having some areas of the business not knowing what others have sent out.

Ignoring some documents
Beyond the documents in the categories above, there is much information within an organisation that can (and should) be ignored by information management projects.

For example, project teams typically create a huge number of documents across the lifetime of a project. Most of these documents are used solely by the project team, with only a few key documents shared with a wider audience.

In this situation, efforts should be focused on those documents that are shared or reused, with the others left to the project team to organise as they see fit.

Targeting efforts
In practice, information management initiatives should target their efforts first on the key documents. Better managing this information will have the greatest impact on the organisation, recognising that only a limited amount of change management is possible in a given timeframe.

Eight Ways to Generate More Ideas in Groups

2007-12-25T07:21:00.000-08:00

The scene is repeated in meeting rooms around the world every day. A problem has been identified and a group has gathered to solve the problem. When ideas are needed, the group decides to brainstorm. And all too often this exercise leads to a short list of not-that-creative ideas.

We know that if we generate more ideas we have a better chance of finding better ideas. This leads us to the logical conclusion that if we can find techniques to create more ideas, we will find better ones. No one technique however will guarantee the perfect solution. Instead your goals should be to have a variety of approaches to help stimulate idea creation in your repertoire. By doing this you will improve the overall quality of ideas by virtue of having more to choose from.
Whether you are unhappy with the current creativity of your group or are having good success with brainstorming sessions, but would like them to be even better, any of the eight suggestions below can help.

Look at problems in different ways. Get the group to change their perspective on the problem. Once people “lock into” one way of looking at things the idea flow will slow to a tickle. Have people take a new persona. Ask them to look at the issue from the perspective of another group – accounting, HR, or sales for example. Ask them to think about how their Grandmother or an 8 year old would solve the problem. These are simple ways to force people into a new perspective and the new perspectives will generate more ideas.

Make novel combinations. The ideas that land on the flipchart or whiteboard in a brainstorming session are typically considered individually. Have the group look at the initial list and look for ways to combine the ideas into new ones.

Force relationships. Once a group is finished with their initial list, provide them with words, pictures or objects. The objects can be random items, the words can come from a randomly generated list (email wordlist@KevinEikenberry.com and we’ll send you such a list), or from pictures in magazines or newspapers. When people have their random word, picture or item, have them create connections between the problem and their item. Use questions like, “How could this item solve our problem?” What attributes of this item could help us solve our problem?”

Make their thoughts visible. Have people draw! Too often the brainstorming session has everyone sitting except the person capturing the ideas. Let people doodle and draw and you never know what ideas may be spurred.

Think in opposites. Rather than asking your direct problem question, ask the opposite. “How could we ensure no one bought this new product?” could be one example. Capturing the ideas on “the opposite,” will illuminate ideas for solving the actual problem.

Think metaphorically. This approach is similar to forcing relationships (and is another way to use your words, pictures or items). Pick a random idea/item and ask the group, “How is this item like our problem?” Metaphors can be a very powerful way to create new ideas where none existed before.

Prepare. Too often people are asked to brainstorm a problem with no previous thinking time. If people have time to think about a topic, and let their brains work on it for awhile, they will create more and better ideas. Allow people to be better prepared mentally by sharing the challenges you will be brainstorming some time before the meeting whenever possible.

Set a Goal. Research shows and my experience definitely confirms that the simple act of giving people a quantity goal before starting the brainstorming session will lead to a longer list of ideas to consider. Set your goal at least a little higher than you think you can get – and higher than this group typically achieves. Set the goal and watch the group reach it!

While these suggestions have all been written from the perspective of a group generating ideas, they all work very well for individuals too. The next time you need to solve a problem by yourself, use these techniques and you will be astounded by the quantity of ideas you will generate!

Finding a Legitimate Online Job

2007-12-25T07:12:00.000-08:00

Finding a needle in a haystack would be easier than finding a legitimate work from home job on the internet on your own. One of the first things you need to know about a vast majority of online businesses is that it involves a lot of advertising for whatever it is you are selling. So if you are not comfortable with this aspect, then you probably would not enjoy working online.

The Work At Home Group has found that most trustworthy work from home jobs have a fee that is paid up front, although many people believe otherwise. Free internet business opportunities involve a lot of work such as multi-level- marketing. Believe me when I say that if the job is free then you are doing all the work, for someone elses' benefit. "You get what you pay for", is very true in the work at home industry. You have to take into consideration that companies that charge a fee supply you with information and valuable knowledge. Before we go any further let me say that every online business with a start-up fee is totally legitimate, is not necessarily true, there are a lot of scams on the internet. One way to find out if a company is legitimate or not is to do a simple search on the internet with their web address. Another good method is to check the BBB on online scam sites.

There are a wide variety of online opportunities on the internet. Everything from free no cost jobs to large and small start-up fees. The most success I have seen people have had were the home typing jobs. I came across about one year ago and of course it involves marketing. This type of job is really good because they cut through all the hype other companies try to sale you and just tell you up front what you will be doing which is placing ads and marketing. What does a home typing jobs involve? It involves placing ads for companies that do business on the interent. You can do this for free or pay a service to do it for you. The way it works is for each sale that your ad generates you will be paid a commission. These commissions range from 50-75% of that sale which sometimes is more then the company profits itself. There are small requirements to be successful with this type of job because most of them will supply you with all free or paid resources and information you need to begin. Another aspect is the tech support you get with these types of jobs. Check for yourself how the support is by emailing the company with a question, and see how long it takes for them to get back with you.

Your only concern is to generate the sales and collect your checks, the companies take care of shipping, order processing, and any refunds. There are several ways to market a company online, the most affective ways of course includes a service fee but you can also choose to do it yourself. This can be very profitable but involves many hours and committment to be successful at it. Being able to sit at home in your pajamas, save gas money and be able to make the same amount of money (if not more) as an outside job from your home is one of the major reasons people want to work from home.

The Skinny on Forex

2007-12-20T07:49:00.000-08:00

What is FOREX?
The Foreign Exchange market, also referred to as the "FOREX" or "Forex" or "Retail forex" or “FX” or "Spot FX" or just "Spot" is the largest financial market in the world, with a volume of about $2 trillion a day. If you compare that to the $25 billion a day volume that the New York Stock Exchange trades, you can easily see how enormous the Foreign Exchange really is. It actually equates to more than three times the total amount of the stocks and futures markets combined! Forex rocks!

What is traded on the Foreign Exchange?
The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, and are traded in pairs; for example the Euro dollar and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY).

Because you're not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy.

In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country's economy, compared to the other countries' economies.
Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.

Until the late 1990’s, only the “big guys” could play this game. The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with! Forex was originally intended to be used by bankers and large institutions - and not by us “little guys”. However, because of the rise of the Internet, online Forex trading firms are now able to offer trading accounts to 'retail' traders like us.

All you need to get started is a computer, a high-speed Internet connection, and the information contained within this site.

What is a Spot Market?
A spot market is any market that deals in the current price of a financial instrument.

When Can Currencies Be Traded?
The spot FX market is unique within the world markets. It’s like a Super Wal-Mart where the market is open 24-hours a day. At any time, somewhere around the world a financial center is open for business, and banks and other institutions exchange currencies every hour of the day and night with generally only minor gaps on the weekend.

The foreign exchange markets follow the sun around the world, so you can trade late at night (if you’re a vampire) or in the morning (if you’re an early bird). Keep in mind though, the early bird doesn’t necessarily get the worm in this market - you might get the worm but a bigger, nastier bird of prey can sneak up and eat you too…

Why Trade Foreign Currencies?
There are many benefits and advantages to trading Forex. Here are just a few reasons why so many people are choosing this market:

*No commissions-No clearing fees, no exchange fees, no government fees, no brokerage fees. Brokers are compensated for their services through something called the bid-ask spread.
No middlemen. Spot currency trading eliminates the middlemen, and allows you to trade directly with the market responsible for the pricing on a particular currency pair.

*No fixed lot size.-In the futures markets, lot or contract sizes are determined by the exchanges. A standard-size contract for silver futures is 5000 ounces. In spot Forex, you determine your own lot size. This allows traders to participate with accounts as small as $250 (although we explain later why a $250 account is a bad idea).

*Low transaction costs- The retail transaction cost (the bid/ask spread) is typically less than 0.1 percent under normal market conditions. At larger dealers, the spread could be as low as .07 percent. Of course this depends on your leverage and all will be explained later.

*A 24-hour market- There is no waiting for the opening bell - from Sunday evening to Friday afternoon EST, the Forex market never sleeps. This is awesome for those who want to trade on a part-time basis, because you can choose when you want to trade--morning, noon or night.

*No one can corner the market-The foreign exchange market is so huge and has so many participants that no single entity (not even a central bank) can control the market price for an extended period of time.

*Leverage-In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make nice profits, and at the same time keep risk capital to a minimum. For example, Forex brokers offer 200 to 1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies. Similarly, with $500 dollars, one could trade with $100,000 dollars and so on. But leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains.

*High Liquidity-Because the Forex Market is so enormous, it is also extremely liquid. This means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell at will. You are never "stuck" in a trade. You can even set your online trading platform to automatically close your position at your desired profit level (a limit order), and/or close a trade if a trade is going against you (a stop loss order).

*Free “Demo” Accounts, News, Charts, and Analysis.- Most online Forex brokers offer 'demo' accounts to practice trading, along with breaking Forex news and charting services. All free! These are very valuable resources for “poor” and SMART traders who would like to hone their trading skills with 'play' money before opening a live trading account and risking real money.

*“Mini” and “Micro” Trading:- You would think that getting started as a currency trader would cost a ton of money. The fact is, compared to trading stocks, options or futures, it doesn't. Online Forex brokers offer "mini" and “micro” trading accounts, some with a minimum account deposit of $300 or less. Now we're not saying you should open an account with the bare minimum but it does makes Forex much more accessible to the average (poorer) individual who doesn't have a lot of start-up trading capital.

Learn Forex Trading

2007-12-20T07:46:00.000-08:00

Almost all internet marketers have heard of forex trading or online currency trading as it is sometimes referred to and many are curious about how the forex trading system works and where they can go to learn forex trading.

In order to become a successful forex trader you need to know what forex trading is and how to successfully trade forex. In order to achieve sufficient knowledge it is vital to learn forex trading from experts. This can be done in the form of a forex tutorial and there are literally hundreds of forex companies offering online tutorials and guides.

An online forex tutorial will explain how the foreign exchange market works and will also explain the types of forex orders that are available to you as a forex trader. A forex tutorial will also explain about technical indicators and what they mean, the economic indicators you will need to be aware of and the various options and strategies that are available to you as a forex trader.

If you are new to forex trading then it is essential that you learn forex trading before parting with any of your hard earned cash. Many online forex companies offer free training and demonstrations that resemble that of real time forex trading. There are also forex trading courses available and these are also a valuable way to learn forex trading as you can refer to these course time and time again.

The most important aspect when it comes to forex trading is to learn forex trading so that you understand how to trade and how to trade successfully. The more you learn forex trading the more understanding you will have and the more success. Finding a forex tutorial or forex trading course is simple. All you need to do is a brief internet search and you will have a great deal of tutorials and courses to choose from. If you are serious about succeeding as a forex trader, then it�s down to you, learn forex trading now and learn to succeed.

Gain Confidence and Boost Self Esteem in 5 Simple Steps

2007-12-16T07:49:00.000-08:00

We all want to become more confident and feel good about ourselves so we can live our very best life. Here are some ways to gain confidence and raise self-esteem:

1. Do something that requires a decision and a follow-through.

Have you been putting off writing that letter to aunt Martha? Is there a friend you’ve been meaning to call? Wash the car, tidy the garden or clean the house. You’ll gain confidence by setting goals (even small ones) and following through on them.

2. Enjoy something you do well.

Do you have any hobbies or sports that you enjoy playing? Some things like going swimming, painting or writing can hold your attention and get you into a state of ‘flow’. While you are in the flow you forget about everything else.Afterwards, you’ll feel competent and capable. It’s a great way to boost your self-esteem. If you don’t have any particular hobbies or pastimes that you enjoy make an effort to try something you’ve always wanted to try.

Picture yourself doing it, and then give it a try! It doesn’t have to be something big - it can be as simple as joining a walking club.You’ll find that you are more centered and happier if you do something that puts you in that flow at least once a week.

3. Shift the focus.

It’s been shown that low self-esteem develops hand-in-hand with individuals who put too much focus on themselves. You can gain confidence by doing something that focuses on someone else or even something else.You’ll find that when you are in a situation where you are meeting new people, you immediately become less nervous when you focus on the person you are meeting.At the end of the day, you’ve interacted with others and will notice that you feel much lighter.

4. Relax, already!

Learning to become more relaxed is a great life enhancer. People who are more relaxed have fewer problems with their memories and are more likely to take the bumps in the road of life in stride.The practice of meditation has gained popularity for this reason. You might want to look into Tai Chi, which involves physical relaxation techniques.Whatever method you decide on, take relaxation seriously. The benefits are just too great to ignore. If you’ve never considered relaxation important, think of it this way: if you can attend to something that results in feeling good, how can you not gain confidence in your personal abilities?

5. Make a list of everything you’ve ever accomplished.

Think small. An accomplishment is an accomplishment! Some things you could put on your list: passed my driver’s test and got my license, scored a goal when I played hockey, managed to save enough money to go on a trip and so on.These are just a few ideas you can use to gain confidence and boost your self-esteem. Use these ideas as a base point and add these things permanently in your life.

Keep in mind, people are not born with good self-esteem, most of us have to work at it. It develops from your thinking and the things you do daily to make yourself feel good.

Creating Wealth In Stock Market

2007-12-12T07:21:00.000-08:00

The 12 Rules of How to Avoid Losing and Start Making Money from the Stock Market

RULE 1: WHY DO YOU INVEST?

Make more money, this is the answer to most people.
If your reason is to make more money, then ask yourself these three questions:

1.Is your strategy making money?
2.Is your strategy safe?
3.How to increase the profit and minimize the risk?

RULE 2: HOW TO CREATE WEALTH IN STOCK MARKET WITH JUST $1,000

Let say we invest some lower price stocks with just $1,000 in the stock market, invest twice a year for short-to-medium term. If each time the return is double, you will make one million dollar cash within 5 years. If your starting capital is $20,000, after 3 years you will make one million dollar cash.

If you are using the same $1,000 capital, invest twice a year, but the return is only 50%, you will make one million dollar cash after 9 years.

So we can always start small. However, it is very important that we know how to select high profit and low risk stocks.

RULE 3: DON'T GET OBSESSED WITH STOCKS

Sitting and monitoring the market whole day long will not bring you profit. Instead, it increases pressure and misleads your judgment.

RULE 4: NEVER GAMBLE

95% of the people always buy at the highest price. They don’t really know when to buy, just relying on news, rumors and tips. Only 5% of the people knows how to trade at the lowest price. That’s why 95% are losing money, only the 5% are making money.
Investment Builds Wealth, Gambling Definitely Lose !

RULE 5: SAY GOODBYE TO NEWS

News used to be able to predict the market trend. But not anymore, it is difficult to judge which news could actually influence the market nowadays.

RULE 6: DO YOUR OWN ANALYSIS, FORGET ABOUT TIPS

Before investing, ask yourself these four questions:

1.How many people have already heard about the tips before you?
If many have heard about it before you, this news is already obsolete. The price is already high.

2.How long have the tips been spreading before it reaches you?
The next day?

3.Who told you?
Listed company director? Or friends?

4.Assuming that the tip is true, would you possibly know about it?
Normally insider news is not disclosed.

RULE 7: SELL YOUR STOCKS EVEN LOSING MONEY

It is easier to be said than done.

Sell at a loss is a difficult decision. Your heart will object, and your feeling will say "It is going to rebound, don't sell." Eventually price dropped further, causing a much tragic lost.

RULE 8: DON'T JUST FOCUS ON MAKING MONEY

How to protect your capital is much more important. Don’t try to make 100% profit. It is already good enough to have a 60% profit margin.

RULE 9: HISTORY WILL NOT ALWAYS REPEAT

Everyone expects to make some money from the stock market before Christmas, New Year, annual budget announcement or election, but the stock market is not always bullish during these events. We can say history is not always repeated.
The best way is “Let the Market Lead us”.

RULE 10: QUOTES FROM WARREN BUFFET

There are only two rules to make money in stock market:

The first rule: Never lose your money.
The second rule: Never forget the first rule.

RULE 11: TURN BAD STOCKS INTO GOOD STOCKS, DON’T JUST HOLD YOUR STOCKS

Don’t hold your stock too long, there is a value when stocks are sold.

How long have you been holding your stocks until now?
Since Year 1993? 1997? Or Year 2000?

Why didn't you exercise your stocks? Long term investment strategy is not practical anymore. Even the blue chips also crash when the market collapses.

The best strategy is to sell the stocks that are not earning money, and reselect some good counters. Buy low, sell high for several times will earn you more than enough to compensate the lost.

RULE 12: WAKE UP FROM MISTAKES

Stop investing if you are not sure of when to buy or sell.

Without the knowledge of investment, you are bound to lose again. This is an age of information. Investors are using knowledge, techniques and strategies to make money. Without investment knowledge, how do you protect your money?

Building wealth through investing starts with securing your capital.

Buffett's Big Bet

2007-12-12T07:09:00.000-08:00

Over the past few days, there have been several stories written about Warren Buffett�s $14 billion bet on global stock markets. I believe these stories are all in reference to this excerpt form Berkshire Hathaway�s annual report:

�Berkshire is also subject to equity price risk with respect to certain long duration equity index put contracts. Berkshire�s maximum exposure with respect to such contracts is approximately $14 billion at December 31, 2005. These contracts generally expire 15 to 20 years from inception. Outstanding contracts at December 31, 2005, have been written on four major equity indexes including three foreign. Berkshire�s potential exposure with respect to these contracts is directly correlated to the movement of the underlying stock index between contract inception date and expiration. Thus, if the overall value at December 31, 2005 of the underlying indices decline 30%, Berkshire would incur a pre-tax loss of approximately $900 million.�

It�s impossible to evaluate what exactly this means for Berkshire or what it tells us about Buffett�s thinking without knowing more details. But, there are a few things I�d suggest you consider when reading the news reports.

First, the $14 billion headline number makes this bet look larger than it really is. According to the above disclosure, a 30% decline in the underlying indices would only create a $900 million pre-tax loss. One article stated that a decline in the indexes to zero was highly unlikely given historical trends. It�s a lot more than highly unlikely. But, since we don�t know the details of Berkshire�s exposure, we can�t evaluate the real risk of a very large loss.

A lot of these news stories have called Berkshire�s �long duration equity index put contracts� a bet on global stock markets. A few individuals have been quoted as saying Buffett has become bullish long-term. Buffett�s always been optimistic about the very long-term insofar as he recognizes how better things are today than they have been at any other time in history, and how that is likely to remain true for some time. Despite Buffett�s concerns about nuclear war, he doesn�t see a return to the Dark Ages and those kinds of anemic returns on capital.

That�s important to keep in mind, because I�m not sure this bet is much more than that. If you assume returns on equity will be similar to those achieved in the years since industrialization began, and you assume central governments will continue to cause inflation, a long duration equity index put contract isn�t much of a stretch.

Equity will earn returns, much of those returns will be retained by the businesses, and inflation will increase (nominal) stock prices regardless of whether the underlying businesses� assets are increasing or remaining stable.

So, I�m not sure this is a bullish sign. In fact, it may be a bearish sign, because it suggests Buffett can�t find individual equities to buy, three of the four indexes are foreign, and someone wants to be protected against very large losses in a diversified group of holdings.

Remember, someone is paying for this protection. In my opinion, it�s not the kind of protection investors need. It�s long-term protection on an index. I suppose I can see why a pension fund might want this (to increase exposure to equities), but it seems like exactly the sort of thing an insurance company can make money selling. There�s fear of a very large loss, and a lot of factors that are hard to see that will tend to make that loss pretty unlikely.

We don�t know what premiums Berkshire is receiving, so we really can�t evaluate these contracts. If someone writes hurricane insurance it doesn�t mean they think hurricanes are unlikely, it just means they think someone is dumb enough to pay more than the protection is worth. Knowing the odds of a decline in global stock markets isn�t enough to evaluate Berkshire�s contracts, because we don�t know the price.

I�m not enamored with current valuations in the U.S., but looking out a couple decades it�s not all doom and gloom. Markets tend to overshoot in both directions, but there�s usually someone sane enough to buy when stocks get cheap enough.

What�s remarkable about the way investors move stock prices isn�t the magnitude of the truly major moves (up or down); it�s the frequency of meaningful moves when there�s no meaningful changes in underlying values. Think about the price range of an average stock in an average year � that�s the really irrational part of investor behavior. I wouldn�t want to have anything to do with a one-year contract on a single stock. That�s a very different situation.

Master your Time, Double your Success

2007-12-08T08:18:00.000-08:00

Time Management is an essential success skill

Practically speaking, time is constant: 60 seconds per minute, 60 minutes per hour, 24 hours per day, 7 days a week (24/7).

However, the usage of time differs among each individual. Some might give time the capacity to control their lives, and others may find themselves a slave of time. Some might have no time at all to relax and create a stress-free lifestyle.

But the bottom-line is not to make time an enemy. One must have time to think of things in order, to plan ways to minimize waste of time, energy, and valuable resources.

Effective time management involves patience and practical thinking. Time and the natural changes in the environment may be modified but, in the end, we should follow the natural order of things.

Remember "There's no day but today." We should use tools and ideas that can improve our efficiency in using time. Time is not renewable; and moments are irreplaceable. A thing done or a past experience cannot be recreated.

However, we can expect these changes and prepare ourselves for better or worse scenarios. We cannot control time but we can make adjustments based on a given moment.

Learning or studying something to achieve mastery is one good example where we can minimize errors or develop ourselves amidst the ever-changing times. During this period of learning, we must maximize the given resources (including time) to fully develop a skill or to acquire knowledge so that by the time we need such skill, we won't be wasting hours trying to figure things out.

One who is able to prepare for a number of possibilities upon entering a situation may have more time to think of the moves and decision to take to minimize the possibilities of errors.

Here are some tips:

1. Think of goals and aims as necessary achievements.
In achieving your desired goals, you should start with a positive outlook. You must be excited with the challenges and tasks that you have to do to give you the right start or motivation.

However, you should also see the path towards your goals in concrete terms. These achievements or aims can be reached by becoming realistic and by knowing your directions. Think of the scenarios of success but you should also recognize the fact that these roads have to be traversed in a given time.

This way, you are not only looking at the possibility of success, but you are also giving yourself the right motivation and the proper time to prepare for a fresh start and achieve your goals at the soonest possible time.

2. Think of the time frame in achieving goals and aims.

You are to do a task at a particular time. As you begin planning your strategies, you must also look forward and recognize your time frames in doing such tasks.

Time frames are the periods you are giving yourself to finish a task. These are just estimates or approximations since you are not the sole factor that will contribute in finishing the given task. Be wary of the processes in your environment; for example, if you are to write a book or an article, consider the time you are giving yourself for this activity in relation to your environment.

Finally, think of the flow of things or the movement of time in your daily life as you move forward in achieving your desired goals. Think of your other activities that might affect the time factor in finishing given tasks.

You might be spending too much time on a very idle activity (like too many late night parties or soir�es or a whole day in front of your computer playing online games) that will give you less time for your plans towards self-fulfillment and success.

3. Be realistic and expect changes.

Time Management involves flexibility and open-mindedness. Do not expect that you can finish a task in what you've considered as your time frame unless everything is laid down perfectly. You should allot some allowance in your time frame, probably for the sake of the unforeseen or unexpected circumstances.

Remember that contradicting factors bring development so don�t be upset with these changes since everything is undergoing a sort of a synthesis. For example, you already made your business plan and a lot of careful considerations have been completed, including the period in which you expect your business to give you financial and personal satisfaction.

However, during the course of application, there are other factors or changes, which you omitted in your feasibility study. In this case, you should have allowed some time for handling unknown variables.

Instead of becoming immobile or paralyzed with any situation, be flexible by making changes. Level the playing field with innovative strategies based on the situation and knowledge you will acquire from your experience in doing the task. Maximize your time by examining your errors and by moving on with solutions that will sustain whatever efforts you have given to traverse difficult situations and challenges.

4. Know your work style.

You are a time clock too. You work with your habits, your cycles, and bodily rhythms. You sleep, eat, exercise, read a book, or cook with either efficiency or a sloppy lifestyle. Give yourself some time to think about how fast you can work on things.

Your sleeping habits and work efficiency are based on what you've grown-up with as an individual. You may either stay up late at night or sleep early, unconsciously following past habits that no longer work for you. See what works for you and what needs to be changed.

Finally, examine yourself and know how fast you can work on things, like typing, filing office data, writing a term paper, or even reading a book. You don�t need to know the exact time a task takes but at least you will have an approximate measurement. When you are able to gauge how you spend your time and how long you take to do things, you can develop a meaningful schedule.

5. Know your environment or workplace

Your life at home has a time of its own, your office has schedules, and your neighborhood has activities to offer. You are surrounded by these time schedules. It would be better if you would be conscious of the time flow in your surroundings.

The daily tasks in your house determine your personal time. Your working hours are defined by the nature of your work and your workplace. And the activities by the people around you may affect your strategies and daily endeavors.

Finally, you are not alone in your workplace and other people are also wary of their time and schedules. All of these would affect your time frames and you must be in-synch with all of these to manage your limited time hassle-free.

6. Make Plans

Planning is a way of saving time for errors. Mistakes usually happen because of unexpected and unforeseen factors such as a wrong estimate of resources or new problems.

Add a small time allowance to your estimated time so that you may still finish the task in a given time-- even if things don't go as smoothly as initially planned. With the proper plan and preparation, these unforeseen circumstances can be expected as well as minimized.

Time management, then, is giving yourself a period to reflect on how time flows in your life. You are also recognizing the factor that affects time and its fluidity. If you manage your time, you'll find ways to have the time of your life.