he global financial turmoil seen during 2008 has led to extreme volatility on the world's stock markets.
Below you can see how some of the main global stock indexes have fared during 2008 (graphs update automatically).
FTSE 100 INDEX: JAN-DEC 2008
Saturday, November 15, 2008
Global stock markets in 2008
he global financial turmoil seen during 2008 has led to extreme volatility on the world's stock markets.
Below you can see how some of the main global stock indexes have fared during 2008 (graphs update automatically).
FTSE 100 INDEX: JAN-DEC 2008
Monday, October 20, 2008
Carry Trade
All that is needed to understand the carry trade concept is a basic knowledge of foreign exchange and interest rates differentials. Each currency has a different interest rate attached to it determined partly by policy authorities and partly by market demand. When taking a foreign exchange position a trader holds long position one currency and short position in another. Each day, the trader will collect the interest on the long side of their trade and pay the interest on the short side. If the interest rate on the purchased currency is higher than that of the sold currency, the result is a net inflow of interest. If the sold currency’s interest rate is greater than the purchased currency’s rate, the trader must pay the net interest.
Carry Trade As A Strategy
For many years, money managers and banks have utilized the inflow and outflow of yield to collect consistent income in times of low volatility and high risk appetite. Holding only one or two currency pairs would invite considerable idiosyncratic risk (or risk related to those few pairs held); so traders create portfolios of various carry trade pairs to diversify risk from any single pair and isolate exposure to demand for yield. However, even with risk diversified away from any one pair, a carry basket is still exposed to those conditions that render this yield seeking strategy undesirable, such as: high volatility, small interest rate differentials or a general aversion to risk. Therefore, the carry trade will consistently collect an interest income, but there are still situation when the carry trade can face large drawdowns in certain market conditions. As such, a trader needs to decide when it is time to underweight or overweight their carry trade exposure.
How are Rate Expectations calculated:
To read this chart, any positive number represents an expected firming in the Japanese benchmark lending rate over the coming year with each point representing one basis point change. When rate expectations rise, the carry differential is expected to contract and carry trades will suffer.
What are Risk Reversals:
We use risk reversals on USDJPY as it is the benchmark yen pair and the Japanese currency is considered the proxy funding currency for carry trader. When Risk Reversals grow more extreme to the downside, there is greater expectations for the yen to gain – an unfavorable condition for carry trades.
What is the DailyFX Volatility Index (VIX):
US Dollar & US Bailout Bill
EURUSD stays under pressure
US Financial
today. After turning down the 1st proposal, the
House of Representatives voted 263 in opposition to
171 to endorse a plan to give the Treasury $300
billion in instant funds to take deadly debt from
banks' and lenders' balance sheets to make
confidence stable and defrost the iced-up credit
markets. Right after following the vote, stocks pulled
back from their pre-event highs and dollar instability
was changed a bit. A quiet response from the carry
trade, Treasuries and credit default swap indexes
indicates there might be cynicism on this bills
efficiency.
US Service Sector fighting to save US from downturn
Forex Market Update: Early Asia Trading
Oil crisis affect the USD. how exactly? find out.
In 1973, oil prices jumped 134% when the members of the OAPEC, which is OPEC plus Egypt and Syria, announced that they were no longer shipping oil to nations that supported Israel in its conflict with Syria and Egypt. This effectively shut down exports to the US, Western Europe and Japan. As a result, prices rose significantly to account for the sharp reduction in supply. At the same time, Saudi Arabia, Iran, Iraq, Abu Dhabi, Kuwait, and Qatar unilaterally raised prices by 17 percent and announced production cuts after negotiations with major oil companies.
In response to this oil shock, the trade weighted US dollar index* as measured against the major currencies first strengthened alongside oil and then sold off immediately. At that time, the Federal Reserve was combating inflationary pressures by raising interest rates. The jump in crude exacerbated the need for further rate hikes, forcing the central bank to bring the Fed Funds target rate from 7.5 percent in May 1973 to a high of 13 percent by the summer of 1974. The focus on inflation was initially dollar bullish but once the rate hikes started to have a serious impact on US growth, the trend turned dollar bearish. Between the third quarter of 1973 and the first quarter of 1975, GDP growth contracted five out of the seven quarters and in response to the deterioration in growth, the US dollar erased all of its gains.
The US’ second oil crisis in 1979 was triggered by the Iranian revolution and exacerbated by a gasoline shortage. OPEC raised prices by 14.5 percent on April 1st and the US Department of Energy announced phased oil price decontrols which involved the gradual increased of old oil price ceilings. Shortly thereafter, OEC raised prices a second time by 15 percent, the US halted imports from Iran, while Kuwait, Iran and Libya cut production. Saudi Arabia also eventually raised their market crude prices to $24 per barrel and because of all of these factors, crude oil prices increased 118 percent between January 1979 and December 1979.
The price action of the US dollar during that time was very similar to the price action of the greenback in 1973; it first rallied and then sold off. At that time, the Federal Reserve was also hiking interest rates to combat inflationary pressures and the oil price spike exacerbated their degree of rate hikes. Between January 1979 and December 1979, rates where taken from 10 percent to 14 percent and by March of 1980, the Fed Funds rate hit a high of 20 percent. Quarterly GDP growth dropped 7.8 percent in the second quarter of 1980, triggering the dollar’s demise.
Between June and October of 1990, oil prices also jumped 113 percent as a result of the first Gulf War. Interestingly enough, the US dollar behaved very differently for two reasons. The first was the short-lived nature of the oil spike; prices started falling 6 months after the initial rise and the second was the Fed’s monetary policy cycle. Unlike the oil crisis of 1973 or 1979, the Federal Reserve started cutting interest rates before the spike and continued to reduce rates throughout 1990 and into 1991 and the dollar was already in a downtrend due to the loosening of monetary policy. The weakness continued as growth slowed with GDP remaining stagnant in third quarter of 1990, and then falling 3 and 2 percent respectively over the next two quarters.
The characteristics surrounding the latest oil rise is more similar to the oil spike in 1990 than the shocks of 1973 and 1979. Therefore it is easy to understand why the US dollar has continued to weaken despite growing inflationary pressures. The Federal Reserve has been consistently cutting interest and these rate cuts have played a far more dominant role in the price action of the dollar than the rise in oil. The market basically doesn’t believe that the Fed will start raising interest rates – and they have good reason to feel this way because based upon the last 3 oil shocks, growth in coming quarters should contract. Back in the 1990s, the Fed took a break from cutting rates like they are expected to do in June, but they quickly resurrected their rate cuts as the economy slowed. Of course, interest rates were much higher then than they are now, but if growth does not pick up, more rate cuts may be right around the corner.
Euro Profitability chance against 1.4672
Support line is at 1.4770 coming much below there would begin to put in doubt the bullish outlook, if so, still a risky game unless support line will reach and be stable for a while.
Forex Currency Trading
Forex Currency Trading and Easy Forex
Forex Currency Trading and Entering Into the Market
Forex Currency Trading and a Forex Broker
Easy Forex
Learning about Easy Forex
Easy Forex and Live Training
Basic Easy Forex
Professional Tutor by Forex Worldwide Training and Support
The problem is we’ve seen it before. Again and again. It’s not a training system; it’s a focus on one part of technical analysis or another (often by people who don’t know the definition of technical analysis). They throw around words like “Fibonacci” or “Bollinger Bands” as if they themselves invented the term.
The tragedy is that “newbie” investors can get sucked in to the promises of huge earnings. They shell out for the ebook. And they’re left confused or overly-confident. Either way, they lose.
How does one succeed in the market? The truth of the matter is, one can succeed with solid, foundational forex training, and then back up that training with support and advice from real trading professionals, and then back up that training and that support with experience.
That’s where VIRT® Professional Tutor by Forex Worldwide Training and Support comes in. In a world of “me-too” content, VIRT® Professional Tutor is real forex training. This organization ignores the hype and instead focuses on doing one thing really, really well. They offer comprehensive, competent training delivered in a compelling way.
Their forex training is comprehensive and competent because it gives every level of investor a place to start. Are you brand new to forex investments? There’s a novice section. Are you experience in forex investments? There’s an advance section. Each section covers a wealth of material that truly takes the learner on a journey from basic introductions, step-by-step through the concepts.
Forex training for novices at VIRT® Professional Tutor is made up of 6 modules covering such diverse but fundamental topics as Market Terminology, Business Environment, Predictability, Capital Management, Probability Study, and Application of Entry Point System. Each module contains 5 to 9 lessons that look at that topic in-depth. Each lesson ends in a quiz to help the student uncover the effectiveness of their learning.
Forex training for advanced investors at VIRT® Professional Tutor is made up of 4 modules covering expert topics like Advanced Fibonacci, the Rule of 8, Fundamentals, and System Development. Again, each module contains several lessons and finishes with a quiz.
This material is compelling in its delivery. There’s text, of course, and interspersed throughout the text are videos and interactive content – including graphics and graphical stories – to explain the concepts and illustrate with real world examples. The text talks about a concept and then a graph is shown to demonstrate an example in real life and to drive home the point.
This level of training enables investors of all backgrounds and investing experiences to enter markets confidently and to exit investments profitably. But to back up their training, a support forum is also available where investors can interact and where expert traders can offer advice, guidance, and mentorship to participants.
Summary
VIRT® Professional Tutor provides high-quality, peerless forex training for novices and advanced investors alike. They package powerful, real world content into a dynamic and compelling interface, which promotes understanding and application. Not only that, they back up their training with support in a forum that connects experts with novices and shares the wealth of knowledge available.
Sunday, October 19, 2008
College Student Loan Help
2. Under the Clinton administration the federal government got involved in the student loan process in a big way. Now the private companies are getting the business back. If you are going to a private college you may not be eligible for federal loans.
3. Always consider your options and talk to a financial aid counselor. If you are applying for graduate school, be aware of the fact that there are few scholarships for graduate school relative to undergraduate programs. You may be able to find a scholarship, but in most cases it will not cover the real costs of graduate school. A graduate student loan may be your only option.
4. It is recommended that you go with a loan company that offers all of the following types of loan services:
Private Student Loans
PLUS Loans
Federal Stafford Loans
Student Loan Consolidation
Private Consolidation Loans
You want the largest selection possible.
5. Whenever possible lock in a student loan rate. Some loans are based off the Treasury bill. In these cases, the loan rate fluctuates. This can either be really good or bad. When interest rates go up, you may want to restructure the loan.
6. Pick a fixed student loan rate and start date to do a side by side comparison. Make sure that you are comparing apples to apples when student loan shopping and checkout numerous student loan companies before making a decision.
7. Never borrow more than you absolutely need. Compound interest can make a small student loan turn into a huge amount. Don't take out extra money and play the stock market or try to get rich quick. This scenario almost never works out for college students. Moreover, in most cases it is a violation of the student loan agreement.
Methods Used To Value Stocks
Investors and financial experts also rely on a number of famous models to value stock:
Basic ABO Model for Valuing Stock
This method, the Edwards-Bell-Ohlson model, considers rate of returns, dividends, risks, book value, time, and future earnings to determine value of stock.
The Risk Proxy EB You'll Model for Valuing Stock
This method of valuing stock does not consider risk and beta, which is used by other models. Instead, this method uses proxies to evaluate risk. This means that factors that investors have determined indicate risk are used instead of beta at risk to value stock. Specifically, high market capitalization, the number of analysts covering a stock, variation in estimated earnings, and debt to market ratio are all considered.
What is meant by the term stock valuation?
chosen by experts. This article covers:
What are the various methods used to value stocks?
How stocks can be valued under PEG value method?
Find software programs that helps in stock valuation
Stock option valuation is the process by which stock options are assigned a dollar value. The truth is every stock value, stock price, and securities cost you see has been carefully chosen by experts. When a company is first offering stock, especially, they use a number of techniques to determine stock valuation: LIFO (meaning last in, first out, a way of evaluating inventory and profits), market conditions, company profitability, and other factors which can affect the stock's price are carefully considered by experts before determining an initial stock price. There are innumerable stock valuation methods.
Although the purpose of all common stock valuation is to provide an accurate dollar value for stocks, stock valuation is so complex that no one valuation model perfectly determines value stock. However, once a stock is available in the market, theoretically the process of trade eventually corrects the price by determining a value that investors are willing to pay. Just because stock valuation techniques and stock valuation software are not foolproof, does not mean that assigning dollar values to stocks is worthless. Valuation is useful when comparing stocks and many investors have found valuation very useful in determining their investments.
How Does A Stock Exchange Work?
If a broker approaches a post and sees that the price of the stock is what they are authorized to pay, the broker can complete the transaction themselves. As soon as a transaction occurs, the broker makes a memorandum and reports it to the brokerage office by telephone instantly. At the post, an exchange employee jots down on a special card the details of the transaction including the stock symbol, the number of shares, and the price of the stocks. The employee then puts the card into an optical reader. The reader puts this information into a computer and transmits the information of the buy or sell of the stock to the market. This means that information about the transaction is added to the stock market and the transaction is counted on the many stock market tickers and information display devices that investors rely on all over the world. Today, markets are instantly linked by the Internet, allowing for faster exchange.
What Is A Stock Exchange?
At first, stock exchanges were completely open. Anyone who wished to buy or sell could do so at a stock exchange. However, to make stock exchange more effective, membership became limited to those in clubs and other associations. Today, professionals who have a seat at the exchange are the people who trade at the exchange.
Stock markets affect the entire economy and encourage investment. In the United States, larger cities including Boston, New York, Philadelphia, Denver, Chicago, Los Angeles, and San Francisco all have stock exchanges. Major cities across the world also have exchanges of their own.
Not all stocks are listed on exchanges. Some are sold on the so-called over-the-counter market, which means that they are sold and bought directly by brokers. This method of buying became especially important during the early 1980s. Today, online stock exchange is even more covalent. Thanks to the growth of the Internet almost anyone can sell and buy stocks online. Investors simply tell their banks or investment brokers online what they wish to trade and when and the brokers hired by the online trading system buy or sell stocks for the client electronically.
Online Stock Exchange
sells certificates representing commodities of trade. This article discusses:
What is the principle behind the operation of stock exchanges?
What are the functions and processes involved in stock exchanges?
Know in detail about major stock exchanges
Understanding what a stock exchange is and how an online stock exchange works, can help you make the right decisions when it comes to your investment. Being able to follow the NY stock exchange and being able to understand the NASDAQ stock exchange numbers that appear on your news every evening can help you become a better investor and can help you profit more from the stock market.
Low-Risk, Mid-Risk, and High- Risk Stocks
Knowing about the different types of stocks available shows you that you have many options when it comes to investing. Rather than thinking of stocks as something monolithic, you should consider all the types of stocks and select those that best meet your goals and your investment.
Speculative Stocks
Technology Stocks
Blue Chip Stocks
Growth Stocks
Preferred Stocks and Common Stocks
Preferred stock offers you preferential treatment when it comes to paying out of dividends. If the company goes bankrupt, stocks holders holding preferred equities get faster access to any assets not used towards paying debts. If you have preferred cumulative stock, your position is secure. This type of stock allows unpaid dividends to be accrued. If a company cannot pay dividends one year, your dividends accrue until the company can pay. During such period all the money owed over the previous years will be paid. Those holding preferred types of stock usually have no voting ability and these stocks only get their pre-determined dividend and not more than that. This is to offset the other advantages of preferred status.
An overview of the Forex market
The main enticements of currency dealing to private investors and attractions for short-term Forex trading are:
24-hour trading, 5 days a week with non-stop access to global Forex dealers.
An enormous liquid market making it easy to trade most currencies.
Volatile markets offering profit opportunities.
Standard instruments for controlling risk exposure.
The ability to profit in rising or falling markets.
Leveraged trading with low margin requirements.
Many options for zero commission trading.
Forex trading
The investor's goal in Forex trading is to profit from foreign currency movements. Forex trading or currency trading is always done in currency pairs. For example, the exchange rate of EUR/USD on Aug 26th, 2003 was 1.0857. This number is also referred to as a "Forex rate" or just "rate" for short. If the investor had bought 1000 euros on that date, he would have paid 1085.70 U.S. dollars. One year later, the Forex rate was 1.2083, which means that the value of the euro (the numerator of the EUR/USD ratio) increased in relation to the U.S. dollar. The investor could now sell the 1000 euros in order to receive 1208.30 dollars. Therefore, the investor would have USD 122.60 more than what he had started one year earlier. However, to know if the investor made a good investment, one needs to compare this investment option to alternative investments. At the very minimum, the return on investment (ROI) should be compared to the return on a "risk-free" investment. One example of a risk-free investment is long-term U.S. government bonds since there is practically no chance for a default, i.e. the U.S. government going bankrupt or being unable or unwilling to pay its debt obligation.
When trading currencies, trade only when you expect the currency you are buying to increase in value relative to the currency you are selling. If the currency you are buying does increase in value, you must sell back the other currency in order to lock in a profit. An open trade (also called an open position) is a trade in which a trader has bought or sold a particular currency pair and has not yet sold or bought back the equivalent amount to close the position.
However, it is estimated that anywhere from 70%-90% of the FX market is speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency.
CURRENCY TRADING SUMMARY
· The Euro (EUR) rebounded from its previous session of declines as manufacturing data out of the U.S. confirmed it grew at it’s slowest pace in 10 months. Coupled with the Eurozone manufacturing accelerating for the month of November as PMI was above expectations of 52.6, coming in at 52.8 (Previous: 51.7). The EURUSD traded with a low of 1.4621 and a high of 1.4708 before closing the session at 1.4659 at the end of the New York session. PPI for the month of October is scheduled for release out of the Eurozone on Tuesday with forecasts at 0.4%/3.1% for the m/m and y/y.
· The Japanese Yen (JPY) was able to gain against a number of majors during the session as concerns continue to surround the market that losses in credit markets may worsen further. As a result the low interest bearing Japanese currency was reprieved of much of its role in funding more attractive yield currencies. The Japanese yen was able to rebound from two week lows against the dollar as Moody's Investors Service said it is preparing the biggest credit-rating cuts since sub-prime mortgages first shook the financial markets. Overall the USDJPY traded with a low of 110.14 and a high of 111.05 before closing the session at 110.43 at the end of New York.
· The Sterling (GBP) edged higher versus the dollar on speculation that the UK economy had not slowed enough to warrant a rate cut by the BoE. In data news, the Sterling Pound was buoyed by reports which had shown manufacturing had quickened unexpectedly for the month of November (Actual: 54.4; Forecast: 52.5) adding further support to the likelihood that the BoE would look to hold rates for the remaining part of 2007. The GBPUSD traded with a low of 2.0526 and a high of 2.0679 before closing the session at 2.0666 at the end of New York. Retail Sales for the UK was released at 1.2% above the previous 1% during the early part of the Asian Session.
· The Australian Dollar (AUD) rose from levels below the key 88 cent mark despite carry trades being out of favor with the investors. Nonetheless, the Aussie traded within tight ranges having a low of 0.8788 and a high of 0.8854 before closing the day at 0.8842 in the New York session. Retail sales for the month of October were released at 0.2% below the consensus of 0.6% (Previous: 0.8%)
· Gold (XAU) bounced of key support levels once again failing to break 800 marks. XAU traded with a low of 777.80 and a high of 791.40.
TECHNICAL COMMENTARY
Currency Sup 2 Sup 1 Spot Res 1 Res 2
EUR/USD 1.4602 1.4617 1.4665 1.4859 1.4908
USD/JPY 108.27 109.48 110.50 111.33 111.76
GBP/USD 2.0519 2.0534 2.0640 2.0833 2.0846
AUD/USD 0.8720 0.8776 0.8795 0.8321 0.8939
XAU/USD 773.00 778.90 792.10 808.05 815.70
· Euro – 1.4665
Initial support at 1.4617 (Nov 19 low) followed by 1.4602 (61.8% retracement of the 1.4010 to 1.4968 advance). Initial resistance is now located at 1.4859 (Nov 28 high) followed by 1.4908 (Nov 27 high).
· Yen – 110.50
Initial support is located at 109.48 (Nov 28 low) followed by 108.27 (Nov 26 low). Initial resistance is now at 111.33 (38.2% retracement of the 117.95 to 107.23 decline) followed by 111.14 (Nov 14 high)
· Pound – 2.0640
Initial support at 2.0534 (Nov 30 low) followed by 2.0519 (Nov 23 low). Initial resistance is now at 2.0833 (Nov 28 high) followed by 2.0846 (Nov 14 high)
· Australian Dollar – 0.8795
Initial support a 0.8776 (Nov 29 low) followed by 0.8720 (Nov 28 low). Initial resistance is now at 0.8921 (Nov 28 high) followed by 0.8939 (38.2% retracement of the 0.9400 to 0.8654 decline)
· Gold – 792.10
Initial support at 778.90 (Nov 30 low) followed by 773.0 (Nov 20 low). Initial resistance is now at 808.05 (Nov 29 high) followed by 815.70 (November 27 high)
Forex Trading Tips:
This two-part report clearly and simply details essential tips on how to avoid typical pitfalls and start making more money in your forex trading.
Trade pairs, not currencies - Like any relationship, you have to know both sides. Success or failure in forex trading depends upon being right about both currencies and how they impact one another, not just one.
Knowledge is Power - When starting out trading forex online, it is essential that you understand the basics of this market if you want to make the most of your investments.
The main forex influencer is global news and events. For example, say an ECB statement is released on European interest rates which typically will cause a flurry of activity. Most newcomers react violently to news like this and close their positions and subsequently miss out on some of the best trading opportunities by waiting until the market calms down. The potential in the forex market is in the volatility, not in its tranquility.
Unambitious trading - Many new traders will place very tight orders in order to take very small profits. This is not a sustainable approach because although you may be profitable in the short run (if you are lucky), you risk losing in the longer term as you have to recover the difference between the bid and the ask price before you can make any profit and this is much more difficult when you make small trades than when you make larger ones.
Over-cautious trading - Like the trader who tries to take small incremental profits all the time, the trader who places tight stop losses with a retail forex broker is doomed. As we stated above, you have to give your position a fair chance to demonstrate its ability to produce. If you don’t place reasonable stop losses that allow your trade to do so, you will always end up undercutting yourself and losing a small piece of your deposit with every trade.
Independence - If you are new to forex, you will either decide to trade your own money or to have a broker trade it for you. So far, so good. But your risk of losing increases exponentially if you either of these two things:
Interfere with what your broker is doing on your behalf (as his strategy might require a long gestation period);
Seek advice from too many sources - multiple input will only result in multiple losses. Take a position, ride with it and then analyse the outcome - by yourself, for yourself.
Tiny margins - Margin trading is one of the biggest advantages in trading forex as it allows you to trade amounts far larger than the total of your deposits. However, it can also be dangerous to novice traders as it can appeal to the greed factor that destroys many forex traders. The best guideline is to increase your leverage in line with your experience and success.
No strategy - The aim of making money is not a trading strategy. A strategy is your map for how you plan to make money. Your strategy details the approach you are going to take, which currencies you are going to trade and how you will manage your risk. Without a strategy, you may become one of the 90% of new traders that lose their money.
Trading Off-Peak Hours - Professional FX traders, option traders, and hedge funds posses a huge advantage over small retail traders during off-peak hours (between 2200 CET and 1000 CET) as they can hedge their positions and move them around when there is far small trade volume is going through (meaning their risk is smaller). The best advice for trading during off peak hours is simple - don’t.
The only way is up/down - When the market is on its way up, the market is on its way up. When the market is going down, the market is going down. That’s it. There are many systems which analyse past trends, but none that can accurately predict the future. But if you acknowledge to yourself that all that is happening at any time is that the market is simply moving, you’ll be amazed at how hard it is to blame anyone else.
Trade on the news - Most of the really big market moves occur around news time. Trading volume is high and the moves are significant; this means there is no better time to trade than when news is released. This is when the big players adjust their positions and prices change resulting in a serious currency flow.
Exiting Trades - If you place a trade and it’s not working out for you, get out. Don’t compound your mistake by staying in and hoping for a reversal. If you’re in a winning trade, don’t talk yourself out of the position because you’re bored or want to relieve stress; stress is a natural part of trading; get used to it.
Don’t trade too short-term - If you are aiming to make less than 20 points profit, don’t undertake the trade. The spread you are trading on will make the odds against you far too high.
Don’t be smart - The most successful traders I know keep their trading simple. They don’t analyse all day or research historical trends and track web logs and their results are excellent.
Tops and Bottoms - There are no real “bargains” in trading foreign exchange. Trade in the direction the price is going in and you’re results will be almost guaranteed to improve.
Ignoring the technicals- Understanding whether the market is over-extended long or short is a key indicator of price action. Spikes occur in the market when it is moving all one way.
Emotional Trading - Without that all-important strategy, you’re trades essentially are thoughts only and thoughts are emotions and a very poor foundation for trading. When most of us are upset and emotional, we don’t tend to make the wisest decisions. Don’t let your emotions sway you.
Confidence - Confidence comes from successful trading. If you lose money early in your trading career it’s very difficult to regain it; the trick is not to go off half-cocked; learn the business before you trade. Remember, knowledge is power.
The second and final part of this report clearly and simply details more essential tips on how to avoid the pitfalls and start making more money in your forex trading.
Take it like a man - If you decide to ride a loss, you are simply displaying stupidity and cowardice. It takes guts to accept your loss and wait for tomorrow to try again. Sticking to a bad position ruins lots of traders - permanently. Try to remember that the market often behaves illogically, so don’t get commit to any one trade; it’s just a trade. One good trade will not make you a trading success; it’s ongoing regular performance over months and years that makes a good trader.
Focus - Fantasising about possible profits and then “spending” them before you have realised them is no good. Focus on your current position(s) and place reasonable stop losses at the time you do the trade. Then sit back and enjoy the ride - you have no real control from now on, the market will do what it wants to do.
Don’t trust demos - Demo trading often causes new traders to learn bad habits. These bad habits, which can be very dangerous in the long run, come about because you are playing with virtual money. Once you know how your broker’s system works, start trading small amounts and only take the risk you can afford to win or lose.
Stick to the strategy - When you make money on a well thought-out strategic trade, don’t go and lose half of it next time on a fancy; stick to your strategy and invest profits on the next trade that matches your long-term goals.
Trade today - Most successful day traders are highly focused on what’s happening in the short-term, not what may happen over the next month. If you’re trading with 40 to 60-point stops focus on what’s happening today as the market will probably move too quickly to consider the long-term future. However, the long-term trends are not unimportant; they will not always help you though if you’re trading intraday.
The clues are in the details - The bottom line on your account balance doesn’t tell the whole story. Consider individual trade details; analyse your losses and the telling losing streaks. Generally, traders that make money without suffering significant daily losses have the best chance of sustaining positive performance in the long term.
Simulated Results - Be very careful and wary about infamous “black box” systems. These so-called trading signal systems do not often explain exactly how the trade signals they generate are produced. Typically, these systems only show their track record of extraordinary results - historical results. Successfully predicting future trade scenarios is altogether more complex. The high-speed algorithmic capabilities of these systems provide significant retrospective trading systems, not ones which will help you trade effectively in the future.
Get to know one cross at a time - Each currency pair is unique, and has a unique way of moving in the marketplace. The forces which cause the pair to move up and down are individual to each cross, so study them and learn from your experience and apply your learning to one cross at a time.
Risk Reward - If you put a 20 point stop and a 50 point profit your chances of winning are probably about 1-3 against you. In fact, given the spread you’re trading on, it’s more likely to be 1-4. Play the odds the market gives you.
Trading for Wrong Reasons - Don’t trade if you are bored, unsure or reacting on a whim. The reason that you are bored in the first place is probably because there is no trade to make in the first place. If you are unsure, it’s probably because you can’t see the trade to make, so don’t make one.
Zen Trading- Even when you have taken a position in the markets, you should try and think as you would if you hadn’t taken one. This level of detachment is essential if you want to retain your clarity of mind and avoid succumbing to emotional impulses and therefore increasing the likelihood of incurring losses. To achieve this, you need to cultivate a calm and relaxed outlook. Trade in brief periods of no more than a few hours at a time and accept that once the trade has been made, it’s out of your hands.
Determination - Once you have decided to place a trade, stick to it and let it run its course. This means that if your stop loss is close to being triggered, let it trigger. If you move your stop midway through a trade’s life, you are more than likely to suffer worse moves against you. Your determination must be show itself when you acknowledge that you got it wrong, so get out.
Short-term Moving Average Crossovers - This is one of the most dangerous trade scenarios for non professional traders. When the short-term moving average crosses the longer-term moving average it only means that the average price in the short run is equal to the average price in the longer run. This is neither a bullish nor bearish indication, so don’t fall into the trap of believing it is one.
Stochastic - Another dangerous scenario. When it first signals an exhausted condition that’s when the big spike in the “exhausted” currency cross tends to occur. My advice is to buy on the first sign of an overbought cross and then sell on the first sign of an oversold one. This approach means that you’ll be with the trend and have successfully identified a positive move that still has some way to go. So if percentage K and percentage D are both crossing 80, then buy! (This is the same on sell side, where you sell at 20).
One cross is all that counts - EURUSD seems to be trading higher, so you buy GBPUSD because it appears not to have moved yet. This is dangerous. Focus on one cross at a time - if EURUSD looks good to you, then just buy EURUSD.
Wrong Broker - A lot of FOREX brokers are in business only to make money from yours. Read forums, blogs and chats around the net to get an unbiased opinion before you choose your broker.
Too bullish - Trading statistics show that 90% of most traders will fail at some point. Being too bullish about your trading aptitude can be fatal to your long-term success. You can always learn more about trading the markets, even if you are currently successful in your trades. Stay modest, and keep your eyes open for new ideas and bad habits you might be falling in to.
Interpret forex news yourself - Learn to read the source documents of forex news and events - don’t rely on the interpretations of news media or others.
Tips for Dealing with a Bank
1. Ask yourself, and your bank, if you're getting the best deal - About once a year, talk to a customer services representative at your bank to make sure you're signed up for the right programs to meet your needs. Maybe a simple adjustment to your banking practices - such as having your paycheck automatically deposited into your checking account - can get you a higher interest rate or reduce or eliminate certain service charges. Perhaps a change in your banking habits will help cut your fees. Maybe your good track record at the bank will qualify you for a lower interest rate on a loan or credit card. Or maybe there is just a new or better bank account that you did not know about. I asked at my bank how I could get a better deal on my checking account because I was paying a minimum balance fee and receiving no interest. I was told that because I had additional funds in a money market account I was now eligible for an interest-earning, no-minimum balance checking account. That is a good deal, but I was not aware of it until I raised the question.
Every three or four years (if not more often), comparison-shop to see if you could do significantly better at another bank. Start by listing the products and services you really use—most likely checking, ATMs and one or two others. Make a note of the interest rate, minimum balance requirements and so on. Then go to your statements for the last year or so and calculate the fees and penalties you typically pay—for monthly account maintenance, ATMs, bounced checks, etc. Now compare your bank with three or four others. You might discover that you can earn or save hundreds of dollars by using another bank. Or, better yet, you may find that your own bank still offers a good value or that it is willing to make concessions to keep you as a customer. Then there is little reason to go through the trouble of switching banks. (If you decide to leave your bank, see If You Decide to Switch Banks.)
2. If deposit insurance is important to you, make sure your funds are fully protected - Be sure that your deposits are in a federally insured institution. For more details, see Is My Money Safe?
3.Simplify your life. Your bank can arrange for the "direct deposit" of your pay and benefit checks and other regular income. Most experts agree that direct deposit is safer and more convenient than paper checks. There are no delays in getting funds deposited because checks are not lost in the mail, forgotten at home or waiting for you to return from vacation. As mentioned previously, you might even get a break on your checking account if your paycheck is deposited electronically.
You also can have your bank automatically make some of your regular payments, such as your mortgage, health insurance premiums, utility bills and investments in a mutual fund. That can be an easy, economical alternative to writing and mailing a lot of checks each month. Also think about doing other banking the high-tech way, such as withdrawing money from ATMs instead of standing in line at the branch or rushing to get to the branch during banking hours. Consider using a "debit card" or "check card" to pay for purchases from your checking account without writing a check. Banking from home, by phone or computer, also can be a time-saver.
4. Get to know bank employees you can turn to for help. Write down the names and numbers of employees who, in-person or over the phone, seem to be especially helpful and knowledgeable. If possible, become a familiar voice or face to them. Why go to this trouble? A good teller, branch manager, customer service representative, loan officer or supervisor can help get your questions answered and your problems solved. They may even come to your aid in a financial emergency, especially if they know you and that you have a good relationship with the bank.
5. Do not be afraid to complain. No bank employee really enjoys hearing from a disgruntled customer. But your bank's managers probably would prefer you bring a problem to their attention and be given the chance to fix it rather than take your business elsewhere or tell all your friends about "that lousy bank." If you do not get satisfaction from a customer service representative or another employee, consider talking to a supervisor...or even one of your banker buddies mentioned in the previous item. And if you are still having problems, consider contacting the institution's federal regulator. (For more tips on how to resolve a dispute with your bank, see If You Have a Complaint about a Bank.)
6. Do not be afraid to ask for a break. Bounce a check for the first time ever? Want a copy of an old monthly statement? Think the fees for your mortgage application are a bit high? Depending on the circumstances, your bank might be willing to reduce or waive a fee or penalty, especially if you have been a good customer and do not have a history as a "repeat offender." Also consider talking to your banker if you are having problems repaying your bank loan. Explain the situation and any unusual circumstances. Many lenders will agree to temporary or permanent reductions in your loan interest rate, monthly payment or other charges. Again, it helps if you have had a clean record in the past.
7. Read your monthly statements. Your bank statements, credit card bills and other mailings from your bank may not make for exciting reading, but they can be among the most important literature you will read. Tucked inside any envelope from your bank could be your only notice about new fees or penalties for certain accounts. If you are not aware of these changes, and you do not notice the higher fees on your next monthly statements, you could end up paying more for your banking and not even realize it.
Also review your bank statement as soon as possible after it arrives to make sure there are no unauthorized charges. If you suspect that a thief has used one of your checks or your credit card, go right to the phone and call the bank (see Unauthorized Use of Your Account (What to Do if Your Identity is Stolen). Under most state laws, you are required to exercise "reasonable promptness" in examining any bank statement that shows payments from your account.
How quickly you report a problem with an ATM debit card could be especially important in limiting your losses. Your maximum loss is just $50 if you report your ATM debit card lost or stolen within two business days of discovering the problem. But if you wait between two and 60 days, you can be liable for up to $500 of what a thief withdraws. Wait more than 60 days after receiving a bank statement with an unauthorized ATM transfer and you may be responsible for all the money withdrawn. (You are not responsible for funds withdrawn after you notify the bank that the ATM card is lost or stolen.)
Another good reason to look at your bank statement as soon as possible is to make sure you have enough in your checking account to avoid bounced checks.
8. Read the fine print. Knowing the costs and requirements of an account before you sign on the dotted line can prevent a complaint or hassle later. Example: Just because a bank account is advertised as "free" or "no cost" does not mean you will never run up a cost. An institution is not allowed to advertise a "free" checking account if you could be charged a maintenance or activity fee (such as for going below a required minimum balance). But your bank can offer a free account and still impose charges for certain services, such as check printing, automated teller machines and bounced checks. Also, ask if an attractive interest rate on a credit card or a deposit is really just a short-term, introductory "teaser" rate.
9. Keep good records. Hold on to your receipts for deposits, ATM withdrawals, credit card charges and other transactions long enough to confirm that your monthly account statements are correct. (Later it's OK to toss these pieces of paper in the trash, but be sure to rip them up enough so that a thief cannot read or use them.) Also, keep copies of any contracts or other documents you sign with the bank (loans, certificates of deposit, etc.), along with any accompanying materials. If there is ever a dispute or a discrepancy, you will have those documents to refer back to.
10. Use your bank as an information resource. A good banker can be an excellent source of advice and information-perhaps about starting or expanding a business, buying a car or home, qualifying for a loan or dealing with a debt problem. He or she also might be able to direct you to good contacts in other businesses or have excellent reference material handy. All of this is yet another reason to get to know the right people at the bank.
Your bank also could have a customer newsletter or a website that provides useful tips for handling your financial affairs. Many banks also offer seminars on topics such as saving for retirement or a child's college education. Add this information to everything else you learn from your lawyer, accountant, financial planner, the media and other sources, and then put it to use when shopping for, or using, financial services. And anything you can learn from the bank about your rights and responsibilities as a consumer can help you avoid misunderstandings and get any problems solved quickly.
Final Thoughts. It is a good idea periodically to shop for and compare financial services, just as you would any consumer goods. If nothing else, you will want to know that the rates, fees and services at your existing bank are at least comparable to what is out there in the marketplace. You will receive more satisfaction from your bank when you know the people there and the services they can provide. Every relationship has its ups and downs, but with a little effort, you might just feel more at home with your bank.
Smart banking tips
As Effie Zahos reports in the March issue of Money magazine, perhaps the most ground-breaking product in recent times is the salary transaction home loan. It works on the principle that interest is calculated daily, so the more you throw in on day one, the more you can save.
It's linked to a credit card. Borrowers are encouraged to deposit all of their salary into the loan, live off their credit card during the interest-free period and withdraw living expenses once a month.
If followed correctly, at 7% a homeowner with a $160,000 25-year mortgage who has a monthly salary of $3100 and spends around $2000 a month can expect to save one year and three months off their term and over $14,000 in interest payments.
Tiered interest rates
Another favourite boost for your financial bottom line can be found in credit cards that offer tiered interest rates. This can be handy if you know you are going to need more then, say, 55 days to pay off a large purchase.
The Commonwealth Bank, for instance, allows some purchases over $1000 to be paid off at a heavily discounted rate of just 0.99%. The rate applies for three months and there's no interest-free period during that time. Then it's back to the regular interest rate of 15% to 17.65%.
Citibank has a credit card that matches interest rates to spending.
Cash-back credit cards
There's only one so far — National Bank's Visa Mini card — but more are sure to follow if the US example is anything to go by. With National, if you spend $1000 a month on your card, you receive $120 cash back each year. You must repay your charges in full each month. If you apply before May 31, the annual fee of $19 will be waived.
Trendy card users may like the fact that the card, nearly half the size of a standard credit card, comes in five different colours, has a phone hook and a cover.
Cash-back home loans
Non-conforming lender Pepper Homeloans recently launched what's probably the only home loan that hands you cash in return for your loyalty. Other lenders offer discounts or rewards but Pepper is the only one that will actually pay you for banking with them.
Every three years and subject to satisfactory payment history, you get a cash-back of one percent of the outstanding loan balance. The rebate is credited to your savings account, not the home loan.
With all these deals, you need to check all the rules and potential costs before you decide they're for you.
Safe Deposit Boxes
While millions of Americans rent a safe deposit box, few pay attention to questions such as who could or should have access to a safe deposit box (especially in an emergency) and how the contents of the safe deposit box are protected. About the only time people ever consider these issues is when there is a problem, and then it may be too late to prevent a loss.
To help you decide whether to use a safe deposit box, and how to use one wisely, read the following questions and answers. To keep things simple, our references to "banks" are intended to apply broadly to banks, savings institutions and credit unions.
In or Out?
Why should I rent a safe deposit box?
It is a convenient place to store important items that would be difficult or impossible to replace. The safe deposit box also offers privacy (only you know what is inside) and security. Although many people like to keep valuables close by in a closet, safe or file cabinet at home or in the office, these places probably are not as resistant to fire, water or theft. Also, some insurance companies charge lower insurance premiums on valuables kept in a bank's safe deposit box instead of at home.
What items should go into a safe deposit box?
Any personal items that would cause you to say, "If I lose this, I am in deep trouble." Important papers to consider putting into your safe deposit box: originals of your insurance policies; family records such as birth, marriage and death certificates; original deeds, titles, mortgages, leases and other contracts; stocks, bonds and certificates of deposit (CDs). Other valuables worthy of a spot in your safe deposit box include special jewels, medals, rare stamps and other collectibles, negatives for irreplaceable photos, and videos or pictures of your home's contents for insurance purposes (in case of theft or damage).
OK, what should NOT go in a safe deposit box?
Anything you might need in an emergency, in case your bank is closed for the night, the weekend or a holiday. Possible examples: originals of a "power of attorney" (your written authorization for another person to transact business on your behalf), passports (in case of an emergency trip), medical-care directives if you become ill and incapacitated, and funeral or burial instructions you make. Consider giving the originals to your attorney, and making copies to go in your safe deposit box or to give a close friend or relative.
If I have a will, should it go in my safe deposit box?
Whether your will should be at the bank or elsewhere, such as with your attorney, depends on what your State law says about who has access to your safe deposit box when you die. Ideally, the person you name to oversee your financial matters after you die (your "executor" or "personal representative") should have early access to your original will (copies are not valid). Some States make it relatively easy for co-renters, family members or the executor to remove the will and certain other documents (such as life insurance policies and burial instructions) from a deceased person's safe deposit box. In those States, it may be a good idea to leave your will in the safe deposit box. But other States may require a court order or another official action to remove the will, which can take time and money. That is why you should check with a bank official (or your lawyer) to find out what is required under State law and your bank's own policies in the event of your death.
Access by Others
Can I arrange for someone to access my safe deposit box in an emergency?
Yes. You can jointly rent your safe deposit box with a spouse, child or other person who would have unrestricted access to the box. (Warning: In some states your co-renter may face delays in accessing the box if you die. Also, merely giving someone else a key will not be enough to grant access. He or she also must sign the bank's rental contract as a joint-renter.) An alternative is to appoint a "deputy" or "agent" (NOT a power of attorney) who will have access to your safe deposit box. A deputy/agent and a general power of attorney are similar in that you may grant or revoke the authority at any time, and the appointment ends if you become incompetent or die. The main difference is that a deputy or agent is appointed in the presence of the box renters and a bank employee, which gives the bank greater assurance about the validity of the authorization. Many people are surprised to find that a power of attorney does not allow access to a safe deposit box. The bank has no way of knowing if the power of attorney is still in effect or if the renter was competent when the power of attorney was signed.
Can law enforcement authorities access my safe deposit box without my knowledge or permission?
If a local, state or federal law enforcement agency persuades the appropriate court that there is "reasonable cause" to suspect you're hiding something illegal in your safe deposit box (guns, drugs, explosives, stolen cash or money obtained illegally), it can obtain a court order, force the box open and seize the contents. What about non-criminal matters, such as a dispute with the Internal Revenue Service (IRS), a company, or other people over money they say you owe? The IRS can "freeze" your assets (effectively placing a hold on your bank accounts and safe deposit box) until the dispute is resolved. Private parties also can freeze your assets but doing so involves going before a judge and proving that there is a legitimate dispute over a debt.
Can a safe deposit box be declared "abandoned" and the contents turned over to the government?
Yes, but only if you do not pay your rental fee for a number of years (as determined by State law) and after attempts to notify and locate you prove unsuccessful. In that case, your safe deposit box will be reported as abandoned and the contents will be turned over to the State's unclaimed property office. Often this happens because the renter dies and the heirs have no knowledge of the box or its contents. The good news is that even if the State has sold your unclaimed property, you or your heirs still have the right to claim its value. To contact a State's unclaimed property office (sometimes part of the treasurer's office), check the State government section in your phone book. You may also contact the National Association of Unclaimed Property Administrators.
What happens to my safe deposit box if my bank fails?
When an insured bank or thrift closes, the Federal Deposit Insurance Corporation (FDIC) usually arranges for another institution to take it over, including branches where you might have a safe deposit box. In those situations, you should be able to conduct business as usual. If the FDIC cannot find a buyer for your bank, it arranges for you to remove the contents of your safe deposit box so you can obtain a box at another institution, if you wish. This is done within a few days after the bank fails.
How Safe?
Are safe deposit boxes protected from fire, flood or other disasters?
The companies that manufacture safe deposit boxes and the vaults that house the boxes make them highly "resistant" to fire, flood, heat, earthquakes, hurricanes, explosions or other disastrous conditions. However, the key word here is "resistant." There is no 100 percent guarantee against damage, and substantial losses sometimes occur.
Are there extra precautions I can take to minimize damage?
Yes. Prevent water damage by sealing items in airtight, zip-lock bags or Tupperware-style containers. Also, put your name on each item, keep a list of the box's contents, make copies of important documents and even take photos of your most prized items left in the safe deposit box. That way, if a disaster occurs, your chances of successfully identifying, claiming or recovering an item would be increased.
Does FDIC insurance cover the contents of safe deposit boxes if they are damaged or stolen?
No. By law, the FDIC only insures deposits in deposit accounts at insured institutions. Although you may be putting valuables, including cash and checks, into an area of the bank that has the word deposit in its name, these are not deposits under the insurance laws that the bank can use, for example, to make loans to other customers. A safe deposit box is strictly a storage space provided by the bank.
Does anyone insure my safe deposit box against damage or theft?
Unless your bank is found to be negligent in the way it handled or protected your safe deposit box, do not expect the bank or its private insurance to reimburse you for any damage or loss. If you are concerned about the safety or replacement of the items in your box, first check whether your own homeowner's or tenant's insurance policy covers your safe deposit box against damage or theft. Many do cover box contents up to a certain dollar amount, even including items lost or damaged when they are out of the box. If your home-related insurance is not sufficient, talk to your insurance agent about additional protection or find out if your bank is among those selling limited insurance coverage on safe deposit boxes. Before buying any extra coverage, carefully review the policy and do some comparison-shopping.
Can thieves rob a safe deposit box?
Yes, it happens, but fortunately not often. Safe deposit boxes are stored in concrete or steel vaults equipped with sophisticated alarms, locks, video cameras, motion sensors, heat detectors and other security devices. Most U.S. banks also have very strict access procedures, among them: verifying signatures, restricting access to the vault, never leaving anyone unattended inside the vault, and requiring two different keys (one being the bank's "guard key") to open a safe deposit box.
14 Forex Tips For You
TIP 2 Stop loss policy - you MUST have one and practice, more practice and even more practice at sticking to it. It will not be easy but it is an essential discipline to profitable trading.
TIP 3 Trading plan / system. Again, you MUST have one! Then you must practice sticking to it. Do not try and second guess or trade against your indicators - wait until they give you a concise signal before acting on it.
TIP 4 TRADE WITH THE TREND. DO NOT trade against the hourly trend of the market unless you are VERY certain the market has turned. Check this by watching a long term moving average (say 80 SMA on 15 minute chart)
TIP 5 Learn to sit on your hands and not trade! It’s better to wait for good quality trades than take a mediocre one and loose money. A day of no trades is better than a day with one loosing one. If you don’t like the market, just walk away. It will always be there later.
TIP 6 Don’t set yourself false targets and expectations. Trading is not an EXACT science and if you do you will only become frustrated by your failure to meet them. Take what the market gives and be satisfied. Greed will kill you as a trader, both mentally and monetarily. .
TIP 7 The market is rarely your friend in a trade that goes against you. Cut your losses quickly and accept them as an inherent part of trading. You will not be able to trade without some loosing positions. Manage them well!
TIP 8 Try hard not to get out of profitable trades too early. Try operating a trailing stoploss of say 15 to 20 pips behind the trade (on 5 minute timeframe) and maximise your good trades by letting them run. Be patient!
TIP 9 Ensure you fully understand how to generate and use pivot points and camarilla points on your trading platform. These are crucial decision points for daily trading and you will struggle without them.
TIP 10 DO NOT overtrade your account. Read up on money management in trading to make sure you fully understand why this is important and develop a strategy which fits with your personal trading capital. NEVER risk wiping out your account because believe me, it can happen. I’ve done it twice myself!
TIP 11 Learn about FIBONACCI levels and how to apply them to your charts.
TIP 12 Keep your trading system simple. Do not have too much information on your trading screen. It is unnecessary and will only cause you to be confused and delay you making your trading decisions.
TIP 13 Always think in terms of probabilities. Trading is all about thinking in probabilities NOT certainties. You can make all the “right” decisions and the trade still goes against you. This does not make it a “wrong” trade, just one of the many trades you will take which, through probability, are on the “loosing” side of your trading plan. Don’t expect not to have negative trades - they are a necessary part of the plan and cannot be avoided.
TIP 14 Ensure that the candle is fully formed on the timeframe you are trading BEFORE you enter your trade. Trade what you see, not what you would like to see.
Choosing the Right Day for Forex Trading
It’s proved and highly recommended not to trade on Weekday, Mondays, when the Forex market has recently opened and is making first steps to form a new trend and on Friday’s afternoon, during the big volume of closing trades. The best days to trade are Tuesday’s, Wednesday’s and Thursday’s, So Basically trade between Weekdays.
Happy Forex Trading.
Currency Pairs, What Forex Traders Should Know
For example, to represent currency trading of British Pound Sterling against US Dollar, we write and or call it GBP/USD or GBP-USD. Below are several basic things related to currency and currency pairs that every trader should knows.
Currency Codes
The common currency codes used recently are based on ISO 4217. It is a list of standard currency names and code elements established by the International Organization for Standardization.
The first two letters of the code are the two letters of ISO 3166-1 alpha-2 country codes and the third is usually the initial of the currency itself. This coding model has been widely used in many financial companies and activities. We can see that at least it helps eliminating the problem caused by the names dollar, franc and pound being used in many different countries.
Major Currencies
“Major Currencies” usually refer to seven most liquid or most traded currencies in the market. Those seven are US Dollar (USD), British Pound (GBP), Eurozone Euro (EU), Japanese Yen (JPY), Swish Franc (CHF), Canadian Dollar (CAD) and Australian Dollar (AUD).
Minor Currencies
Simply, “Minor Currencies” refer to all currencies other than those major currencies. Following table shows currency distribution of reported market turnover (in %). I captured this from the pdf document of Triennial Central Bank Survey released on December 2007.
Commodity Currencies
In general financial topic “commodity currencies” points to currencies of countries which rely heavily on commodity exports for a major share of their export income. According to IMF studies there are 58 countries which could be included here. In forex trading discussion “commodity currencies” usually refer to the Australian Dollar, Canadian Dollar and New Zealand Dollar
Major Currency Pairs or Major Pairs
Historically, forex is “USD-Centered” by mean that in any currency exchange process the first step had to be a convertion into USD. I’m not sure what the real reason was, it could be related to the world’s economics-reordering after the 2nd World War (which we know has become US-Centered) or probably just for somekind of standardization purpose.
It is probably why in forex trading discussion “currency pairs” often spesifically refers to any pairs which includes the USD. In the opposite, “cross currency” refers to any pairs which doesn’t include the USD.
Then, what is Major Pairs? Some trader use it to refer the seven most liquid pairs: EUR/USD, USD/JPY, USD/CHF,GBP/USD, AUD/USD, NZD/USD and USD/CAD. Some others say that major pairs are only EUR/USD, USD/JPY, USD/CHF and GBP/USD and the other three (AUD/USD, NZD/USD and USD/CAD) are commodity pairs. I think both opinions are acceptable.
Commodity Pairs
As I write above, this term refer to three of the seven most liquid currency pairs:AUD/USD, NZD/USD and USD/CAD. Obviously this classification relate to above definition of “commodity currencies”.
Cross Currency
Also has been noted above, this refer to any pairs which doesn’t include the USD. Cross currencies simplify the process of exchanging currency without any need to firslty convert it into USD.
Currency Pairs Nickname
This is the funny part, some currency pairs have their own nickname. Some are as follow:
Cable for GBP/USD
Euro for EUR/USD
Geppy for GBP/JPY
Loonie for USD/CAD
Kiwi for NZD/USD
Swissy for USD/CHF
Gopher for USD/JPY
Beaver for USD/CAD
“Cable” was given to GBP/USD for a reason that in the old time the synchronization of GBP/USD rate between the London and New York markets were transmitted through a cable running beneath Atlantic sea.
What are the different types of stocks available in the market?
This article helps you to know more on:
What re the various types of stocks available?
What are the features of preferred stocks?
What are the characteristics of blue chip stocks?
There are different types of stocks to choose in the stock market. While you do not necessarily have to be an expert on all the types of stocks available in stock market content, being able to differentiate and choose stocks is crucial to stock market investing. Depending on your goals and your investment, you may simply find that some stocks are better suited to your needs than others. At the very least, being able to tell the difference between preferred and common stocks can help you get started in investing.
How To Identify The Best Growth Stock
thing to do is to follow your instinct. Is the company in which you are interested going to
change the world? Can you imagine it doing it? Many of the best small cap growth stock companies in the market started as small operations. For example, Ebay and Amazon. With time, these companies proved to be organizations that changed the way the world moved.
Another growth stock indicator that needs to be considered in growth stocks is the year to year growth, both in sales and earnings. This is specially important since it means two things: that they have an adequate management and that they have the right people to execute the orders of the managers. As simple as it may sound, this combination isn't easy. In reality, it is quite difficult to achieve. In order to become an attractive growth stock, that growth percentage must be, at least of 20%.
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An interesting detail that must be noted by every investor is that earnings aren't everything. In reality, the figure that should attract your attention is profit. For example, company X invested 100 million and obtained 50 million in profit. On the other hand, company Y invested 500 million and obtained 80 million in profit. If you calculate the percentages, company X is selling a product that is more profitable than the one sold by company Y. A company that has a revenue of thousands of millions of dollars isn't worth considering if it's profit is a very small percentage of it.
Finally, avoid companies with big debts. The financial stress that entails the payment of monthly quotas, plus interests, can eat away all the earnings of a small company. If all of these recommendations for choosing a growth stock are too much for your expertise, you can go for a growth stock fund. These companies are specialized in investing in this type of stock. One example is T. Rowe Price Growth Stock Fund, which manages a portfolio of $12 billion. There are many other growth stock mutual funds, so you will need to make some research if you want to follow this path.
Small cap growth stock are seen as an excellent choice for many investors; growth stock of this type are, usually, small companies, managed by strong leaders who have an innovative product or idea that they know they can place in the market. But, should small cap growth stock be of your interest? At the end it depends on each investor. But one thing is for sure, you must do your homework. Research in the stock market is as basic as breathing.
What Is The Difference Between Growth And Value Stocks?
Some characteristics with which a value stock can identified are: the price of the share is the same as the one that appears on the book (or less), the assets are surpass by twice by the liabilities of the company, the price to earning growth ratio is less than one (this is one of the strongest indicators), there is as much equity as debt and, finally, the price per earnings ratio is in the lowest 10% of the rated companies.
What Are Growth Stocks?
There is one thing that should be considered by every responsible investor. Growth stocks should not be used as part of your cash flow. They are very risky investments that may earn you a lot of money, or loose a lot of money. That's why the dollars that you have set aside for investing in growth stock shouldn't be considered as part of your annual expenses.
Earning High Return on Equity With Growth Stocks
among many others. All of them created as a special language that can explain the
intricacies of the stock market. In this case, let's find out what growth stock is about. It doesn't matter if it is big or small cap growth stock, the important thing is that we understand what does it mean.
Stock market charts
trends of a certain stock, mutual fund, or index they would like to put their money on.
Free stock charts can be availed of from different sources with the Internet being the first of them all.
Predicting the trends of the highly volatile stock market is always a challenge to experts. In fact, there are a lot of tools developed to accurately forecast the future of stocks. Stock charts are simply one of the many tools that are devised and are being continuously improved on to give all investors a good estimate of what a particular day in the stock market holds for them.
The stock market is a very huge market, so to speak. Its players come from the different places of the world. And so this means that not just one currency is used in dealing. Although players may choose to participate in their own country or region's stock market, the possibility of playing big and wide is always there.
The usual stock market charts created are the OHLC charts. OHLC means Open, High, Low, Close chart. These charts are further classified into two - the plain vanilla and the candlestick chart. These charts contain basic information such as the time frame, which could be in months, days, hours, or even minutes, the high and low values of the period, the opening and closing price, and the volume story of the stock.
Today, there are some stock market chart companies that even customize the chart for their clients. This ensures their clients get supreme readability and understandability of the graphics. Also, their clients will be satisfied of the significance of the data in the chart presented to them.
You can get both regular and 3D stock charts over the Internet. Some of them are offered for free, while others can be availed of for a minimal fee. They may come in different variations, but basically, they all follow the same idea. Reading these charts seems painfully hard, but once you understand what each figure represents, everything else comes easy.
Tips for First-time Home Buyers
The answer is it didn't. First-time home buyers start the search long before most even realize it.
Here's what you can expect from your home shopping experience.
Figuring Out the Benefits
You should buy a home. That's what you've been hearing from friends and family, right? So, by now you have likely already weighed the benefits and decided that home ownership was the best decision for you. That's a major hurdle now passed. You are focused and certain. Good.
Defining Search Parameters
Almost 80% of all home searches today begin on the Internet. With just a few clicks of the mouse, home buyers can search through hundreds of online listings, view virtual tours, and sort through dozens of photographs and aerial shots of neighborhoods and homes. You've probably defined your goals and have a pretty good idea of the type of home and neighborhood you want. By the time you reach your real estate agent's office, you are halfway to home ownership.
How Long Should It Take to Find What You Want?
In seller's markets, often I show only one home. After all, how many homes does one family need? A few buyers will look for years, but buyers who do that aren't motivated. A motivated buyer will find a home within two weeks. Most of my buyers find a home within two days.
Good real estate agents will listen to your wants and needs and arrange to show only those homes that fit your particular parameters. Your agent should preview homes before showing them to you as well.
How Many Homes Will You See?
Studies show that the your memory dramatically improves after consumption of carbs and slows upon consuming sugar. So, layoff the soft drinks and have a hearty meal of carbs before venturing out to tour homes. The average number of homes that I show to a buyer in one day is seven. Any more than that, and the brain is on overload. Therefore, don't expect to see 20 or 30 homes; although it's physically possible to do so, you probably will not remember specific details about any of them.
The "Red Shoes" Experience
Women will relate to this. Say, you need a new pair of red shoes. You go to the mall. At the first shoe store, you find a fabulous pair of red shoes. You try them on. They fit perfectly. They are glamorous. Priced right, too. Do you buy them? Of course not! You go to every other store in the mall trying on red shoes until you are ready to drop from exhaustion. Then you return to the first store and buy those red shoes. Do not shop for a home this way. When you find the perfect home, buy it.
How to Rate Inventory
Bring a digital camera and begin each series of photos with a close-up of the house number to identify where each group of home photos start and end.
Take copious notes of unusual features, colors and design elements.
Pay attention to the home's surroundings. What is next door? Do 2-story homes tower over your single story?
Do you like the location? Is it near a park or a power plant?
Immediately after leaving, rate each home on a scale of 1 to 10, with 10 being the highest.
View Top Choices a Second Time
After touring homes for a few days, you will probably instinctively know which one or two homes you would like to buy. Ask to see them again. You will see them with different eyes and notice elements that were overlooked the first go-around.
At this point, your agent should call the listing agents to find out more about the sellers' motivation and to double-check that an offer hasn't come in, making sure these homes are still available to purchase.
Making the Selection
I'll let you in on a little secret. I generally know which home a buyer is going to choose, and I suspect most other agents operate the same way. It's an intuition. But I make it a practice not to steer buyers, and I insist that buyers choose the home without interference from me. It's not my choice to make.
Real estate agents are required, however, to point out defects and should help buyers feel confident that the home selected meets the buyer's search parameters.
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