The Market - Explained

5 Things You Must Do If You Want To Attain Financial Freedom Through Forex Trading
by: Eddie Yakubovich

With the amazing growth of the forex market, you are going to see an astounding amount of traders lose all their money. Unfortunately, they haven't followed the simple steps I have laid out for you. Go through these steps and give yourself the greatest opportunity to achieve your goals.

1. Have Faith In Yourself

To reach the level of elite forex trader, you must trust in yourself and your forex trading education. You must be willing to make all your trading decisions, instead of relying on someone else's thoughts or ability (or lack of). Of course, you will prepare yourself fully before every risking any money.

2. Accept Your Learning Curve

Unless you are a veteran trader, you will lose money trading the Forex market. This is a near certainty. I don't say this to talk you out of trading. In fact, quite the opposite. You will be trading against others that fall to this reality day in and day out. You, however, will not risk a dime until you have learned the skills you need to make money trading the forex.

3. Decide What Type of Trader You Are

There are many ways to trade the forex. They range from very active to very patient. You must decide which style suits you best. The best time to learn this about yourself is while you are trading a demo account. There is no need to allow your learning curve to cost you money.

4. Get Educated

Education is the shortest path to elite forex trading. Regardless of your ultimate goals, you will reach them quicker with a great forex trading education. Take some time to review different options before deciding on who to trust with your forex trading education needs. A forex seminar will help shorten your learning curve drastically.

5. Continue to Get Educated

In order to achieve and retain elite forex trading skills, you must constantly be adding to you knowledge base. Your education should never end. In fact, one of the key points to look for in an elite forex trading course is ongoing education. It's nice to have an ongoing relationship with the person/people helping you to achieve your goals.

What separates an elite forex trader from all others is their desire and ability to be independent. Many traders are willing to follow signals, systems, strategies, or anything else you may call them. By taking this approach, however, these traders are only as good as the people they follow.

An elite forex trader will lead. Their decisions will be calculated and analyzed to near perfection. They will make decisions with no hesitation, and handle the growth of their account in a predetermined, intelligent fashion. Take your trading to their level and you will never look back.

Posted by Cody McClaflin at 8:52 AM | Permalink | Comments

Sometimes, You Need A Break From Trading
by: Stuart McPhee

In his book, ‘Trade Your Way to Financial Freedom’, the renowned American psychologist Dr Van Tharp discusses in several parts how important your psychology or mindset is to your trading success. He graphically depicts the significance of your psychology using a pie chart and explaining that it is the most essential ingredient to trading.

To many who have traded for an extended period of time, they would agree with the fact that traders can experience a wide range of emotions and often one straight after another. Traders can experience the exultation of a winning trade that went very well to the despair of the string of losses where ‘giving up trading’ is a prominent thought in one’s mind.

Books like ‘Market Wizards’ by Jack Schwager and other similar texts illustrate how successful traders have found a trading methodology that they are very comfortable with. None of them have found any magic solution to trading but they all clearly possess an inner confidence in their own ability to follow rules and their own trading plan.

Undoubtedly however, trading can be a taxing experience on your mental health. You are constantly faced with decisions that need to be made and can easily go through the swing of emotions described earlier. For some people, in all honesty you may also lack confidence in your own ability to trade well or lack courage of your own conviction and therefore experience another array of emotions when trading.

Sometimes trading can be quite stressful and other times it may appear as if you can do no wrong. These emotional swings and emotional stresses do impact on your mental state and can ultimately affect your trading decisions.

It may be prudent sometimes to schedule a break from trading. Therefore, close all positions before your break, or a few weeks out from the break commencing, open no new positions and allow your open positions to take their course in the time leading up to your break. The time you schedule your break may coincide with the school holidays or your Christmas break from work. This may end up being the best trading decision you make as you are able to separate yourself from some of the emotions you have experienced, and recharge the mental batteries. The requirement for a break will obviously significantly vary from trader to trader and will depend largely on your trading frequency.

One of the things stopping people thinking about taking a break is that they may miss out on some good trading opportunities. Rest assured that the Australian Stock Exchange is a vital part of corporate Australia and will always be open for trading. This means that when you finish your two week break for example, the ASX will be open as if you didn’t even have your break.

Next time you open your diary, consider scheduling a break from trading.

Posted by Cody McClaflin at 8:52 AM | Permalink | Comments

Why Paper Trading Is Smart
by: Yvonne Volante

Do you paper trade? Paper trading of securities is an excellent way of jumping in and learn the ropes of investing. Some thoughts about learning investing through paper trading.

Some people read books on trading and investing, go to various seminars, paying hundreds or sometimes even thousands of dollars to get educated, but still don't get to the point where they actually put in their trades. They like the idea of acquiring knowledge, pondering investment strategies and thinking about various trades they might like to make. However somehow they just don't seem to do anything with the knowledge they acquire. They don't put their investment strategies into action and they never really make the trades they are constantly thinking about.

Paper trading is a form of simulation and therefore, like all simulations, it has certain advantages:

- It offers great learning potential.

- There is no financial risk involved. You can't lose money.

However, inherent in all forms of simulation is also a number of disadvantages. For paper trading disadvantages are:

- Unlike most other forms of simulation, there is no real way to speed up the process. Of course you could start with historical prices, but the whole exercise tends to get a bit artificial that way.

- There are no financial benefits. You can't make money.

- There are no financial risks. You can't lose money.

- It just isn't real.

The first and second disadvantage seem obvious. The third may appear strange at first, especially since it was also listed as an advantage. Some of you might wonder: "How can the absence of financial risk ever be a disadvantage?". To answer that question we just have to look at the fourth disadvantage, which ties them all together. This last one really is the big one. The lack of any true financial implications seriously inhibits the learning effect. No matter how much you think, speculate, simulate or however you would like to call it, until you actually put your money where your mouth is, it just isn't real. We tend to learn most from our mistakes, especially mistakes that hurt. If it doesn't hurt it just doesn't have the same effect.

It's like people watching a boxing match on television claiming they would never give up if they were up there. Statements like: "You can knock me out, but you can't make me give up" are easy to make. The truth is that most people making such a statement have never experienced a situation even remotely like it. If they would actually find themselves in that ring, facing an opponent, most of their bravery would vanish in less than an instant. As soon as they would start to feel some of the pain that those fighters have to endure, most would quickly sing to a different tune and leave the ring.

"But that's physical pain. That's different." you might say. Fact is that emotional pain can be just as intense and even worse. Take someone that has lost something dear to him; whether it is a loved one, a relationship or his life's savings. Then ask him the following question: "Knowing what you know now, if you could do it over again and you could choose between physical pain, in the form of a beating, or losing whatever it is you lost, which would you choose?". Most would opt for the beating without a second thought. Doesn't make sense? Well maybe not, until something like that happens to you or someone you know.

Ther is no doubt that paper trading is a good, safe alternative to starting out cold when beginning investing. Just remeber, when you start for real and are earning or losing your own money, you're in the big leagues and things start to change. Hang on for the ride and good luck!

Posted by Cody McClaflin at 8:50 AM | Permalink | Comments

Tips for Online Currency Trading
by: Morgan Hamilton

Did you realize that currency trading is the world's largest business? Yes, it's true. Over three trillion dollars worth of transactions take place each and every day in the world's currency markets and online currency trading is now available to everyone.

The markets are extremely volatile and fortunes can be won and lost in mere minutes. But please understand that currency trading is anything but some sort of get rich quick scheme. It is like any other investment and can be compared to the stock market. Be warned, if you are interested in participating in currency trading you had better get a sound education or you will surely lose your money.

The currency market is an informal, unlike the formal stock exchange, market where dealers buy and sell currencies in order to make a profit. Currency trading is open 24 hours a day, 7 days a week because it is a global exercise. To borrow a phrase from the British Empire, the sun never sets on the currency markets.

To invest in online currency trading, you need to open an account with one of the many reliable firms that you will find on the Internet. You must deposit a minimum amount of money and fill out the requisite paperwork before paying allowed to trade such currencies as the French franc, German mark and Eurodollars. I would strongly recommend to the newcomer to take it very slowly as he embarks upon the world of online currency trading.

The market operates on a very high margin-trading basis. That means you can control a great deal of money by putting down only a fraction of it. It is called leverage and you are usually allowed approximately 10 times your cash position. That can be a big advantage for making profits. It can also cost you a lot if your trades go against you, so you have to be on top of the situation. This is not a game.

If you are going to venture into online currency trading, study the trading and the markets. Many of the larger online currency trading firms offer information and training materials that are extremely helpful. It would also be beneficial to learn about technical trading as that is what most short-term traders use to help make their buy and sell decisions. There are mountains and mountains of information available on the Internet.

Online currency trading is not gambling but you need to know what the investment is all about and how it works before you consider trading. Look for a company that has been established for a long time and has a solid track record. If you are not sure about something and by all means ask as many questions as you need.

Also, note that online currency trading is not for everyone but for the people that take the time to learn the business, it can be very profitable and rewarding. You should only use money that you can afford to lose and never trade with the mortgage or tuition money. If it's done right they can be quite exciting and lucrative. The market moves quickly and if you enjoy fast paced action, nothing beats online currency trading.

Posted by Cody McClaflin at 8:50 AM | Permalink | Comments

A Beginners Guide To Trading Stock Online
by: Jason Davies

So You Want To Buy Or Trade Shares?

The first thing you need to do if you are online, is check out online brokers such as TD Waterhouse or E-Trade. Opening an account is normally free, and once it is opened you can deposit money into your account so that you can trade.

What Type Of Broker?

The cheapest is an execution only broker. What this basically means is that you aren't given any advice on when to buy or sell the shares/trade. Their job is to provide a quote and fill the order.

What Is An Order?

All participants in the market want to do one of three things. They either want to buy, sell or hold. You only need a broker when you want to buy or sell. Holding the shares takes care of itself ( and is the least expensive while your stocks are going up in price ).

Online Trading Platforms

By having an account online, it allows you to buy or sell shares automatically ( i.e. without human intervention in the most part ). Once you place an order to buy or sell, you normally have a limited amount of time to accept or turn down the price offered.

How Are Prices Made Up?

Prices consist of a bid and offer, with the Mid price being the actual price of the share. Most stocks have one or more marketmakers that set the price for the stock so they can make money on the spread in return for making a market in that stock. For instance, you may have a stock priced at 136p with a 134p bid and 138p offer. This means the marketmaker will buy the stock off you for 134p and sell it to you for 138p.

Okay I Want To Place The Trade.

So in the example above you agree to buy at 138p and the deal goes through. Congratulations you now own shares in Company 'X'. If you pay the full offer price, it is also known as the 'touch' price. One thing to check is the normal market size for the shares you wish to buy. If the amount you require is above NMS, then the marketmakers can choose a different price to the 'screen price'

Posted by Cody McClaflin at 8:49 AM | Permalink | Comments

Investing – A Beginners Guide
by: Anastasia Phocas

Managing the personal finances and to multiply it many fold needs prudent investment strategies. Without gaining adequate knowledge in investment, do not try your hand in various investment options, which can result in drastic and sometimes disastrous results.

A new investor should first visit the local library and try to get various guides on personal finance. Issues relating to personal finance includes basis for a budget, sticking to the budget, saving money for an easy retirement life, major purchases, and managing the accrued finances properly.

New investors should go through newspapers such as Wall Street Journal, which will familiarize the reader with insurance, stocks, investments etc. through their Friday Column aptly named “Getting Going” by Jonathan Clement.

A new investor should not barge into the stock market based on any half-baked advice by close relatives or friends. For getting a proper idea about overall money management, study books such as The Intelligent Investor. For the sake of reference, this title is highlighted. If you browse in the bookstores or libraries, several other equally good guides might be available. Find more info at http://www.onestopinvestmentresource.info

If excess cash is available immediately and if you are still going through the learning process, without wasting time, you can put the excess money in a mutual fund or even the bank.

Even though this learning process appears to be a daunting chore, it is better than relying on professional money market advisors who will charge a hefty amount for guiding you in making money. Ultimately, you and you alone are responsible for your financial situation – win win or no win.

Once a new investor gets a fair idea about personal finance management, further studies in mutual funds, stocks and bonds will be the next logical step.

A mutual fund is money pooled by a group of investors, which is used to buy stocks or bonds from various companies and strives to achieve a specified target of growth. Many mutual funds set 1000 dollars as the minimum initial investment money. A closed ended mutual fund is similar to a share issued by a company trading in the stock exchanges. It can be traded through a broker just like any other stocks. Open-ended mutual funds assure a fixed annual income without any surprises.

Some of the popular mutual funds are money-market funds, balanced funds, index funds, pure bond funds, pure stock funds and tax-free bond funds.

The next logical step or the parallel step is investments in stocks. A certain amount of guesswork is needed for buying and selling them. To get some knowledge about the risks involved, try to play the investment games online, which simulates the practice of selling and buying stocks without losing money or facing any risk. After thorough familiarisation, a first trade in stock with minimum investment can be tried.

Posted by Cody McClaflin at 10:31 AM | Permalink | Comments

The Basics On How To Research Stocks
by: Luke Cameron

Dealing with stock investments is a very tricky and risky job. Some even compare it to gambling because there is always no guarantee on what the outcome of the trade will be. What separates the gamblers from the investors is research. Data gathering and analysis is an important part in the success of a particular trade.

You may not have the time or the patience to conduct experiments; however, there are individuals or firms available to offer you their services for a certain fee. There are brokerages, especially the larger and more stable ones, which offer research for the existing clients.

The most successful investors consider research as a part of the entire trading process. When you give importance to research before buying or selling, you are already investing. And the result of such research will be beneficial.

The first thing you should do if you want to know how to research stocks is to gather data about the current trade practices being employed in the stock market. You should also be aware of the different companies playing in the market. The most unbiased sources you will be able to acquire are actual filings of publicly traded companies.

There are different reports that can be presented by a company. One is the 10-K. This is somewhat similar to annual reports, and they are available for download at the website of SEC. The report that is filed quarterly is called the 10-Q and the one that is filed for certain important changes in between is called the 8-K.

The reports contained in the aforementioned reports are the latest information on the company's financial status - their income, expectation, competition, lines of businesses and the members of the board. Fundamental analysts use this information as tools to be able to come up with their trading strategies.

Companies produce quarterly and annual reports to be circulated among its share holders. However, the contents of the reports are available for public knowledge and scrutiny. These reports have some data similar to 10-K's and 10-Q's, but there are several subtle and minimal changes as well. These reports can be very beneficial on how to research stocks.

For a minimal fee, certain brokerages offer copies of chart data of the different companies participating in the stock market. Most of these companies are their clients for whom they also offer research services.

Another source of data are newsletters. These newsletters contain the most recent events and updates that are happening in the stock market and its active players. There are so many newspapers available to help aid investors. However, with the large number of these newsletters, it would be a little bit challenging to find reliable publication.

CEOs, CFOs and other members of the board often give interviews or conferences to the financial press. They give information on the company's financial status and assures the public their companies are sustainable and strong.

All the data that has been gathered during should kept in mind and used to be able to make it big in the stock market. It is very important to know how to be able to research stocks in order to find reliable data to help aid in the formulation of trading strategies.

Posted by Cody McClaflin at 10:31 AM | Permalink | Comments

It is a negative thing to go into debt unless that debt is bringing in an income to off-set the debt payments. One thing I learned is that plumbers can cost you an arm and a leg. I found that if you own a lot of properties, like I do, it is a good idea to have 1 plumber that you can develop a solid relationship with. It allows you to negotiate cheaper rates on the work that they do.

Here is a great list for finding plumbers in the LA area:

Los Angeles Plumbers

Posted by Cody McClaflin at 12:13 PM | Permalink | Comments

Fundamentals of Debt

Bond-contract between the issuer and an investor. Investor lends money becoming a creditor. The issuer, which can be a government entity or a private business, promises to pay the money back when the bond matures and to pay the investor interest on the loan. The issuer is then a debtor and since this is a loan, bonds are called debt securities.

Issuing debt is referred to as leverage financing because the issuer is borrowing against its net worth. For a corporation a comparison between debt and equity is used to determine how heavily leveraged the corporation is.

Bearer Bonds-no name of the owner recorded on either the bond or the books of the issuer. Bond carries interest coupons attached. At maturity, the bondholder presents the bond certificate for redemption. No longer issued in the US.

Registered Bonds-has the holder’s name and address recorded on the bond and on the books of the issuer. The bond may be registered as to principal only or fully registered.

Registered as to principal only-will only have th owner’s name and address recorded for purposed of receiving any written notices and payments of the principal amount at maturity. Interest payments are received by means of attached interest coupons.

Fully Registered bond has the owner’s name and address recorded for purposed of receiving any written notices, payment of the principal amount at maturity, and receiving interest payments. The interest payments are received by means of a check from the issuer every 6 months.

Book Entry Form...another type of fully registered form that is becoming quite common. Here, there is no physical bond issued. Instead, ownership is evidenced by means of a computer entry of the owner’s name and address. All negotiable U.S. Treasury and government agency debt is currently issued in book entry form.

Par Value (Principal or Face Amount)

Bonds are typically issued with a $1,000 par value. While $1,000 is a common denomination for corporate bonds, many municipal bonds are issued in denominations of $5,000. When trading a round lot of bonds would be $100,000 of total par value.

Prices

Prices can differ between par value, at a discount, or a premium. Each 1% increment is know as a point. If the price of a bond changes from 90 to 91, it has increased by one point. The actual price has increased from $900 (90% of $1,000 face value) to $910 (91% of $1,000 face value). Therefore, the dollar value of a bond point is $10, 1/4 point is $2.50, ½ point is $5, etc.

Maturity Date

The maturity date of a bond is the day on which the issuer must pay the principal (face amount) of the bond to the investor. The investor will also receive his LAST semiannual interest payment at this time. The maturity date is stated in a month-day-year format.

Maturities typically vary from 10 years to as long as 100 years. Generally, as we will see, bonds with longer maturities tend to pay higher interest rates (all other factors being equal) than bonds with shorter maturities. At the same time, the market prices of longer-term bonds tend to be more volatile than shorter-term bonds.

Posted by Cody McClaflin at 8:07 AM | Permalink | Comments

This site is going to explain, in great detail, how the financial markets work. This information is being provided to assist anybody in learning about the stock market, bond market and how they all work as well as the legal and regulatory environments that exist in them.

If anyone has questions, please feel free to email Cody139x@gmail.com and I will answer in a timely fashion.

Posted by Cody McClaflin at 2:29 PM | Permalink | Comments