Learn to get USD now!

[Ebook] Value Averaging: The Safe and Easy Strategy for Higher Investment Returns (Wiley Investment Classics) - Michael E. Edleson

2008-12-16T16:21:00.002+07:00

Title: Value Averaging: The Safe and Easy Strategy for Higher Investment Returns (Wiley Investment Classics)
Author: Michael E. Edleson
Foreword: William J. Bernstein
Pages: 234 pages
Publisher: Wiley; Revised edition (October 27, 2006)
Language: English
ISBN-10: 0470049774
ISBN-13: 978-0470049778

Michael Edleson first introduced his concept of value averaging to the world in an article written in 1988. He then wrote a book entitled Value Averaging in 1993, which has been nearly impossible to find—until now. With the reintroduction of Value Averaging, you now have access to a strategy that can help you accumulate wealth, increase your investment returns, and achieve your financial goals.

Download (3.27Mb, Type: RAR'd PDF)
Rapidshare.com
or
Megaupload.com

[Ebook] Economics Lab: An Introduction to Experimental Economics (Routledge Advances in Experimental and Computable Economics) - Dan Friedman

2008-12-16T16:15:00.002+07:00

Title: Economics Lab: An Introduction to Experimental Economics (Routledge Advances in Experimental and Computable Economics)
Author: Dan Friedman
Pages: 256 pages
Publisher: Routledge; 1 edition (March 12, 2004)
Language: English
ISBN-10: 0415324025
ISBN-13: 978-0415324021

Experimental Economics is a discipline that attempts to give economic theory firmer scientific foundations than it has perhaps had in the past. This impressive new book will introduce students to this vital field.

Download (1.51Mb, Type: RAR'd PDF)
Rapidshare.com
or
Megaupload.com

[Ebook] 10 Minute Guide to Project Management - Jeff Davidson

2008-12-16T16:08:00.003+07:00

Title: 10 Minute Guide to Project Management
Author: Jeff Davidson
Pages: 192 pages
Publisher: Alpha; 1st edition (August 2000)
Language: English
ISBN-10: 0028639669
ISBN-13: 978-0028639666

The 10 Minute Guide to Project Management offers simple, practical help for busy people who need fast results. Following the advice in this guide will not only help your get your project off on the right foot, but will also keep you and your team marching along to its successful conclusion. You'll learn how to put together the best team for the job, how to define your goals and motivate your teammates, how to monitor the teams progress and keep the project on track, and how to stay within budget and time constraints. The book also explains how to use charts and diagrams to detail and define various aspects of the project.

Download (339Kb, Type: RAR'd PDF)
Rapidshare.com
or
Megaupload.com

[Ebook] Ten Minute Guide to Managing Your Time - Jeff Davidson

2008-12-16T16:05:00.003+07:00

Title: Ten Minute Guide to Managing Your Time
Author: Jeff Davidson
Pages: 192 pages
Publisher: Penguin Putnam; 1 edition (April 2000)
Language: English
ISBN-10: 0028638867
ISBN-13: 978-0028638867

The 1-Minute Guide to Managing Your Time offers simple, practical help for busy people who need fast results. Through goal-oriented, 10-minute lessons, you learn all the skills you need to effectively use your time!

Download (289Kb, Type: RAR'd CHM)
Rapidshare.com
or
Megaupload.com

[Ebook] 10 Minute Guide to Getting Organized - Janet Bernstel, Stephen Windhaus

2008-12-16T16:00:00.003+07:00

Title: 10 Minute Guide to Getting Organized
Authors: Janet Bernstel, Stephen Windhaus
Pages: 156 pages
Publisher: Alpha (October 13, 2000)
Language: English
ISBN-10: 0028636139
ISBN-13: 978-0028636139

This guide is based on the philosophy that organization is a skill and, like all skills, it can be learned. The author provides steps for creating systems that will save you time and labor, shows you how to keep your desktop clutter-free, helps you avoid procrastination and excuses,and introduces you to organizational tools that will benefit both you and your staff.

Download (471Kb, Type: RAR'd PDF)
Rapidshare.com
or
Megaupload.com

[Ebook] 10 Minute Guide to Leadership - Liz O'Leary

2008-12-16T15:56:00.004+07:00

Title: 10 Minute Guide to Leadership
Author: Liz O'Leary
Pages: 192 pages
Publisher: Alpha; 2 edition (July 21, 2000)
Language: English
ISBN-10: 0028636112
ISBN-13: 978-0028636115

In todays fast-paced world, everyone wants simple and quick solutions to workplace issues and problems at home. These distinctive guides offer easy-to-understand, helpful information on a variety of business and personal finance topics. Each book is written by an expert in the respective field.Leading others, whether in a one-on-one situation or in groups, can be daunting. This book explains how to acquire the necessary leadership skills required for every workplace situation. In addition , this book gives key techniques for coaching effectively and resolving conflicts.

Download (232Kb, Type: RAR'd CHM)
Rapidshare.com
or
Megaupload.com

[Ebook] 10 Minute Guide to Investing in Stocks - Alex Saenz

2008-12-16T15:52:00.002+07:00

Title: 10 Minute Guide to Investing in Stocks
Author: Alex Saenz
Pages: 196 pages
Publisher: Alpha; 1st edition (September 1, 2000)
Language: English
ISBN-10: 0028636104
ISBN-13: 978-0028636108

New investors can fall into some dangerous traps. If you are new to the stock market, if you need a refresher course in investing basics, or if you are an employee of a corporation that manages its own profit sharing stock plan, this easy-to-use reference guide on everything from research to mutual funds can help you. It provides a basic education on stocks, investing, and the way the market works.

Download (322Kb, Type: RAR'd CHM)
Rapidshare.com
or
Megaupload.com

[Ebook] Ten Minute Guide to Conducting a Job Interview - William W. Larson

2008-12-16T15:44:00.004+07:00

Title: Ten Minute Guide to Conducting a Job Interview
Author: William W. Larson
Pages: 192 pages
Publisher: Alpha; 1 edition (November 20, 2000)
Language: English
ISBN-10: 0028639960
ISBN-13: 978-0028639963

If you have the responsibility of selecting and evaluating job candidates, this book will give you the tools to carry out an effective interview. Based on the philosophy that the best predictor of future success is past performance, the guide teaches you how to analyze a job, review a resume, and plan and maintain control of an interview. The list of sample questions will help you identify the right person for any job opening.

Download (642Kb, Type: RAR'd PDF)
Rapidshare.com
or
Megaupload.com

Internet Trading Course: The complete course in online investment (Financial Times Series) - Alpesh Patel

2008-08-26T15:35:00.003+07:00

Title: Internet Trading Course: The complete course in online investment (Financial Times Series)
Author: Alpesh Patel
Pages: 352 pages
Publisher: FT Press (September 5, 2002)
Language: English
ISBN-10: 0273656309
ISBN-13: 978-0273656302

The Internet Trading Course is based on years of real trading experience from one of the most renowned names in the investment world.

From the basics—such as getting online, hardware and browser guides—through to stock picking techniques and managing risk, this course book is an enlightening start for novices entering the trading arena and for more experienced hands who often neglect sophisticated yet essential techniques such as money management.

Its accessible, user-friendly format and fun and crisp manner make it an enjoyable as well as essential tutorial in the art of Internet trading. The Internet Trading Course not only educates you in the strategies that will lead to your success but also provides the tools to carry them out with confidence and ease.

Download (3.72Mb, Type: RAR'd PDF)
http://ifile.it/2cmqf5d

Investor's Guide to Charting: Analysis for the Intelligent Investor - Alistair Blair

2008-08-26T15:32:00.002+07:00

Title: Investor's Guide to Charting: Analysis for the Intelligent Investor
Author: Alistair Blair
Pages: 256 pages
Publisher: Financial Times Management; 2nd edition (September 2003)
Language: English
ISBN-10: 0273662031
ISBN-13: 978-0273662037

Charting is a complex and sometimes derided world, but one that nonetheless commands an enormous following. Some basic knowledge of charting is essential for any keen investor, and this fully revised and updated edition of Alistair Blair's Guide to Charting is the independent, introductory overview of technical analysis for the private investor. Guide to Charting is packed with purpose-drawn charts and worked examples, and explains in detail how charting theories work. Written with the private investor's viewpoint in mind the book's coverage will give you all that you need to start practicing technical analysis and, unlike other books on the subject, will also interest the more sophisticated, experienced practitioner by -- Comparing technical analysis with fundamental analysis; Examining the records of some of charting's most renowned exponents; Applying technical analysis to recent FTSE company price charts; Providing alternative interpretations of 'live' charts; Identifying both successful and failed recommendations by professional chartists. An insight into the world of charting, this text includes information on where to start, timescales, basic components of a price chart and different types of chart. It should be of interest to investors who are less than fully conversant with technical analysis.

Download (3.57Mb, Type: RAR'd PDF)
http://ifile.it/2dvjig6

Managing the Customer Experience: Turning customers into advocates (Financial Times Series) - Shaun Smith, Joe Wheeler

2008-08-26T15:26:00.003+07:00

Title: Managing the Customer Experience: Turning customers into advocates (Financial Times Series)
Authors: Shaun Smith, Joe Wheeler
Pages: 272 pages
Publisher: FT Press; 1 edition (November 8, 2002)
Language: English
ISBN-10: 0273661957
ISBN-13: 978-0273661955

How much more profit could you make if you had customers who couldn't imagine doing business with anyone but you? In your dreams! Tell that to Virgin Atlantic or Harley Davidson.How great would life be if 40% of your new business simply knocked on your door without you having spent a cent advertising for it? Impossible! Tell that to First Direct.

The companies in this book have managed to turn customers into advocates. Advocates who constantly refer their friends and colleagues to those businesses. Why? Because those companies have created a Branded Customer Experience. They have managed the relationship to the point where customers can't imagine wanting to do business with anyone else.

How can you gain this unbeatable competitive advantage? Managing the Customer Experience shows you how. It takes you through the step-by-step process of creating Loyalty by Design. It shows you how to re-think your business from the customer's point of view and then design and deliver a customer experience that drives loyalty and profitability.

Customer Satisfaction is no longer enough. 80% of customers who switch suppliers express satisfaction with their previous supplier. To lead the market companies need customers who are enthusiastic 'advocates', customers who are highly loyal and drive new business to the company. For example 38% of First Direct's business comes from customer referrals. Advocacy comes from creating a customer experience that becomes synonymous with the brand, what Forum calls a Branded Customer Experience.

Research for this book with organisations like Amazon.com, Virgin, Pret A Manger, Krispy Kreme, Harley-Davidson, Manchester United, and many others has identified the 'Uncommon Practices' that help these organisations create a Branded Customer Experience. Such an experience requires Marketing, Operations, and Human Resources to work together to deliver the brand creating a common strategic agenda within the organization.

Download (1.1Mb, Type: RAR'd PDF)
http://ifile.it/qnsfc0v

Forex Shockwave Analysis - James L. Bickford

2008-08-26T09:16:00.001+07:00

Title: Forex Shockwave Analysis
Author: James L. Bickford
Pages: 368 pages
Publisher: McGraw-Hill; 1 edition (December 5, 2007)
Language: English
ISBN-10: 0071498141
ISBN-13: 978-0071498142

More than $2 trillion is traded in the foreign exchange every day, and many experts believe this figure will double in the next five years. Fortunately for spot currency traders, the high-volume periods in this market are predictably moved by information released from government and informational agencies, typically on Wednesdays and Fridays at 8:30 a.m. Knowing this gives the Forex trader tremendous analytical advantage, and in Forex Shockwave Analysis, veteran online spot currency trader James Bickford offers reliable techniques and know-how to capitalize on the violent disruptions that happen at these times.

When a severe breakout up or down occurs in an otherwise well-behaved time series, it's called a shockwave, and Forex Shockwave Analysis offers unprecedented focus on identifying, analyzing, and categorizing this unique pattern in the foreign exchange market. It not only helps independent investors isolate and recognize recurring shockwave personality traits, but it also gives insight into the reactive phase immediately following the shockwave. Fundamental analysis is covered to provide complete coverage, but playing this market's action can be most highly profitable when the streaming data available today is used to reveal critical properties and characteristics about the underlying currency pair. This book equips you with the four most important methods of technical analysis:

Pattern recognition
Econometric models
Crossover trading systems
Wave theory

Forex Shockwave Analysis is packed with practical information for mastering shockwave trading, including a refined minimum reversal algorithm that converts raw security data (OHLC quotes) to swing data, numerous charts and diagnoses based on activity, range, and interaction, as well as fifteen case studies demonstrating how covered material works in the real world. This highly visual book is also outstandingly designed to serve as a computer-side reference that equips you with eleven appendices filled with all the tools you need to gain a distinct advantage while working online in your currency trading platform.

Download (1.59Mb, Type: RAR'd PDF)
http://ifile.it/atfjg9h

Forex Made Easy : 6 Ways to Trade the Dollar - James Dicks

2008-08-26T08:57:00.004+07:00

Title: Forex Made Easy : 6 Ways to Trade the Dollar
Author: James Dicks
Pages: 256 pages
Publisher: McGraw-Hill; 1 edition (March 12, 2004)
Language: English
ISBN-10: 0071438947
ISBN-13: 978-0071438940

The foreign currency market is the largest financial market in the world, and foreign exchange trading is quickly becoming one of today's most high-profile, potentially lucrative markets. One problem is that books on the topic are complex, technically dense, and difficult for Forex novices to grasp.

FOREX Made Easy is the first book to approach the topic in a detailed yet accessible style, gradually and deliberately moving from simple to complex in easy and natural language. Author James Dicks--founder of the popular trading software 4X Made Easy--draws upon his trading knowledge to give readers only the information they need, from setting up a workstation to trading electronically.

This Forex guidebook provides traders with:

An easy-to-follow, six-step process for FOREX trading
Methods for gaining an advantage using technical analysis
Dozens of examples to illustrate key points

Download (4.57Mb, Type: RAR'd PDF)
http://ifile.it/0gwjc8x

Stock Market Cycles: A Practical Explanation - Steven E. Bolten

2008-08-24T17:08:00.003+07:00

Title: Stock Market Cycles: A Practical Explanation
Author: Steven E. Bolten
Pages: 184 pages
Publisher: Quorum Books (May 30, 2000)
Language: English
ISBN-10: 1567203205
ISBN-13: 978-1567203202

Anyone who wants to understand stock market cycles and develop a focused, thoughtful, and solidly grounded valuation approach to the stock market must read this book. Bolten explains the causes and patterns of the cycles and identifies the causes of stock price changes. He identifies the sources of risks in the stock market and in individual stocks. Also covered is how the interaction of expected return and risk creates stock market cycles. Bolten talks about the industry sectors most likely to be profitable investments in each stage of the stock market cycles, while identifying the stock market bubble and sinkhole warning signs. The role of the Federal Reserve in each stage of the stock market cycle is also discussed. All the categories of risk are identified and explained while no specific risk is left undiscussed. The underlying causes for long-term stock price trends and cycles are highlighted. The book is useful in many areas including stock analysis, portfolio management, cost of equity capital, financing strategies, business valuations and spotting profit opportunities caused by general economic and specific company changes.

Download (985Kb, Type: RAR'd PDF)
http://ifile.it/y89rf2u

Stock Market Strategies That Work - Jake Bernstein

2008-08-24T16:45:00.002+07:00

Title: Stock Market Strategies That Work
Author: Jake Bernstein
Publisher: McGraw-Hill Companies (February 2002)
ISBN-10: 0071406336
ISBN-13: 978-0071406338

Making significant money in the stock market isn't a given. However, investors can greatly increase their odds of success by knowing the basics of how the market works andmore importanthow to trade profitably in the market. Stock Market Strategies That Work goes far beyond other introductory books on the market, explaining in step-by-step detail the specific techniques, systems, methods, and indicators that veteran investors have used for years to prey on the unsuspecting average investor and fatten their own trading accounts. Jake and Elliott Bernstein use numerous charts and graphs to emphasize timing, entry and exit methods, trend analysis, risk management, and other higher-level topics.

Methods covered in this unique introduction to profitable investing include:

Risk management in today's volatile market
Charting techniques to track the consistent big movers
Finding key entry and exit points using technical analysis

Download (921Kb, Type: RAR'd PDF)
http://ifile.it/9i8mjsq

Exchange-Traded Funds For Dummies - Russell Wild

2008-08-24T15:34:00.006+07:00

Title: Exchange-Traded Funds For Dummies
Author: Russell Wild
Pages: 360 pages
Publisher: For Dummies (November 6, 2006)
Language: English
ISBN-10: 0470045809
ISBN-13: 978-0470045800

It seems like every week Wall Street comes up with some new, exotic investment idea that puts your money at risk. Thankfully, exchange-traded funds (ETFs) are less volatile than individual stocks, cheaper than most mutual funds, and subject to minimal taxation. But how do you use this wonderful product to diversify your investments in today’s fast-growing and ever-changing market?

Exchange-Traded Funds For Dummies shows you in plain English how to weigh your options and pick the exchange-traded fund that’s right for you. It tells you everything you need to know about building a lean, mean portfolio and optimizing your profits. This hands-on guide will give you the power to use ETFs to:

Create the stock (equity) side of your portfolio
Handle risk control, diversification, and modern portfolio theory
Manage small, large, sector, and international investments
Add bonds, REITs, and other ETFs
Invest smartly in precious metals
Work non-ETFs into your investment mix
Revamp your portfolio to fit life changes
Fund your retirement years

In addition, this book covers commonly asked questions about ETFs and mistakes that many investors, even the experienced ones, make. It provides forecasts of the future for ETFs and personal spending and also provides a complete list of ETFs and Web resources to assist your investment. With Exchange-Traded Funds For Dummies, you’ll soon discover what makes ETFs the hottest investment on the market!

Download (3.16Mb, Type: RAR'd PDF)
http://ifile.it/9adwbzo

[Ebook] Stock Trader's Almanac 2008 (Stock Trader's Almanac Investor Series) - Jeffrey A. Hirsch

2008-01-17T20:53:00.002+07:00

Title: Stock Trader's Almanac 2008 (Stock Trader's Almanac Investor Series)
Author: Jeffrey A. Hirsch
Pages: 192 pages
Publisher: Wiley; Spi edition (October 5, 2007)
Language: English
ISBN-10: 0470109858
ISBN-13: 978-0470109854

The Stock Trader's Almanac is a practical investment tool that has helped traders and investors forecast market trends with accuracy and confidence for over 40 years. Organized in an easy-to-access calendar format, the 2008 Edition contains historical price information on the stock market, provides monthly and daily reminders, and alerts users to seasonal opportunities and dangers. For its wealth of information and authority of its sources, the Stock Trader's Almanac stands alone as the guide to intelligent investing.

Download (2.24Mb, Type: RAR'd PDF)
http://mihd.net/9nf0xo7

Home Based Business - A Business for Anyone With Huge Profit Potential

2008-01-17T20:52:00.000+07:00

The home based business I am going to outline here can be learned in a couple of weeks, only costs a few hundred dollars to fund and has the potential to make huge profits. You don't need a college education just a desire to succeed and a willingness to learn.

The business is becoming an online currency trader from home - HANG ON!

I Couldn't do that, you may say but the fact is you could - just check out these advantages many of which you may never have considered

- You can learn currency trading in around two weeks.
- You only need a few hundred dollars to get started.
- You then need just an internet connection and PC.
- You can run the business in 30 minutes a day or less.
- There is never a recession in currencies as one rises another must fall.
- There are profit opportunities every day.
- You can leverage your deposit up to 400 times!

This means $500 can control $200,000 and that's why this business can be so lucrative.

So how easy is it to learn? Let me tell you a story ...

In 1983 trading legend Richard Dennis set out to prove trading was a skill anyone could learn.

He decided to conduct an experiment in which he took 14 people who had never traded before and taught them to trade in just 14 days. They were of varying ages, both sexes and of varying levels of intelligence.

He then set them up with trading accounts - the result?

They went on to make $100 million in just 4 years and become trading legends.

The experiment showed that anyone could learn if they had the desire to succeed and did their homework and you could learn trading to.

The best way to learn is to spot repetitive price patterns on charts that can be traded for profit. The idea then is to lock in and hold the longer term trends, use leverage to make money fast and cut losing trades quickly.

Human nature is constant and this is reflected in repetitive price patterns that when you trade them you will have the odds in your favour. You wont win every trade of course and will have losses - but if you can get just 30% of your trades right when following long term trends, you can make a lot of money.

While trading can be learned its does require not only that you learn a method but you have the discipline to follow it, through losing periods.

Trading is a combination of both.

Most traders do not trade in a disciplined fashion and let their losses mount - this is why discipline is so important. If you look after the losses and keep them small, you will soon be able to cover them with the bigger trending moves.

Trading is the final frontier of the free market economy and is one of the few areas where you can start with small stakes and build wealth quickly.

Sure, it's a challenge but what other business allows you to make such huge gains quickly and can be learned by anyone.

If you have a desire to succeed then your almost there...

You can set about getting the right education for trading success and a potentially life changing income.

Live The Dream
Become A Professional Forex Trader From Home!

Author: Kelly Price

Currency Trading Forecast - Spotting the Big Trends

2008-01-17T20:50:00.000+07:00

Many traders like to follow currency trading forecasts from news wires and brokerage houses. Here we are going to give you some tips on spotting the ones that are good and also how to do it yourself.
Today we live in an age of instant communications and information overload and there are numerous people involved in currency trading forecasts: Banks, brokers, vendors and TV analysts and most of them are dead wrong.

Why?

Because they either forecast to far ahead - or they base their view simply on the supply and demand fundamentals.

There are problems with both methods.

You will often see annual reports telling you where such and such a currency will end up in a year - How on earth can you do that?

We live in a world where events change constantly and you simply cannot look too far into the future as world events will simply make the forecast redundant.

Supply and demand fundamentals don't move prices - human opinion of them does.

Humans are not logical and we base our trading views not on logic but on the emotions of greed and fear. The facts are there for all to see but we all draw different conclusions from the facts presented to us.

Markets tend to collapse when the fundamentals are most bullish and rally when their most bearish - this is investor psychology at work.

Humans push prices to far from fair value and these price spikes don't in many instances reflect the supply and demand facts, they reflect greed and fear.

So how do you forecast correctly?

The answer is never to look to far ahead and simply back up your opinion with the reality of price change - this is obvious from forex charts.

Forex charts not only give you the advantage of seeing the fundamentals reflected in price action, they also tell you how humans perceive the fundamentals.

In conclusion you get a complete picture to look at.

By using a forex chart you are trading reality of price change and can act upon it.

You're trading the facts and truth you see - not speculating into the future, so the next time you see a currency trading forecast that sounds convincing, check your forex charts for confirmation.

Trade the facts as they are and the truth of price movement.

Author: Kelly Price

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

2008-01-17T20:45:00.000+07:00

Many forex traders what to use for ex news to generate buy and sell signals for profit and here we are going to give you a simple powerful tip, you can use to catch the really big moves and big profits.

There is an old quote that says: "If you can hold your head around you while everyone else is losing theirs you probably haven't heard the news"

This is the basis of the tip we are going to explain here. It works in currencies or any financial markets.

You are looking for news that has moved the market already and an extreme in investor sentiment, where the news is discounted and prices have moved to far from fair value and no longer reflect the facts.

You are effectively looking for news that is discounted and an emotional spike in price to far away from fair value.

Live Trades and $20,000 In Potential Profits

Let's start with an example in one of the most sentiment driven markets of all ( before we look at currencies), crude oil.

Regular readers of my articles will know that I am a crude oil bear, crude is simply overpriced. There is plenty of it about and world demand is dropping.

The true value is about 80.00 a barrel.

Every time sentiment has pushed it up toward the psychological $100.00 we have sold it - look at our other articles. If you would sold on the last two pops to this level, you will have seen the decline is $20,000 based upon 1 contract.

Its only sentiment that drove prices up - greed and fear drove the market NOT Supply and demand.

A CURRENCY TRADE EXAMPLE

Now let's look at a currency that is overbought and a huge profit to be made.

The euro against the dollar is the trade.

Regular readers again will know that 1.50 is the psychological number that traders want to target.

1.50 is too high just like $100 in crude is. This is simply sentiment driving prices near these levels and the euro will not trade above this level in our view and today its started falling.

The last time it got up we sold (see our other articles) and said it would target 1.46 it did and that's a tidy 600 pips profit.

It's up testing the highs again - but the bad news for the dollar is discounted in the price and its now only greed and fear driving the euro.

All the arguments you here for dollar weakness are discounted:

A 50 bps rate cut, a housing market in trouble, sluggish growth etc and there is no more bad news that's not known.

Now throw into the equation that the euro zone has problems of its own (which traders seem not to bothered about) and you could see a break in the dollars favour.

How far?

We expect the dollar to trade back to 1.46 and if this level gives way target 1.40

The majority don't agree with us (they didn't in crude either) but we won't let that bother us, were sticking with our euro short view to give us another thumping profit.

When looking for extreme bullish or bearish news to break a price always get confirmation of weakening momentum on your forex charts, so you are trading the reality and not getting in to soon.

Will Rogers once said:

"I only believe what I read in the papers"

He was joking but many traders simply take it as gospel when a news story says the dollar is going to fall into oblivion.

Hold your head, look at the facts and if prices gone too far to soon, get ready to trade against the losing herd.

Can you do the above?

Of course you can - it simply means standing back, examining the facts and then looking for trading signals on your forex charts.

This article was written at 8AM Eastern time 15th January by Kelly Price

Using Technical Indicators to Improve Your Trading

2008-01-17T20:43:00.000+07:00

One of the most difficult aspects of trading and investing is selecting appropriate technical indicators and whilst all technical indicators will work some of the time none will work all of the time. With over 150 to choose from, and more joining the market every day, it's not surprising that traders and investors can feel both confused and overwhelmed. However, understanding and knowing which indicator to select and apply to a particular market and time frame will be the difference between success and failure. It is my belief that the best way to approach the use of indicators is as follows:

First, understand that the most important technical indicator is the price on a chart, what lies behind it, where is it likely to go (up, down or sideways) in the short, medium and long term. For the purposes of this article whenever price is mentioned it is based on the use of Japanese candlesticks although there are other formats such as, point and figure, Renko etc.

Step one is therefore to start with a chart. Next is to select the time frame best suited to your own personal trading and investing strategy. As a long term currency trader my own time frames are monthly, weekly and daily. Minute by minute movements in currency pairs are of little or no use at all. Similarly equity investors would look at end of day data through to yearly charts in order to see how the price has been moving. On the other hand as day and swing traders are only interested in making a profit as fast as possible they will use anything from minute to hourly charts. All this is self evident yet why do so many fail in the financial markets?

The next stage is possibly where it all goes wrong when perhaps too many inappropriate or conflicting indicators are added to the price movement and time frame. Avoiding these mistakes is actually quite straightforward and the key is it to keep it simple. For novice traders I would suggest starting with the simplest indicators of all, namely volume and simple moving averages. Volume will give you an idea of how many traders are joining in the move, either up or down, and all charts now include this within their packages. Look for anomalies in the volume such as very large volume spikes which stand out from the average, and conversely very small volume, where you might expect average volume to appear. These signals will indicate that perhaps something is happening in the market and we need to pay attention.

Simple moving averages, as their name suggests are moving averages are simply an average of previous price movements. They are excellent for identifying turning points, where we are looking for crossover points, with one crossing over another. Personally I set these up using a 20, 50 and 200 period MA. Here I look for the 200 crossing the 50 for a possible trend reversal downwards, and the opposite for an uptrend. In addition I look for prices to bounce off the 50 SMA as this indicates strength in the upward trend. Simple moving averages are very easy to set up and again all trading packages will include them as standard.

Other indicators can then be added to this basic setup and here I would suggest adding one at a time and testing its effectiveness under different market conditions. It will be a case of trial and error and keeping things as simple as possible which is at odds with the powerful trading packages and black box systems so readily available. However, the analogy I would use here is a mobile phone, yes it can take pictures, play music and surf the net but actually when you have broken down in your car and you need help all you want is to be able to make a phone call for help!

Anna Coulling

[Ebook] Investing with Exchange-Traded Funds Made Easy: Higher Returns with Lower Costs--Do It Yourself Strategies Without Paying Fund Managers

2008-01-11T06:57:00.000+07:00

Title: Investing with Exchange-Traded Funds Made Easy: Higher Returns with Lower Costs--Do It Yourself Strategies Without Paying Fund Managers
Authors: Marvin Appel
Pages: 272 pages
Publisher: FT Press; 1 edition (October 29, 2006)
Language: English
ISBN-10: 0131869736
ISBN-13: 978-0131869738

ETFs offer exceptionally low expenses, outstanding performance, and unparalleled transparency. But, the number and variety of choices can be overwhelming. Now, one of the field's leading experts cuts through the ETF hype, offering a start-to-finish plan for choosing the right ETFs and using them to beat the market, year after year.

Dr. Marvin Appel explains exactly how ETFs work, what they can and cannot do, and why they’re not all equally attractive. Then, drawing on objective data and proven, back-tested strategies, he shows you how you can quickly move into the right ETFs at the right time, consistently staying on the winning side of major market trends.

Appel illuminates every facet of ETF investing: quantifying potential risk and reward, using ETFs to improve diversification, implementing simple ”active strategies,” deciding when to move into cash, and more. He also presents a full chapter on international ETF investing, as well as a discussion on how ETF investing can reduce your taxes.

From start to finish, this book candidly assesses risks, costs, and rewards, helping you become an informed ETF consumer and a powerfully effective ETF investor.

Use ETFs to invest like the big players
Drive down costs and fully leverage diversification, the only “free lunch” on Wall Street
Learn what your investment advisors won’t tell you
The objective truth about ETF costs, risks, and opportunities
Build your “one-decision” portfolio
Profitable investing has never been this easy
Drive even greater profits with proven “active” strategies
Simple asset allocation strategies you can implement in just minutes
Choose ETFs that match your investment style
Build a profitable portfolio you’re comfortable with

Download (2.11Mb, Type: RAR'd PDF)
http://mihd.net/k2bupt

Don't Quit On Your Forex Education

2008-01-11T06:54:00.000+07:00

Forex education and training can provide you with the confidence to control your financial future. We must look past the hype in the marketplace and focus on what it really takes to personally achieve in the Forex market or any endeavor for that matter.

I'm not going to lie to you, trading Forex is not easy. But not for the reasons you may think. In the end we are the ones that will ultimately decide to become successful or not. The separator is not IQ, but rather emotional discipline or Self-Mastery. Where's this obtained?

Your Forex Education is the key!

Learning yourself will increase your bottom line more than any other single aspect. Let me just preview what emotional elements must be in place for you to succeed in Forex. You will notice that there is no mention of strategy, moving averages or pivot points!

1. Have A Strong Enough "Why" Statement

Why do you want to get your Forex education and trade the currency market? Is it to save for retirement? Is it to supplement your current income? Is it to replace your current job? Are you trying to accelerate your college fund? The answer to this question must be strong and full of passion! This will be the one element that will get you through the dark times all traders face.

Also, having this statement transferred to your Forex education mission statement will allow for the thoughts and actions of successful traders.

2. You Must Create Momentum

When you begin learning to trade Forex it is exciting and new, but like everything there is a finite honeymoon period and the effort begins to wade and life takes you away from your Forex education. You must create momentum - pick a time in your schedule and dedicate this to study and trading and continue to focus on the process of trading. Making money should be a secondary thought to placing sound trades.

Imagine where you are going to be six months from now with a solid commitment. Hold on to that thought and never let it go. Work, kids, friends and family - we all go 'em . Don't let excuses creep in and steal your dream.

3. Overcome Any Obstacle

Listen, nobody is exempt from having to climb the learning curve to achieving in Forex. There are no short cuts. Forex education is the best path. I came across a system the other day that is being marketed as a system that "you don't have to learn" to begin trading in your live account immediately. Just watch a video for 10 minutes and you are good to go! Warning!! The sad thing is that the system appeared to build on sound principals, but no system is fool-proof and without your Forex education your risk is 100% if you do not understand when that system can fail!

Create a vision board of pictures that represent your "Why" statement. Put it within eyesight of your trading area. If you come to work in your car - stop listening to the radio and listen to a audio book, if you do not have the money to fund your live trading account continue trading your demo account until you can fund a live account - you will be in better position than 99.9% of the traders who fund an account right away. This why having a coach is so important.

4. Don't Play The Blame Game

You must from this second forward begin to take full responsibility for all your actions. If a trade didn't work out, don't blame the market or the strategy. Look at each situation as a learning experience. I always say that in life there are no failures only feedback! I always ask one simple question after both a losing trade and a wining trade:

"What lesson do I need to learn from this to become a better trader?"

5. Don't Quit On Yourself

It is your dream and I want to fight for it with you, because I know what a mistake it would be to just give up and quit. If you quit you will ultimately learn nothing and would've missed an opportunity to turn your "Why" into your reality!

Building the proper foundation and investing in your Forex education will build confidence which naturally leads to results.

Todd Judkins

Regret Will Kill Your Forex Account

2008-01-11T06:51:00.000+07:00

You get over it, that’s what you do! Regret over a bad trade will eat your account from the inside out. Regret is a more powerful emotion than most traders recognize. It is like the unwanted guest that keeps living off of your bank account until there is no more left. It takes most traders into a tailspin that they will never recover. It can lead to dangerous psychological results such as failure to pull the trigger over even worse, paralysis by analysis.

“Yeah, but…” (I will save the disempowerment of this statement for another day)

It’s not easy putting those emotions aside when your money is on the line. That’s why they called it trading, folks. In Forex someone is on the other side of the trade controlling their emotions and eventually controlling your account balance. If you want to find consistency you must never let regret live in your trading experience.

Here’s what I do to combat this debilitating emotion … I get over it! How do I do this? I simply perform a post mortem of my bad trades (I still have them every now and then) and keep a detailed journal. Over time I began to recognize my personal triggers and simply tweaked my trade plan to be a more proactive currency trader and avoid the situations that led to the bad trade in the first place, in my instance over-trading or being tired.

What trader do I model my approach after? The answer may surprise you!

The answer is Tiger Woods.

I play golf, so you could imagine I am a huge fan of Tiger Woods. There are a lot of similarities between golf and trading. Both venues offer a look at who we are as a person, raw and uncensored. Both live in the world of risk and reward.

I admire Tiger Woods skill as a golfer, but even more so his mental toughness. Next time you watch Tiger Wood hit a bad shot follow his reaction. His immediate reaction is to get upset, really upset. Then count 5 seconds. His expressions and demeanor will have returned to one of focus and concentration.

And the funny thing is that is doesn’t matter what kind of prize money is online. He takes the same approach to every golf shot, in every tournament.

Let’s translate that to trading. Do you give yourself 5 seconds to get over a bad trade? Do you take the same approach to every trade?

Stop living in the world of regret and only think about the possibilities of wining trades and you will find your experiences trading the Forex market one filled with achievement and success.

-- Collected --

Are you a forex trader or a gambler?

2008-01-11T06:50:00.000+07:00

How many pips do you need to be wealthy? The answer may surprise you.

A very common thought and question among us forex traders. Of course this is variable in desires; however it is a good idea to put things into perspective. In reality, the following is what separates the gamblers from the traders.

About 2 years ago I sent out a similar letter that changed the outlook and the lives of many traders. While most at the time were mini-traders a simple 25 pip gain equated to a mere $25.00. "How can I live off of that?" I was repeatedly asked. It didn't take long to put this into perspective.

Determining Percent Return

Profits are one thing, percent return is another. Monthly profits may add up to look nice or not so nice, but what is the actual return? I am sure we have all heard traders say, "I made 1,000 pips last month." OK.. what was your percent return? Not only for one month, but for the life of your trading.

Return Calculation

The simple return calculation is used to determine your return on an investment after you sold it. Or in this case, the profits after closing trades over a period of time.

Here is the formula:

Net Proceeds /Cost Basis - 1 x 100

Let's run through a simple example.

Suppose you traded one standard forex contract for a profit of 200 pips. This would be a raw profit of $2,000. The cost in this case was the spread and the margin needed to secure the contract; the most common margin is 100:1. Thus it cost a temporary, $1,000 to secure this contract. We say temporary because we all know we would not trade without a stop loss, most likely the stop would have been worth about $250.

Calculation:

Net Proceeds = $2000

Cost Basis = $20 (spread) + $1,000 margin

($2,000 /$1,020 - 1) x 100 = 96% (Just under 100% in a single 30 days)

So, if you are trading with a 100:1 margin and averaging around 200 pips per month, you are close to a 100% return per month.

What about per year?

Try it, you will be amazed. Hint: Don't forget to compound.

Take Home Message

Trade conservatively, a few 25 pip trades per week (300 pips per month) on a single lot can give you a return of just under 200% a month. Build your account slowly, trade with the same level of caution, just add more lots. This is the best method, the most realistic method and the lowest stress method of enjoying the rewards of forex.

John Keister

ForexInterBank
http://www.forexinterbank.com

The ONLY Difference Between Professional Traders and Amateurs Is ...

2008-01-11T06:49:00.000+07:00

"Successful trading is imply a business of not making mistakes."

That has become such a cornerstone to my trading that I actually framed that saying and put it on my wall over my trading flat screens.

One of the most productive things you can do to become a profitable trader is to make a list of your most common mistakes.

Awareness is the first step.

Then watch your behavior and don't allow yourself to make those mistakes any more.
Each of us has her or his own challenges, so you must make your own list.

But to get you started, I'll expose my sins and share with you what have been my most common mistakes over the years. This is the official list of my own 7 most common mistakes. Perhaps you'll find it helpful:

1. Missing trades. When my setup occurs I need to make sure I'm aware of it and haven't been distracted by chat rooms, email, phone calls or lulled into boredom by a consolidating market.
I also need to make sure I don't hesitate to pull the trigger when I do see my setups.

2. Trading reversals that are not in extended trends and during which the internal market energy has not reversed.

3. Trading only 1 time frame without the confirmation of a longer term chart.

4. Trading while tired.

5. Over trading. Never try to make up for losses or missed trades. Never trade out of boredom. Never take any trade that doesn't match my rules 100%.

6. Not taking profits on my first exit soon enough. This is critical to adjust my cost position in the trade and therefore keep losses small.

7. Exiting my entire position too soon. I must keep at least part of my position alive until the energy of the trade has shifted so that I can ride the big moves.

Well, that's my confession.

Now you know my sins, but I imagine they're not so different than yours.

Have you committed these trading sins ... or your own unique ones?

The only solution is to REPENT!

That doesn't simply mean to say you're sorry.

It means to change your behavior.

Many people treat trading as:
an intellectual exercise.
a mathematical challenge.
or a research project.

Actually it's more about managing your behavior than anything else ... of course that's often the most difficult thing of all!

-- Collected --

[Ebook] Stock Market Prediction - Bradley

2008-01-02T18:24:00.000+07:00

Title: Stock Market Prediction
Authors: Bradley
Pages: 52 pages
Publisher: Llewellyn Publications (January 1, 1951)
Language: English
ISBN-10: 087542046X
ISBN-13: 978-0875420462

Download (1.65Mb, Type: RAR'd PDF)
http://mihd.net/dtbvl3

Scalping Trading Style

2008-01-02T17:59:00.001+07:00

Scalping is a trading style specializing in taking profits on small price changes, generally soon after a trade has been entered and has become profitable. It requires a trader to have a strict exit strategy because one large loss could eliminate the many small gains that the trader has worked to obtain. Having the right tools such as a live feed, a direct-access broker and the stamina to place many trades is required for this strategy to be successful.

Scalping is based on an assumption that most stocks will complete the first stage of a movement (a stock will move in the desired direction for a brief time but where it goes from there is uncertain); some of the stocks will cease to advance and others will continue. A scalper intends to take as many small profits as possible, not allowing them to evaporate. Such an approach is the opposite of the "let your profits run" mindset, which attempts to optimize positive trading results by increasing the size of winning trades while letting others reverse. Scalping achieves results by increasing the number of winners and sacrificing the size of the wins. It's not uncommon for a trader of a longer time frame to achieve positive results by winning only half or even less of his or her trades - it's just that the wins are much bigger than the losses. A successful scalper, however, will have a much higher ratio of winning trades versus losing ones while keeping profits roughly equal or slightly bigger than losses.

The main premises of scalping are:

* Lessened exposure limits risk - A brief exposure to the market diminishes the probability of running into an adverse event.
* Smaller moves are easier to obtain - A bigger imbalance of supply and demand is needed to warrant bigger price changes. It is easier for a stock to make a 10 cent move than it is to make a $1 move.
* Smaller moves are more frequent than larger ones - Even during relatively quiet markets there are many small movements that a scalper can exploit.

Scalping can be adopted as a primary or supplementary style of trading.

Primary Style
A pure scalper will make a number of trades a day, between five and 10 to hundreds. A scalper will mostly utilize one-minute charts since the time frame is small and he or she needs to see the setups as they shape up as close to real time as possible. Quote systems Nasdaq Level II, TotalView and/or Times and Sales are essential tools for this type of trading. Automatic instant execution of orders is crucial to a scalper, so a direct-access broker is the favored weapon of choice.

Supplementary Style
Traders of other time frames can use scalping as a supplementary approach in several ways. The most obvious way is to use it when the market is choppy or locked in a narrow range. When there are no trends in a longer time frame, going to a shorter time frame can reveal visible and exploitable trends, which can lead a trader to scalp.

Another way to add scalping to longer time-frame trades is through the so-called "umbrella" concept. This approach allows a trader to improve his or her cost basis and maximize a profit. Umbrella trades are done in the following way:

* A trader initiates a position for a longer time-frame trade.
* While the main trade develops, a trader identifies new setups in a shorter time frame in the direction of the main trade, entering and exiting them by the principles of scalping.

Practically any trading system, based on particular setups, can be used for the purposes of scalping. In this regard, scalping can be seen as a kind of method of risk management. Basically any trade can be turned into a scalp by taking a profit near the 1:1 risk/reward ratio. This means that the size of profit taken equals the size of a stop dictated by the setup. If, for instance, a trader enters his or her position for a scalp trade at $20 with an initial stop at $19.90, then the risk is 10 cents; this means a 1:1 risk/reward ratio will be reached at $20.10.

Scalp trades can be executed on both long and short sides. They can be done on breakouts or in range-bound trading. Many traditional chart formations, such as a cup and handle or triangle, can be used for scalping. The same can be said about technical indicators if a trader bases decisions on them.

Three Types of Scalping
The first type of scalping is referred as "market making", whereby a scalper tries to capitalize on the spread by simultaneously posting a bid and an offer for a specific stock. Obviously, this strategy can succeed only on mostly immobile stocks that trade big volume without any real price change. This kind of scalping is immensely hard to do successfully as a trader must compete with market makers for the shares on both bids and offers. Also, the profit is so small that any stock's movement against the trader's position warrants a loss exceeding his or her original profit target.

The other two styles are based on a more traditional approach and require a moving stock where prices change rapidly. These two styles also require a sound strategy and method of reading the movement.

The second type of scalping is done by purchasing a large number of shares that are sold for a gain on a very small price movement. A trader of this style will enter into positions for several thousand shares and wait for a small move, which is usually measured in cents. Such an approach requires highly liquid stock to allow for entering and exiting 3,000 to 10,000 shares easily.

The third type of scalping is the closest to traditional methods of trading. A trader enters an amount of shares on any setup or signal from his or her system, and closes the position as soon as the first exit signal is generated near the 1:1 risk/reward ratio, calculated as described earlier.

Scalping can be very profitable for traders who decide to use it as a primary strategy or even those who use it to supplement other types of trading. Adhering to the strict exit strategy is the key to making small profits compound into large gains. The brief amount of market exposure and the frequency of small moves are key attributes that are the reasons why this strategy is popular among many types of traders.

-- Collected --

Forex vs. Stocks

2008-01-02T17:56:00.000+07:00

Opportunities in a rising or falling market
Dissimilar from trading in the equity market, forex does not have any restrictions on short selling. No matter which way the market is moving or whether a trader is short or long, profit potential (and risk) exists in the forex market. Because currency trading involves the buying and selling of currency pairs, traders have an equal potential to profit (or lose) in a falling or rising market.

Unparalleled liquidity
In the forex market, over $3.2 trillion worth of trades are traded daily, which makes the currency trading market the most liquid market in the world – trading in 1 day what Wall St. trades in 1 month. No matter what time of the day or night it is, the forex market is always moving, and around the world active traders are buying and selling currencies.

200 times more leverage than trading stocks
With stocks, the maximum leverage is 2:1. But when you trade Forex with CMS Forex, you can use up to 400:1 leverage. For example, if you invest $1,000 in stocks, with 2:1 leverage you may buy up to $2,000 worth of shares. However, if you invest $1,000 margin on a foreign currency trade, at 400:1 leverage, you can control up to $400,000 in currencies. Leverage is one of the most appealing factors of the forex market. Traders should note that trading using leverage may increase potential gains as well as losses on any given trade.

Scratch-out the middleman
Spot currency trading bypasses expensive middlemen that are always associated with trading stocks. With forex, clients are able to interact directly with the currency market, and can buy and sell at the simple click of a mouse. No mess. No hassle. No middleman.

Commission-free*
With CMS Forex, you are never charged a commission. No clearing fees. No exchange fees. No Software fees. No brokerage fees.

*CMS charges no commission on your trades; we are compensated through the Bid and Ask prices or spread of a given currency pair. We may charge a fee for fund withdrawals. Please see Withdrawal of Funds for more information. Please be aware that the bank you deal with may be charging fees on your deposits or withdrawals. CMS has no control over any applicable bank fees.

Forex and the technical trader
Because currencies typically develop strong trending patterns, a technical currency trader may potentially identify new trends, breakouts, and opportunities to enter and exit positions.

Measuring the currency market
Currency prices are reflected in the balance of supply and demand for currencies. When it comes to currencies, there are two primary factors that affect supply and demand and they are interest rates and the strength of the originating country’s economy as a whole. Fundamental indicators, such as foreign investment, PPI, CPI, GDP, and the trade balance, echo the overall health of the economy, and alter the supply and demand for that currency. Expert commentaries and data on interest rates, International trade, and currencies are release on a regular basis.

Trade forex 24-hours a day
When you are looking at your forex platform, you are actually looking at a window display of the world’s economy. Currency trading is available twenty-four hours a day, starting on Sunday at 5P.M. EST with the opening of the market in Sidney and Singapore. A short while after, the Tokyo market opens. Then London, which opens at 2A.M. EST on Monday. And, by daytime in N.Y., the currency market has already been very active for fifteen hours. With currency trading, you are able to decide when to trade. Trading stocks when the U.S. markets are closed is difficult and only offers limited liquidity. With forex, you can trade twenty-four hours a day, from Sunday at 5P.M. EST. until Friday at 5P.M EST.

6 major currency pairs vs. over 8000 stocks
There are approximately 8,000 publicly traded companies, deciding which one to trade can become downright tedious and confusing. How do you determine which needle to pull out of the haystack? With Forex, there are currently 6 major currency pairs to choose from, and about 34 second-tier currencies.

-- Collected --

Forex Tips: 5 Steps to Successful Forex Trading

2008-01-02T17:48:00.000+07:00

Close to 95% of all Forex traders will lose money. We're not just talking about novices, either. Whether you trade Forex for a living, as a hobby or just for fun, odds are against your success. That's a simply astonishing fact. However, the remaining 5% of Forex traders somehow manage to break even and there are those lucky few that actually make money in the currency market – consistently!

Like the TV show says … “How’d they do that, anyway?”

That's the million dollar questions, isn’t it? Countless books, seminars and expos have been hosted to answer this very question. That sad fact is that thousands of books have been written and countless seminars and interviews have been conducted in an attempt to answer the magic questions. The reality of the situation is that there is no magic formula; no one single Holy Grail of Forex trading.

So what do the successful traders do that the rest of us have simple not comprehended. They have mastered a process of winning where they combine and customize several factor to produce consistent results. They have mastered the Process of Trading.

The Process of Trading is:

Strategy > Money Management > Self-Mastery

Here are some simple Forex Education tips to help you master the process of forex trading:

Forex Success Tip #1 – You’ve Got To Have a Plan

You must have a written business plan that will detail all aspects of your trading. When are you going to trade, how much to risk, strategies for entries and exits are just o name a few. To become a consistent (profitable) Forex trader you have to plan your trade sand trade your plan.

Simplicity rules! Don’t make this plan too complicated. One sheet of paper for you mission statement and another for your trading plan should suffice. Anything more is probably too complicated.

Forex Success Tip #2 – Focus on Your Personal Psychology

Knowing yourself will allow you to master the discipline necessary to execute high quality trades with solid money management techniques. Lack of discipline is fatal in Forex trading. Go on a personal journey to identify you attitudes towards risk and money. Get intimate with your strengths and weaknesses as a trader and build in to your trading plan strategies to minimize those weaknesses and maximize your strengths.

Different personalities lend to different trading styles. Get familiar with all the different styles and over time you will begin to gravitate towards one particular style. Don’t fight the urge like I did. I insisted I was a day trader, but had only limited results. I found my winning percentages were much higher when I entered swing trades. Guess what’s my bread and butter strategy now!

Forex Success Tip #3 – Be Realistic About Your Expectations

This is a hard one, I know! I am on the internet every day and the amount of advertising is staggering. Brokers are offering free education (fox in the hen house if you ask me), forums of all different trading styles and points of view. Gurus pushing their system as “the one” that will make you the big bucks. How do you get through all that noise?

Let me tell you loud and clear right now – everyone is right and everyone is wrong. You have to make a personal commitment to become a successful trader, find a trading style that works for you and expect a slow and steady approach to wealth building through Forex.

What works for me may not work for you. Expect to go through an exploratory period where you are learning and at the same time exploring yourself as a trader. Keep an open mind and don’t pay attention to all the noise out there.

Forex Success Tip #4 – Be Patient

Rome was not built in a day and neither will your trading account. In fact, I tell all of my students that while they are studying to become successful Forex traders they should not look solely at their account balance as an indication of success or failure.

By tracking and increasing your percentage of high quality trades you execute is a far better barometer of your progress than your account balance. Cause and effect rule here. Over time when you increase your probabilities through the execution of high quality trades your account balance will respond accordingly.

Keep the focus on the process and with time your results will blow your mind.

Success Tip #5 - Money Management Is Top Priority

I would rather have a shaky strategy and excellent money management techniques than the other way around. This topic warrants its own blog post to do it justice. Limited your exposure (read “risk”) allows for you to stay in the game and allow the laws of probability to work.

Let’s take a casino for an example. They need gamblers to frequent their slot machines to make money. Why? They have a game that has a greater than 50% chance of making money for the house. The more people that play the slots, the greater the casino’s profits.

The casino controls risk by payout tables (always favoring the house!) and increases their probabilities by keeping gamblers at the slot machines (read “free drinks”). As a trader you must limit your risk by committing only 1% - 3% of available capital to a single trade. When you execute enough trades with a high probability strategy you too can clean up like the casinos – but only by staying in the game long term.

In conclusion, Forex trading is not easy. It’s hard work and will test the limits of your patience and perseverance. If anyone tells you otherwise .., buyers beware! It can be a very rewarding and profitable venture if done correctly. In the end it is a profession that requires a learning curve and practical experience, no different than an airline pilot or engineer. Understanding how to approach and learn this game will allow you to reap all the benefits advertised.

-- Collected --

Forex: Technical Analysis

2008-01-02T17:44:00.000+07:00

The technical trader is concerned with studying patterns of price movement on the chart in order to predict the direction of current and future trends in the Forex market. The decision to buy, sell, or hedge a current position – or to stay out of the market entirely – is made upon this analysis. Identify recurring patterns and make educated assessments to guide your decisions; should you initiate a trade at the current price, or set your system to open a position at a future price? The goal of the technical analyst is simple: to make profitable Forex trades by identifying past patterns that have historically led to a predictable outcome. However, the potential risk should always be considered. A recurring pattern is not precise and does not guarantee a desirable or expected price movement.

Tools of the Technical Trader

Using various chart types and technical indicators, more accurate predictions can be made from better analysis of the Forex market. Technical indicators use price, volume, volatility, and other factors to create measures of how the market crowd is behaving. Technical indicators can be utilized to help decipher underlying currents that are behind price action. Trend lines, support and resistance levels, reversals, and numerous patterns can also be used to track and identify trends. Once a pattern is recognized (not all are apparent), the Forex trader can decide whether to place a trade, or wait and monitor the price to see if the predictions were accurate.
CMF Forex

[Ebook] Stock Market Wizards: Interviews with America's Top Stock Traders - Jack D. Schwager

2007-12-29T17:26:00.001+07:00

Title: Stock Market Wizards: Interviews with America's Top Stock Traders
Authors: Jack D. Schwager
Pages: 352 pages
Publisher: Collins; Rev Upd edition (April 15, 2003)
Language: English
ISBN-10: 0066620597
ISBN-13: 978-0066620596

The third in the bestselling Market Wizards series, this time focusing on the barometer of the economy—the stock market.

It has been nearly a decade since the publication of the highly successful The New Market Wizards. The interim has witnessed the most dynamic bull market in US stock history, a collapse in commodity prices, dramatic failures in some of the world's leading hedge funds, the burst of the Internet bubble, a fall into recession and subsequent rumblings of recovery. Who have been the 'market wizards' during this tumultuous financial period? How did some traders manage to significantly outperform a stockmarket that during its heyday moved virtually straight up?

This book will feature interviews with a variety of traders who achieved phenomenal financial success during the glory days of the Internet boom. In contrast with the first two Market Wizard books, which included traders from a broad financial spectrum—stocks, bonds, currencies and futures—this volume will focus on traders in the stockmarket.

Download (3.65Mb, Type: RAR'd PDF)
http://mihd.net/om4h6e

Trading Forex

2007-12-29T17:23:00.000+07:00

Using fundamental and technical analysis, the individual trader attempts to determine trends in the price movements of currencies, and by buying or selling currency pairs, attempts to gain profits. The most often traded currencies, the major currencies, are those of countries with stable governments and respected central banks that target low inflation. Currencies that often trade along with the U.S. Dollar include the European Euro, the Japanese Yen, and the British Pound as they are the most liquid. A trader can trade these currencies in any combination. CMS Forex also offers the Swiss Franc, and the Canadian, Australia and New Zealand Dollars making for 19 total trading instruments when accounting for all the cross pairs. More "Exotic" currencies are not offered as they are often tightly regulated and simply too illiquid.

Buying and Selling Currencies
Traders can generate profits (or losses) whether a currency is rising or falling by buying one currency, which is anticipated to gain value against another currency or selling one currency, which is anticipated to lose value against another currency. Taking a long position is one in which a trader buys a currency at one price and aims to sell it later at a higher price. Alternatively, a short position is one in which the trader sells a currency that he anticipates to depreciate and aims to buy the currency back later at a lower price.

Buying or selling currencies in response to economic or political events which occur are reactive, whereas buying or selling currencies on anticipated events is speculative. The bulk of currency activity is generated by market participants anticipating the direction of currency prices. In general, the value of a currency versus other currencies is a reflection of the condition of that country’s economy with respect to the other major economies.

It is the trader’s option to take either a conservative or a more risk-taking approach. Employing a conservative approach, the trader establishes and liquidates positions quickly and efficiently to capitalize on even the slightest of price fluctuations, using limit and stop orders to manage risk. A limit order is placed to ensure a position is established once a price level in the market has been reached.* A stop order is placed to automatically liquidate a position at a chosen price level in order to limit potential loss on a particular trade. By placing orders in relation to technical support and resistance levels, the trader may profit incrementally from the minor price fluctuations that occur each day.

The Time in the Major Financial Centers Impacts Market Players

Foreign exchange is a continuous global market, providing participants with 24-hour market access. The only breaks in trading occur during a brief period over the weekend. Although foreign exchange is the most liquid of all markets, the fact that it is an international market and trading 24-hours a day, the time of day can have a direct impact on the liquidity available for trading a particular currency.

The major dealer centers and time zones are that of Sydney, Tokyo, London, and New York. Therefore, traders must consider which players are in the market, since in the modern interconnected financial world, events that occur at any hour, in any part of the globe, can affect some or all parts of the investment community.

The market's 24-hour nature is a substantial attraction to traders that prefer to trade at all times of the day, or night.

-- CMS Forex --

Forex - Fundamental Analysis

2007-12-29T17:19:00.000+07:00

Fundamental analysis involves examining the intrinsic value of a nation’s currency based on economic news releases that reflect the strength, or weakness, of a country’s economy. Fundamental traders follow these news announcements, known as “fundamental indicators,” because they paint a picture of a currency's strength in relation to other countries.

Fundamental indicators are reports that include statistical data on things such as employment, gross domestic product (GDP), international trade, retail sales, housing, manufacturing, and interest rates. The stability, growth, or decline in any of these sectors may have an effect – direct or indirect – on the value of a country’s currency.

Factors That Move The Forex Market

Central banks play a key role in the Forex market because they have the responsibility of changing the country’s “base” interest rate. A central bank has to find a fine balance when setting interest rates as it wants to maintain growth in the economy, but at the same time it has to be careful to curtail inflation. The bank’s decisions on whether to raise, cut, or hold the interest rate fuels speculation in the Forex market, where the value of a currency, or group of currencies, changes in real time.

In addition to information about a country’s economy, the value of a currency is connected to national and international political events, elections, and changes in government trade policies. The prices of sensitive commodities like oil and gasoline are an important fundamental indicator as high prices can hurt consumer spending and confidence, and curtail the activities of certain businesses and government services.

Natural disasters, terrorist attacks, and militarily actions in a sensitive region cause instability in the world and have a significant impact on the Forex market as they develop. These types of evens can be hard to predict in advance.

The ability to identify trends in macroeconomic indicators and reading central bank’s current and future actions is a valuable tool that comes from following financial news, watching the markets, and trading Forex.

-- CMS Forex --

Investing Online (Part 2)

2007-12-29T17:13:00.000+07:00

Open Online Investing Account. Once you've chosen the brokerage you desire, open the account. You can usually do this online by filling out a form and then submitting it electronically. However, at some point you will have to sign a few forms and either mail or fax them back to the brokerage. We suggest that when you open an account, that you get all of the account options that you can. For example, instead of just opening a cash investing account, we suggest that you open a margin account with option trading capability that has checks and an atm/debit card. That way, as you become a better investor and grow into the account you'll already have all the tools you need at your disposal.

Make Initial Deposit. Before you can trade you'll need to fund your account. You can do this by sending in a check, doing a direct transfer from a checking or savings account, or by wiring your money (fast but expensive). Make sure you deposit more than the initial amount so that if you lose some money, you will not trigger any maintenance fees.

Select Investments. Now that you've got a funded account, it's time to select your investments. Take your time!! Don't rush into finding investments just because you're account is funded. And don't feel like you have to invest all of the money at once. Use the other resources on this site to help you find stocks and funds to purchase.

Execute Trades. Once you select your investments, place your order. You can do this with many different types of orders. Here are the most basic:

market order. This is the simplest order and is simply an order to buy or sell a stock or mutual fund at the current price.

limit order. This is an order to buy or sell a stock at a given price or better. For example, you could put in a $20 limit order to buy a stock that is currently trading at $20.25. Your order will only execute if the stock hits or falls below the $20 price. These orders can be used to get a better price for stocks that are volatile, but they sometimes backfire and the price moves up before they execute. You can also use a limit order to lock in a profit. For example, if you bought your stock at $20 and put in a limit order to sell at $25, then the next time the stock hits $25 your order will be executed and you will have locked in a gain.

stop order. Although more complicated, this is like a limit order except that it is used to protect your investments. For example, you may have a stock that you hold at $25 that has already given you a nice return. To protect the gain, you could put in a stop order at $22. When the stock hits $22 the order will turn into a market order to sell the stock. Whereas the limit order at $22 would have executed immediately, the stop order executes only when the trigger price is met.

stop limit order. Similar to a stop order, this trade turns into a limit order once the stop price is met. For example, if you put in a stop limit order at $22 and your stock hit $22, the order would be triggered but the stock would then only sell at prices greater than or equal to $22. This type of order is commonly used to lock in gains and to ensure that one does not sell at a loss. However, this type of order could backfire terribly if the stock price keeps dropping.

short sale. This is an order where you sell a stock that you do not own, by borrowing the stock from the brokerage and then selling it. Short sales are very risky and are used to make bets that a stock will go down. They are risky because there is no downside limit to your risk. For example, you could short a stock that seemed overpriced at $50 and the stock could go up to $200, thereby losing 3 times the stock price. When you short stock, you are required to keep a percentage of the stock price in your account at all times, and you are charged interest on the amount of stock you shorted. If the price goes up too much, you will get margin calls and be required to deposit more money or to close your short position at a loss.

good till canceled (gtc). This is one of the two timing options. It means that your order will stay active until it is filled in whole. In other words, you could place a GTC order to sell a $20 stock at $30 and it would stay active until the stock hit $30, which could be months or even years.

day order. This order will only be active the day in which it is placed. It will expire at the end of normal trading.

all or none. This is an option whereby you can decide if you want your order split up or not. Normally, orders are executed in small lots. For example, if you buy 1,000 shares, it typically takes several small trades to accumulate that many shares. However, in an all or none order, the broker will only execute the trade if they can get all 1,000 shares at once.

Monitor Portfolio. Now that you've bought your investments sit back and don't watch them too closely (it's often frustrating). However, once a year, or even twice a year, look at your investments and decide whether or not they are still meeting your goals. As your goals change, and as your investments go up and down, change your portfolio to meet your current needs. For example, you may have one stock that moves from 10% to 25% of your portfolio. You should reduce your exposure to this stock by selling some of it and buying something else. This is also known as rebalancing your portfolio. Also, if any investments are doing poorly because of bad management, change in their competitive position, etc. -- you should sell them immediately. Use the rest of the tools on this website to monitor and optimize your online investing portfolio.

-- ABC Stock Investment --

Investing Online (Part 1)

2007-12-26T13:10:00.000+07:00

Investing online is easy, even if you are a beginner investor. To get started, this is all you have to do:

Choose An Online Brokerage. There are many things to look for in an online broker, but these are the most important.

Reliability. Most online brokerages have strong reliability ratings, but to make sure, check out the reviews of each brokerage by third parties. You can find ratings in many money and consumer related magazines, including their online versions. Do a search for "online brokerage reviews".

Execution. It is very important that when you place a trade order, that it is executed in an extremely timely manner. To find out how fast different brokerages execute trades, you can also read reviews, or visit their site and see their execution guarantees.

Breadth of Investments. Perhaps one of the most important aspects is the breadth of investing options that your online brokerage provides. Before you sign up, browse through the broker's site and view all of the different investments that you can purchase. Look specifically at the choice in mutual funds. Some brokers only provide limited options and others allow access to almost any mutual fund out there. Typically, the larger the brokerage, the more investing options they can provide. Also, the more discounted the broker is, the less options they provide. Besides mutual funds, look to see what they offer for bond investments, options and money market funds.

Diversity of Products. Similar to breadth of investments, you want to make sure that your online brokerage offers all the products you'll need in the future. Look to see that they offer investing in stocks, bonds, mutual funds, options, exchange traded funds (ETF) and money market accounts. On top of that, see if they also offer checks and atm/debit cards related to your account (easy ways to get money out). Some online brokers even offer separate bank accounts that can be tied to your brokerage account, and some even offer mortgages or home equity lines of credit. If you use all or several of the products, many brokerages offer discounts.

Pricing. Although pricing is important, unless you're a day trader the actual cost of doing a trade really shouldn't be your final decision maker. That's because a typical long-term investor only makes a few trades a month or year. And if you need to spend an extra few dollars for your trades but get better service and more investment options, then I would recommend paying for the better options.

Account Minimums. Check the account minimums for each online broker you're investigating. Some are as low as $100 and some are $10,000. Check to see the minimum amount before you are charged a maintenance fee (fee charged if your balance is below a certain dollar value).

Rates. Look at the interest rates offered by the brokerage for their money market accounts. If you are planning to hold a lot of cash in your account, this rate is very important. They can vary dramatically, but typically the more money you have invested, the higher the rate paid. Also, look at the margin interest rates (the rate charged on money you borrow from the brokerage). These rates can be astronomical for some brokerages.

Fees. Look for any fees that the brokerage may charge. A good brokerage should not charge any annual fees, maintenance fees or sales loads. Look closely at the website for any hidden fees and make sure you avoid them.

Investment Research. Look for online investing companies that offer free or reduced price research. Although you don't need this research, and it is often tainted by the person or firm who wrote it, it is often helpful to see the information from another perspective.

-- ABC Stock Investment --
To be continued...

The Compounding Effect of Investing

2007-12-26T13:05:00.000+07:00

The compounding effect of investing your money is perhaps one of the most important aspects to achieving long-term wealth. For it to work, you must be a long-term investor with a lot of patience. Here is a summary of how it works.

Say that you invest $1,000 and that you achieve a return of 10% per year. That means that in the first year you would have $100 in gains ($1,000 x 10%) and a total of $1,100. In the second year, you'll start with $1,100 but this year you'll earn $110 ($1,100 x 10%) for a total of $1,210. The third year you will earn $121 ($1,210 x 10%) and have a total of $1,331. You'll notice that each year you earn significantly more than the year before because each year you earn money on the previous years' gains. This is called the compounding effect of money and it is one of the most important aspects to investing and saving money.

It is important to understand that the longer you keep your investment, the more money you will make. However, the amount of money you make does not rise in a linear fashion. Instead, for each year you keep the money invested, you will earn significantly more money. This can be illustrated in the following manner:

If you earn 10% per year, at first glance, it seems like it will take you 10 years to double your money (10 x 10%)), and 20 years to triple your money (20 x 10%). However, this couldn't be further from the truth. If you keep compounding your gains and earning 10%, you will actually double your money in under 8 years, and triple your money in under 12 years. Your money will quadruple in 15 years and you will have over 6 times your investment by year 19!

To illustrate this effect, we've added a graph and table below that shows the effect of compounding your investments:

Total Dollars by Year, Assuming a 10% Annual Return

Total Dollars Invested and Profit Per Year, Assuming $1,000 Initial Investment and a 10% Annual Return

Year	Total $	Profit $	Year	Total $	Profit $
0	$1,000	$100	21	$7,400	$740
1	$1,100	$110	22	$8,140	$814
2	$1,210	$121	23	$8,954	$895
3	$1,331	$133	24	$9,850	$985
4	$1,464	$146	25	$10,835	$1,083
5	$1,611	$161	26	$11,918	$1,192
6	$1,772	$177	27	$13,110	$1,311
7	$1,949	$195	28	$14,421	$1,442
8	$2,144	$214	29	$15,863	$1,586
9	$2,358	$236	30	$17,449	$1,745
10	$2,594	$259	31	$19,194	$1,919
11	$2,853	$285	32	$21,114	$2,111
12	$3,138	$314	33	$23,225	$2,323
13	$3,452	$345	34	$25,548	$2,555
14	$3,797	$380	35	$28,102	$2,810
15	$4,177	$418	36	$30,913	$3,091
16	$4,595	$459	37	$34,004	$3,400
17	$5,054	$505	38	$37,404	$3,740
18	$5,560	$556	39	$41,145	$4,114
19	$6,116	$612	40	$45,259	$4,526
20	$6,727	$673

-- ABC Stock Investment --

[Ebook] How to Trade in Stocks: The Livermore Formula for Combining Time Element and Price

2007-12-25T16:35:00.000+07:00

Title: How to Trade in Stocks: The Livermore Formula for Combining Time Element and Price
Authors: Jesse L. Livermore
Pages: 111 pages
Publisher: Traders Pr (November 1991)
Language: English
ISBN-10: 0934380201
ISBN-13: 978-0934380201

Review
Jesse Livermore's book, in my opinion, is the single all time best book ever written on trading stocks.

I have read many books on trading, 7 out of 10 ordinary books are written by people who are good at writing textbooks. They are good at talking theory, but when it comes to combat in the trading battlefield, they come short and leaves you unsatisfied.

Jesse walks...

Download (6.87Mb, Type: PDF)
http://mihd.net/zjig9e

Analyzing Mutual Funds (Part 2)

2007-12-25T16:24:00.000+07:00

Compare Mutual Funds - The best way to judge a mutual fund is to compare it to its peers. Select the funds in the sectors you desire from the families you've chosen and compare them to each other. You can get fund information from prospectuses (available online at the fund families sites) or through screening tools like Yahoo Finance or E*Trade. Look closely at the following aspects of each fund:

Management - Look at the background of the portfolio managers. Do they have a lot of experience? Do they have experience in the industry that they are analyzing? How is their past performance? How is their past performance on other funds and at other companies? Look for backgrounds that have business experience as well as finance experience, and look for someone with a solid track record and that thinks independently of investment bankers and institutional research analysts.

Investment Strategy - What type of strategy does the fund follow? This is clearly stated in the prospectus and is easy to find online. Do you want someone that speculates? Uses leverage? Holds too much cash? Tries to time the market? You'll find that strategies vary dramatically from fund to fund, even in the same sectors. For example, one growth fund may look for stocks growing 5% or more, while another looks for stocks that grow 15% or more. One growth fund may invest mostly in international, large cap stocks and another similar looking fund may invest in domestic small cap stocks.

Look closely at how the fund describes it's goals. Make sure that they match the type of fund you are looking for.

Fund Size - Look at the total size of the funds' assets. If it is small (in the $100s of millions) then the company may be able to get in and out of stock positions quickly. For larger funds (in the $billions), it is much more difficult to get in and out of stock positions. In fact, the largest mutual funds often have trouble finding enough stock to make their positions, which often leaves them no option to invest in some of the smaller cap companies. With that said, this is just one more tool to use when evaluating different funds.

Turnover - Do you want a mutual fund that is constantly buying and selling stocks or do you want an investment that buys and holds its stocks for a long period of time? Many funds say that they are long term investors but still have high turnover rates. Check the prospectus or information site you are using to compare turnovers. High turnover means higher commissions and expenses.

Holdings - This is one of the best ways to see what types of stocks your fund buys. Each fund is required to report its top 10 holdings each quarter, along with the percent held of each. Look at the list of top stocks. Are they too concentrated? Not concentrated enough? Are they all in the same sector? Are they chasing currently popular stocks? Are they international, domestic, large cap, etc? Compare the top holdings of each similar fund you are contemplating. Make sure that the same stocks aren't in each of the funds. For example, a stock like Microsoft could be found in growth, value, large cap, technology and many index tracking funds. Overall, the top holdings should give you one of the best answers as to whether or not you want to buy it.

Past Performance - This information can be found in any prospectus, charting service (like BigCharts.com) or mutual fund screening tool (like Yahoo or E*Trade). Look at the past performance compared to it's benchmark and compared to other funds you are looking at. If the performance is much better or worse than its peers, figure out why. And remember, past performance is not an indicator of future performance. There are many reasons why a fund has performed better or worse than its peers. For example, many funds that have done well over the past have often been invested heavily in certain sectors that have done well. Although these funds have performed well, they may have also taken more risk and could be currently exposed to downside risk if that sector goes through a down cycle.

With that said, past performance shouldn't be used as the main reason to select a mutual fund. However, by studying the past performance, you should be able to gauge what kind of returns are likely in the future. For example, two growth funds that appear identical could have vastly different returns over time. One might vary between -10% and 15% returns per year while another varies between -25% and 30% returns. Difference like this are probably a good indicator of the type of inherent risk and return that you can expect from those funds.

Fees - Once you've narrowed the funds you like down to a short list, start comparing the fees. Look at the load and the management fees. We recommend that you never buy any fund with a load (a load is a fee charged to buy the fund that is in addition to an annual management fee), unless you really, really like the fund. Loads are typically used to pay salespeople and financial advisors and you shouldn't have to pay these if you are buying on your own account. Regarding management fees, they vary from about 0.5% to upwards of 5%. We recommend that you find a fund that charges 1.5% or less. Remember, the management fee comes out of the fund each year, so if the total return on the fund is 8% and the fee is 3%, they've taken away 38% of your profit!!!

Minimum Investment - Finally, look at the minimum investments for a fund. Some minimum investments are $10,000 or more, so before you decide on a fund, make sure that you can meet the minimum investment criteria. For IRAs, this amount is often lowered so if you really want a high minimum fund, you could invest in it through an IRA.

-- ABC Stock Investment --

Analyzing Mutual Funds (Part 1)

2007-12-25T16:20:00.000+07:00

Mutual fund investing can be overwhelming. There are hundreds of mutual fund companies and thousands of funds spread across hundreds of different market sectors. Our method of analyzing mutual funds is rather simplified but should yield as good of results as many financial advisors can give. To find the right mutual fund, research using the following methods:

Determine the Mutual Fund Sector(s) to Invest In - Should you invest in large cap, small cap, growth, value, bonds, international, health care, technology or other sector funds? The answer depends mainly on how much money you have to invest. If you have several hundred thousand dollars to invest, you should diversify your mutual funds over a dozen funds or more, with as little overlap as possible between the mutual funds. In this case you could choose many specific sector funds if you prefer. If you are just starting out and want to invest a few hundred or few thousand dollars, then you should stick to one fund that is general in nature. In other words, the more money you have, the more variety of mutual funds you should purchase.

Also, you should pick your mutual funds based on your age and your investment goals. If you are simply speculating, you'll want to stick with pretty specific sector funds. This increases your risk and chance of higher return. Also, the younger you are, the more risk you can withstand in your portfolio. Regarding age, the older you are, the more diversification you should take. For example, if you are nearing retirement, you'll want a large portion of your portfolio invested in bond mutual funds. Take this information into account with the information from the previous paragraph and use them together. For example, if you are young and don't have a lot of money to invest, you should pick one or two general funds that replicate the overall stock market. If you are older and have lots of money to invest, you should own several funds including both foreign and domestic stock and bond funds.

If you know what sectors of the market you want to invest in, you can determine your fund sector based on personal preference. For example, you may believe that technology, oil, or healthcare stocks are poised to rise faster than the rest of the market. If this is the case, and you are okay taking the extra risk, then you could invest in specific sector funds that match your beliefs. Often, it is a good idea to invest your money by the book (generally accepted investment philosophies, i.e. diversify, diversify, diversify), but it also makes sense to invest most of your money by the book and invest the rest in sectors that you find particularly appealing.

With an idea of what type of funds you want to invest in, it is time to narrow down the list to a group of fund families that you find acceptable.

Find Acceptable Mutual Fund Families - You'll want to pick mutual fund companies that have a wide variety of options, low fees, no loads and most importantly, a great reputation. I usually choose the large mutual fund companies that have avoided any scandals, but small fund companies can be just as good if not better. By selecting large companies you can choose between many different mutual funds under one family. Also, large mutual fund companies often charge lower fees and have better insider trading and fraud protection programs. Most importantly, a larger mutual fund company doesn't rely on one single portfolio manager for all of its funds. That means that just in case the manager leaves the firm, there will still be several other capable managers to take over. Our favorite mutual fund companies (at the time of this article) are Vanguard and T. Rowe Price - they both have no loads, low fees, good reputations and a large variety of funds. Once you've done your research and have formed a list of several fund families, it's time to pick your specific funds.

-- ABC Stock Investment --
(To be continued)

Real time Foreign Exchange Software

2007-12-25T16:18:00.000+07:00

How a Foreign Exchange Software Operates in Real Time

Online foreign exchange occurs in real time. Exchange rates are constantly changing, in intervals of seconds. Thus, an online Forex system operates in real time. That means that quotes are accurate for the very moment they are displayed, and in 10 seconds or less, a different rate may be quoted. Also, when a user locks in a rate and executes a transaction, that transaction is immediately processed and the exchange/trade has been executed.

Up-to-date exchange rates

As exchange rates change so rapidly, any Forex software must display the most up-to-date rates to the user. That means that Forex software is continuously communicating with a remote server that provides the current updated exchange rates. The rates that are quoted on Forex software, unlike traditional bank exchange rates, are real, tradable rates. A user may choose to "lock in" and trade at the rate which is currently displayed, (called the freeze rate), which is valid as long as it is displayed. A different rate may be displayed within a few seconds.

Transaction processing and storage

As soon as a transaction is executed, the relevant data is processed securely and sent to the data server where it is stored. A backup is created in a different server farm to ensure data integrity and continuity. All of this happens in real time, with no human intervention.

Forex software systems

2007-12-25T16:09:00.000+07:00

Forex software systems: An overview into modern Forex software systems.

Foreign Exchange (Forex) software is designed to allow end users to trade currencies online in a real time, secure, private and efficient manner.

The major issues that a foreign exchange software platform should address are:

* Real-time- providing constantly up-to-date exchange rates in increments of a few seconds. These rates, in contrast to traditional bank rates, are actual, tradable Forex quotes. Once you decide to trade on a currency you can "lock" in a rate and this will be the actual rate at which the transaction will take place.

* Security, privacy and data integrity- for any user performing financial transactions over the Internet, this is a main issue. This point is further emphasized with Forex trading software, where the amounts traded may be significant. Forex trading software must be designed with the highest level of data security, integrity and privacy. Most systems use at least one layer of at least 64-bit SSL encryption, as well as various data backup and recovery methods and procedures.

* 24x7 availability - providing updated Forex quotes 24x7 and allowing a trade any time of the week.

Web-based versus downloaded Forex software

Forex software comes in two main forms - web-based and client-side Forex software:

Web-based Forex software system

Web-based Forex software means that all the operations are performed on the vendor's website, pending user verification. That means that users are offered a familiar, web-based interface, to perform their desired operations. The advantages of such a system are:

No need to download and install proprietary software
Log in anywhere, anytime. A web-based system allows instant access to a user account, from any Internet connected computer.
Familiar and friendly, web-based user interface.

Client side Forex software system

Client-side Forex software is a program that a user downloads and installs to gain access to the Forex markets. The software communicates with the vendor's server offering Forex services.

-- Easy Forex --

[Ebook] The Complete Guide to Online Stock Market Investing: The Definitive 20-Day Guide

2007-12-15T15:48:00.000+07:00

Title: The Complete Guide to Online Stock Market Investing: The Definitive 20-Day Guide [ILLUSTRATED]
Authors: Alexander Davidson
Pages: 234 pages
Publisher: Kogan Page; 2nd ed. edition (March 1, 2007)
Language: English
ISBN-10: 0749447478
ISBN-13: 978-0749447472

Review
"Navigate internet trading and avoid the pitfalls... A useful guide to anyone who wants to know about online or offline share dealing."

Book Description
The Complete Guide to Online Stock Market Investing provides all the information and techniques needed to make money as an online stock market investor. The strategies revealed are tried and tested. In 20 easy modules, readers will discover the secrets of buying bargain stocks and trading. Drawing on the author's most recent experience in the City (London's financial district), this latest edition of the classic guide shows how to: get the most from the broker, select value and growth stocks, read the charts, choose promising investment funds, trade derivatives for fast profit, deal foreign exchange, and manage your money and win.

Download (1.12Mb, RAR'd PDF)
http://mihd.net/s0fta2

Forex software security - An overview of the security needs of Forex software

2007-12-15T15:43:00.000+07:00

Foreign exchange software should be designed for the utmost security, privacy, integrity and if necessary, recovery of data. Clearly, any security holes can mean millions of dollars in losses.

Secured data exchange

The common method for securing the exchange of data is to encrypt it. Encryption means that the data transferred over the communication line is encoded in a special way at the sending end, and decoded using the same algorithm in reverse at the receiving end. The data that goes through the communication channel is meaningless to an eavesdropper, even if he does succeed in intercepting the data. Unless the eavesdropper can decode the data, he cannot read it. The encryption strength is dependent upon the length of the encryption key. The key that is used to encrypt/decrypt the data is a very long number. The longer the number, the harder it is, exponentially, to decode the data. Lengths of keys vary between 32, 64, 128, 256 bit and so on. The minimum length for good security is 64-bit. The problem with selecting a very long key is the computing power that is required to encode/decode the message. So selecting a very long key can mean slow processing time. Privacy and data integrity have their own software protocols but are generally handled in the same way as described above.

Data recovery

Important data should be backed up in more than one location. Physical disasters such as the 9/11 attacks or software/hardware failures should be able to be managed by backing up the data in more than one physical location.

Easy-Forex security

Easy-Forex treats the issues of data security, privacy, integrity and backup with the utmost attention and care. This is achieved through:

Ensuring authorized access only, Easy-Forex uses two layers of top class firewall protection: one at the server level and one at the application level.
For user authentication and data transfer, Easy-Forex uses an advanced SSL by Verisign.
Separating the application servers (the servers that handle our clients' online activity) from the transaction information, which is stored on a different data server.
For data recovery, integrity and replication, Easy-Forex uses two different server farms, physically located away from each other. Data must be synchronized in both locations, and thus cannot be tampered with. All of the information on the servers is encrypted.
Each server farm has very high physical security. Armed guards are on-site 24 hours a day, and access to the premises is strictly forbidden except for authorized personnel.

-- Easy Forex --

Forex risk management strategies

2007-12-15T15:40:00.000+07:00

Learn about the basic strategies for controlling risks while trading Forex

The Forex market behaves differently from other markets! The speed, volatility, and enormous size of the Forex market are unlike anything else in the financial world. Beware: the Forex market is uncontrollable - no single event, individual, or factor rules it. Enjoy trading in the perfect market! Just like any other speculative business, increased risk entails chances for a higher profit/loss.

Currency markets are highly speculative and volatile in nature. Any currency can become very expensive or very cheap in relation to any or all other currencies in a matter of days, hours, or sometimes, in minutes. This unpredictable nature of the currencies is what attracts an investor to trade and invest in the currency market.

But ask yourself, "How much am I ready to lose?" When you terminated, closed or exited your position, had you had understood the risks and taken steps to avoid them? Let's look at some foreign exchange risk management issues that may come up in your day-to-day foreign exchange transactions.

Unexpected corrections in currency exchange rates
Wild variations in foreign exchange rates
Volatile markets offering profit opportunities
Lost payments
Delayed confirmation of payments and receivables
Divergence between bank drafts received and the contract price

There are areas that every trader should cover both BEFORE and DURING a trade.

Exit the Forex market at profit targets

Limit orders, also known as profit take orders, allow Forex traders to exit the Forex market at pre-determined profit targets. If you are short (sold) a currency pair, the system will only allow you to place a limit order below the current market price because this is the profit zone. Similarly, if you are long (bought) the currency pair, the system will only allow you to place a limit order above the current market price. Limit orders help create a disciplined trading methodology and make it possible for traders to walk away from the computer without continuously monitoring the market.

Control risk by capping losses

Stop/loss orders allow traders to set an exit point for a losing trade. If you are short a currency pair, the stop/loss order should be placed above the current market price. If you are long the currency pair, the stop/loss order should be placed below the current market price. Stop/loss orders help traders control risk by capping losses. Stop/loss orders are counter-intuitive because you do not want them to be hit; however, you will be happy that you placed them! When logic dictates, you can control greed.

Where should I place my stop and limit orders?

As a general rule of thumb, traders should set stop/loss orders closer to the opening price than limit orders. If this rule is followed, a trader needs to be right less than 50% of the time to be profitable. For example, a trader that uses a 30 pip stop/loss and 100-pip limit orders, needs only to be right 1/3 of the time to make a profit. Where the trader places the stop and limit will depend on how risk-adverse he is. Stop/loss orders should not be so tight that normal market volatility triggers the order. Similarly, limit orders should reflect a realistic expectation of gains based on the market's trading activity and the length of time one wants to hold the position. In initially setting up and establishing the trade, the trader should look to change the stop loss and set it at a rate in the 'middle ground' where they are not overexposed to the trade, and at the same time, not too close to the market.

Trading foreign currencies is a demanding and potentially profitable opportunity for trained and experienced investors. However, before deciding to participate in the Forex market, you should soberly reflect on the desired result of your investment and your level of experience. Warning! Do not invest money you cannot afford to lose.

So, there is significant risk in any foreign exchange deal. Any transaction involving currencies involves risks including, but not limited to, the potential for changing political and/or economic conditions, that may substantially affect the price or liquidity of a currency.

Moreover, the leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of your initial margin funds and be required to deposit additional funds to maintain your position. If you fail to meet any margin call within the time prescribed, your position will be liquidated and you will be responsible for any resulting losses. 'Stop-loss' or 'limit' order strategies may lower an investor's exposure to risk.

Easy-Forex foreign exchange technology links around-the-clock to the world's foreign currency exchange trading floors to get the lowest foreign currency rates and to take every opportunity to make or settle a transaction.

Avoiding/lowering risk when trading Forex:

Trade like a technical analyst. Understanding the fundamentals behind an investment also requires understanding the technical analysis method. When your fundamental and technical signals point to the same direction, you have a good chance to have a successful trade, especially with good money management skills. Use simple support and resistance technical analysis, Fibonacci Retracement and reversal days. Be disciplined. Create a position and understand your reasons for having that position, and establish stop loss and profit taking levels. Discipline includes hitting your stops and not following the temptation to stay with a losing position that has gone through your stop/loss level. When you buy, buy high. When you sell, sell higher. Similarly, when you sell, sell low. When you buy, buy lower. Rule of thumb: In a bull market, be long or neutral - in a bear market, be short or neutral. If you forget this rule and trade against the trend, you will usually cause yourself to suffer psychological worries, and frequently, losses. And never add to a losing position. On Easy-Forex the trader can change their trade orders as many times as they wish free of charge, either as a stop loss or as a take profit. The trader can also close the trade manually without a stop loss or profit take order being hit. Many successful traders set their stop loss price beyond the rate at which they made the trade so that the worst that can happen is that they get stopped out and make a profit.

-- Easy Forex --

Stock Investment Strategies

2007-12-15T15:39:00.000+07:00

Recommended ways to invest in the stock market:

Don’t try to time the market. As tempting as it is to try, it is not possible to time the stock market. People have written millions of pages of research on this topic and NO ONE has ever found a legitimate way to determine its trends.

Use cost averaging. By buying stocks on a periodic basis (like once a paycheck, once a month or even once a year), you will always be buying at an average price. If you try to time the market, you may be buying at a high or low valuation.

Take taxes into account. When you buy stocks, try to hold them for more than one year so you get taxed at the long term capital gains rate, which is currently 18%. If you sell your stock before one year, you will be taxed at your ordinary income tax rate, which is almost always higher than 18%, sometimes twice as high.

Invest as much as possible into tax-sheltered 401K, 403B and IRAs. By investing in tax deferred plans, you are able to invest money and not worry about the tax implications. With 401K and 403B plans, you get to invest your earnings before taxes, so the investment will grow on a higher base. For example, if you received a paycheck for $2,000 gross pay and taxes were taken out, you'd be left with only $1,200 or so to invest. The investment return on $1,200 could be substantial, but if you could invest that same $2,000 in a tax deferred account, you would be investing and earning a return on $2,000 instead of $1,200. Also, many employers offer matching investments that could make that $2,000 investment equivalent to a $4,000 investment. Put as much as you can into these tax deferred investments.

Diversify your investments. Don't just invest in stocks. It is better if you diversify your investments into other asset classes including real estate (a house), cash (savings account or CD) and maybe even bonds. That way, if one asset class really underperforms, you will have some exposure to the better performing assets.

Diversify your stocks (mutual funds). When investing in the stock market, don't load up on just one or two stocks. Diversify your investments across many stocks. If your portfolio is not large enough to buy 15 or more different stocks, you should consider purchasing one or more mutual funds to ensure diversification.

-- ABC Stock Investment --

What Stock Market Returns to Expect

2007-12-15T15:33:00.000+07:00

Stock market returns rely solely on what types of investments you choose. The riskier the investments, the more you can gain or lose in any year. However, if you are investing for a long time horizon, then more risk will almost surely mean higher returns. Also note that this assumes you invest in a diversified portfolio (i.e. not just one stock). For example, if you invest in Company A, which is developing a new technology that hasn't yet caught on, you could make 1000%s or you could easily lose it all in just one year. If you held this stock for 10 years, you could end up losing money all ten years. On the other hand, if you bought Company A and 20 other companies like it, you could still lose or make quite a bit of money the first year, but you would not make 1000%s or lose it all. And in the long run, these stocks together should make you money.

There is no hard and fast rule as to exactly what to expect when you invest. And because the amount of risk you take in your investments can also not be measured accurately, it is even harder to know what type of returns to expect.

Here are some rough guidelines as to what type of returns to expect. Remember, the opportunity to make more money also means the opportunity to lose more money.

Risk Level	Investment Types ¹	Short Term Expected Return ²	Long Term Expected Return ³	Comments
Low	Savings Account, Certificates of Deposit	0.5% to 6.0%	2.0% to 5.0%
Medium	Bonds, Large Established Stocks	-10% to 10%	5% to 9%
High	Small Stocks, Tech Stocks	-15% to 15%	10% to 12%
Very High	Emerging Stocks, Speculative Stocks	-75% to 75%	10% to 20%

¹ Assumes a diversified portfolio of similar investment types or a mutual fund of that investment type.

² Assumes an investment period of approximately 1 year. These expected returns are based on historical results and actual results could vary by even more.

³ Assumes an investment period of at least 10 years. Any given year could fluctuate dramatically.

-- ABC Stock Investment --

[Ebook] The Five Rules for Successful Stock Investing: Morningstar's Guide to Building Wealth and Winning in the Market

2007-12-08T19:24:00.000+07:00

The Five Rules for Successful Stock Investing: Morningstar's Guide to Building Wealth and Winning in the Market
by Pat Dorsey (Author)

Hardcover: 384 pages
Publisher: Wiley; 1 edition (December 25, 2003)
Language: English
ISBN-10: 0471269654
ISBN-13: 978-0471269656

Book Description

OVER the years, people from around the world have turned to Morningstar for strong, independent, and reliable advice. The Five Rules for Successful Stock Investing provides the kind of savvy financial guidance only a company like Morningstar could offer. Based on the philosophy that "investing should be fun, but not a game," this comprehensive guide will put even the most cautious investors back on the right track by helping them pick the right stocks, find great companies, and understand the driving forces behind different industries–without paying too much for their investments.

Written by Morningstar’s Director of Stock Analysis, Pat Dorsey, The Five Rules for Successful Stock Investing includes unparalleled stock research and investment strategies covering a wide range of stock-related topics. Investors will profit from such tips as:

How to dig into a financial statement and find hidden gold . . . and deception
How to find great companies that will create shareholder wealth
How to analyze every corner of the market, from banks to health care

Informative and highly accessible, The Five Rules for Successful Stock Investing should be required reading for anyone looking for the right investment opportunities in today’s ever-changing market.

About the Author
PAT DORSEY, CFA, is the Director of Stock Analysis for Morningstar, Inc. He writes regularly for Morningstar.com and heads Morningstar’s team of equity analysts. He was instrumental in developing the Morningstar Rating for stocks and played a key role in building Morningstar’s stock coverage. Dorsey is widely quoted in the media, including USA Today, U.S. News & World Report, NBC Nightly News, CNBC, and CNN. He also appears weekly on the Bulls and Bears financial show on Fox News Channel.

MORNINGSTAR, INC. is a Chicago-based global investment research firm. Morningstar is known for its independent research and analysis of stocks, mutual funds, exchange-traded funds, closed-end funds, and more. Morningstar is a trusted source for individuals, financial advisors, and financial institutions.

Download (1.08Mb, Type: PDF)
http://mihd.net/unc8gy

Forex candlestick chart patterns

2007-12-08T19:20:00.000+07:00

Candlestick patterns that can be extracted from Foreign exchange charts

Doji
A name for candlesticks that provide information on their own and feature in a number of important patterns. Dojis form when the body of the candle is minimal as market's open and close are virtually equal.

Hammer
A price pattern in candlestick charting that occurs when the market trades significantly lower than its opening, but rallies later in the day to close either above or close to its opening price. This pattern forms a hammer-shaped candlestick.

Inverted hammer
A price pattern in candlestick charting that occurs when a security trades significantly higher after its opening, but gives up most of all of its intraday gain to close well off of its high. Gravestone - The market gaps open above the previous day's close in an uptrend. It rallies to a new high, then loses strength and closes near its low: a bearish change of momentum. Confirmation of the trend reversal would be an opening below the body of the Shooting Star on the next trading day. If the open and the close are identical, the indicator is considered a Gravestone Doji. The Gravestone Doji has a higher reliability associated with it than a Shooting Star.

Shooting star
A candlestick indicating a reversal. The previous day's candle has a very large body. On the day the shooting star occurs, the price (generally) opens higher than the previous day's close, then jumps well above the opening price during the day, but closes lower than the opening price.

Three white soldiers
Three white soldiers is a bullish reversal pattern that forms with three consecutive long white candlesticks. After a decline, the three white soldiers pattern signals a change in sentiment and reversal of trend from bearish to bullish. Further bullish confirmation is not required, but there is sometimes a test of support established by the reversal.

Three black crows
A bearish reversal pattern consisting of three consecutive black bodies where each day opens higher than the previous day's low, and closes near, but below, the previous low.

-- Easy Forex --

Building Your Own Stock Portfolio

2007-12-08T19:17:00.000+07:00

How to Select An Investment. Here are some tips on how to narrow down your selection of investments.

CDs – Choose your time horizon. Then find the CD closest to that time horizon with the highest rate. Shop around at your local banks or through your brokerage account.

Money Market Accounts – Offered by banks and brokerages. Choose between tax-free and traditional accounts. Then look for the highest rate. Tax-free accounts are more beneficial if you are in a very high tax bracket, but they pay a lower interest rate.

Stocks – Picking individual stocks is the riskiest method of investing. If you are just starting to invest, you should probably start with stock mutual funds. However, it doesn’t hurt to add a small percentage (never more than 10% of your portfolio per single stock) of individual stocks to your account. Doing so will likely increase your participation level and interest in the stock market. To pick individual stocks, use a variety of tools, many of which are offered through your online brokers. Find companies that you know something about and that have a good reputation. Then, read about the company and learn about their business. Try to get your hands on some research reports to learn what other people think (but remember that research reports are wrong as often as they are right). Look for long-term trends that will benefit the company you like. Always invest for long-term reasons and don’t ever buy a stock simply because it is popular or because you think you know something others don’t. As a previous research analyst, I can safely tell you that every time I knew something that the rest of the market didn’t know, I was wrong as to how the stock would react to the news. Basically, I’m saying that you can’t predict the short-term fluctuations of the stock market or of individual stocks. The best way to invest is to find long-term, sustainable business trends that you can invest in, and then to hold your investment until you think those trends are changing. A great way to find stocks to read is to subscribe to a magazine that offers opinions and spells out their business models (try Smart Money or Kiplinger's) . Also, word of mouth works to give you ideas, but don’t be too hasty acting upon other people’s ideas. Quite often they are just repeating something they heard from their broker, or from a friend of a friend of a friend.

Mutual Funds – Use the tools from your broker, or other sites like Yahoo Finance or Motley Fool, or even magazines like Money Magazine to learn about and compare different funds. Find a fund in the risk category you are comfortable with (capital preservation, income, growth, aggressive growth) that has demonstrated at least market average returns over the past. It also makes sense to go with funds from companies that you’ve heard of before (like Strong, Janus, Putnam, Fidelity). These companies will likely be in business longer and often attract better portfolio managers than other funds. Also, remember that previous results are not indicative of future results. High flying funds often falter for years afterwards, and the top performing funds often come from previously under performing managers. To find out if a fund is right for you, read their prospectus, which can be found on the website of your online brokerage, on the website of the fund company, or through request from your broker or brokerage. Look at the quality and experience of the managers of the fund, their investment philosophy, and the list of the top stocks held in their fund (all of these are required to be reported in the prospectus). Also, look at the fee structure of the fund. An average management fee shouldn’t exceed a few percent a year. Also, some funds charge you extra fees to purchase or sell their shares. Stay away from these funds. And most importantly, don’t fret too much about which fund you are buying, and when you buy it, and try not to be too critical of its performance. Give it some time before you judge its results. If it’s not working out a year from now, then consider buying a different fund. For more information, see our section on mutual fund investing.

Bond Funds – Search for a bond fund the same way you search for a stock mutual fund. I wouldn’t recommend buying bond funds unless you are nearing retirement, or unless you have a very large portfolio that you need to diversify. When buying bond funds, look at the duration of each fund. Find out whether it invests in long-term, short-term, or medium-term bonds. Use your online broker’s tools (or Yahoo Finance) to look at their historical returns versus other funds. Look for good brand names and read the fund’s prospectus to determine if it is right for you.

- Abc stock investing --

How Much Stock Risk Should You Take?

2007-12-08T18:59:00.000+07:00

Choose your risk level to invest in. Decide on how much risk you are willing to take, and on how much risk you are comfortable with. The longer your time horizon, the more risk you should take. The more risk you take, the higher your return should be. When you take risk, make sure you try to diversify within your risk level. For example, if you are investing in medium risk, large cap investments (like Fortune 500 companies or S&P 500 companies), either buy several stocks or buy a mutual fund that invests in a broad array of these companies.

Determine Your Goals and Needs. Depending on what your goals are, you will utilize different investment tools. Here are the first questions to answer. If you are saving for one or more of these goals, then prioritize them and allocate your investment money among the various investments.

Are You investing for the short or medium-term? If so, you’ll want to open a traditional brokerage account, or maybe even use your local bank. If you are investing for the short-term (less than a year), then you are probably best off if you purchase a CD at your local bank or park your money in a money market savings account. If you are investing for the medium-term or long-term, you’ll want to open a brokerage account. Opening a brokerage account is as easy as filling out and mailing in an online form, and can be done by almost anyone.

Are You investing money that you will want access to before retirement? If so, do not invest the money in a tax-deferred account, but rather follow the advice from the previous goal.

Are You Saving for retirement? If so, you’ll want to utilize as many tax-deferred investments as possible, including any 401K, 403B, IRA or Roth IRA that you qualify for. 401K and 403B plans are only available through your employer. These are the most beneficial tax-deferred plans available. If you are eligible for these plans you should start investing in them immediately, and contribute as much as you can each paycheck and each year. The difference between an IRA and a Roth IRA is that an IRA is tax deductible the year that you create it. Also, if you already participate in a 401K or 403B plan, you are usually unable to contribute to a traditional IRA. In a traditional IRA your money grows at a tax-deferred rate but when you sell it you’ll have to pay taxes on the full amount. On the other hand, with a Roth IRA you are taxed on your contribution the year you make the deposit, but you will never have to pay taxes on the money when you take money out. (Click here for a good example of the differences between the two)

Are You saving for children’s college? If this is one of your specific goals, then you can invest money in a 529 plan (either a prepaid tuition plan or a savings plan) or a Coverdell IRA (formerly know as Educational IRA). Also, see collegesavings.org to find out what plans your state offers.

Which Stock Asset Types to Choose

Choose your asset class(es) to invest in. Do you want to buy money market accounts (or CDs), stocks, bonds or real estate. If you have a long term investment horizon (over 15 years), then there is no need to invest in bonds yet. Most investors are best suited to buying stocks. Stocks include individual companies, stock market tracking stocks (like the QQQ or SPiDERs), and of course mutual funds.
- Abc stock investing --

[Ebook] How to Make Money in Stocks: A Winning System in Good Times or Bad

2007-12-03T20:00:00.002+07:00

Title: How to Make Money in Stocks: A Winning System in Good Times or Bad
Author: William J. O'Neil
Pages: 272 pages
Publisher: McGraw-Hill Companies; 2nd edition (September 1, 1994)
Language: English
ISBN-10: 0070480176
ISBN-13: 978-0070480179

William J. O'Neil's proven investment advice has earned him millions of loyal followers. And his signature bestseller, How to Make Money in Stocks, contains all the guidance readers need on the entire investment processfrom picking a broker to diversifying a portfolio to making a million in mutual funds. For self-directed investors of all ages and expertise, William J. O'Neil's proven CAN SLIM investment strategy is helping those who follow O'Neil to select winning stocks and create a more powerful portfolio. Based on a 40-year study of the most successful stocks of all time, CAN SLIM is an easy-to-use tool for picking the winners and reducing risk in today's volatile economic environment.

Download (4.55Mb, Type: PDF)
http://mihd.net/qas8ci

Forex forecasting

2007-12-03T19:56:00.000+07:00

Basic Forex forecast methods: Technical analysis and fundamental analysis

This article provides insight into the two major methods of analysis used to forecast the behavior of the Forex market. Technical analysis and fundamental analysis differ greatly, but both can be useful forecast tools for the Forex trader. They have the same goal - to predict a price or movement. The technician studies the effect while the fundamentalist studies the cause of market movement. Many successful traders combine a mixture of both approaches for superior results.

Technical analysis

Technical analysis is a method of predicting price movements and future market trends by studying charts of past market action. Technical analysis is concerned with what has actually happened in the market, rather than what should happen and takes into account the price of instruments and the volume of trading, and creates charts from that data to use as the primary tool. One major advantage of technical analysis is that experienced analysts can follow many markets and market instruments simultaneously.

Technical analysis is built on three essential principles:

1. Market action discounts everything! This means that the actual price is a reflection of everything that is known to the market that could affect it, for example, supply and demand, political factors and market sentiment. However, the pure technical analyst is only concerned with price movements, not with the reasons for any changes.

2. Prices move in trends Technical analysis is used to identify patterns of market behavior that have long been recognized as significant. For many given patterns there is a high probability that they will produce the expected results. Also, there are recognized patterns that repeat themselves on a consistent basis.

3. History repeats itself Forex chart patterns have been recognized and categorized for over 100 years and the manner in which many patterns are repeated leads to the conclusion that human psychology changes little over time.

Forex charts are based on market action involving price. There are five categories in Forex technical analysis theory:

* Indicators (oscillators, e.g.: Relative Strength Index (RSI)
* Number theory (Fibonacci numbers, Gann numbers)
* Waves (Elliott wave theory)
* Gaps (high-low, open-closing)
* Trends (following moving average).

Some major technical analysis tools are described below:

Relative Strength Index (RSI):

The RSI measures the ratio of up-moves to down-moves and normalizes the calculation so that the index is expressed in a range of 0-100. If the RSI is 70 or greater, then the instrument is assumed to be overbought (a situation in which prices have risen more than market expectations). An RSI of 30 or less is taken as a signal that the instrument may be oversold (a situation in which prices have fallen more than the market expectations).

Stochastic oscillator:

This is used to indicate overbought/oversold conditions on a scale of 0-100%. The indicator is based on the observation that in a strong up trend, period closing prices tend to concentrate in the higher part of the period's range. Conversely, as prices fall in a strong down trend, closing prices tend to be near to the extreme low of the period range. Stochastic calculations produce two lines, %K and %D that are used to indicate overbought/oversold areas of a chart. Divergence between the stochastic lines and the price action of the underlying instrument gives a powerful trading signal.

Moving Average Convergence Divergence (MACD):

This indicator involves plotting two momentum lines. The MACD line is the difference between two exponential moving averages and the signal or trigger line, which is an exponential moving average of the difference. If the MACD and trigger lines cross, then this is taken as a signal that a change in the trend is likely.

Number theory:

Fibonacci numbers: The Fibonacci number sequence (1,1,2,3,5,8,13,21,34...) is constructed by adding the first two numbers to arrive at the third. The ratio of any number to the next larger number is 62%, which is a popular Fibonacci retracement number. The inverse of 62%, which is 38%, is also used as a Fibonacci retracement number.

Gann numbers:

W.D. Gann was a stock and a commodity trader working in the '50s who reputedly made over $50 million in the markets. He made his fortune using methods that he developed for trading instruments based on relationships between price movement and time, known as time/price equivalents. There is no easy explanation for Gann's methods, but in essence he used angles in charts to determine support and resistance areas and predict the times of future trend changes. He also used lines in charts to predict support and resistance areas.

Waves

Elliott wave theory: The Elliott wave theory is an approach to market analysis that is based on repetitive wave patterns and the Fibonacci number sequence. An ideal Elliott wave patterns shows a five-wave advance followed by a three-wave decline.

Gaps

Gaps are spaces left on the bar chart where no trading has taken place. An up gap is formed when the lowest price on a trading day is higher than the highest high of the previous day. A down gap is formed when the highest price of the day is lower than the lowest price of the prior day. An up gap is usually a sign of market strength, while a down gap is a sign of market weakness. A breakaway gap is a price gap that forms on the completion of an important price pattern. It usually signals the beginning of an important price move. A runaway gap is a price gap that usually occurs around the mid-point of an important market trend. For that reason, it is also called a measuring gap. An exhaustion gap is a price gap that occurs at the end of an important trend and signals that the trend is ending.

Trends

A trend refers to the direction of prices. Rising peaks and troughs constitute an up trend; falling peaks and troughs constitute a downtrend that determines the steepness of the current trend. The breaking of a trend line usually signals a trend reversal. Horizontal peaks and troughs characterize a trading range.

Moving averages are used to smooth price information in order to confirm trends and support and resistance levels. They are also useful in deciding on a trading strategy, particularly in futures trading or a market with a strong up or down trend.

The most common technical tools:

Coppock Curve is an investment tool used in technical analysis for predicting bear market lows.

DMI (Directional Movement Indicator) is a popular technical indicator used to determine whether or not a currency pair is trending.

Unlike the fundamental analyst, the technical analyst is not much concerned with any of the "bigger picture" factors affecting the market, but concentrates on the activity of that instrument's market.

Fundamental analysis

Fundamental analysis is a method of forecasting the future price movements of a financial instrument based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of whatever underlies the financial instrument. In practice, many market players use technical analysis in conjunction with fundamental analysis to determine their trading strategy. One major advantage of technical analysis is that experienced analysts can follow many markets and market instruments, whereas the fundamental analyst needs to know a particular market intimately. Fundamental analysis focuses on what ought to happen in a market. Factors involved in price analysis: Supply and demand, seasonal cycles, weather and government policy.

The fundamentalist studies the cause of market movement, while the technician studies the effect. Fundamental analysis is a macro or strategic assessment of where a currency should be trading based on any criteria but the movement of the currency's price itself. These criteria often include the economic condition of the country that the currency represents, monetary policy, and other "fundamental" elements.

How and Where to Open a Stock Brokerage Account

2007-12-03T19:52:00.000+07:00

Open an Account. Once you know which types of accounts you want to start investing in, the next step is to open up an account. Here are the basics of opening up each account:

Certificates of Deposit – You can do this through your local bank. Enter your bank and ask the teller about opening a CD account. They will put you in touch with the right person.

Discount Brokerage – The fastest, easiest and cheapest way to open a brokerage account is to open it through a discount brokerage. Even better, open it at an online discount brokerage. My favorites (in order), are E*Trade, Schwab.com and Ameritrade. Ameritrade is the cheapest, E*Trade is inexpensive but offers more options and a better interface than the rest (you can get bank accounts, research reports and other services), and Schwab.com is the most expensive but offers you to pay for additional services like advice, research reports and other full-service options.

Full Service Brokerage – These include companies like Morgan Stanley, American Express, Edward Jones, Merrill Lynch, Prudential Financial. These brokerages provide you guidance, advice and research reports, but they are much more expensive but their brokers can often push you toward investments you may not be comfortable with. Instead of charging a flat fee for trades, they usually charge a commission-based fee structure that can be much more expensive. Also, they charge annual maintenance fees on your account of sometimes hundreds of dollars. Be leary of these accounts unless you really need the extra guidance.

401K, 403B – These plans are ONLY offered through your employer. Find out if your employer offers one of these plans (or any other tax-deferred, stock investment or other plan) by contacting your Human Resources department. They will give you the forms needed to sign up.

Traditional IRA – You can open one of these with almost any brokerage or discount brokerage. I recommend doing it yourself with a discount broker like E*trade or Ameritrade. E*trade doesn’t charge a monthly fee and offers decent tools to help you choose your investments. If you want a little more guidance, you can open a discount brokerage account with Charles Schwab, who will give you personal guidance for additional fees.

Roth IRA – This type of account can be opened the same was as a Traditional IRA.

Coverdell IRA (Educational IRA) – You can open at many brokerages, including E*Trade or Schwab.com.

529 plan – Check with your state to see which plans are offered. Check out www.collegesavings.org to find more information about the plans in your state. Some of these accounts are also offered by online brokers including E*Trade and Schwab.com.

Other plans – Many other specialized, small-business or self-employed plans also exist. Such plans include SEP IRAs, Rollover IRAs, Custodial IRAs, QRP / Keogh, Simple 401k, profit-sharing, money purchase and other plans.

- Abc stock investing --

Stock Investment Research

2007-12-03T19:50:00.000+07:00

You hear every day how "analysts" are raising or lowering their stock ratings. Ever wondered how they come up with those stock ratings and just how accurate they are? Well, I was a stock analyst for close to ten years and can tell you first hand that you can do your own stock investment research and come up with answers that are just as accurate as theirs. I'll try to break down into simple terms some of the techniques they use. If you are interested in learning more, there are thousands of books devoted entirely to this subject. However, I would recommend keeping things simple and not getting too technical.

There are two steps to choosing the right stocks to invest in. First, do your investment research. This means learning about the fundamentals of the company, including their products, services, business goals, management depth and other intangible assets. Once you've done this, it's time to apply various stock valuation techniques in order determine if the stock is priced attractively and if you should buy it.

In this section, I'll discuss how to do your own stock research. To learn about stock valuations, visit the stock valuation section. You'll need to take the results of both techniques into account before making your investment decision.

Let's get started by looking at the different ways to research stocks. And by research, what we really mean is that we are going to find out as much information about the company as possible and then use that information to deem whether or not the company merits your investment consideration. Use the following methods to formulate an overall opinion about the quality of the company you are considering.

Annual and Quarterly Reports

Press Releases

Industry Reports

Analyst Days and Other Webcasts - product releases, analyst days, webcasts from investment conferences

Conference Calls

Competitive Analysis - market share

Intangible Assets - brand names, patents

Management Depth

Company Goals - are they clear, calculated

Contact the Company

- Abc stock investing --

Competitive Analysis of Stocks

2007-12-03T19:42:00.000+07:00

Competitive Stock Analysis. By far the most important way to value any company is to compare it to others. By using competitive analysis, you can put to use all of the ratios above and compare them to one another so that you can get a much more complete picture of the stock valuation of the company you are researching. To start a competitive analysis, follow these steps:

1 - Find a list of comparable companies.

A comparable company is any company that is similar to the company you are valuing. For example, if you are valuing Wal-Mart, you'll also want to look at other public companies like Target, Kohl's, Kmart, Sears, Shopko, JC Penney, Federated Dept Stores, and Saks. To find a quick list of comparable companies you can search most financial sites by industry and get a list of all stocks that are included in that industry. I usually use Yahoo Finance. This is the easiest way to find comparable companies, however it is not a very comprehensive list and many companies are so unique that they do not have identical competitors. If this is the case, you need to use your imagination. Find companies that provide similar goods or services, or that have similar business models. Even if the companies don't do the same thing, if there growth and outlook is similar, the stocks will often be valued similar, and you can therefore compare them to each other. Once you've compiled as comprehensive list of companies as possible, it's time to create your spreadsheet table for analysis.

2 - Create a spreadsheet.

Create a spreadsheet to organize your competitive stock analysis. List the comparable companies down the left side of the spreadsheet and the ratios and values you are computing along the top / columns. Suggested columns include Company Name, Ticker, Price, Fully Diluted Shares, Market Cap, Total Debt, Enterprise Value, LTM Sales, LTM EBITDA, LTM Net Income, LTM EPS, This Year Calendar EPS (estimated), Next Year Calendar EPS (estimated), 3 - 5 Yr Growth Rate (estimated), LTM P/E, This Year P/E, Next Year P/E, PEG Ratio, Price / Sales, EV / Sales, EV / EBITDA ratio and anything else you see fit to add. For examples of how each value is included, refer to the stock valuation section. If you'd like to use our Excel spreadsheet template, please click here to download.

3 - Gather the data.

Now it's time to fill the spreadsheet in by gathering all of the financial data for each of the comparable companies. You can find the information from several sources, but if you want to do the most accurate job, then you should look for numbers directly from the companies and then adjust them yourself if necessary. At first it will seem a little confusing, but once you've looked at a few dozen companies you'll begin to understand more and more about what their numbers and ratios mean. To start, go to each company's website and look for their investor section. They usually have quarterly and annual financial statements, as well as press releases, recorded conference calls and webcasts, and sometimes they'll even have product updates and more. Read as much information as you can. If you can't find much historical information on the company's website, visit any finance site for more info (I like Yahoo Finance for information and BigCharts.com for charting). Begin filling in the columns of your spreadsheet with the information you are gathering. To get the estimated fields (like future EPS and EPS growth) you'll have to create estimates by doing your own stock research. When you've finished doing that, you'll be ready to compute the ratios.

4 - Compute the ratios.

Computing the stock valuation ratios can be tricky, so make sure that you double check each figure to see that it makes sense. The example comparable stock analysis spreadsheet we've compiled has many of the ratios computed for you.

5 - Look for Outliers and Adjust the Ratios.

Now look closely at all of the stock valuation ratios you've computed. Do any of them stand out? You should look for any outliers and then try to adjust them so that they are comparable to the other companies. When you find a number that doesn't make sense or seems too high or low there is always a reason behind it. It could be that earnings are negative, that the company's asset structure is different, or that the figures you're using to compute it are wrong. Even if you can't adjust or correct the valuation ratios it is just as important to understand why they are different. Now that your spreadsheet is complete, it's time to compare the companies' stock valuations.

6 - Compare the Companies.

Look at each stock valuation ratio and compare it to the other companies. Then, look at all of the ratios for each company and compare all of them to the other companies. Study the differences and valuations long and hard. Go away and then come back to them in a few days when you have fresh eyes. Begin to form an opinion as to which company offers the best value and growth prospects. Begin to think about whether the company you are investigating is worth buying, or if you should perhaps wait until its valuation becomes more attractive.

7 - Account for Differences.

Explain each difference between the companies to yourself. If one company has higher growth, then it likely has a higher valuation. Use the PEG ratio to determine which company's growth is price more attractively. Look at the company's overall market cap to determine it's liquidity and size. Larger companies are often priced at a premium because of the strong historical growth record and stability, while smaller companies often get a premium because they can grow faster than large companies. Companies that are barely profitable or going through the early stages of restructuring often have depressed earnings and therefore their P/Es sometimes look astronomically high. In summary, each ratio is high or low for some reason. Find that reason and you will learn one more thing about the company you wish to value.

8 - Decision.

The final step is to make your decision as to whether or not the stock you valued is worth buying. To do that, you'll want to take this competitive stock valuation into account, but you'll also want to do your own investment research and make sure that the stock fits your investment philosophy, strategy and style. Once you've read the other sections of this website, you should be able to make your decision. If you are still unsatisfied and feel like you need to do more, there are tons of investment books and magazines that will help you make decisions and find new investments.

- Abc stock investing --

[Ebook] Financial Structure and Economic Growth: A Cross-Country Comparison of Banks, Markets, and Development

2007-11-29T07:26:00.001+07:00

Title: Financial Structure and Economic Growth: A Cross-Country Comparison of Banks, Markets, and Development
Authors: Asli Demirguc-Kunt, Ross Levine
Pages: 443 pages
Publisher: The MIT Press; 1st edition (December 1, 2001)
Language: English
ISBN-10: 0262041987
ISBN-13: 978-0262041980

This is the first broad cross-country assessment of the ties between financial structure -- the mix of financial instruments, institutions, and markets in a given economy -- and economic growth since Raymond Goldsmith's 1969 landmark study. Most studies focus on developed countries and compare bank-based and market-based systems. Debates over the relative merits of the two systems have relied on case studies of Germany, Japan, the United Kingdom, and the United States, countries with similar long-run growth rates. The absence of data on developing countries limits the usefulness of such studies for policy makers.

The book contains recently acquired cross-country data from almost 150 countries. It includes information on the size, efficiency, and activity of banks, insurance companies, pension and mutual funds, finance companies, and stock and bond markets. It also incorporates information on each country's political, economic, and social environment. The chapters contain a mix of case studies, cross-country studies, macro- and micro-oriented approaches, and analytical and empirical work. The conclusions point not to markets versus banks, but to markets and banks. It is how well a financial system functions that is critical for long-run economic growth. The research suggests that strong legal rights for outside investors and the overall efficiency of contract enforcement are effective tools for developing the financial sector and the economy. The book includes a CD containing World Bank data.

About the Author
Asli Demirgüç-Kunt is a Lead Economist at the World Bank. Ross Levine is Professor of Finance in the Carlson School of Management at the University of Minnesota.

Download (1.53Mb, Type: PDF)
http://mihd.net/98uvcr

Dollar-euro currency exchange

2007-11-29T07:17:00.000+07:00

This article provides an overview of the factors affecting the leading currency pair: euro-dollar exchange, commonly expressed as EUR/USD.

The euro to dollar exchange rate is the price at which the world demand for US dollars equals the world supply of euros. Regardless of geographical origin, a rise in the world demand for euros leads to an appreciation of the euro.

Factors affecting exchange rates

Four factors are identified as fundamental determinants of the real euro to dollar exchange rate:

The international real interest rate differential
Relative prices in the traded and non-traded goods sectors
The real oil price
The relative fiscal position

The nominal bilateral dollar to euro exchange is the exchange rate that attracts the most attention. Notwithstanding the comparative importance of euro to US dollar bilateral trade links, trade with the UK is, to some extent, more important for the Euro zone than is trade with the US. The dollar and the euro have a strong predisposition to run together in the very short run, but sometimes there can be significant discrepancies. The very strong appreciation of the dollar against the euro in 2003 is one example of these discrepancies.

In the long run, the correlation between the bilateral dollar to euro exchange rate, and different javascript:void(0)
Publish Postmeasures of the effective exchange rate of Euroland, have been rather high, especially if one looks at the effective real exchange rate. As inflation is at very similar levels in the US and the Euro area, there is no need to adjust the dollar to euro rate for inflation differentials, but because the Euro zone also trades intensively with countries that have relatively high inflation rates (e.g. some countries in Central and Eastern Europe, Turkey, etc.), it is more important to downplay nominal exchange rate measures by looking at relative price and cost developments.

The fall of the dollar

The steady and orderly decline of the dollar from early 2002 to early 2004 against the euro, Australian dollar, Canadian dollar and a few other currencies (i.e., its trade-weighted average, which is what counts for purposes of trade adjustment), while significant, has still only amounted to about 10 percent.

There are two reasons why concerns about a free fall of the dollar should not be worth consideration. The first is that the US external deficit will stay high only if US growth remains vigorous. But if the US continues to grow strongly, it will also retain a strong attraction for foreign capital, which should support the dollar. The second reason is that the attempts by the monetary authorities in Asia to keep their currencies weak will probably not work.

The basic theories underlying the dollar to euro exchange rate:

Law of One Price: In competitive markets free of transportation cost barriers to trade, identical products sold in different countries must sell at the same price when the prices are stated in terms of the same currency.

Interest rate effects: If capital is allowed to flow freely, exchange rates become stable at a point where equality of interest is established.

The dual forces of supply and demand determine euro vs. dollar exchange rates. Various factors affect these two forces, which in turn affect the exchange rates:

The business environment: Positive indications (in terms of government policy, competitive advantages, market size, etc.) increase the demand for the currency, as more and more enterprises want to invest there.

Stock market: The major stock indices also have a correlation with the currency rates.

Political factors: All exchange rates are susceptible to political instability and anticipations about the new government. For example, political or financial instability in Russia is also a flag for the euro to US dollar exchange because of the substantial amount of German investments directed to Russia.

Economic data: Economic data such as labor reports (payrolls, unemployment rate and average hourly earnings), consumer price indices (CPI), producer price indices (PPI), gross domestic product (GDP), international trade, productivity, industrial production, consumer confidence etc., also affect fluctuations in currency exchange rates.

Confidence in a currency is the greatest determinant of the real euro-dollar exchange rate. Decisions are made based on expected future developments that may affect the currency. A EUR/USD exchange can operate under one of four main types of exchange rate systems:

Fully fixed exchange rates

In a fixed exchange rate system, the government (or the central bank acting on its behalf) intervenes in the currency market in order to keep the exchange rate close to a fixed target. It is committed to a single fixed exchange rate and does not allow major fluctuations from this central rate.

Semi-fixed exchange rates

Currency can move inside permitted ranges of fluctuation. The exchange rate is the dominant target of economic policy-making, interest rates are set to meet the target and the exchange rate is given a specific target.

Free floating

The value of the currency is determined solely by market supply and demand forces in the foreign exchange market. Trade flows and capital flows are the main factors affecting the exchange rate. A floating exchange rate system: Monetary system in which exchange rates are allowed to move due to market forces without intervention by national governments. For example, the Bank of England does not actively intervene in the currency markets to achieve a desired exchange rate level. With floating exchange rates, changes in market demand and supply cause a currency to change in value. Pure free floating exchange rates are rare - most governments at one time or another seek to "manage" the value of their currency through changes in interest rates and other controls.

Managed floating exchange rates

Governments normally engage in managed floating if not part of a fixed exchange rate system.

The advantages of fixed exchange rates are the disadvantages of floating rates:

Fixed rates provide greater certainty for exporters and importers and, under normal circumstances, there is less speculative activity - although this depends on whether the dealers in the foreign exchange markets regard a given fixed exchange rate as appropriate and credible.

Advantages of floating exchange rates

Fluctuations in the exchange rate can provide an automatic adjustment for countries with a large balance of payments deficit. A second key advantage of floating exchange rates is that it gives the government/monetary authorities flexibility in determining interest rates.

-- Easy Forex --

Stock Valuation Methods

2007-11-29T07:14:00.000+07:00

Stocks have two types of valuations. One is a value created using some type of cash flow, sales or fundamental earnings analysis. The other value is dictated by how much an investor is willing to pay for a particular share of stock and by how much other investors are willing to sell a stock for (in other words, by supply and demand). Both of these values change over time as investors change the way they analyze stocks and as they become more or less confident in the future of stocks. Let me discuss both types of valuations.

First, the fundamental valuation. This is the valuation that people use to justify stock prices. The most common example of this type of valuation methodology is P/E ratio, which stands for Price to Earnings Ratio. This form of valuation is based on historic ratios and statistics and aims to assign value to a stock based on measurable attributes. This form of valuation is typically what drives long-term stock prices.

The other way stocks are valued is based on supply and demand. The more people that want to buy the stock, the higher its price will be. And conversely, the more people that want to sell the stock, the lower the price will be. This form of valuation is very hard to understand or predict, and is often drives the short-term stock market trends.

In short, there are many different ways to value stocks. I will list several of them here. The key is to take each approach into account while formulating an overall opinion of the stock. Look at each valuation technique and ask yourself why the stock is valued this way. If it is lower or higher than other similar stocks, then try to determine why. And remember, a great company is not always a great investment. Here are the basic valuation techniques:

Earnings Per Share (EPS). You've heard the term many times, but do you really know what it means. EPS is the total net income of the company divided by the number of shares outstanding. It sounds simple but unfortunately it gets quite a bit more complicated. Companies usually report many EPS numbers. They usually have a GAAP EPS number (which means that it is computed using all of mutually agreed upon accounting rules) and a Pro Forma EPS figure (which means that they have adjusted the income to exclude any one time items as well as some non-cash items like amortization of goodwill or stock option expenses). The most important thing to look for in the EPS figure is the overall quality of earnings. Make sure the company is not trying to manipulate their EPS numbers to make it look like they are more profitable. Also, look at the growth in EPS over the past several quarters / years to understand how volatile their EPS is, and to see if they are an underachiever or an overachiever. In other words, have they consistently beaten expectations or are they constantly restating and lowering their forecasts?

The EPS number that most analysts use is the pro forma EPS. To compute this number, use the net income that excludes any one-time gains or losses and excludes any non-cash expenses like stock options or amortization of goodwill. Then divide this number by the number of fully diluted shares outstanding. You can easily find historical EPS figures and to see forecasts for the next 1-2 years by visiting free financial sites such as Yahoo Finance (enter the ticker and then click on "estimates").

By doing your fundamental investment research you'll be able to arrive at your own EPS forecasts, which you can then apply to the other valuation techniques below.

Price to Earnings (P/E). Now that you have several EPS figures (historical and forecasts), you'll be able to look at the most common valuation technique used by analysts, the price to earnings ratio, or P/E. To compute this figure, take the stock price and divide it by the annual EPS figure. For example, if the stock is trading at $10 and the EPS is $0.50, the P/E is 20 times. To get a good feeling of what P/E multiple a stock trades at, be sure to look at the historical and forward ratios.

Historical P/Es are computed by taking the current price divided by the sum of the EPS for the last four quarters, or for the previous year. You should also look at the historical trends of the P/E by viewing a chart of its historical P/E over the last several years (you can find on most finance sites like Yahoo Finance). Specifically you want to find out what range the P/E has traded in so that you can determine if the current P/E is high or low versus its historical average.

Forward P/Es are probably the single most important valuation method because they reflect the future growth of the company into the figure. And remember, all stocks are priced based on their future earnings, not on their past earnings. However, past earnings are sometimes a good indicator for future earnings. Forward P/Es are computed by taking the current stock price divided by the sum of the EPS estimates for the next four quarters, or for the EPS estimate for next calendar of fiscal year or two. I always use the Forward P/E for the next two calendar years to compute my forward P/Es. That way I can easily compare the P/E of one company to that of it's competitors and to that of the market. For example, Cisco's fiscal year ends in July, so to compute the P/E for that calendar year, I would add together the quarterly EPS estimates (or actuals in some cases) for its quarters ended April, July, October and the next January. Use the current price divided by this number to arrive at the P/E.

Also, it is important to remember that P/Es change constantly. If there is a large price change in a stock you are watching, or if the earnings (EPS) estimates change, be sure to recompute the ratio.

Growth Rate. Valuations rely very heavily on the expected growth rate of a company. For starters, you can look at the historical growth rate of both sales and income to get a feeling for what type of future growth that you can expect. However, companies are constantly changing, as well as the economy, so don't rely on historical growth rates to predict the future, but instead use them as a guideline for what future growth could look like if similar circumstances are encountered by the company. To calculate your future growth rate, you'll need to do your own investment research. The easiest way to arrive at this forecast is to listen to the company's quarterly conference call, or if it has already happened, then read a press release or other company article that discusses the company's growth guidance. However, remember that although company's are in the best position to forecast their own growth, they are not very accurate, and things change rapidly in the economy and in their industry. So before you forecast a growth rate, try to take all of these factors into account.

And for any valuation technique, you really want to look at a range of forecast values. For example, if the company you are valuing has been growing earnings between 5 and 10% each year for the last 5 years but suddenly thinks it will grow 15 - 20% this year, you may want to be a little more conservative than the company and use a growth rate of 10 - 15%. Another example would be for a company that has been going through restructuring. They may have been growing earnings at 10 - 15% over the past several quarters / years because of cost cutting, but their sales growth could be only 0 - 5%. This would signal that their earnings growth will probably slow when the cost cutting has fully taken effect. Therefore you would want to forecast earnings growth closer to the 0 - 5% rate than the 15 - 20%. The point I'm trying to make is that you really need to use a lot of gut feel to make a forecast. That is why the analysts are often inaccurate and that is why you should get as familiar with the company as you can before making these forecasts.

PEG Ratio. This valuation technique has really become popular over the past decade or so. It is better than just looking at a P/E because it takes three factors into account; the price, earnings, and earnings growth rates. To compute the PEG ratio (a.k.a. Price Earnings to Growth ratio) divide the Forward P/E by the expected earnings growth rate (you can also use historical P/E and historical growth rate to see where it's traded in the past). This will yield a ratio that is usually expressed as a percentage. The theory goes that as the percentage rises over 100% the stock becomes more and more overvalued, and as the PEG ratio falls below 100% the stock becomes more and more undervalued. The theory is based on a belief that P/E ratios should approximate the long-term growth rate of a company's earnings. Whether or not this is true will never be proven and the theory is therefore just a rule of thumb to use in the overall valuation process.

Here's an example of how to use the PEG ratio. Say you are comparing two stocks that you are thinking about buying. Stock A is trading at a forward P/E of 15 and expected to grow at 20%. Stock B is trading at a forward P/E of 30 and expected to grow at 25%. The PEG ratio for Stock A is 75% (15/20) and for Stock B is 120% (30/25). According to the PEG ratio, Stock A is a better purchase because it has a lower PEG ratio, or in other words, you can purchase it's future earnings growth for a lower relative price than that of Stock B.

Return on Invested Capital (ROIC). This valuation technique measures how much money the company makes each year per dollar of invested capital. Invested Capital is the amount of money invested in the company by both stockholders and debtors. The ratio is expressed as a percent and you should look for a percent that approximates the level of growth that you expect. In it's simplest definition, this ratio measures the investment return that management is able to get for its capital. The higher the number, the better the return.

To compute the ratio, take the pro forma net income (same one used in the EPS figure mentioned above) and divide it by the invested capital. Invested capital can be estimated by adding together the stockholders equity, the total long and short term debt and accounts payable, and then subtracting accounts receivable and cash (all of these numbers can be found on the company's latest quarterly balance sheet). This ratio is much more useful when you compare it to other companies that you are valuing.

Return on Assets (ROA). Similar to ROIC, ROA, expressed as a percent, measures the company's ability to make money from its assets. To measure the ROA, take the pro forma net income divided by the total assets. However, because of very common irregularities in balance sheets (due to things like Goodwill, write-offs, discontinuations, etc.) this ratio is not always a good indicator of the company's potential. If the ratio is higher or lower than you expected, be sure to look closely at the assets to see what could be over or understating the figure.

Price to Sales (P/S). This figure is useful because it compares the current stock price to the annual sales. In other words, it tells you how much the stock costs per dollar of sales earned. To compute it, take the current stock price divided by the annual sales per share. The annual sales per share should be calculated by taking the net sales for the last four quarters divided by the fully diluted shares outstanding (both of these figures can be found by looking at the press releases or quarterly reports). The price to sales ratio is useful, but it does not take into account any debt the company has. For example, if a company is heavily financed by debt instead of equity, then the sales per share will seem high (the P/S will be lower). All things equal, a lower P/S ratio is better. However, this ratio is best looked at when comparing more than one company.

Market Cap. Market Cap, which is short for Market Capitalization, is the value of all of the company's stock. To measure it, multiply the current stock price by the fully diluted shares outstanding. Remember, the market cap is only the value of the stock. To get a more complete picture, you'll want to look at the Enterprise Value.

Enterprise Value (EV). Enterprise Value is equal to the total value of the company, as it is trading for on the stock market. To compute it, add the market cap (see above) and the total net debt of the company. The total net debt is equal to total long and short term debt plus accounts payable, minus accounts receivable, minus cash. The Enterprise Value is the best approximation of what a company is worth at any point in time because it takes into account the actual stock price instead of balance sheet prices. When analysts say that a company is a "billion dollar" company, they are often referring to it's total enterprise value. Enterprise Value fluctuates rapidly based on stock price changes.

EV to Sales. This ratio measures the total company value as compared to its annual sales. A high ratio means that the company's value is much more than its sales. To compute it, divide the EV by the net sales for the last four quarters. This ratio is especially useful when valuing companies that do not have earnings, or that are going through unusually rough times. For example, if a company is facing restructuring and it is currently losing money, then the P/E ratio would be irrelevant. However, by applying a EV to Sales ratio, you could compute what that company could trade for when it's restructuring is over and its earnings are back to normal.

EBITDA. EBITDA stands for earnings before interest, taxes, depreciation and amortization. It is one of the best measures of a company's cash flow and is used for valuing both public and private companies. To compute EBITDA, use a companies income statement, take the net income and then add back interest, taxes, depreciation, amortization and any other non-cash or one-time charges. This leaves you with a number that approximates how much cash the company is producing. EBITDA is a very popular figure because it can easily be compared across companies, even if all of the companies are not profitable.

EV to EBITDA. This is perhaps one of the best measurements of whether or not a company is cheap or expensive. To compute, divide the EV by EBITDA (see above for calculations). The higher the number, the more expensive the company is. However, remember that more expensive companies are often valued higher because they are growing faster or because they are a higher quality company. With that said, the best way to use EV/EBITDA is to compare it to that of other similar companies.
- Abc stock investing --

How the Stock Market Works

2007-11-29T07:09:00.000+07:00

The stock market is driven solely by supply and demand. The number of shares of stock available for sale dictates the supply and the number of shares that investors want to buy dictates the demand. It's important to understand that for every share that is purchased, there is someone on the other end selling that share (or vice versa). When peoples views of the stock market or individual stocks change (which can be driven by economic fundamentals, consumer confidence, fear of terrorism, or company earnings), the demand for stock changes. This also causes the prices to change. For example, if people in general believe that the economy is growing, they become more optimistic and want to own more stock. This increases the demand for stock. At the same time, since people are selling less stock, it also decreases the supply of stock for sale. Both of these factors cause the average stock price to rise.

In essence, the stock market is really just a big, automated superstore where everyone goes to buy and sell their stock. The main players in the stock market are the exchanges. Exchanges are where the sellers are matched with buyers to both facilitate trading and to help set the price of the shares. The primary exchanges are the NASDAQ, the New York Stock Exchange (NYSE), all of the ECNs (electronic communication networks) and a few other regional exchanges like the American Stock Exchange and the Pacific Stock Exchange. Years ago, all of the trading was done through the traditional exchanges (like the NYSE, American and Pacific Exchanges) but now almost all of the trading is done through the NASDAQ, which uses ECNs and thousands of other firms with access to the NASDAQ to facilitate trading.

To give you a better idea of what happens behind the scenes, here's an example of one of the many ways that the stock market works:

You open an account with E*Trade. You send E*Trade a check for $1,000. E*Trade deposits the check into a trading account that is listed under your name. You log onto E*Trade and place an order to buy 100 shares of a stock in Company A, which is currently trading at $5. E*Trade uses it's network to tell the NASDAQ and all of it's related networks that there is demand for 100 shares of Company A's stock. The NASDAQ finds someone who is willing to sell 100 shares of Company A and, instantaneously, they execute the trading of stock between you and the person selling the shares. The trade information is sent to a clearinghouse where the information is processed and the shares will now be registered to you. Basically, the clearinghouse will designate 100 shares of Company A to E*Trade and E*Trade will designate those 100 shares as yours. The actual stock certificates are typically held "in street name" at the brokerage and never really need to exchange hands (although you could request that the stock certificates be transferred to your name and held by you).

In a nutshell, that's how the stock market works. It's really just like any other marketplace - it facilitates the exchange of goods between interested parties and works to reduce distribution costs and set prices.

-- Abc stock investing --

[Ebook] The Economics of Financial Markets

2007-11-26T19:34:00.001+07:00

Title: The Economics of Financial Markets
Author: Roy E. Bailey
Pages: 548 pages
Publisher: Cambridge University Press (July 11, 2005)
Language: English
ISBN-10: 052184827X
ISBN-13: 978-0521848275

The Economics of Financial Markets presents a concise overview of capital markets, suitable for advanced undergraduates and for beginning graduate students in financial economics. Following a brief overview of financial markets--their microstructure and the randomness of stock market prices--this textbook explores how the economics of uncertainty can be applied to financial decision-making. Emphasis is placed on the economic principles underlying all financial markets, focusing on markets for equities, bonds, futures and options contracts.

About the Author
R. E. Bailey is Reader in Economics at the University of Essex. His main interests are in monetary economics, together with economic history and philosophy.

Download (2.53Mb, Type: PDF)
http://mihd.net/i7cmea

Stock Investing Basics

2007-11-26T19:29:00.000+07:00

The first thing you need to know about stock market investing is that it is easy to do and that anyone can do it. The second thing to know is that there is no 'perfect' way to invest in the stock market. And there is no 'perfect' stock or investment product for you to choose.

The best investment choices are the one’s that you are comfortable with and the one’s that most closely meet your goals. With that said, you can always choose stocks better when you’re educated, so once you get started, keep practicing and you should keep getting better over time. As your investments grow, so will your knowledge of how to invest. Start simple and as you learn and save more money, expand and diversify the types of investments you have.

In its simplest form, here are the steps required to invest in the stock market:

* save money
* create a strategy
* open a stock account
* fund stock account
* select and purchase stock(s) or mutual fund(s)
* save more money
* invest in more stocks and funds
* keep educating yourself
* occasionally rebalance your portfolio

Save Money

This sounds pretty simple but is actually the single biggest deterrent to investing. It is important to know that you don't have to save a lot of money to begin investing. There are plans were you can start by investing as little as $50 per paycheck. However, most brokerages require a $500 or $1,000 initial deposit to open an account. If you can't come up with that much money right away, don't worry, start your own savings plan and tuck away as much money as you can in a bank savings account until you can fund your brokerage account. At $50-$100 per paycheck, you'll be up and running in just a few months. Having trouble saving money? You may want to visit this site and read hundreds of ways to save money.

Create a Strategy

Now it's time to create your investing strategy. Are you going to invest for growth, for speculation, for a down payment on a house, for retirement, or for college? Also, are you going to invest a set amount of money each month or are you going to try to 'time' the market? For a more detailed explanation of strategies, see our section on stock investment strategies.

Open a Stock Account

Now that you've saved money and have an idea of your strategy, it's time to open your stock account. If you are opening an account for speculation, you'll want to open a margin account with option trading enabled, if you are looking for a retirement account, you'll want to explore the tax benefits of opening an IRA or Roth IRA, and if you are saving for college, you'll want to explore the 529 and Coverdell IRA accounts. For a more detailed analysis on opening account, see our section on how and where to open a stock account.

Fund Your Stock Account

This part is really easy. Once your account is opened you need to send money to your account. A direct link between your checking / savings account and your brokerage is the fastest and most convenient way to fund your account. By doing this, you can automatically have funds transferred each paycheck or month, or you can manually move money whenever it is available.

Select and Purchase Stocks or Mutual Funds

This is probably the hardest part of investing because there are tens of thousands of different investments to choose from. Do you choose stocks, bonds or mutual funds? And then, which specific stocks or funds do you buy? The best way to choose stocks is to learn how to do your own research, which you can find in our section on stock investment research. We also have a section on analyzing mutual funds.

Save More Money

Until you retire, you should never stop saving money. Continue to save money with the goal of saving more and more each year. As you watch your prior investments grow, you should become more and more motivated to save even more money. The fastest way to do this is to increase your income and lower your expenses at the same time.

Invest in More Stocks and Funds

With the new money, invest in different stocks and funds to build a diversified portfolio. See our section on building your stock portfolio.

Keep Educating Yourself

Keep reading up on the stock market and finding new investments that are right for you. The more you read, learn and watch, the easier it will be for you to choose investments. See our section on recommended reading for stock investing.

Occasionally Rebalance Your Portfolio

Every year or so, take a look at your total portfolio and make sure that it is diversified, invested in quality investments, and that it is aimed toward your goals. See our section on building your stock portfolio.

-- Abc stock investing --

Investing In Real Estate. Should You Invest?

2007-11-26T19:26:00.000+07:00

There are hundreds of great reasons to invest in real estate, but is it right for you? We try to cover some of the simple bases that can help lead you in the right direction.

First of all, only invest in real estate if you are very patient. If you are looking to make a quick buck by flipping houses or speculating on condos then you should NOT invest in real estate. Real estate is a unique investment because it is the buying of real property, versus buying stock which is a share of a company's business.

Buying real property requires much more commitment and follow through than buying and selling other investments. The costs to acquire and dispose of property are fairly high and include commissions, loan fees, appraisals, inspections, filing fees and advertising costs; not to mention the large amount of time it takes to find, maintain, buy and sell a property.

Once you own the property, especially if it is a rental, you will have to deal with maintenance, tenants, legal rights, insurance, contractors and the tax and accounting effects of real estate ownership. Overall, the monetary and time costs of investing in real estate are very high.

With that said, investing in real estate can be very rewarding and offers lots of great tax breaks. If you're not scared of all the costs mentioned above, and you are very self-determined and driven to make it work, here are the things you can look forward to:

First of all, real estate is more stable than stocks. Even though real estate prices do go down, they typically go up and down in more controlled levels than other investments.

Second, buying real estate uses leverage to magnify your returns. For example, you can buy a $300,000 property with only $30,000. When the property rises 5%, you make $15,000 on your investment of $30,000, which is a 50% return on your money. But remember, leverage works the opposite way too. If prices go down you could lose all of your investment very quickly.

Third, owning investment property offers lots of tax breaks. The interest, taxes and insurance are deductible against the rents that it generates. And losses can be deducted against your personal income to greatly reduce your tax burden. Furthermore, assets such as phones, computers, tax software, mileage and other work-related expenses can also be deducted to make your paper profit lower and to reduce your taxes.

Fourth, buying real estate is a great way to diversify your investments. If you have a lot of money in stocks, bonds and 401Ks, it makes more sense to invest in real estate.

-- Collected --

Investing For Beginners - How Do I Start Investing? (Cont)

2007-11-26T19:23:00.000+07:00

Start Investing. Once your account is open and funded (follow the instructions from your broker to learn how to fund your acccount), it is time for you to make your first investment(s). Here are some tips:

Choose your risk level to invest in. Decide on how much risk you are willing to take, and on how much risk you are comfortable with. The longer your time horizon, the more risk you should take. The more risk you take, the higher your return should be. When you take risk, make sure you try to diversify within your risk level. For example, if you are investing in medium risk, large cap investments (like Fortune 500 companies or S&P 500 companies), either buy several stocks or buy a mutual fund that invests in a broad array of these companies.
Choose your asset class(es) to invest in. Do you want to buy money market accounts (or CDs), stocks, bonds or real estate. If you have a long term investment horizon (over 15 years), then there is no need to invest in bonds yet. Most investors are best suited to buying stocks. Stocks include individual companies, stock market tracking stocks (like the QQQ or SPiDERs), and of course mutual funds.
If you are starting out with only a small amount of money, don’t worry too much about diversifying your investments. Start by buying a single mutual fund investment in the risk category you are interested in. To find a suitable mutual fund, check with your brokerage to see what they offer. Most brokerages give you access to thousands of funds. (See How to Select An Investment below on how to select one.)
As your investments grow and you invest more and more money, start to diversify your investments to include investments from multiple risk categories (preservation, income, growth, aggressive growth) and asset classes (money markets/CDs, stocks, bonds).

How to Select An Investment. Here are some tips on how to narrow down your selection of investments.

CDs – Choose your time horizon. Then find the CD closest to that time horizon with the highest rate. Shop around at your local banks or through your brokerage account.
Money Market Accounts – Offered by banks and brokerages. Choose between tax-free and traditional accounts. Then look for the highest rate. Tax-free accounts are more beneficial if you are in a very high tax bracket, but they pay a lower interest rate.
Stocks – Picking individual stocks is the riskiest method of investing. If you are just starting to invest, you should probably start with stock mutual funds. However, it doesn’t hurt to add a small percentage (never more than 10% of your portfolio per single stock) of individual stocks to your account. Doing so will likely increase your participation level and interest in the stock market. To pick individual stocks, use a variety of tools, many of which are offered through your online brokers. Find companies that you know something about and that have a good reputation. Then, read about the company and learn about their business. Try to get your hands on some research reports to learn what other people think (but remember that research reports are wrong as often as they are right). Look for long-term trends that will benefit the company you like. Always invest for long-term reasons and don’t ever buy a stock simply because it is popular or because you think you know something others don’t. As a previous research analyst, I can safely tell you that every time I knew something that the rest of the market didn’t know, I was wrong as to how the stock would react to the news. Basically, I’m saying that you can’t predict the short-term fluctuations of the stock market or of individual stocks. The best way to invest is to find long-term, sustainable business trends that you can invest in, and then to hold your investment until you think those trends are changing. A great way to find stocks to read is to subscribe to a magazine that offers opinions and spells out their business models (try Smart Money or Kiplinger's) . Also, word of mouth works to give you ideas, but don’t be too hasty acting upon other people’s ideas. Quite often they are just repeating something they heard from their broker, or from a friend of a friend of a friend.
Mutual Funds – Use the tools from your broker, or other sites like Yahoo Finance or Motley Fool, or even magazines like Money Magazine to learn about and compare different funds. Find a fund in the risk category you are comfortable with (capital preservation, income, growth, aggressive growth) that has demonstrated at least market average returns over the past. It also makes sense to go with funds from companies that you’ve heard of before (like Strong, Janus, Putnam, Fidelity). These companies will likely be in business longer and often attract better portfolio managers than other funds. Also, remember that previous results are not indicative of future results. High flying funds often falter for years afterwards, and the top performing funds often come from previously under performing managers. To find out if a fund is right for you, read their prospectus, which can be found on the website of your online brokerage, on the website of the fund company, or through request from your broker or brokerage. Look at the quality and experience of the managers of the fund, their investment philosophy, and the list of the top stocks held in their fund (all of these are required to be reported in the prospectus). Also, look at the fee structure of the fund. An average management fee shouldn’t exceed a few percent a year. Also, some funds charge you extra fees to purchase or sell their shares. Stay away from these funds. And most importantly, don’t fret too much about which fund you are buying, and when you buy it, and try not to be too critical of its performance. Give it some time before you judge its results. If it’s not working out a year from now, then consider buying a different fund.
Bond Funds – Search for a bond fund the same way you search for a stock mutual fund. I wouldn’t recommend buying bond funds unless you are nearing retirement, or unless you have a very large portfolio that you need to diversify. When buying bond funds, look at the duration of each fund. Find out whether it invests in long-term, short-term, or medium-term bonds. Use your online broker’s tools (or Yahoo Finance) to look at their historical returns versus other funds. Look for good brand names and read the fund’s prospectus to determine if it is right for you.

-- Collected --

[Ebook] Stock Investing For Dummies

2007-11-25T09:04:00.001+07:00

Title: Stock Investing For Dummies
Author: Paul Mladjenovic
Pages: 360 pages
Publisher: For Dummies; 22 edition (January 2, 2006)
Language: English
ISBN-10: 0764599038
ISBN-13: 978-0764599033
Product Dimensions: 9.2 x 7.3 x 0.5 inches

Stock Investing For Dummies, 2^nd Edition covers all the proven tactics and strategies for picking the right stocks. Packed with savvy tips on today’s best investment opportunities, this book provides a down-to-earth, straightforward approach to making money on the market without the fancy lingo. Soon you’ll have the power to optimize your returns by:

Recognizing and minimizing the risks
Gathering information about potential stocks
Dissecting annual reports and other company documents
Analyzing the growth and demand of industries
Playing with the politicians
Approaching uncertain markets
Using corporate stock buybacks to boost earnings
Handling the IRS and other obligations

With a different strategy for every investor—from recent college grad to married with children to recently retired—this valuable reference is a must-have. It also features tips and tricks on how to tell when a stock is on the verge of declining or increasing, how to protect yourself from fraud, and common challenges that every investor must go through, along with resources and financial ratios.

About the Author
Paul Mladjenovic is a certified financial planner practitioner, writer, and public speaker who has a Web site at www.mladjenovic.com. His business, PM Financial Services, has helped people with financial and business concerns since 1981. In 1985 he achieved his CFP designation. Since 1983, Paul has taught thousands of budding investors through popular national seminars such as “The $50 Wealthbuilder” and “Stock Investing Like a Pro.” Paul has been quoted or referenced by many media outlets such as Bloomberg, MarketWatch, CNBC, and many financial and business publications and Web sites. As an author, he has written the books The Unofficial Guide to Picking Stocks (Wiley, 2000) and Zero-Cost Marketing (Todd Publications, 1995). In 2002, the first edition of Stock Investing For Dummies was ranked in the top 10 out of 300 books reviewed by Barron’s. In recent years, Paul accurately forecasted many economic events, such as the rise of gold and the decline of the U.S. dollar. At press time he has been warning his students and clients about the coming decline in housing. He maintains a financial database for his readers and students at www.supermoneylinks.com.

Download (2.87Mb, Type; PDF)
http://mihd.net/q9g5ht

Investing For Beginners - How Do I Start Investing?

2007-11-25T08:57:00.000+07:00

The first thing you need to do is realize that there is no “perfect” way or time for you to start. And there is no “perfect” product for you to start investing in. The best investment choices that you have are the one’s that you are comfortable with and the one’s that you choose yourself. With that said, you can always choose better when you’re educated, so once you get started, keep practicing and you should get better in no time.

Indeed, as your investments grow, so will your knowledge of how to invest. Start simple and as you learn and save more money, expand and diversify the types of investments you have. There are thousands and thousands of choices that you can make, so to get started you’ll have to come up with a simple plan. Here’s my advice on how to create your plan:

Determine Your Goals and Needs. Depending on what your goals are, you will utilize different investment tools. Here are the first questions to answer. If you are saving for one or more of these goals, then prioritize them and allocate your investment money among the various investments.

* Are You investing for the short or medium-term? If so, you’ll want to open a traditional brokerage account, or maybe even use your local bank. If you are investing for the short-term (less than a year), then you are probably best off if you purchase a CD at your local bank or park your money in a money market savings account. If you are investing for the medium-term or long-term, you’ll want to open a brokerage account. Opening a brokerage account is as easy as filling out and mailing in an online form, and can be done by almost anyone.

* Are You investing money that you will want access to before retirement? If so, do not invest the money in a tax-deferred account, but rather follow the advice from the previous goal.
* Are You Saving for retirement? If so, you’ll want to utilize as many tax-deferred investments as possible, including any 401K, 403B, IRA or Roth IRA that you qualify for. 401K and 403B plans are only available through your employer. These are the most beneficial tax-deferred plans available. If you are eligible for these plans you should start investing in them immediately, and contribute as much as you can each paycheck and each year. The difference between an IRA and a Roth IRA is that an IRA is tax deductible the year that you create it. Also, if you already participate in a 401K or 403B plan, you are usually unable to contribute to a traditional IRA. In a traditional IRA your money grows at a tax-deferred rate but when you sell it you’ll have to pay taxes on the full amount. On the other hand, with a Roth IRA you are taxed on your contribution the year you make the deposit, but you will never have to pay taxes on the money when you take money out. (Click here for a good example of the differences between the two)
* Are You saving for children’s college? If this is one of your specific goals, then you can invest money in a 529 plan (either a prepaid tuition plan or a savings plan) or a Coverdell IRA (formerly know as Educational IRA). Also, see collegesavings.org to find out what plans your state offers.

Open an Account. Once you know which types of accounts you want to start investing in, the next step is to open up an account. Here are the basics of opening up each account:

* Certificates of Deposit – You can do this through your local bank. Enter your bank and ask the teller about opening a CD account. They will put you in touch with the right person.
* Discount Brokerage – The fastest, easiest and cheapest way to open a brokerage account is to open it through a discount brokerage. Even better, open it at an online discount brokerage. My favorites (in order), are E*Trade, Schwab.com and Ameritrade. Ameritrade is the cheapest, E*Trade is inexpensive but offers more options and a better interface than the rest (you can get bank accounts, research reports and other services), and Schwab.com is the most expensive but offers you to pay for additional services like advice, research reports and other full-service options.
* Full Service Brokerage – These include companies like Morgan Stanley, American Express, Edward Jones, Merrill Lynch, Prudential Financial. These brokerages provide you guidance, advice and research reports, but they are much more expensive but their brokers can often push you toward investments you may not be comfortable with. Instead of charging a flat fee for trades, they usually charge a commission-based fee structure that can be much more expensive. Also, they charge annual maintenance fees on your account of sometimes hundreds of dollars. Be leary of these accounts unless you really need the extra guidance.
* 401K, 403B – These plans are ONLY offered through your employer. Find out if your employer offers one of these plans (or any other tax-deferred, stock investment or other plan) by contacting your Human Resources department. They will give you the forms needed to sign up.
* Traditional IRA – You can open one of these with almost any brokerage or discount brokerage. I recommend doing it yourself with a discount broker like E*trade or Ameritrade. E*trade doesn’t charge a monthly fee and offers decent tools to help you choose your investments. If you want a little more guidance, you can open a discount brokerage account with Charles Schwab, who will give you personal guidance for additional fees.
* Roth IRA – This type of account can be opened the same was as a Traditional IRA.
* Coverdell IRA (Educational IRA) – You can open at many brokerages, including E*Trade or Schwab.com.
* 529 plan – Check with your state to see which plans are offered. Check out www.collegesavings.org to find more information about the plans in your state. Some of these accounts are also offered by online brokers including E*Trade and Schwab.com.
* Other plans – Many other specialized, small-business or self-employed plans also exist. Such plans include SEP IRAs, Rollover IRAs, Custodial IRAs, QRP / Keogh, Simple 401k, profit-sharing, money purchase and other plans.

--Collected--
To be continued...

Understanding Forex Quotes

2007-11-25T08:47:00.000+07:00

Reading a foreign exchange quote may seem a bit confusing at first. However, it's really quite simple if you remember two things:

1) The first currency listed first is the base currency and
2) the value of the base currency is always 1.

The US dollar is the centerpiece of the Forex market and is normally considered the 'base' currency for quotes. In the "Majors", this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. For example, a quote of USD/JPY 110.01 means that one U.S. dollar is equal to 110.01 Japanese yen.

When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote we previously mentioned increases to 113.01, the dollar is stronger because it will now buy more yen than before.

The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as GBP/USD 1.7366, meaning that one British pound equals 1.7366 U.S. dollars.

In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar.

In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.

Currency pairs that do not involve the U.S. dollar are called cross currencies, but the premise is the same. For example, a quote of EUR/JPY 127.95 signifies that one Euro is equal to 127.95 Japanese yen.

When trading forex you will often see a two-sided quote, consisting of a 'bid' and 'ask':

The 'bid' is the price at which you can sell the base currency (at the same time buying the counter currency).
The 'ask' is the price at which you can buy the base currency (at the same time selling the counter currency).

What is a pip?

In the Forex market, prices are quoted in pips. Pip stands for "percentage in point" and is the fourth decimal point, which is 1/100th of 1%.

In EUR/USD, a 3 pip spread is quoted as 1.2500/1.2503

Among the major currencies, the only exception to that rule is the Japanese yen. In USD/JPY, the quotation is only taken out to two decimal points (i.e. to 1/100 th of yen, as opposed to 1/1000th with other major currencies).

In USD/JPY, a 3 pip spread is quoted as 114.05/114.08

--Collected--

[Ebook] How I Made $2,000,000 In The Stock Market

2007-11-23T20:19:00.002+07:00

Title: How I Made $2,000,000 In The Stock Market
Author: Nicolas Darvas
Pages: 197 pages
Publisher: Lyle Stuart (February 1, 2001)
Language: English
ISBN-10: 0818403969
ISBN-13: 978-0818403965

Nicolas Darvas wrote "How I Made $2,000,000 in the Stock Market" in 1960, shortly after he had made over $2,000,000 trading stocks in a little over 18 months. But the story starts in 1952, when Darvas, a ballroom dancer by profession, acquired his first stock in a Canadian mining company almost inadvertently. He sold it at a profit, and he was hooked. But Darvas knew nothing about the stock market. He learned everything the hard way, and that's what makes this book interesting. Darvas is a colorful, overbearing, but frank character, and he takes us through his quest to figure out how to make money in the stock market step by painful step.

Darvas divides his learning experience into 4 parts. At first he was "The Gambler", acting on tips and impulses. That failed. Then he got serious and became "The Fundamentalist", reading annual reports, listening to analysts, and investing accordingly. That failed. So he became "The Technician", developing his own method of anticipating a rise in stock price, which he called "box theory". He wasn't losing much money, but he wasn't making much either. Finally Darvas devised a method of predicting stock price movement that incorporated all of his hard-learned lessons. He became "The Techno-Fundamentalist". He selected stocks based on earning prospects for their sector, but bought the leaders in their sector only when price movement looked promising according to his box theory.

Download (3.49Mb, Type: RAR'd PDF)
http://ifile.it/nhsmcia

The Stock Market - A Beginner's Guide

2007-11-23T19:43:00.000+07:00

The stock market is a creature in and of itself. At times it makes sense and at other times, no one can explain why it acts the way it does. What is clear is that, over the long run, the stock market will climb and climb faster than almost any other traditional investment. With that said, there are also moments (that sometimes last years) when the value of the stock market gets out of whack with the underlying companies and with the economy.

How the stock market works.

The stock market is driven by supply and demand. The number of shares of stock dictates the supply and the number of shares that investors want to buy dictates the demand. It's important to understand the for every share that is purchased, there is someone on the other end selling that share (or vice versa). The stock market is really just a big, automated superstore where everyone goes to buy and sell their stock. The main players in the stock market are the exchanges. Exchanges are where the sellers are matched with buyers to both facilitate trading and to help set the price of the shares. The primary exchanges are the Nasdaq, the New York Stock Exchange (NYSE), all of the ECNs (electronic communication networks) and a few other regional exchanges like the American Stock Exchange and the Pacific Stock Exchange. Years ago, all of the trading was done through the traditional exchanges (like the NYSE, American and Pacific Exchanges) but now almost all of the trading is done through the Nasdaq, which uses ECNs and thousands of other firms with access to the Nasdaq to facilitate trading.

Here's an example of one of the many ways that the stock market works:

You open an account with E*Trade. You send E*Trade a check for $1,000. E*Trade deposits the check into a trading account that is listed under your name. You log onto E*Trade and place an order to buy 100 shares of a stock in Company A, which is currently trading at $5. E*Trade uses it's network to tell the Nasdaq and all of it's related networks that there is demand for 100 shares of Company A's stock. The Nasdaq finds someone who is willing to sell 100 shares of Company A and, instantaneously, they execute the trading of stock between you and the person selling the shares. The trade information is sent to a clearinghouse where the information is processed and the shares will now be registered to you. Basically, the clearinghouse will designate 100 shares of Company A to E*Trade and E*Trade will designate those 100 shares as yours. The actual stock certificates are typically held "in street name" and never really need to exchange hands (although you could request that the stock certificates be transferred to your name).

In a nutshell, that's how the stock market works. The stock market is really just like any other marketplace - it facilitates the exchange of goods between interested parties and works to reduce distribution costs and set prices.

How stocks are valued.

First, the fundamental valuation. This is the valuation that people use to justify stock prices. The most common example of this type of valuation methodology is P/E ratio, which stands for Price to Earnings Ratio. This form of valuation is based on historic ratios and statistics and aims to assign value to a stock based on measurable attributes. This form of valuation is typically what drives long-term stock prices.

The other way stocks are valued is based on supply and demand. The more people that want to buy the stock, the higher its price will be. And conversely, the more people that want to sell the stock, the lower the price will be. This form of valuation is very hard to understand or predict, and is often drives the short-term stock market trends.

Why the stock market is a good investment (in the long term).

It’s all about risk and return, and because your money is at more risk in the stock market than if you park it in a savings or CD (by the way, the money you invest in a CD is probably reinvested by the company offering the CD), the potential return is higher. It’s true that the gyrations in the stock market can cause both large losses and large gains, but if your investment time horizon is long enough, these short-term fluctuations will result in relatively high returns. It is generally accepted, that the average long term return from investing in stocks is 10-12%. This is much higher than the average CD or savings rate of 4-6%.

Why the stock market gets out of whack with reality.

Over the long term, the stock market is driven by underlying economic, financial and global growth. But in the short run, the market is driven by simple greed and fear, which are dictated by human emotions. During periods of prosperity, the stock market often rises faster than underlying earnings. During tough economic times, political uncertainty, and low consumer confidence, the stock market often performs worse than the underlying fundamentals predict.

Recommend ways to invest in the stock market.

Don’t try to time the market. As tempting as it is to try, it is not possible to time the stock market. People have written millions of pages of research on this topic and NO ONE has ever found a legitimate way to determine its trends.
Use cost averaging. By buying stocks on a periodic basis (like once a paycheck, once a month or even once a year), you will always be buying at an average price. If you try to time the market, you may be buying at a high or low valuation.
Take taxes into account. When you buy stocks, try to hold them for more than one year so you get taxed at the long term capital gains rate, which is currently 18%. If you sell your stock before one year, you will be taxed at your ordinary income tax rate, which is almost always higher than 18%, sometimes twice as high.
Invest as much as possible into tax-sheltered 401K, 403B and IRAs. By investing in tax deferred plans, you are able to invest money and not worry about the tax implications. With 401K and 403B plans, you get to invest your earnings before taxes, so the investment will grow on a higher base. For example, if you received a paycheck for $2,000 gross pay and taxes were taken out, you'd be left with only $1,200 or so to invest. The investment return on $1,200 could be substantial, but if you could invest that same $2,000 in a tax deferred account, you would be investing and earning a return on $2,000 instead of $1,200. Also, many employers offer matching investments that could make that $2,000 investment equivalent to a $4,000 investment. Put as much as you can into these tax deferred investments.
Diversify your investments. Don't just invest in stocks. It is better if you diversify your investments into other asset classes including real estate (a house), cash (savings account or CD) and maybe even bonds. That way, if one asset class really underperforms, you will have some exposure to the better performing assets.
Diversify your stocks (mutual funds). When investing in the stock market, don't load up on just one or two stocks. Diversify your investments across many stocks. If your portfolio is not large enough to buy 15 or more different stocks, you should consider purchasing one or more mutual funds to ensure diversification.

.
-- Free Financial Advice --

Stock Market - Some Basic Terms

2007-11-23T19:40:00.000+07:00

Share
A share of stock represents a small part of the ownership of the company. If a company has 30 million shares and you own 100 shares, you own 0.00033% of the company. Many figures are divided by the number of shares to provide a common measure. For instance, Earnings / Share, Revenues / Share, or Book Value / Share. We'll talk about these terms in future sections on valuation.

* There are several additional terms that you might see in relation to Shares: Authorized Shares - This is the number of shares that the company has available to issue. They are usually issued only for ESOP programs, stock splits, and acquisitions. Most other uses or issuation of the authorized stock requires a shareholder vote.
* Issued Shares - This is the number of shares used in most calculations. It is the number of authorized shares that have actually been issued.
* Float - This is the number of shares issued which are owned by people outside of the company. Anyone who owns 5% or more of the stock is also considered "inside" the company and are not included in this number. If the float is considerably smaller than the issued shares, it may be hard for larger investors (including funds and institutions) to get in and out of the stock without dramatically affecting the stock price.

Market Capitalization
The Market Capitalization (or Market Cap) of a stock is the total value of all of the stock in the company. Just multiply the share price by the number of shares outstanding.

Example: As of 6/10/97, BT Office Products (NYSE:BTF) has a share price of $8.5 and has about 33.5 million shares outstanding. That's a market cap of about $285 million.

IPO

IPO is an acronym for Initial Public Offering, which is what takes place when a company first goes public. New investors often find IPO's intriguing, although in general they typically have a very poor track record, and it is quite difficult to buy shares in an IPO.

Stock Split

Most companies like to keep their stocks in a certain price range so that it is not "too expensive" for smaller investors. When a stock's price has appreciated towards the upper end of that range, they "split" the stock. In a two-for-one stock split (the most common type), each share of stock becomes two shares that are worth half as much. You still own the same dollar value of stock. This can cause temporary fluctuations in stock price (other than the split) due to the excitement over splitting.

Example: CompUSA (NYSE:CPU) on November 18, 1996 had a two-for-one stock split. Before the split, there were about 45 million shares at $44 per share. After the split, there were about 90 million shares at $22 per share.

Dividend

Some larger stocks, especially utility stocks pay dividends. Essentially, they are giving part of their profits to shareholders rather than reinvesting it into the company. For smaller, faster growing companies, their profits are put to much better use by reinvesting in the company and funding growth. For this reason, most small companies and growth companies don't pay dividends.
--Collected--

Forex Market Overview

2007-11-23T19:32:00.000+07:00

What is Forex trading?

An overview of the foreign exchange (Forex) market

The Forex market is a nonstop cash market where currencies of nations are traded, typically via brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets and traders' investments increase or decrease in value based upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events.

The main enticements of currency dealing to private investors and attractions for short-term Forex trading are:

* 24-hour trading, 5 days a week with nonstop 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.

Exchange rate

Because currencies are traded in pairs and exchanged one against the other when traded, the rate at which they are exchanged is called the exchange rate. The majority of the currencies are traded against the US dollar (USD). The four next-most traded currencies are the euro (EUR), the Japanese yen (JPY), the British pound sterling (GBP) and the Swiss franc (CHF). These five currencies make up the majority of the market and are called the major currencies or "the Majors". Some sources also include the Australian dollar (AUD) within the group of major currencies.

The first currency in the exchange pair is referred to as the base currency and the second currency as the counter or quote currency. The counter or quote currency is thus the numerator in the ratio, and the base currency is the denominator. The value of the base currency (denominator) is always 1. Therefore, the exchange rate tells a buyer how much of the counter or quote currency must be paid to obtain one unit of the base currency. The exchange rate also tells a seller how much is received in the counter or quote currency when selling one unit of the base currency. For example, an exchange rate for EUR/USD of 1.2083 specifies to the buyer of euros that 1.2083 USD must be paid to obtain 1 euro.

At any given point, time and place, if an investor buys any currency and immediately sells it - and no change in the exchange rate has occurred - the investor will lose money. The reason for this is that the bid price, which represents how much will be received in the counter or quote currency when selling one unit of the base currency, is always lower than the ask price, which represents how much must be paid in the counter or quote currency when buying one unit of the base currency. For instance, the EUR/USD bid/ask currency rates at your bank may be 1.2015/1.3015, representing a spread of 1000 pips (also called points, one pip = 0.0001), which is very high in comparison to the bid/ask currency rates that online Forex investors commonly encounter, such as 1.2015/1.2020, with a spread of 5 pips. In general, smaller spreads are better for Forex investors since even they require a smaller movement in exchange rates in order to profit from a trade.

Margin

Banks and/or online trading providers need collateral to ensure that the investor can pay in case of a loss. The collateral is called the margin and is also known as minimum security in Forex markets. In practice, it is a deposit to the trader's account that is intended to cover any currency trading losses in the future.

Margin enables private investors to trade in markets that have high minimum units of trading by allowing traders to hold a much larger position than their account value. Margin trading also enhances the rate of profit, but has the tendency to inflate rates of loss, on top of systemic risk.

Leveraged financing

Leveraged financing, i.e., the use of credit, such as a trade purchased on a margin, is very common in Forex. The loan/leveraged in the margined account is collateralized by your initial deposit. This may result in being able to control USD 100,000 for as little as USD 1,000.
Five ways private investors can trade in Forex directly or indirectly:

* The spot market
* Forwards and futures
* Options
* Contracts for difference
* Spread betting

A spot transaction

A spot transaction is a straightforward exchange of one currency for another. The spot rate is the current market price, also called the benchmark price. Spot transactions do not require immediate settlement, or payment "on the spot." The settlement date, or "value date," is the second business day after the "deal date" (or "trade date") on which the transaction is agreed to by the two traders. The two-day period provides time to confirm the agreement and arrange the clearing and necessary debiting and crediting of bank accounts in various international locations.
Risks

Although Forex trading can lead to very profitable results, there are risks involved: exchange rate risks, interest rate risks, credit risks, and country risks. Approximately 80% of all currency transactions last a period of seven days or less, while more than 40% last fewer than two days. Given the extremely short lifespan of the typical trade, technical indicators heavily influence entry, exit and order placement decisions.
-- Easy Forex --

[Ebook] Forex - Tell me about it!

2007-11-22T08:17:00.001+07:00

Are you ready to join the thrill?
Forex trading, the highly attractive marketplace, with a daily volume of 2.5 trillion dollars, has become the largest arena on earth. It’s about time that you, like millions of other individual investors, join this market, which is accessible for everyone worldwide, around the clock, from any computer.

This Forex e-book has everything you need
This book shows you everything you need to know to start trading Forex. It addresses the reader at eye level, in a friendly and simple manner. Yet, it provides a professional study of the most popular techniques implemented today by Forex traders worldwide. This book offers useful and valuable background, including technical methods, trading tips, Forex glossary, chart reading, and financial indicators used in Fundamental Analysis.

A word about this e-book’s approach
This book reflects years of experience in Forex trading and Forex platform operation, parallel to Forex education, including seminars, printed publications and academic studies. Such experience was brought to this book, to provide all levels of traders the training and the essentials of Forex trading.

With the help of this guide, you will soon be ready to start trading Forex. In fact, you can start today, while beginning with small amounts and gradually obtaining the experience you need. We wish you success in your trading, and hope you find this book interesting, helpful and enjoyable.

Author's page: http://forex.info

Download (1.4Mb, Type: PDF)
http://mihd.net/u7hwzf
or
http://www.box.net/shared/1xly7utp8u

Introduction to Trading Forex

2007-11-22T07:54:00.000+07:00

Foreign Exchange
This short introduction explains the basics of trading Forex online, a brief explanation of the markets and the major benefits of trading Forex online. There are also two scenarios describing the implications of trading in a bear as well as bull market to better acquaint you with some of the risks and opportunities of the largest and most liquid market in the world.

As an additional aid for those who are new to Forex, there is also a glossary at the bottom of this text which explains some of the terms used in connection with currency trading.

Overview
Foreign exchange, forex or just FX are all terms used to describe the trading of the world's many currencies. The forex market is the largest market in the world, with trades amounting to more than USD 1.5 trillion every day. This is more than one hundred times the daily trading on the NYSE (New York Stock Exchange). Most forex trading is speculative, with only a few percent of market activity representing governments' and companies' fundamental currency conversion needs.

Unlike trading on the stock market, the forex market is not conducted by a central exchange, but on the “interbank” market, which is thought of as an OTC (over the counter) market. Trading takes place directly between the two counterparts necessary to make a trade, whether over the telephone or on electronic networks all over the world. The main centres for trading are Sydney, Tokyo, London, Frankfurt and New York. This worldwide distribution of trading centres means that the forex market is a 24-hour market.

Trading Forex

A currency trade is the simultaneous buying of one currency and selling of another one. The currency combination used in the trade is called a cross (for example, the Euro/US Dollar, or the GB Pound/Japanese Yen.). The most commonly traded currencies are the so-called “majors” – EURUSD , USDJPY , USDCHF and GBPUSD .

The most important forex market is the spot market as it has the largest volume. The market is called the spot market because trades are settled immediately, or “on the spot”. In practice this means two banking days.

Forward Outrights
For forward outrights, settlement on the value date selected in the trade means that even though the trade itself is carried out immediately, there is a small interest rate calculation left. The interest rate differential doesn't usually affect trade considerations unless you plan on holding a position with a large differential for a long period of time. The interest rate differential varies according to the cross you are trading. On the USDCHF , for example, the interest rate differential is quite small, whereas the differential on NOKJPY is large. This is because if you trade e.g. NOKJPY, you get almost 7% (annual) interest in Norway and close to 0% in Japan. So, if you borrow money in Japan, to finance the trade and buying NOK, you have a positive interest rate differential. This differential has to be calculated and added to your account. You can have both a positive and a negative interest rate differential, so it may work for or against you when you make a trade.

Trading on Margin
Trading on margin means that you can buy and sell assets that represent more value than the capital in your account. Forex trading is usually conducted with relatively small margin deposits. This is useful since it permits investors to exploit currency exchange rate fluctuations which tend to be very small. A margin of 1.0% means you can trade up to USD 1,000,000 even though you only have $10,000 in your account. A margin of 1% corresponds to a 100:1 leverage (or 'gearing'). (Because USD 10,000 is 1% of USD 1,000,000.) Using this much leverage enables you to make profits very quickly, but there is also a greater risk of incurring large losses and even being completely wiped out. Therefore, it is inadvisable to maximise your leveraging as the risks can be very high. For more information on the trading conditions of Saxo Bank, go to the Account Summary on your SaxoTrader and open the section entitled "Trading Conditions" found in the top right-hand corner of the Account Summary.

--Forex Trading--

History of Foreign Exchange

2007-11-22T07:36:00.000+07:00

The foreign exchange market (fx or forex) as we know it today originated in 1973. However, money has been around in one form or another since the time of Pharaohs. The Babylonians are credited with the first use of paper bills and receipts, but Middle Eastern moneychangers were the first currency traders who exchanged coins from one culture to another. During the middle ages, the need for another form of currency besides coins emerged as the method of choice. These paper bills represented transferable third-party payments of funds, making foreign currency exchange trading much easier for merchants and traders and causing these regional economies to flourish.

From the infantile stages of forex during the Middle Ages to WWI, the forex markets were relatively stable and without much speculative activity. After WWI, the forex markets became very volatile and speculative activity increased tenfold. Speculation in the forex market was not looked on as favorable by most institutions and the public in general. The Great Depression and the removal of the gold standard in 1931 created a serious lull in forex market activity. From 1931 until 1973, the forex market went through a series of changes. These changes greatly affected the global economies at the time and speculation in the forex markets during these times was little, if any.

The Bretton Woods Accord
The first major transformation, the Bretton Woods Accord, occurred toward the end of World War II. The United States, Great Britain and France met at the United Nations Monetary and Financial Conference in Bretton Woods, N.H. to design a new global economic order. The location was chosen because, at the time, the U.S. was the only country unscathed by war. Most of the major European countries were in shambles. Up until WWII, Great Britain's currency, the Great British Pound, was the major currency by which most currencies were compared. This changed when the Nazi campaign against Britain included a major counterfeiting effort against its currency. In fact, WWII vaulted the U.S. dollar from a failed currency after the stock market crash of 1929 to benchmark currency by which most other international currencies were compared. The Bretton Woods Accord was established to create a stable environment by which global economies could restore themselves. The Bretton Woods Accord established the pegging of currencies and the International Monetary Fund (IMF) in hope of stabilizing the global economic situation.

Now, major currencies were pegged to the U.S. dollar. These currencies were allowed to fluctuate by one percent on either side of the set standard. When a currency's exchange rate would approach the limit on either side of this standard the respective central bank would intervene to bring the exchange rate back into the accepted range. At the same time, the US dollar was pegged to gold at a price of $35 per ounce further bringing stability to other currencies and world forex situation.

The Bretton Woods Accord lasted until 1971. Ultimately, it failed, but did accomplish what its charter set out to do, which was to re-establish economic stability in Europe and Japan.

The Beginning of the free-floating system
After the Bretton Woods Accord came the Smithsonian Agreement in December of 1971. This agreement was similar to the Bretton Woods Accord, but allowed for a greater fluctuation band for the currencies. In 1972, the European community tried to move away from its dependency on the dollar. The European Joint Float was established by West Germany, France, Italy, the Netherlands, Belgium and Luxemburg. The agreement was similar to the Bretton Woods Accord, but allowed a greater range of fluctuation in the currency values.

Both agreements made mistakes similar to the Bretton Woods Accord and in 1973 collapsed. The collapse of the Smithsonian agreement and the European Joint Float in 1973 signified the official switch to the free-floating system. This occurred by default as there were no new agreements to take their place. Governments were now free to peg their currencies, semi-peg or allow them to freely float. In 1978, the free-floating system was officially mandated.

In a final effort to gain independence from the dollar, Europe created the European Monetary System in July of 1978. Like all of the previous agreements, it failed in 1993.

The major currencies today move independently from other currencies. The currencies are traded by anyone who wishes. This has caused a recent influx of speculation by banks, hedge funds, brokerage houses and individuals. Central banks intervene on occasion to move or attempt to move currencies to their desired levels. The underlying factor that drives today's forex markets, however, is supply and demand. The free-floating system is ideal for today's forex markets. It will be interesting to see if in the future our planet endures another war similar to those of the early 20th century. If so, how will the forex markets be affected? Will the dollar be the safe haven it has been for so many years? Only time will te

TIMELINE OF FOREIGN EXCHANGE
1944 � Bretton Woods Accord is established to help stabilize the global economy after World War II.
1971 Smithsonian Agreement established to allow for greater fluctuation band for currencies.
1972 European Joint Float established as the European community tried to move away from its dependency on the U.S. dollar.
1973 Smithsonian Agreement and European Joint Float failed and signified the official switch to a free-floating system.
1978 The European Monetary System was introduced so other countries could try to gain independence from the U.S. dollar.
1978 Free-floating system officially mandated by the IMF.
1993 European Monetary System fails making way for a world-wide free-floating system.

---Global view---