Investment product

1.The surefire steps towards better stock investing

2008-09-02T19:33:00.000-07:00

Investing in the stock market is full of risks and compared to the real estate market is a gamble of your money and wealth! Nevertheless, many people have built tremendous wealth from the stock market. They did it because they knew what they were doing. They knew the investing basics and the economic indicators and used it to read the world economy and make sound investments. In a nutshell; that's really what it takes to succeed in the stock market. The world economy however isn't an open book! It is a big ambiguous mystery novel full of twists and turns to drag your mind away from the real ending. Those who know how to interpret the world economy and translate its twists and turns into plausible clear indications, will cut through the clutter and win.

The thing that everybody has to understand about the stock market is that this market is not bounded by the walls of the trading center or the limits of the big cities or even the oceans. Literally, anything that happens in the world affects this market and the more any incidence makes people fear the future the more the stock indicators are going to jump up and down like crazy. Fortunately, if there is a well there is always a way. Even nowadays with the dwindling economy, a lot of people are making a lot of money from the stocks market! Why? Because while it does matter what the economy looks like when it comes to stocks, that still doesn't mean that all the stocks will be worthless. For example, if technology stocks drop, energy or real estate stocks will go up for a couple of reasons connected to the world events and economy! You just have to read the world economy!

These are the surefire ways towards better stock investing:-

1- Read the world economy: - For example, gold was at its cheapest prices back in 1999. That's because the world was living in a state of relative political calm and the U.S. economy was booming. Oil supply was abundant and there were no fears of shortages or sudden increases in demand. After the events of September 11, the world has changed considerably. Terrorism has become a serious threat. Security measures have shot costs to the roof. The wars that followed in Iraq and Afghanistan have created a new chapter of instability. We outsourced many jobs and opened many factories in China, India, Mexico etc. without knowing that while this reduces manufacturing costs, it created a boom in demand for energy in those countries, which translated to a boom in demand for oil. As a result of all of this, gold and oil prices have shot up, the dollar devalued, inflation soared and the real estate market collapsed because of the rising interest rates of adjustable mortgages. This should give a clear picture of what kind of companies to invest in right now. These are: oil companies, alternative energy companies, Gold mining companies and finally weapon manufacturing companies! I don't want to be pessimistic, but recovering from this weak economy will not be easy and we have a long way to go in this dark tunnel.

2- Do your due diligence: - Don't take my words for granted and go ahead and invest in every oil and alternative energy company. Even though you will not regret it, still before investing, technical analysis must be done on any company before you invest. There are certain indicators to look at like: - how much debt to equity ratio this company has, what's their future expansion plans, how stretched their assets are compared to revenues, what is their real worth in the market (also called book value), what is their P/E ratio, which is the value of the stock compared to its earnings and much more. Put all of these together and draw a picture of how well this company will do. Don't forget to read the world economy too! A good resource for all of this analysis is CNBC website. They have amazing analysis reports where they have done most of the tough technical analysis hard work for you. You just have to read the world economy and make decisions.

3- Always watch the insiders: - one of the very important ways to succeed in the stock market is to have extra knowledge resources to vaguely or specifically know what is happening inside the office walls of companies. One way to do this is by continuously reading the quarterly reports or called 10-Q reports of companies. What to look for is the stocks selling and buying activity of the company board of directors or the private shareholders. Think of it this way, if the people who know best about what's happening in their own company are day after day selling large volumes of their stocks, what kind of indication you will get from that. Yes; dump your shares before the stock tanks! Another way is to have good relations with some of the senior managers in the company that you want to invest it. Believe me; this kind of friendship is very valuable.

4- Don't put all of your eggs in one basket: - as simple as this rule is, you would be surprised how many people are doing it in the stock market in a daily basis. Diversify in your portfolio by investing in different winning sectors and in multiple companies. Even if you know the CEO of a company and he tells you that the stocks of his company will triple in the next week, still don't take all of your money and buy the stocks of this company.

5- Don't borrow excessively to create wealth: - Suppose you diversified and did your due diligence, but 80 percent of your money is borrowed and you lost half of it. Financial recovery in this situation is a very hard thing to do. Even if you don't have a lot of money, start small, build your wealth and take it a step by step. If you donâ€™t have a lot of money, start investing in small capital companies and a lot of good ones are available in the NASDAQ stock exchange. The good thing about small cap companies is that they have a tendency to shoot up in value more than big cap companies in terms of percentage growth. So it will be really worth while your investment if you found that gem in the crowd.

6- Practice, practice and practice: - Even if you have read a lot about using financial indicators, you did a lot of technical stock analysis and you have many insiders, practice before doing the real thing. Start a fictitious portfolio containing real stocks, but with imaginary investments. After a month or two check how well are you are doing. If you are not doing well, go back and see what where you doing wrong because you must've did something wrong to choose bad investments. Correct your mistakes and retry. There are free imaginary portfolio tools available by the big online stock brokers like E-trade or Ameritrade. You can use these tools to buy stocks and track stock movements and calculate your earnings and losses instantly. You can also set up a simple Excel sheet to do this tracking.

I personally like the stock market and I think it is the most lucrative and the fastest way to wealth. Real estate is good, but it delivers results over extended periods of time. As long as you know what you are doing, you should have no problems. Read some reports and books about stock investing, practice it a little bit with small amounts of money and learn from your mistakes. Stocks are not risky, they are calculated risks!

2.FX Trading 101: 1-What is FX Trading

2008-09-02T19:31:00.000-07:00

Firstly lets talk about what investing in foreign exchange means. It does not mean buying foreign currency and keeping it up until it fairs well in value. Converting the money you have and holding it till it appreciates in value can take you only so far, usually you may gain about a few dollars over a period of an year by doing that. Then what does it mean? It means actively trading currency in a foreign currency market place or and exchange.

Before going into details, lets see how a FX market really works. In FX markets there is no concept of buying a currency, there is always an exchange of currencies, one being bought and the other being sold. Lets take this to a level that we are all comfortable with; You'd usually 'buy dollars', but what we actually do is exchange the local currency we have into USD at the current market rate. Lets assume the dollar is at 105 local currency units now, we'll spend 210/= and buy 2US$ and will keep the dollars with us. If the dollar rises to 110/=, our investment has also appreciated. To make use of the appreciation, we have to re-sell the dollar at 110/= and we would have made a profit of 10/= on the transaction. Now look at this from a purely external point of view. Intially the investor gives out some currency to buy another sort. Then when the rate rises, he sells what he originally bought and buys back the depreciated currency. The difference in the rate he bought at and sold at, is his profit.

In a forex market, you'll trade something thats called a currency pair. This will look something like EUR/USD. If you buy this, you will actually exchange the USD that you have with Euros. When you've bought a currency pair, its called opening a position. But just because the Euro went up, you cant benefit from it. You have to convert it back to the original USD to compare the profit. So how would you do this? You have to exchange the EUR you have to USD, i.e. you close the position that you opened. Lets take an example: In current market the value of the EUR/USD is about 1.57 i.e. each Euro is worth 1.57 times the USD. Lets say you have 157 USD, you exchange this for a 100 EURs (i.e. you open a position by buying the EUR/USD pair). Tomorrow, the EUR/USD rate might turn out to be 1.5730, the EUR has gained slightly. Let say that you close the position now, you have 100 EURs which converts to 157.30 USD, you've gained 30 cents on your investment. See? pretty easy.

You may ask how this is any different to buying foreign currency and holding it till it goes up. The reason is because with a bank, you can only exchange the LKR with the majors (USD, EUR, JPY, GBP). Lets say the Dollar started appreciating against the GBP; you really cant do anything about it. (eg: USD is say 105/= and say GBP is somewhere around 200/=, you have LKR with you and all of a sudden USD starts going down all the way to 100/=. The effective rate of GBP/USD at the beginning was 1.9047 at the end of the event, the rate is 2.00. If you could trade the GBP/USD pair, you could have made a profit on this. But you cant cos you have only LKR. Well yes, you could convert the money to USD and then to GBP and wait till it goes up and ... bit of a process yes?) In a forex dealing place, the conversion will automatically done for you; You can deposit your money in USD and actually trade a pair like EUR/JPY.

Well what you've just read through is all a lie. But its an important lie to get introduced into dealing in forex markets. To be fair, the above sums up the principle of a forex dealing place; It will help you to understand how the profit and loss taking really happens. But thats not how it operates.

Like everything else, forex rates are also based on the demand for the currency. And also like in most of the international markets, the currency rates are determined by large traders who do transactions worth several millions of dollars per trade. When you buy USD from a local bank, they sell you the dollars they've bought from the international market. This is exactly what a forex dealing exchange does. (i.e. This is what a forex dealing exchange for normal people like you and me does. I have no idea how exactly the bigger deals work out); they channel all the orders from their user base into dealing places for large banks.

We know that with an exchange place we will be trading currency pairs. The rate of the currency pair would typically be expressed in five numbers. Eg: GBP/USD = 1.9825 USD/JPY = 106.38

The smallest change possible for each pair is known as a pip. (i.e. for GBP/USD this is 0.0001, for USD/JPY this is 0.01)

In most exchanges, each lot of the traded currency is in lots of 10,000. Thus, if you buy 1 lot of GBP/USD at 1.9825, you are actually buying 10,000 GBP. The amount of USD you spent for this is 10,000*1.9825 = 19,825 USD. Let's say you hold the currency pair till the rate goes up to 1.9830. You will close out the position by selling the GBP and buying the USD. Thus you will sell out 10,000 GBP and buy USD. This would yield 19,830 USD; the rate of the currency increased by 5 pips and your profit increased by 5$. If each lot was 100,000 units of the currency, then for the same 5 pip increase, the profit would be 50$. For any currency pair that looks like X/USD this is the case.

Let's look at the USD/JPY pair now. Pair is at 106.38 and you buy it, i.e. you buy 10,000 USD by spending Japanese Yen. Now that's a problem right? Cos you deposited the money in USD but definitely you don't have any JPY. Not a problem. The exchange knows that what you'll do is opening up a position and later closing it. Thus you'll buy some USD spending the JPY you don't have and buy back the JPY later. So the exchange will settle the net cash amount for you without bothering to look whether you have JPY or not. So lets say you buy the USD/JPY pair for 106.38, you buy 10,000 USD spending JPY. If you had JPY, what would be the worth of it? You'd spend 10,000*106.38 JPY to open the position. Now let's say the currency pair rises to 106.48 and you close the position. What you'd technically do is to sell out the 10,000 USD and buy back the JPY. The amount of JPY that you'd receive would be 10,000*106.48. Thus your JPY worth has gone up by 1,000. If you convert this to USD, it would be a net gain worth 1,000/106.48 = 9.39$. What the exchange does is to pay out this 9.39$ to you. There is no need to convert your dollars to anything or whatever. Every one is happy.

Obviously, its not easy to calculate the gains or losses on a non USD denominated currency pair (like USD/JPY or AUD/EUR). Thus the brokers (the correct name for 'exchanges') publish lists of 'pip costs'. It tells you how much of a gain or loss you'd make if the pair moved by one pip.

Now in this example we saw that the traded value of each pair is worth several thousands of dollars. Obviously a normal individual would not have access to that amount of money. This is where leverage comes in. The brokers let you play with money that is much more than what you have, this is known as leverage. Typically a forex broker would offer leverages from 50:1 to 200:1. What does this mean? This means that to do a trade worth 10,000$, with a 50:1 leverage, you need only 200$. With a 200:1 leverage, you can do the same trade for 50$.

This may look very lucrative, but it means that you are also at a large risk. Lets say you put 50$ for a 200:1 leveraged trade. The maximum loss you could make is 50$ (as the broker will not allow you to make a loss for more than what you have. If that becomes the case, a 'margin call' will fire and most probably your position will be automatically closed. This is done as a safety mechanism for the broker to not to have clients running large losses and not covering them.) To lose 50$, your currency pair needs to lose 50 pips. In the currency markets 50 pip move can happen in a matter of few hours. Now lets say you had a leverage of 50:1, then you would need 200$ to do the trade and even with a 50 pip loss, you'd still have 75% of your investments left. If you are dealing with large leverages, its necessary to have a large percentage of your deposit not allocated in a trade to make sure you don't lose out on price spikes. (We'll talk about this later on another topic where I plan to talk on how to play with currencies).

3.Trading Forex - Pound troubles

2008-09-02T19:30:00.000-07:00

It has been only couple of months when financial press was lamenting the fate of US dollar. All time or multi year low against many currencies, credit crisis, housing market in shambles, nightmarish deficit. Seemed like every news hitting the wire was worse than the one before. Tragic story. And the outlook, well, just as bad.

What a difference two months make. USD has staged impressive rally across the board. Large moves against CHF, AUD, EUR, NZD and GBP seemed to quiet the critics and reverse general sentiment. There hasn't been many bullish news for the dollar, as much as a lot of bearish developments for the other currencies. Falling commodities prices and signs of world wide economic slowdown seemed to take the heat off of the Dollar. The new "whipping boy" of Forex markets is, for the moment, British Pound.

Just how bad have things gotten for the Pound? GBP-USD lost 8.2% percent in August. This is the biggest monthly drop since October 1992, when the fall was just a little worse at 8.6%. And we all know just how memorable that event was. UK left European Exchange Rate Mechanism which resulted in a huge one day Sterling tumble. That is when George Soros "broke" the Bank of England and reportedly made $ 1B in one day, something that is stilled widely discussed in all financial circles.

This time around there has not been any single event, but rather a string of news of economic data getting from bad to worse. Figures reported in August showed house prices fell at their fastest pace since 1991, while retail sales plunged to their lowest level in 25 years. These are pretty bad numbers by anyone's standards and they culminated in news that economic growth ground to a halt in the second quarter.

This raised expectations that the Bank of England would move to cut interest rates during next meeting, further undermining the Pound's appeal to investors. And it looks like investors have been loosing faith in Sterling rapidly. Over last couple of weeks GBP sell off was not confined only to its pair with Dollar, but broadened significantly. Just over last 10 trading days pound fell 1000 pips against JPY, 500 pips against CHF, while CAD gained 600 pips. To top it all off, EUR-GBP is on a brink of all time high.

We don't know what BoE is going to do, but current outlook for the Pound is not very optimistic. That is, at least, general market sentiment as reported by financial media. We all know, however, that market participants, as a group, tend to be collectively wrong when markets are reaching the extent of their moves. Just look two months back and USD.

Current Sterling situation isn't exactly like that. We are not at multi year price extreme, but rather an intermediate move bottom, as measured on weekly charts. Let's take a closer look at GBP-USD and use it as a proxy for all Pound pairs. After an initial sell off from 2.1100 to 1.9400, there was a period of consolidation. It was followed by this latest leg down, which reached 1.8200. This is probably the extreme of this move.

Chances are price will consolidate in this area, contained within roughly 1.8500-1.8000 range. This should take few weeks. After that, breakout above/below this range will likely indicate direction of next price move. Analysts are predicting continuation of the move down, to about 1.7200, but given their recent track record, appreciation to 1.9200 is more likely.

No matter what happens, Pound is currently at very important juncture. Even if you missed most recent moves, just get ready and be patient. Next few weeks will probably provide very good trading opportunity, with a move large enough, that, if caught, can easily make trader's year.

4.Forex Trading Tips - 4

2008-09-02T19:29:00.000-07:00

The forex trading tips enclosed can turn a mediocre forex trading strategy in to a winner and anyone thinking of trading should consider incorporating them because they work - here they are...

1. Leverage Stops and Risk

Most traders get 200:1 leverage from their broker and want to use it but this is a huge mistake - a trader should use leverage wisely and 10 20: 1, is enough. This allows you to risk more to your stop and this is vital to success.

Most traders put stops so close they are guaranteed to get stopped out by normal volatility. They get the direction right, see their stop hit and then see prices reverse back the other way and make thousands and their not in!

If you want to win, your stop must be far enough back so you don't get hit by random price moves in the trend. This isn't being rash this is sensible investment strategy.

2. Risk More Per Trade

In line with the above forget all the rubbish you read about risking 2% per trade.

On a small account its so little risk it guarantees you will get stopped out.

Sure if you have 100k you can do this - but not on a small account.

Many traders try to restrict and control risk so much they create it and lose. To make meaningful gains, you need to risk 10 - 20% on a small account.

3. Learn Patience

Most traders think the more they trade the more profits they are going to pile up - dead wrong.

You don't get rewarded for your trading frequency; you get rewarded for being right!

The high odds trades only come around a few times a month in each currency - hit these and hit them hard.

Hitting the high odds trades and hitting them hard can make you a lot of money. I know lots of forex traders, who only trade a few times a month and still pile up big triple digit annual gains, because they are hitting good risk to reward trades and hitting them hard.

4. Forget Diversification

OK on a 100k account there is an argument for doing it but not on a small account.

If you have a great trade, why potentially dilute its profit potential by taking trades for the sake of trading? It doesn't make sense and will dilute your potential profits.

Hit the high odds trade you like and focus on it.

Keep in mind:

You Don't Get Rewarded for Effort in forex trading.

Many traders make this mistake.

They want to trade and force profits but this is not possible. They spend a lot of effort looking for trades that it blinds them to the fact most are dogs and should be passed by.

In forex trading your success is determined by the accuracy of your trading signals and your market timing and the money you put in your pocket - that's it.

So the forex trading tips here mean you need to be patient, hit high odds trades, hit them hard and take meaningful, calculated risks so, you can make a triple digit annual income.

The above is really common sense and these forex trading tips, should be the cornerstone of your forex trading strategy and if you use them wisely and have a good forex trading system then you can enjoy the currency trading success you desire.

5.Credit Card Offers For People With Bad Credit

2008-09-02T19:28:00.000-07:00

As a rule, as soon as you're in a bad credit folder, it is very difficult to reach an agreement for a credit card. However, you have a credit card to people with poor credit instruments the United States. These credit cards are credit cards without the guarantee, in particular for helping people to feel, than the wrong folder credit cards. Although, with a record of bad credit history, May is not in a position to an average housing credit card. A credit card is no guarantee that in most cases, a credit limit poorest, and high interest rates. But in reality poor credit history, you May is not yet in a position to buy one. Many companies can help the victims outside their state, you with your credit card without any guarantee for the people bad credit record. They meet the promises of advertising grant his application for a credit card, even if you have a bad credit record. But you can collect many are from the first reading between the lines, and is in the company offers the best conditions.

The credit card offers people are bad debt holders of credit cards is not guaranteed. Some credit cards without a guarantee gives people bad credit file is for the people who repair and re-construct its historical mean. In the past rejected if by some banks and credit card companies because of their bad credit folder, your application can now by credit card gives people bad credit cards. These credit card gives people bad credit folder, with a much lower limit of credit cards but with your credit card gives people bad credit folder in the amount of the interest rate. At least you will be able to offer a credit card with a credit card gives people bad credit record. If you own credit cards wrong folder, May You do not have the choice of the best credit card offers people bad credit record. As the reason for this is that for most purchases, we need a credit card than a credit card, the people bad credit record. Nevertheless, we must carefully consider the choice of the credit card people bad credit file within the shortest possible time.

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One option would be credit card does not guarantee the people bad credit file credit card would be an ideal choice. Since that credit card guarantees gives people a bad credit card loans, a measure of control over the expenditure of foreigners. An important point, with t