Posts tagged personal finance
Everybody has to have money, that is clear enough, but how do you get it, or enough of it, on a recurring basis to be able to enjoy a fairly comfortable life? Most people work for somebody else, some others prefer to set up their own firm in order to be their own bosses and still others choose to buy and sell intangible goods like stocks and shares. A concept comparable to this last one is trading currencies on the foreign currency exchange, which is normally shortened to Forex or even FX.
The Forex is the largest market in the world. It turns over trillions of dollars every day and is actually open 24/7. Every country in the world has access to the Forex and every government and every bank trades on it every day. With all this money sloshing about it is obvious that there is a lot of money to be made from trading on the Forex. However, one must never forget that when someone wins, someone else loses. Billions of dollars are made and lost every day.
Never let anyone persuade you that making money on the Forex is easy. If it were easy, everyone would be rich and if everyone were rich no one would be. There is no easy money. However, what Forex traders try to do is establish a strategy that works for them. Once a profitable strategy has been developed, traders try to utilize that same strategy over and over again. This is a way of minimizing risk and, it is hoped, maximizing profits.
As you are developing your own strategy or maybe adapting one that you have read about in a book on Forex strategies, you will come across various terms which describe tools that are used in parts of those strategies. One of the most common tools is called ‘Leverage’.
Leverage effectively multiplies the value of your trading account. Leverage is often 100 times the real, funded value. Consequently, if you have $1,000 in your account, you can use leverage to ‘play’ with $100,000. This evidently gives you higher gains or losses and is a dangerously useful tool.
Another tool to be utilized in your general strategy is the ‘Stop Loss Order’. In many ways, the stop loss order can be used to stop you making a total idiot of yourself with leverage. For example, if you bought the USD/GBP at 1.50 and expected it to go to 1.60 and it does head off in that direction all well and good. However, you could place a stop loss order on the transaction at, say, 1.47, so that if it goes in the wrong direction you can only lose a ‘little bit’. The stop loss order is there to permit you to run your profits, but minimize your losses.
An ‘Automatic Entry Order’ allows you to enter the market at a price prearranged by you. So, for instance you may think that the USD would never drop below GBP 0.66 in a million years, but if it does hit 0.66, you are so sure that it will rebound that you want to purchase at that price at any time. You place an automatic entry order and you will never miss that opportunity, if it ever crops up.
These tools or strategies can be used in an overall strategy to minimize risk, but not eliminate it, you still have keep your eye on the ball and learn the rules of the game.
When you start a new hobby or even profession, you are bound to come across terminology that you do not understand. The problem with not understanding the terminology of the industry, is that it hinders your development in your chosen field.
I know many people, especially older people, who think that they will never be able to grasp computers, because the terminology sounds like a foreign language. The same can be said for Forex, so I am going to explain my top 20 terms to trade Forex that I think you have to be aware of.
Ask, Offer – the price at which a trader will buy a currency; it is the seller’s price
Base Currency – the currency that all trades are quoted in. This will usually be the USD, but some systems allow the trader to choose
Bear – someone who thinks that the market or position will fall
Bull – someone who thinks that the market or position will rise
Broker – the person who places and deals with the trade for the trader. In FX there are no fees as such, as they are dealt with by the spread.
Cable – dealers’ slang for the USD/GBP exchange rate
Currency Risk – the risk of incurring losses resulting from an adverse change in exchange rates.
Day Trading – refers to opening and closing the same position or positions within one day’s trading (day trader)
ECB – the European Central Bank
Forex, FX or Foreign Exchange – the concurrent buying of one currency and selling of another. The currencies are written in pairs such as USD/GBP.
GTC – ‘good till cancelled’ – this means that an order is left with the dealer to buy or sell at a price pre-set by the trader. When the price is met the trade will be automatically carried out.
Initial Margin – this is the initial deposit of collateral required in order to enter into a position. It is a guarantee on future performance
Margin – clients must deposit funds as security to cover any potential losses from unfavorable movements in currency prices
Market Maker – is a dealer who offers prices and is prepared to buy or sell at those stated bid and ask (offer) prices. A market maker keeps a trading book
Open Position – this refers to any deal which has not been sorted out by monetary payment or reversed by an equal and opposite deal for the same value date.
Pip or Points – in currency markets refer to the smallest move an exchange rate can make. This could be 0.0001 in the case of EUR/USD, GBD/USD, USD/CHF or 0.01 in the case of USD/JPY
Resistance – is the level at which charts suggest that selling will take place
Spread – this is the difference between the bid and offer (ask) prices. It is used to measure market liquidity, narrower spreads often indicate higher liquidity
Stop Loss Order – an order to buy or sell when a particular price is reached, either above or below the price that prevailed when the order was given
Technical Analysis – is an attempt to predict future market activity by analyzing historical market data. It is usually represented in the form of charts, price trends and volume graphs.
The web hosting industry has grown enormously and many people want to try their luck in business. Controlling the costs s somehow difficult even though you are dealing with the best web hosting provider. This means that you should be aware of the various ways on how to save money on website hosting services.
There are numerous ways you can adopt to reduce costs on these services. One of them is actually to look for an optimum hard drive space. Too much disk space than the required can really push your profits down. You need to look for a disk space that is just enough for your site.
You also need to find an optimum bandwidth. This is just the same as in disk space in that you do not need extra bandwidth since you will incur extra costs for no reason. Avoid over usage of bandwidth since it will make you incur extra costs. Stay within your limits and try to choose bandwidth that match high data transfer.
Shop around for block purchase of bandwidth and disk space. You require those providers that offer block purchase facilities to their clients. Check whether the amount allocated within the block can best suit your needs. This will actually help you reduce costs and save more.
Deal with providers that are ready to offer reliable services to clients. Make sure you can easily get notified immediately when an over usage for bandwidth and space occurs. This will enable you to reduce your spending since you will not be charged for the extra usage.
Look for reliable providers that have multiple domain services. There are numerous options whereby one account is capable of offering multiple domains to a client. This is good because you will reduce costs as compared to those with single domain facilities.
Clients with more than one websites should prefer multiple domains in order to save more. Teaming up with other webmasters that are willing to launch their sites can also be cost effective. This is because the cost will be shared equally thus making the service affordable.
You may also prefer a free mail server. Stay away from those web hosting providers that charge for mail servers since this facility is available for free. Look for standard web hosting providers and you will enjoy free mail server.
Using correct options and optimum facilities are the effective ways on how to save money on website hosting services. Ensure that customer care service is reliable. Let everything be optimal and you will greatly reduce your costs.
Do well with the cost of hosting your website and you will be able to run your business better. Another way to save cost with your website is by using the Adobe promotion codes here to buy your design software.
The Forex market used to be the realm of governments, banks, financial institutions and very rich people. That was not so long ago either. Fifteen years ago, perhaps, maybe even less. The development that altered all that is the Internet. These days, the Forex market is played by small companies and even ordinary people as well as the big players of yesteryear.
Whether or not it is a level playing field for the big and the small, you will have to decide for yourself, because so much shame has come to light recently about issues in other financial markets. However, the Forex is so big that it is hard to think that it can be manipulated. (Although George Soros is blamed for a run on the GBP in the early nineties).
It is probable that the big players have more access to information that the rest of us. Particularly governments as they introduce the policies that affect the way a currency moves. Information is the key to successful Forex trading. Therefore, you have to know the terminology of the Forex market; how to utilize the financial instruments that your broker makes available to you and you have to be up-to-date on the information affecting your target currencies.
Therefore, it stands to reason that you should decide to open an account with a Forex broker that provides the most advanced trading platform, supplies the best training and distributes the best, up-to-date news and market analysis.
The best way of selecting an online Forex trading system is to Google “online Forex trading system” and pick six of the most impressive to you and save them into a folder in your ‘Favourites’ list. If you are new to Forex trading, you should read the companies’ training literature. This will give you an impression of how much the broker cares. Try putting some of the doctrines that you learn into practice in a ‘practice account’. The practice account is free, but sometimes you may only use a practice account for a month or so.
You will discover that some online Forex trading systems are simpler to use than others. One online Forex trading system might suit you but not suit me, it is a personal preference. Some online Forex trading systems will have all the bells and whistles, but you may prefer a simpler system. For example, if your computer is slow or your Internet connection is slow, you may want to be able to turn off any elements that you do not need in order to speed your system up.
Another aspect that you should pay close consideration to when choosing an online Forex trading system, is the system’s functionality for technical analysis. You will have to have free access to the historical data of the currencies that you are interested in. These data can then be interpreted by graphs, which may be able to help you determine which way a particular currency pair may go. Breaking news is also very important and your broker should supply you with all the most recent news stories ‘hot off the wire’.
Numerous younger individuals do not realize just how important a good credit rating is. To be fair, a great deal of older people only discovered this the difficult way as well.
Some people only learn by cruel experience. I know that there are people who have made money out of fraud, but really the average person should remember that extremely wealthy institutions (like banks), owned by very wealthy people create the rules regarding finance and they create the rules to suit themselves.
This is fair enough if someone is attempting to steal from them – I have a burglar alarm too – although we may not all agree with how much of their own way the bankers ought to have it. In general, if you are silly enough to attempt to profiteer from banks, they will make you pay for your stupidity. And they will punish you arduously and so will all the friends of the bankers like governments and merchants.
The course of punishment could be custodial hell or they might permit you your freedom but without the ability to acquire any credit, which makes life very difficult, as anyone who has undergone this state of limbo can attest to. If you are not credit worthy, you are an outsider and made to pay for it.
You will not be able to get credit at all, which means electricity meters, water meters, gas meters and pay-as-you-go telephones, all of which are the most expensive method of paying for these services.
Furthermore, no more credit cards; Internet cafes will be a way of life, no hire-purchase and everything has to be paid for in cash, which makes you a target for muggers. I hope that I have persuaded you, that your credit rating is highly important.
On top of that, it is a valuable asset as there are jobs that you cannot have, if you are not credit worthy. Credit worthiness can be compared to your personal reputation with your friends and family.
So, if you have fallen foul of the financial institutions, what can you do about it? Make no mistake about it, bankers are like the church in this regard, they are waiting to welcome you back into the fold. The process is called credit repair.
If you are not clever with money, you should begin by visiting a Citizens’ Advice Bureau. If they do not exist in your country, you will need to phone all your creditors and explain to them that you want to sort the problem out.
One of your creditors will suggest that you consolidate all your debts into one. This is the best tactic, because it means that you only have to concentrate on paying one bill a month. Your difficulty here is not accepting the first offer that comes along. And do not believe that the banks are going to be the best to take the debt consolidation loan from either. They might be, but do not take it for given.
This is where you really do require help from a specialist, but take it from me, you have made the first step towards cleaning up your financial life if you have gotten this far, but you still have to be wary of rip-offs.
Owen Jones, the writer of this article, writes on several topics, but is now concerned with Debt Consolidation and Credit Rating. If you want to know more, please visit our website at Debt Consolidation and Reduction
Picture being able to work any hours you like, day or night, from home. Picture if most of the work involved with this dream job was reading and thinking. No heavy manual work and no going to bed early so that you can get up early, unless you want to. Well, these jobs do exist. The newer ones are all Internet based, but you seem to be on the Internet anyway. You could build websites, blog, play the stock markets or you could try Forex trading.
Although each of these new jobs has its own virtues, I want to talk about the Internet and Forex trading, because it has the most promise. Blogging and websites will make you some money and there is little financial risk. The stock markets are only open about nine hours a day, but Forex never stops.
It is live literally twenty-four hours a day. This is because Forex exists only in machines, there is no Forex Building in the same way that there is a London or New York Stock Exchange, where people actually, physically go to work five days a week.
At this stage of the game, I will suppose that you are not going to give up your full-time job and that Forex will be a hobby. Hopefully a profitable one, but first you have to learn how to get started. Go to your favourite search engine and type in ‘forex brokers’ or ‘forex platforms’.
A dozen or more will crop up and you should visit the individual websites and save three or four that you like in a Favourites Folder. Then write down there titles, for example, AC Markets, and type into the SE: ‘AC Markets problems’. You may want to discard a few from your chosen ones after doing this. Anyway, ultimately, you will come up with a Forex broker that you are content with.
Pick a broker that gives a free Forex trading account and a free practice trading account too. A good Forex trader will provide you with free online charting services and access to information on the currencies that they deal with. So begins the protracted process of learning the principals of Forex trading. The point is that you should be able to learn how to place Forex trades prudently based on knowledge that you have gleaned and test your ideas all free of charge, until you feel self-confident enough to risk some of your own, hard-earned, real money.
One of the good elements of Forex trading is ’set and forget’. For example, your research may lead you to believe that over the next month, the GBP will rise by two cents against the USD and then fall back to being one cent ahead of where it is now. These trades can be programmed in automatically, so that if the GBP starts going up, the software buys for you and then sells for you at a given price, waits for a given fall and then buys back again. This is very helpful, if you are convinced but you have other things to do, like a real job to get on with.
The main thing to keep in mind is that you have all the time in the world, so take your time and be careful. Learn how to play the game before you take a seat at the table and you should find yourself earning a nice little extra income.
Gambling on Forex is all about forecasting and the only tools you have to help you predict are news and charts, both being ways of representing historical data. Therefore, if you want to make money out of currency dealing, it follows that you will have to be able to understand these data correctly. The news can be manipulated by corrupt governments and corrupt officials, but historical charts can not. Therefore, the first task of any aspiring currency trader is to come to learn how to read a Forex chart.
The basic Forex chart is a graphical depiction of how one currency has fared against another. Therefore, you see USD/GBP and USD/EUR charts, showing the historical movements of the US dollar against the British pound and the Euro respectively.
When you open a Forex account with a broker, charting software should be part of the deal, if it is not look elsewhere quickly. The charting software will allow you to plot your two target currencies against each other.
A standard Forex chart or graph will have two axes. The bottom axis or line is a time line and can read in any units: years, months, days, hours or even minutes. The side axis will read in units of currency: usually tenths of a cent or penny or possibly whole cents. Whatever the units are, they will be clearly stated on the chart.
You can alter the time frame at the click of a button so that you can first look at the long term tendency, then the medium term trend and finally the short term tendency, which could be as short the last hour or minute by minute. It is especially interesting to watch a currency pair when important news breaks, like, for example, the GBP/EUR when the UK election results are announced.
It could go either way, but if there is a strong vote for one party or another, it means stability, whereas a hung parliament means instability. Stability will probably mean a stronger GBP, but will the international financial community rather a Labour or a Conservative government?
There are thousands of possible currency pairs, but most Forex brokers will only deal in a few dozen. However, it is very hard to remember all that data, so charting is useful to remind the currency trader of recent and not-so-recent trends.
Some people say that charting is more or less a waste of time, because no chart would have predicted 9/11 and that is true, but the fact is in truth, that if you want to gamble real money on the Forex market, you will have to learn how to read a Forex chart.
If you want to attempt to make some money by trading in foreign currencies, you clearly need to do a great deal of research. The basis for this research should be provided for you if you have opened a Forex account with a good Forex broker.
A decent Forex broker should provide its account-holders with sufficient news and sufficient charting functions to make good financial judgments. Because the Forex market is active every second of every day, the news has to be up-to-date as well. And precise.
A Forex market trader endeavours to use market indicators to forecast the future trends of currency pairs – for instance, the UK pound against the US dollar. Market indicators could be good or bad news concerning your target countries.
They might be jobless or gross national product (GNP) figures. Other market indicators might be the threat of war or the rise in the price of oil. In fact, almost all political and economic news can affect the way a currency moves.
These items of news will have a short term or a long term affect on the trend of a currency and the longer term trends are depicted in graphs or charts as they are known as in financial circles. Charting software should be integrated in your Forex trading account system.
These charts can be utilized to trace almost any time span, so you can make a trace of how two currencies fared against each other over the last five years, five months, five weeks, five days or even five hours.
The best technique to make full use of these charts is to use them in conjunction with current affairs. That way, you will see that so-and-so bit of news had so-and-so effect on the market price of so-and-so currency. For example, a steep rise in the price of crude oil will injure the dollar [USD], the pound [GBP] and the Euro [EURO], but it will help the currencies of oil-producing nations.
You can set triggers on your charting software so that you become aware of certain financial events. For instance, if you see that the USD is falling against the GBP, but you think that a fall under 1GBP/2USD is not justified, you could set a trigger point to advise you when that level is attained, so that you can buy back in or sell or reverse whichever position you are holding.
There are many market indicators and if you want to be a flourishing Forex market trader, you will need to learn how to utilize them. There are Stochastics, Fibonacci Retracements and dozens and dozens more.
The good thing about using a Forex broker’s online software is that the raw data is updated automatically, so that when you call up a graph, you know that the data is up to date and that the market indicators are working as they should be.
The only problem, and it is a big problem, is that then you have to interpret that data in order to forecast the future trend of a currency pair. At the end of the day, it is your money and you cannot blame the indicators, you can only blame your interpretation of them.
A preferred non directional trading strategy is the Weekly Options Credit Spread. This strategy is one of the easier option spreads to comprehend for newer option traders. In addition it is simple to place and there is not much to do management wise while the trade is in play – which allows the credit spread trader to be freed from their trading chair and not have to watch every up tick and down that the market makes all day.
A core trading strategy that is found within many of the other option trading strategies like the butterfly trade which is constructed from a credit spread and a debit spread, and also the iron condor which is built from two separate credit spreads placed on either side from where the stock or index being used is trading at.
These trades are popular due to their high probability of winning. When placed and traded properly, it is possible for credit spreads to provide the trader with consistent income month after month – without the trader having to be right about market direction. Basically, those who trade this strategy just need to be correct about one thing which is where the stock or index being traded will not go.
Let’s create an imaginary trading scenario to illustrate. Imagine that a trader believes that a particular stock will be heading down in the short term. Because he is bearish on this stock, he sells a bearish credit spread called a bear call spread which benefits from bearish move.
The only way this spread trade can lose money is if the stock winds up doing 1 out of 4 possible scenarios – giving our trader a three out of four likelihood of winning. If the stock moves down as our trader predicts he wins. If the stock stays stagnant and goes nowhere, he wins. In fact, even if the stock moves against our trader and heads upward he wins just so long as the underlying doesn’t move so far as to breach the spread sold. The only our trader loses is if the underlying moves far enough upwards passing the option strike price that was sold – which if it does, our trader could still salvage the position through appropriate management and adjustment methods – adding up to yet another reason why option sellers love this strategy so much which is also called the Iron Condor .
To be taught a much ’superior’ technique to trade the credit spread and the weekly options for monthly income, go to this Iron Condor site for down-to-earth step-by-step instructions on how to suitably enter, negotiate, and ADJUST these trades.
A great investment strategy for traders looking for a way to generate consistent profits without having to be a stock picker or know which way the stock market is headed is an option trading strategy called the Iron Condor . This is an option trading strategy that performs best when the underlying being used is trading in a range – however it can also generate good returns in trending markets as long as the iron condor trader understands how to correctly manage the trade.
The iron condor is a trade that benefits from the reality that options are a wasting asset – an investment vehicle that slowly drains value as time passes by. These trades will profit just as long as the strikes which have been sold remain outside the range that has been created on the iron condor profit graph when the trade was first initiated. And these trades can kick off a good and solid return on investment in quick periods of time.
Iron Condors are actually constructed from 2 separate credit spreads – one on either end from where the underlying be used is currently trading at. Positioned above the underlying current trading price is a bear call spread. Positioned below the current trading price is a bull put spread. Depending on the broker being used, these can be placed separately as individual vertical spreads- or together as one iron condor trade.
The goal of the trade is for the underlying to stay contained within the ‘range’ created by the two sold credit spreads. While the trade is on, the underlying can move around on the chart as long as it stays contained within this ‘range’. It the underyling beings moving around too much, or moves too far in either direction, the trade will become threatened and the trader will need to take some sort of action to manage and/or adjust.
Most of the time, iron condors can be profitable as they offer a high probability of success. That being said, it is extremely important for the newer iron condor trader to understand the potential danger of these trades as the reward/risk ratio is very poor. One losing trade can completely destroy a trading account and eliminate many months worth of gains. This is why it is so important to have a solid iron condor management and adjustment plan in place before getting started trading this strategy. These can absolutely be profitable over the long run IF one knows how to correctly place, manage and adjust.
When I first began trading this strategy, I found myself winning month after month – UNTIL – suddenly I hit a bad month and wound up giving everything back and then some – simply because I didn’t take the time up front to properly learn how to manage and adjust.
This is exactly what happened to me when I first started trading the option greeks iron condor strategy – and I had to learn this lesson the hard way through taking a large painful loss to my own account. Had I just taken the time to learn the risk management and hedging techniques taught at this iron condor training website, I could have avoided much of this trading pain.