You will here about the advantages of currency trading and their well known but there NOT advantages unless – you trade currencies correctly. They can just as easily be disadvantages and that’s what happens to most traders!

Here are the perceived advantages and how they cause traders to lose.

1. Currencies can be leveraged

Many brokers will now give up to 400:1 in leverage and while this allows you to increase gains – it’s a double edged sword and can cause losses. Most traders have no idea of risk control over leverage themselves and lose.

Poor risk control is probably the major reasons traders get wiped out, they simply cant handle leverage and have no idea about standard deviation of price.

2. Currencies are volatile

Therefore profit opportunities present themselves everyday.

The high odds trades don’t though and most traders simply trade low odds trades.

They trade far to much and end up losing furthermore, the volatility of currency trading has led many traders to try day trading which is simply dumb. There is no way you can get the odds on your side in day trading and they lose all their money.

In forex trading you don’t get paid for trading often you get paid for being right and that’s it.

3. Currencies trend

Yes they do – but the problem is of course you have to lock into and hold these trends and execute your trades at the right time. This looks easy going back on the charts but is much harder going forward!

The trends are easy in hindsight but catching the big long term trends causes emotional problems for most traders.

Why?

Because they cant hold a trend.

The reason for this is they get a profit and get so excited they want to take it before it gets away. The more the market moves in their favour the more excited they get. Then volatility starts to eat into their open equity and they snatch a marginal profit.

If of course they hung on they could have had a huge profit but mentally they couldn’t cope with volatility.

As you can see an advantage is not an advantage until you turn it into one.

An advantage for some is a disadvantage for others and in the case of currency trading most traders can’t make the above advantages work for them.

Of course with the right education and attitude you can but in today’s world of experts and e-books promising traders riches beyond their dreams (all for a few hundred dollars) traders plunge in and burn their equity.

If you want to win keep in mind:

- Don’t over leverage and execute proper risk control.

- Trade in frequently to catch the high odds set ups.

- Study volatility and standard deviation of price.

- If you are trend following have the discipline to follow them.

The currency markets need to be treated with respect – that means proper forex education and an understanding of how and why they work and how to put the advantages in your favour.

The currency markets do NOT have advantages unless you make them advantages and they start off as disadvantages.

If you understand the above, you will realise what you need to do and if you do it get the right forex education and harness the advantages of currency trading.

If you do you could make a lot of money and enjoy currency trading success.

The stock market was devastated by the worst one-day collapse in history in a pandemonium of panic selling that shattered all records, worse than during the Great Depression.

That was Tuesday, October 20, 1987.

When the stock market fell in 1929, it was said that bankrupt speculators, who were once aristocracy, committed suicide by jumping out of buildings.

Could this happen again?

ANYTIME.

Do you have stock market insurance?

Of course not, because there is no insurance against falling stocks. Unless, of course, you’re willing to pay for an option to sell your shares once they’ve lost enough.

Investing in the stock market can be compared to throwing your money on the poker table, when you’re not even playing! You have no control and no insurance. Sure, the big players and brokers

advise everyone to get into the market. The more money there, the more they stand to make.

So what can you do with your money to get a decent rate of return and secure your investment with collateral?

Have you considered becoming a private mortgage lender?

A private mortgage lender loans money to a real estate investor who then pays back the loan with an agreed-upon interest rate.

And guess what?

Private mortgage lenders have collateral!

As a private mortgage lender, you are not responsible for finding anyone to loan money to. You are investing in a business that makes

first position lien mortgages with loan to value (LTV) ratios of seventy per cent or less. This means the loans are only made for up to seventy per cent of the After Repair Value (ARV).

*You choose how much to invest.

*You only handle minimal details.

*You have no costs.

*You do no collecting

*Your investment is secured – you receive a security instrument with

a property as collateral and all pertinent documents.

*You can liquidate easily.

Q: Is this a mortgage pool?

A: No, it’s not. You are in charge. You don’t answer to the bank, because you are the bank!

Q: Will I have to handle all of the minute and tedious details?

A: No, you do not have to worry about handling any of the annoying details — the business you deal with will take care of that for you.

Q: Who determines the term of the loan, and do I have to commit to someone else’s business plan?

A: You determine the loan! You do not have to commit to anyone’s plan but your own. You are able to form the term of your own plans.

You decide the length of the loan from the very beginning. You are in control.

Q: Will my loan be secured?

A: Yes, you acquire a secured instrument using property as collateral and all relevant documents and hazard insurance.

Q: What kind of costs will I have?

A: None. The borrower pays all the costs. You don’t have to mess with fees of any sort.

Q: Will I have to spend a lot of time collecting the money and dealing with billing issues?

A: No, there are absolutely no collection hassles. You don’t have to worry about a thing!

Q: Will I be able to apply any tax deferments to this plan?

A: Yes, your earnings can be tax deferred, if they are made through the right investment vehicle, such as your IRA or pension plan.

Please consult your legal and tax advisors when making any investments.

There is little protection against loss in the market due to falling stocks. Private mortgage lending has real collateral and real property insurance. Maybe the time has come for you to start getting the sleep you deserve. Next time there’s a headline like the one above, instead of feeling like finding a roof and jumping off, you’ll be one of the people who can laugh it off.

You can make money with Forex Trading if you know the mechanics of how it works. This is not just some sort of gambling but instead you need to know all about investments before you consider trading. Online currency trading is done through Forex trading or Foreign Exchange Trading. Online currency trading is a popular way for investors to broaden their perspectives. However, the competition is intense in online currency trading domination.

You can make money with Forex Trading if you pursue online currency trading. This is because online currency trading is the future of Forex trading. It is also available to everyone in the world today. Statistically speaking, the Forex trading market has become the largest financial market in the world while online currency trading is one of the fastest growing.

Since Forex is based primarily on the net, you can make use of online currency trading services twenty four hours a day. You can initially start getting the hang of Forex trading by using a demo with a Forex broker. There are some Forex brokers who are willing to provide training on their online currency trading system. There are also companies which offer Forex trading software as well as foreign currency exchange services which emphasize Forex trading strategies. Knowing which strategies to use may entail the services of a Forex broker who offers free guides.

There are ways which you can become a competent Forex trader so that you can make money with Forex Trading. You can do so by attaining the correct education, using Forex tools, and learning more about margin accounts.

You have to attain the correct education in order to be prepared to make money with Forex trading. There are hundreds of online training courses and materials to help you with your education. There are workshops which deal with online currency trading. Try to find the learning program which suits you.

You should use Forex trading tools to perform tasks such like sending trading signals and various buy or sell alerts straight to your mobile device or computer. Such tools are usually software based and these can be provided by Forex trading sites. However, not all people base their decisions on these signals and use their technical and fundamental analysis to know when to buy or sell.

Learn about margin accounts since they are the lifeblood of Forex trading. Be sure to understand the Forex broker’s margin terms before setting an account. You need to be knowledgeable on the margin requirements and calculations.

In order to make money with Forex Trading you have to know what an investment is all about and how it operates before actually conducting any trading. Visit my blog today for more information regarding Forex trading.

So what is the stock market going to do?

So what is the stock market going to do now`? Continue downwards or start to recover and go upwards again’? It’s anybodies guess as to what is going to happen.

But there are a few clues which can tell us when and if it’s the right time to renter the market or not.

Firstly we can take a look at past history. We have had quite a few previous downturns, (call them corrections if you prefer.) Only to see the market to rebound and hit even higher levels than before.

Is there any guarantee that this will happen again? Given the laws of probability history says it will. But perhaps the higher the rise the bigger the fall next time.

Emotions play a vital part in the behaviour of the market. Fear and Greed are always the most predominant emotions at any given point in time.

At this particular time Fear is running rampant through the market with all eyes on the USA worrying about the possibility of a recession. While here in Australia the economy is doing the exact opposite with interest rates probably due to rise soon to slow the economy down. But no one is taking any notice of that at all.

Remember Fear invariably causes the market to go down while Greed has the opposite effect which can cause the market to rise.

Timing in the market is important particularly if you want to reinvest in the market after bailing out. But be aware that no one can pick the exact bottom or top of the market and if they happen to do so it is just pure luck and nothing else.

It never ceases to amaze me how quickly investors can forget the painful lessons learnt the minute the stock market begins to rise again and caution goes out the window.

Fear takes a back seat once Greed gets hold of the steering wheel.

So what is the first thing to look for prior to re entering the stock market? Quite simply when prices stop going downwards, they start to begin to see saw up and down slightly and then begin to rise. There are no hard and fast rules which apply to this situation.

I personally use a system which comprises of three things.

Firstly I use a trading plan which I stick to religiously. ( Sec previous articles on this.)

The second thing I look for are peaks higher and troughs higher. I shall explain this further.

The first is that the peak you see now is higher than the preceding one and also that one is higher than the one before that. In other words three high peaks in a row.

Each one higher than the one previous.

The same rule applies to troughs. Each trough is actually higher than the previous one. Again I look for three in a row. By seeing three of each in a row this confirms that the stock is in an upwards trend.

Of course sometimes there are no troughs at all ,with the share price just going straight upwards.But be wary these “Shooting Stars” can reverse just as quickly as profit takers move in.

Secondly I use the law of probability.

When a share price is heading downwards there is a 70% chance of continuing downwards, 20% of going sideways and a 10% chance of it going upwards.

When a stock is tracking sideways I use 50% chance of staying the same a 25% chance of going downwards and a 25% of the stock going upwards.

For a stock in an upward trend I use the percentages of 70% continuing upwards, 15% chance of going sideways and 15% chance of the stock going downwards.

These percentages are what I use, but of course they are adaptable to suit yourself.

There is no right or wrong time to enter the stock market. The systems I use just put the odds in my favour a little. But the one thing that I always do is to “Buy in gloom and sell in Boom.”

It works for me.

Forex Trading, meaning Currency Trading, is a world wide, little known market, which will become the most popular source of income for investors in the very near future. It is open for banks, rich investors and small ones alike and, depending on the sum of money they are willing to risk, the earnings demonstrate this is the best way to start getting rich.Why choose currency trading over stock, real estate or futures trading? The currency trading advantages are speed, liquidity, commission-free transactions, increased safety, short-term trading and great earnings. Letâ??s study each of these advantages in other trading systems: -Speed: Currency trading is instant due to a large amount of transactions while future trading implies a longer time to trade certain commodities, agricultural products, financial instruments and goods (contracts need to be written and signed)-Stock traders must pay brokers a certain fee for each transaction made. The brokerage fee is available for all futures transactions, but not in the case of currency trading. In currency trading brokers earn money by studying and profiting from the difference of price between sold and bought currencies.-Liquidity: The currency market is opened non-stop, anywhere in the world giving currency traders the chance to trade whenever they find the opportune moment and prices. This is a characteristic attributed only to currency trading.-Safety: while other trading systems are based on speculation, on the fluctuation of price, on slippage and market gaps, currency trading is controlled with the help of built in safeguards that limit slip-ups. -Short term trading, like currency trading, is more efficient for profit making than long term trading. Day trading does not increase speculation, risk and does not imply that the brokerâ??s commission will reduce any profit made.Anyone can start trading currencies. This means Currency Trading is easy therefore making money is easy! The potential profit that can be made by buying and selling currencies and with a minimum capital for investment is amazing. Currency trading techniques are available online for learning for those interested in doing so, but the best choice would be to let a broker do business for you. Tricks and traps are everywhere for inexperienced and the best way to avoid loosing money and time is to hire a broker who knows how the currency market works and how to increase your venues. Let someone else do the trading for you!The Currency market is very vast and it involves traders all over the world.Therefore the market can not be monopolized, cornered in any way for a single beneficiary. There are many participants, many banks involved and currency trading is a global phenomenon. The amount of business done during a particular period of time by the Currency market is 30 times bigger than that done by the US Equity markets. The average sum of money exchanged during one day of transactions with many currencies goes over 1.6 trillion US$. The impressive numbers donâ??t stop here. The Currency market predictions of growth in the futures are over 2.0 trillion US$. These facts together with others (like the lack of physical location or centralization of any kind) offer the Currency trader safety. Trading currencies allows investors to make money quick and efficient, with little risk and in a big way! So whatâ??s keeping you from becoming a Currency trader?

I have been a trader for over 25 years and have seen most things booms, busts, extraordinary life changing events, the rise of the internet and here I am going to give new traders what I Consider the best currency advice I can in terms of getting started in the exciting world of forex trading… The first bit of advice I would give you is, don’t think currency trading is a walk in the park – its not.The rewards of currency trading are high and it’s important to get the right education and don’t believe anyone who tells you that you can make easy money. Forget all the forex robots with there fake track records, or sure fire trading systems at the end of the day they won’t help you. Trading is a personal experience where you have to construct a forex trading strategy and apply it yourself with discipline. You can get a lot of good education free online and you should approach the markets by using forex charts. By trading with charts you can simply trade price changes as you see them on a chart and you can learn this skill in a few weeks and soon be making big profits for just 30 minutes work or less per day. You only need a simple robust forex trading system and forget about anyone who tells you there is some hidden market order in terms of a scientific theory – there isn’t and applying complicated theories is doomed to failure, as they have too many elements to break. Keep it simple and keep it robust. I have used the same system for over 25 years and NEVER changed it. Sure it’s not perfect, no system is however it makes money and that at the end of the day is the aim of currency trading. The real challenge of currency trading is maintaining discipline and my currency trading advice here would be – it sounds simple but it is actually very hard and most traders never master it. If you are a currency trader you are going to have a strong of losses which will last for weeks ( even the best traders do), what you have to do is to keep executing your plan with discipline through this losing period, until you hit a home run which you will, if your forex trading strategy is soundly based. You have to lose to win and many people simply can’t take this and throw in the towel. They can’t stay disciplined and if you cannot apply a system with discipline, you simply don’t have one. Currency trading is a unique challenge, anyone can learn to trade but most fail because they cannot accept responsibility, follow others, or get the wrong education. If you take responsibility for your destiny and get a simple forex system, you understand and can apply with discipline; you can enjoy currency trading success. The world of currency trading is one where you can enjoy success with a great second income, or even a life changing income, if you have the right education and a disciplined mindset.

You can usually predict, well before the event, that a stock market crash is going to happen. There are certain events which happen prior to the crash, and which lead up to it. To begin with the market is quite weak, a situation which is known as a bear market. When this happens many people are eager to invest in shares, believing that the value of those shares is bound to rise and therefore make them a good profit. This interest in the market does indeed cause the share values to rise, and the market becomes a bull market, in other words an especially strong one.
Mutual funds are an especially popular type of investment at this point in the investment cycle. The market is quite stable at this stage, and there are good profits to be had from investment in this early part of the cycle.
More investors join in at this stable part of the investment cycle, as investors are encouraged to buy and to increase their profit in the stock market.
Companies release stocks onto the market during the bull market phase, and it is common for IPOs or Initial Public Offerings to be available in this period before a stock market crash. Companies do very well out of this situation, with the value of their stocks rising steeply, and great confidence from investors in the value of their stocks. More and more money is being invested by people who want to be the first to buy stocks in a particular company.
Those investors who bought shares in the beginning phase of the cycle are now keen to sell them, before they lose their money, knowing that the value of their shares will soon go down. Sometimes during a bull market there can also be various scandals and scams on a corporate level, because people become greedy. The market is becoming flooded with stocks, and yet people feel that the values of stocks will continue to rise.
Eventually the stock market reaches the point where people have invested so much it is ‘overbought’, and the only way to go is down. This is the beginning of the stock market crash. Stocks start to lose value, and when people become aware of this fact, they then want to sell, and before you know it everyone is selling rather than buying, and this brings about the stock market crash.
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The relationship between risk and return is a fundamental trade-off in Finance. When investors expect macroeconomic conditions to expand, they tend to accept extra risk in investments because they expect higher returns and low volatility. Expansionary macroeconomic conditions influence investment decision making and make investors accept extra investment risk in the expectation of being adequately compensated with higher returns. In this aspect, risk is an inherent element of investment returns and is defined as the possibility of defaulting in oneâ??s investment objectives because of return uncertainty about the expected benefits from an investment.

There are certain risks associated with trading on the stock market.

Market risk is associated with the short-term losses in the stock market. These losses can occur as a result of (1) equity risk â?? associated to stock price changes, (2) interest rate risk â?? associated to interest rates changes, (3) currency risk â?? associated to foreign exchange rates changes and (4) commodity risk â?? associated to commodity price changes. Traders and portfolio managers identify and reduce their risk exposure on a tactical level with a series of risk metrics. On a strategic level, organizations apply risk limits to manage market risk.

Systematic risk is associated with the economic and financial system and its effect is pervasive throughout the economy. The value of investments may depreciate over a given time period because of economic changes that greatly influence the stock market. To anticipate market risk, traders and portfolio managers employ asset allocation and diversification techniques in order to offset the losses of one asset class by gains in another in the same portfolio. Examples of systematic risk include changes in interest rates, changes in taxes, changes in exchange rates, the economic growth rate, actions by the Federal Reserve and military or political actions.

Unsystematic risk, also referred to as specific risk, is associated with the characteristics of a type of asset, or a specific industry or company. Examples of unsystematic risk include labor strikes, rise of new competitors, poor management decisions and poor service or product quality. How varying sales revenues affect the profitability of a firm and its ability to cover its liabilities is subject to a number of firm-specific factors such as how sensitive expenses are to changing sales and how much debt a firm has.

This brings risk classification to business risk that refers to the uncertainty of income cash flows and asset prices caused by the nature of a firmâ??s operations. For instance, in retail food industry sales and earnings are typically more stable over time than in the auto industry where sales and earnings fluctuate dramatically. Hence, the more certain the firmâ??s income flows, the more certain the investment returns because the undertaken risk is lower. Business risk is managed with a focus on achieving a high return on investment on a long-term horizon.

Financial risk is the risk associated with the uncertainty introduced by the method by which the firm finances its assets. For instance, if a firm finances its assets only with common stocks, then the risk incurred is simply business risk. If instead, it borrows money to finance its assets, it pays interest to its creditors prior to providing income to its stockholders, which increases the stockholderâ??s uncertainty of returns.

Liquidity risk is the risk incurred when an investor is not able to sell an asset for a fair market value. When investors acquire assets, they expect that they will mature or that they will be able to sell it to someone else at a higher price. In either case, investors expect to be able to convert the value of the asset into cash and to use the proceeds for current or future consumption. In this aspect, the more difficult the conversion is, the greater the liquidity risk. For instance, US T-bills have no liquidity risk because they can be bought and sold instantly at their quoted price. On the contrary, real estate pieces, antiques or foreign securities incur high liquidity risk.

How many of you actually had the time to watch the stocker tickers every minute or even every second to monitor the prices when the stock market is bullish?

What if you forgot to watch the stock prices and the bullish market take a reverse and becomes bearish instead. If you sell too early, you lose out on greater profits. Sounds familar eh?

So, what can you do about it? You can use something called a ‘trailing stop loss’ order. A trailing stop loss’ is a stop order which allows you to automate your selling strategy. A trailing stop loss order allows you to set a percentage or dollar amount below the market price of the stock. If you set the trailing stop loss at 15% and that when prices of the stock drop below 15% of the last traded price, your stock broker will automatically sell off your stocks automatically.

A very popular tool among many technical investors is called Fibonacci analysis. This tool will allow you to better predict, or should I say estimate the areas of support and resistance (a basic but very important concept in Technical Analysis) so that one can better estimate if a bullish or bearish trend will end soon or if the trend will continue.

With fibonacci analysis, you will be able to

1. Calculate and determine the profitable future turning points in the market in ADVANCE!

2. Determine the support and resistance levels so as to buy at the RIGHT PRICE at the RIGHT TIME!

The world best traders know this technique at the back of their hand, so should you.

Click here to read more about this advanced technique, Fibonacci analysis .

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