The 7 Undeniable Rules of Forex Trading

Writen by Sorna Devadas

Before we go into 7 rules of Forex Trading, that have been approved by a number of full time and successful traders, I’d like to narrate this story.

There was a lion, a donkey and a fox all keen to go out rabbit hunting together. After a productive day of hunting, the three of them sit around the pile of rabbits and the lion asks the Donkey, “Mr Donkey, would you please divide the pile into equal shares for the 3 of us?”. The Donkey obliges and counts the rabbits into three equal piles for each of them. The Lion immediately roared and pounced him. He then piled all the rabbits on top of the donkey and asked the Fox “Mr Fox, would you please divide the rabbits up evenly between us?”. The Fox takes out 1 scrawny rabbit from the pile and puts it in a pile for himself then say “There you go, Mr Lion, that’s your pile” pointing to the large pile of rabbits. The lion says “Mr Fox, where did you learn to divide so equally?” and the fox says “The Donkey taught me.”

The moral of the story is to learn from others’ mistakes. Now we proceed to our 7 rules. These are for you benefit as mentioned earlier, from experienced, successful traders.

Rules #1

Never risk any more than you can afford to lose, you will lose money, all traders do, make sure you’re not sacrificing anything else important in the process

Rule #2

Never risk any more than 2% of your margin trading account on a simple trade. For mini account holders, 2% of $300 would be $6 so realistically you would need around $15 so you can make this 5%. As soon as your account size is big enough, make this 2%.

Rule #3

Always use a stop loss order. If you haven’t figured out where your stop loss order and limit order should be at the start of your trade then you shouldn’t be trading.

Rule #4

Know your exit point before you enter a trade.

Rule #5

Demo Trade First: Become successful with paper trading when there’s nothing on the line before you open a real account.

Rule #6

Take a breather when your equity has taken a dive.

Rule #7

Don’t let your emotions call the shots: Stay cool, calm and collected. Patience and a clear head will win the game.

For more powerful concepts and to receive the mini-account trading e-book, “Forex Freedom”, visit http://www.wealthyforex.com This will be an asset to both beginner and experienced traders and anyone that wants to make a considerable amount of money through the Forex.

Big profits from Currency Trading

Writen by Stephen Todd

If you want to make big profits from currency trading, you need to lock into and follow the longer-term trends.

“The art of contrary” thinking is one of the most powerful tools a trader can use, and is a trait with which all true great traders are familiar with.

What is the Art of Contrary Thinking?

Humphrey Neill’s book, “the art of contrary thinking,” the best known work on the subject, is based on a simple powerful idea that:

“When everybody thinks alike, everybody is likely to be wrong”

“The art of contrary” thinking consists in training your mind to ruminate in directions opposite to general public opinions; but basing your opinion in the light of current events and human behavior”.

Why Contrary Trading Works

By spotting situations when the consensus of a currency is either extremely bullish or bearish, means that a trend change is imminent, as it is likely the emotions of greed and fear have pushed prices too far away from true value.

If you can step aside from the crowd and take a contrary view at these turning points, you can make big currency trading profits. Contrary thinking can be used in any market and is highly effective in currencies.

Contrary thinking can be used to make really big currency trading profits and if used selectively, when markets are extremely over bought or oversold, you can be in right at the start of the trend for maximum profitability.

In any currency you look at - The Yen, Euro, British Pound Swiss Franc Canadian or Australian dollar and many others, there are always occasions where a currency trend in the news is forecast to continue, due to overwhelming evidence in its favor and it then promptly collapses!

Big profits from currency trading can therefore be made by using the art of contrary thinking when the market is extremely bullish or bearish.

Why? Because everyone who has bought has taken positions and there are no buyers left. Prices have moved away from fair value. When there is no more buying to enter the market, a trend change is imminent.

It is clear that to succeed and make big profits in currency trading you need to think independently of the majority at important market turning points.

You can make big profits in currency trading from trend following, but you can with a little practice spot potential turning points in currencies as well which will help you bank profits, tighten stops or open new trades right on the turn, for maximum profitability.

Contrary trading will not only make you big profits in currency trading but in ANY market and has worked for centuries, as human nature never changes.

New! A valuable FREE Currency Trader CD containing 9 critical trading reports, tips, strategies and currency trading info. Visit our web site now and grab your CD http://www.tradercurrencies.com.

Stock Loans

Writen by Afra AmirSanjari

Hedge current portfolio positions and gain access to capital resources through loans against free trading, aged affiliate or aged non-affiliate securities. Make proper use of your assets while waiting for performance and hedge your position should the asset move against you.

Whether you need to borrow cash for personal or business purposes, these loans against stock can be funded in as few as five business days and are available to insiders, affiliates and common shareholders of publicly traded companies on U.S. exchanges, as well as other major foreign exchanges.

Big Board or Large Cap stockholders are usually elegible for high LTV’s while Small to Mid-Cap stockholders can receive respectable LTV’s based on exchange, price and liquidity. Furthermore, no expenses or upfront fees are charged for our loan programs.

Stock Loan is a loan. It is not a sale. For most of our borrowers, a Stock Loan does not trigger a capital gains tax event unless they default. And though the proceeds cannot be put into any marginable securities, they are available for other types of investments or purchases. Interest can accrue or be paid quarterly.

There are no margin calls. Enron stock investors with a Flagship Stock Loan would have received 90% loan to value out of their investment - and been free to walk away without a single margin or house call, even after the infamous fall in share price.

Yes, literally, walk away. These are “non-recourse” stock loans, so that if you wish, you may simply walk away and owe not a penny more to us as lender, with no negative consequence to your credit, forfeiting only the presumably devalued stock shares. Why? We’ve written private hedges on every share. And though you may have tax consequences in the event of default, you won’t have to repay your loan to us.

In the market? Out? Why not both? So you want your stock investments to stay stock investments. You love your stock picks. And they aren’t doing too badly, maybe have some great prospects next year too. You rightly don’t want to sell (maybe capital gains taxes are looming?); you don’t want to leave the market. But you need the cash. In… Out…Go…. Stay… What to do?

Consider a Stock Loan for Your Stock Investment. Put a floor on your potential loss, while keeping all of your potential gain. Stock Loan means you can do both. No need to sell your shares if you’d rather leave them in the market working for you… You can tap their value today ? safely ? so you can have the cash you require. You’ll get 90% of the market value and no principle or interest payments, if you choose to let interest accrue.

But… if the share price increases, that increase belongs entirely to you. The upside (depending on the type of Stock Loan you choose) from the the stock portfolio is thus yours. You stay in the market, and out, at the same time. The best of both worlds!

Afra AmirSanjari is the Principal for Peacock Capital. Peacock Capital specializes in solving the cash flow challenges of Small/Medium Businesses, Government Vendors and Individuals with innovative financial solutions by providing a network for securing operating capital.

http://www.peacockcapital.com; info@peacockcapital.com

Forex Market Heats Up For The Individual Trader

Writen by Alvin Toh

There has been a plethora of new financial instruments coming on stream for individuals in recent years. A few provide more leverage than just buying and selling stocks. Among the most rewarding markets opening up to traders is the FOREX (Foreign Exchange Market).

Why? Money or currency is the ultimate commodity. Every time a company or government buys or sells products and services in a foreign country, they are subject to a foreign currency trade, the exchanging of one currency for another. May individuals and organizations also trade currencies for speculative purposes. In contrast to the world’s stock markets, foreign exchange (Forex) is traded without the constraints of a central physical exchange.

Transactions are instead conducted via telephone or online networks. With this transaction structure in place, the Foreign Exchange market has become by far the largest marketplace in the world. With all these currency transactions going on daily, it is no wonder that the foreign currency exchange market (known as Forex or FX market) is the largest financial market in the world. It is much bigger than all the US Stock markets combined with a daily trading volume larger than that of all the world’s stock markets put together!

In addition, it is the least regulated market providing the greatest liquidity to investors. Trillions of dollars of foreign exchange activity takes place very day. From 1997 to 2000, daily Forex trading volume surged from US$5 billion to US$20Trlllion. The Forex market continues to grow at a phenomenal rate. This high volume is advantageous from trading standpoint because transactions can be executed quickly (with minimal slippage) and with low transaction costs. (Small bid/ask spread).

Before the Internet, only corporations and wealthy individuals could trade currencies in the Forex market through the use of proprietary trading systems of banks, often through private banking.

These systems required about $1Million to open an account. Thanks to the proliferation of the internet, today self directed investors with only a few thousand dollars and smaller financial firms can have access to the forex market 24 hours a day with the same liquidity as larger market participants.

For traders, Forex trading provides an alternative to the stock market trading. Whilst there are thousands of stocks to choose from, there are only a few major currencies to trade (Dollar, Yen, British Pound, Swiss franc and the Euro are the most popular). Forex trading also provides a lot more leverage than stock trading and the minimum investment to get started is a low lower. In addition, you have the ability to choose flexible trading hours (Forex trading goes on 24 hours a day!) and lower margin requirements.

As a result, foreign exchange trading has long been recognized as a staple and superior investment vehicle by central banks, major banks, multinational corporations (MNC), individual investors and speculators, institutional funds and hedge funds.

Trading or speculation makes up 95% of the daily volume. The other 5% of daily volume consists of governments and commercial companies converting one currency into another from buying and selling goods and services. The other 5% of daily volume consists of governments and commercial companies converting one currency into another from buying and selling goods and services.

More individual traders are jumping on this Forex Market bandwagon as it opens up opportunities to trade a global market on a flexible schedule and low barrier of entry.

Buy Low - Sell High

Writen by Al Thomas

Now where have I heard that before? I know. It was my broker.

So I took his advice and bought some of the stocks he recommended. I am still waiting for the ’sell high’ part of the equation. Everything he touted went up for a while and now it is lower than when I bought it. It is so low I can’t bring myself to sell it. My capital has shrunk about 60% from where I started. That’s a lot of money to me because it took a long time to save it. What happened?

The brokerage company that your broker works for puts out recommendations almost very week for various companies listed on the major stock exchanges. They have simple things like Buy or Strong Buy. Then they have a complex group of words used when they downgrade a stock. It never goes from Buy to Sell. No, it becomes Accumulate, Underperform, Attractive, Market Perform, Neutral or some other meaningless term. If any stock is ever downgraded even one notch sell it immediately. Finally after a stock has lost 50% or more of its value it becomes a ‘Hold”. And you know where you are holding it.

Last year the brokerage companies gave over 33,000 stock recommendations to their customers. Of those only 125 were Sell. On the NASDAQ exchange alone there were over 1,000 stocks that lost more than 90% of their value. The “experts”, known as analysts, were all telling you to buy. Your kid could have thrown a dart at the Wall Street Journal in 1999 and done as good a job as almost any analyst. What I want to know (and I think you do too) is if they were smart enough to tell you to buy then why weren’t they able to tell you to sell?

I’ll tell you why. Brokerage companies never give sell signals because they don’t want to offend a company that might come out with a public offering on which they will make a killing. It is better to kill a few customers than miss out on several million dollars. You pay commission and ask for honest advice, but you are being fed disinformation.

Is there any way you can protect yourself from this nonsense? Yes! It is called a stop-loss order. Brokers don’t like them because then they have to watch your account. He will tell you you don’t need it as he will watch your account. And pigs can fly. The average broker has 300 accounts and unless you have a large 6-figure account you will be on the bottom of the pile.

Anyone can place a protective open stop-loss order for stocks. Most are about 8% to 15% below the highest closing price. I recommend that each Saturday morning you look in the paper for the Friday closing price of your stock and place your open stop each Monday morning with the broker. As your stock moves up keep raising the stop and you will sell near the high. Never lower it. This will lock in your profit or take you out of a losing position. I can assure you your broker will never call you to sell. Brokers are not taught to protect your capital.

This is the only way to buy low, sell high, protect your capital and lock in your profits.

Al Thomas’ book, “If It Doesn’t Go Up, Don’t Buy It!” has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he’s the man that Wall Street does not want you to know.

Copyright 2005

al@mutualfundstrategy.com; 1-888-345-7870

How To Avoid Bankruptcy 4 Effective Tips & 7 Tips If You Have No Alternative

Writen by Dean Shainin

Bankruptcy would not be just an emotional and mental burden. The consequence of not paying debts will continue to exist long after filing. Congress has worked on legislations making it tougher or impossible for some people to file for bankruptcy.

For those people having a large amount of debt but an insufficient income on hand, bankruptcy would become their last resort.

Here Are 4 Helpful Tips On How To Avoid Bankruptcy

1. The first thing to do is to categorize your debt into two, secured and unsecured debts. Contact those company or creditors in particular who hold your unsecured debts. Unsecured debts are those for which there is no collateral, example are credit cards, some car loans, personal loans, and judgments. On the other hand, secured debts are those protected by collaterals, this includes second mortgages and loans secured with a car or other property.

2. Contact those company or creditors in particular who hold your unsecured debts. Work out things with them, they will sure to also work out things with you, because they would rather not have you on bankruptcy.

3. You can also turn to your assets. You can perhaps borrow from a pension fund to pay off your debts. Many plans can let you get your hands on loans that have low interest rates.

4. Be serious about getting money on hand. This would imply selling valuables like an extra car, television sets, a refrigerator, or a home entertainment center. Anything that is too much for you, an excess to your daily living.

7 Helpful Tips If You Have To File For Bankruptcy

1. Bankruptcy allows for a fresh start. Under the Bankruptcy Abuse Prevention and Consumer Protection Act (”BAPCPA”), which significantly amended the U.S. Bankruptcy Code effective October 17, 2005, prior to filing a bankruptcy case, an individual must obtain some consumer credit counseling from an entity approved by the U.S. Trustee within 180 days of the date of the filing of a bankruptcy case. Such counseling is intended to provide an individual with alternatives in filing a bankruptcy case.

2. Research your options as it relates to filing. Some people choose to file without the aid of a lawyer.

3. Meet with the lawyer you’ve selected and go over your case. A lawyer will also assist you with completing the BAPCPA’s means test.

4. The fees for filing are varied. Some lawyers will require that you pay up front before they file.

5. Wait for a meeting of creditors. Prior to the meeting, you should have reviewed your file with your lawyer.

6. In filing a bankruptcy case, do not use your credit cards. If you do so with the intent to file, a creditor can challenge the discharge of the debt owed or even your right to discharge any debt. If you obtained the debt knowing that you could not repay it, you may not be able to discharge that debt if the creditor challenges it through a lawsuit, or adversary proceeding, in your bankruptcy case.

7. If the trustee determines that all your assets are exempt, a report of no distribution will be filed with the bankruptcy court. In a chapter 7 case, you may never have to pay a creditor back. If no such lawsuits are filed, shortly after that 60th day you will receive notification of a discharge of debt if you filed chapter 7.

A discharges means that you have no further obligation to repay the discharged debt, the existence of that discharged debt may still appear in your credit reports though, and that your creditors can never collect the debt from you.

Dean Shainin offers online Bankruptcy and debt advice. For more information, articles, news, tools and valuable resources on bankruptcy and debt solutions, visit this site: Bankruptcy Attourneys

Short Introduction to Elliot Waves as a Resource in Forex Trading

Writen by Adrian Pablo

The Forex market has the largest volume of trades per day among all the capital markets you can trade. This characteristic together with it’s high leverage and around the clock trading schedule makes Forex very attractive for traders around the world.

Once you enter the world of forex trading you will realize that this market has strong trends that seem to follow a repetitive pattern in all the different time frames you can use to analyze the market conditions.

Ralph Nelson Elliot also observed this and after analyzing a great number of charts he discovered in the late 1920’s that the markets move in a repetitive manner that is far away from being a totally chaotic behavior. The markets move in cycles and they reflect the mass psychology of the active elements participating in them, with a characteristic ebb and flow that can be divided and analyzed as “waves” of this active elements psychology in their daily dealing with the markets.

But Elliot not only discovered the repetitive nature of the markets cycles but he also realized that this patterns had a fractal nature. This means that the patterns not only repeated with time but that in a given period of time the characteristic wave pattern would repeat at different scales (days, hours, minutes).

The Elliot wave pattern can be divided in five constitutive waves with the first of the waves called the impulsive wave. The fractal nature if this waves was evident to Elliot when he observed that in every impulsive wave, when observed at a smaller time scale he would find the characteristic five waves of the pattern he had found and if he now looked at the impulsive wave of the smaller impulsive waves in an even smaller scale he would find again five ways, etc.

Elliot waves are very important in Forex because he identified the specific patterns that you can observe when trading this market and considering the repetitive nature of this patterns you can make a pretty accurate forecast of what the markets will do next. Giving you a huge advantage in your daily encounters with the currency markets.

Adrian Pablo is a freelance writer with articles published in a number of places. Get a free report on Fibonacci Trading and learn more about the world of trading, visit=> http://www.1-forex.com

Doesn’t Everyone Need To Know More About Bankruptcy?

Writen by Chadder McD.

Certainly this article is about bankruptcy but I want to tell you up front that you may come across the word ‘budgie’. Don’t worry, the article is not about birds; I do like budgies though. I use the word ‘budgie’ or ‘budgies’ sometimes in place of budgets because a budget is known to get budged and also as it makes me laugh!

Okay, so bankruptcy is a procedure which allows a debtor (someone that owes money to someone else) to get a court ordered exemption from his debts. In some cases bankruptcy can act as a valuable method to get rid of debts. But everybody who faces any financial difficulty should not file for bankruptcy.

Is bankruptcy an option in my case?

Tough question really. You’ll need to discuss this one with a bankruptcy attorney or a credit counselor as they can determine the benefits and costs for your situation. The kind and amount of debt you have can make a big difference and really you make the final decision in the matter anyway. Know the consequences fully before you make your final decision. Many bankruptcy filings could have been prevented with a strict budgie.

What are the substitutes to bankruptcy?

There are numerous choices available rather than filing bankruptcy. What is suitable to you depends largely upon your financial situation. Again, go for financial counseling prior to filing a bankruptcy case to make sure you know the full ramification of what your about to do.

Here are some possible alternatives to bankruptcy:

Financial Management

It means allotting a nice deal of control, you can employ a financial manager for paying your bills, and to place you under an “allowance” until your financial conditions are back in proper order. This can be especially helpful if your financial problems are a result of bad spending habits. In North America we are told we can have anything we want without paying for it (credit) and that if it’s bright and shiny, you probly deserve it so don’t restrain, go ahead and rack up that credit card. Ooopsss….. bit of a rant there but I think you get the idea. For a less encroaching form of management by simply having a financial counselor help you create a budget. Just remember that budgets only work if your super disciplined and don’t have problems with buying bright shiny objects (:–).

Give Your Debts A Workout

Financial counselors can be really expensive so choose one wisely if youre going this route. Look for a non-profit counselor in your area. Creditors know it can be hard to collect money whether you declare bankruptcy or not. Know that collection agencies take large commissions for collecting and litigation can also be expensive, time consuming and forcing debtors to file for the big ‘B’ doesn’t guarantee recovery of debt anyway.

Refinancing

If you have a home, try to refinance your home to pay debts. By refinancing you can get long term financing at a very low interest rate, which allows you to pay your debts faster. Avoid dealing with companies that are offering you to combine all debts into single low payment loan, usually they have high interest rates and only want you to pay the interest and not the principle. Consider obtaining a loan package only through a known bank or credit unions.

Credit Repair Offers Are Often Scams

Before or after bankruptcy, some companies attract debtors and offer them packages such as repair bad credit or even promise them to remove a bankruptcy from your credit history. Allot of these offers are fraudulent. There are way’s to boost your credit rating but I’ll save that for another article.

So to conclude: don’t tempt yourself with bright shiny objects and do whatever you have to so you don’t spend more each month than what you earn. A well cared for budgie will go along way. I trust this to be of some assistance or at least gave you a laugh anyway. Anyhow, don’t sweat it; there are more important things in life than money or the lack of it. Have a great day!

When Filing for Bankruptcy isn’t the Answer

Writen by John Campbell

If you feel like you’re hopelessly buried in debt and you have very few assets, filing for bankruptcy may not be the answer to ending your financial problems. In fact, it may make them worse.

If you’re unemployed, on public assistance, have little or no money in a bank account, don’t own an automobile, or rent or live with others, filing for bankruptcy may do little to improve your financial situation. If you’re already behind on payments to your creditors under these circumstances, you may not even need the protection bankruptcy may provide.

Creditors can’t strip you of your living necessities and can’t collect any money from you to pay off your debt if you don’t have it. They could try to sue you but will be wasting their time if you can’t possibly pay them. Additionally, any public assistance you may be receiving is untouchable by creditors.

If you don’t own a home or car that could be seized to pay off your debts, creditors have even fewer options available to them to collect on your debt. They can’t send someone to remove your personal belongings and can’t even get you sent to jail for failing to pay off your debt. You only risk a jail sentence if you neglect to pay taxes or child support.

As crazy as it may sound, if you find yourself barely scraping by and you have no assets that could be seized, don’t do anything about your debt. If you can’t afford to pay your debts any longer you should at least focus on paying your living expenses. Bankruptcy may cost you hundreds of dollars that you simply can’t afford in your present financial situation.

Bankruptcy may also be more damaging to your credit report than missing payments to your creditors. A bankruptcy will put a black mark on your credit report for 7 years under Chapter 13 bankruptcy or 10 years under Chapter 7 bankruptcy. Any unpaid debts not wiped away by bankruptcy will be automatically considered uncollectible after several years and should be taken off your credit report in 7 years.

In the years you may wait for your debts to be considered uncollectible, you may find yourself dealing with a lot of angry debt collectors. Although filing for bankruptcy can help get these people off your back, filing for bankruptcy isn’t the only way to stop their harassment. The Fair Debt Collection Practices Act (FDCPA) and several state laws are already set in place to protect you from abusive and harassing debt collectors. Contact the attorney general in your state if you think debt collectors are illegally harassing you.

Before you have to deal with debt collectors, try negotiating with your creditors directly. If you can convince your creditors that you may not be able to continue making payments you may be able to negotiate for lowered monthly payments, lowered interest or even paying less than you owe to wipe out your debt. Most reasonable creditors would prefer to collect a partial debt owed instead of nothing. If you can afford to make the agreed upon payments you could save your credit rating as well as your finances.

Bankruptcy is just one of several options available to you if your finances are on the verge of collapse. You will have to determine if bankruptcy is right for your own particular situation and, if not, what you need to do to get your finances back on track. The decisions you make will impact your financial future for many years to come.

FOREX: There Is No Free Lunch - Know The Risks

Writen by Steve Welker

Though many people will try to convince you otherwise FOREX is not risk free. The majority of the people trying to convince you that it is risk free have some FOREX product that they want you to buy. When you trade you are dealing with substantial amounts of money and there is always the possibility that a trade will go against you. You can minimize your risk, there are many trading tools available that will help you trade successfully and profitably while minimizing your losses.

A few years ago the FOREX market abounded with scams, currently the industry has cleaned up significantly but there is still a risk of being scammed. You will need to use some common sense and exercise some caution when you sign up with a broker. Take your time and be sure to investigate a broker before you sign up with them. A reputable broker will be associated with some sort of large financial institution such as an insurance company or a bank. They will also be registered with the proper government agencies. Here in the US they will be with the Commodities Futures Trading Commission or they may be a member of the National Futures Association.

Even once you find a reputable dealer to work with there are still some risks involved in the FOREX exchange. All trades are susceptible to sudden rate changes, radical political events and market changes.

Exchange Rate Risks: This is the fluctuation of currency prices during the time of the trade. Prices can fall suddenly which can lead to unexpected losses, stop loss orders can be used to help mitigate this risk. Stop loss orders are used to close a trade if the currency passes below a set price level. By using stop loss orders in conjunction with limit orders you can greatly automate the process of FOREX trading. Limit orders are used to open a trade when it falls to a certain price or close it when it rises to a specified price or profit level.

Interest Rate Risk: This can result from differences in the interest rates in the two countries involved in the currency trade. This can cause differences in the expected profit or loss level of a trade.

Credit Risk: This is possibility that one of the parties will not honor their debt when the trade is closed. This is usually only an issue when a financial institution declares bankruptcy. You can greatly reduce this risk by only dealing with regulated exchanges that monitor the credit worthiness of the members.

Country Risk: This refers to when the government in a country becomes involved in the currency exchange by limiting the availability of the currency in the market. This is a greater risk when involved with the more exotic currency than if you stick to the major currencies that allow their currency to be freely traded.

This outlines some of the most common risks in currency trading. All of these risks can be reduced to manageable levels even though they cannot be completely eliminated.