The Forex market, or FX market as some call it is, in my opinion, the best market in the world! It is one of the few avenues by which just about anyone with a couple thousand dollars in trading capital, can achieve financial independence. This market is becoming increasingly popular, and it’s potential for the future is vast.

Throughout the world, currencies are continuously bought and sold, both by large institutions and individual traders. Since it’s establishment in the 1970s, the Forex market has gained a tremendous amount of ground with many countries participating in it, and thus fueling it. Once a proper understanding of how the market works is gained by an individual, and good solid tactical trading plans are established, the degree of financial gain that can be obtained, is nothing short of astronomical. Read the rest of this entry »

10 Things Stock and Commodity traders need to know about trading Currencies:

1. Did you know that the Canadian dollar is highly influenced by oil? As oil goes up, it provides support for the CAD. Also, rising oil hurts Japan since they have to import over 95% of their oil no matter what the price is at the time. This is why CAD/JPY can be a great “oil trade”.

2. Did you know that the Australian dollar is highly influenced by gold? As gold rises, in provides support for the AUD.

3. Did you know that the Japanese yen is a gauge of risk? When the Dow goes down, it generally goes up. When the Dow goes up, JPY generally goes down. Read the rest of this entry »

When approached properly, investing is the financial commitment to undertake an educated guess. How do you minimize the risks of making the wrong guess?

The Golden Rule in reducing investment risk is: Do not invest more than you can afford to lose. Obviously, no reasonable person will want to lose anything; you should consider the implications of losing 100% of the capital you are about to invest. If you put more capital at risk than you can afford to lose, you are no longer investing; you are gambling, and presumably not merely with financial obligations, but other types of obligations (e.g., family, health, education, etc.). Read the rest of this entry »

HOW DO YOU BECOME A SUCCESSFUL AND PROFITABLE TRADER?

POSITIVE FRAME OF MIND

Well you start by getting yourself into the right frame of mind. You are who you are. You are human and your moods, health and inspiration will fluctuate. You need to feel good about yourself to do battle against your opponent.

Your opponent is the Stock Market or Mr. Market as Ben Graham has called him. He is the aggregate of all computations of company values and of all the greed and fear surrounding the future valuation of these companies. Like yourself, Mr. Market has good days and bad days and although he is very smart, he is not always right. It is always worth remembering that good advice is hard to find at the tops and bottoms of stockmarket cycles. Read the rest of this entry »

The most important thing to know about oil investing is this: No one knows where oil is heading.

Only four months ago (May ’08), oil cleared $120 a barrel on its way to $145. Within a month, analysts were calling for $150, even $200 oil. Countless graphs and charts surfaced showing how demand was outpacing supplies. Pundit after pundit commented that emerging markets like China and India were fueling an unstoppable mega-boom for black gold.

Then Russia invaded Georgia, and oil took a nose dive falling more than 20 consecutive days from $145 down to $115 a barrel. Hurricane Gustav gave it a brief shot in the arm, but the damage was less than expected and oil rolled over the next day. Read the rest of this entry »

If we were to define what a stock actually is, its fair to say that it is a share in the ownership of a company. The more shares you own, the greater the stake is in the company. The terms equity, stock or shares all mean the same thing. You have a claim on the company’s assets and earnings.

Before you start making big plans for this company you own shares with, it’s important to remember that you are one of many other owners. Some will have lots of shares, others only a few. Just like your peers, you have a say. However, the peers with more shares happen to have a bigger say. Those are the perks of ownership of voting rights to the stock.

Not so long ago (before the internet), shareholders were rewarded with a stock certificate. This acted as proof of ownership. When you wanted to sell your shares, you literally took the physical shares to your brokerage who would arrange the sale for you. Fortunately today, we dont have to worry about that kind of delay. The brokerage firm holds these documents electronically (called holding shares). Now when you want to sell, you just pick up the phone or click a mouse and your brokerage firm is no longer “holding shares”. Read the rest of this entry »