Discover All Of The Insider Techniques That The Pros Are Using With Great Success
5 Profitable Reasons to Take Advantage of Online Forex Trading by Chris Robertson

Forex trading has become extremely popular in recent years. Many newcomers to the stock market enjoy Forex trading because it's a simple way to earn profits without monitoring hundreds of company stocks. Forex trading (a.k.a. currency trading) is easy to learn, less risky for short-term profits, and can be very lucrative for those who invest wisely. Fortunately, there's online Forex trading to make things even easier. Outlined below are five profitable reasons to take advantage of currency trading online.

1. A Liquid Market

Online Forex trading offers you a liquid market in which you are in control at all times. Though no profits are guaranteed, you can buy or sell at will with the simple click of the mouse. This prevents getting stuck with a particular trade. You can set the online Forex trading platform to close at a pre-determined profit level automatically, or even to close a trade if the odds are going against you.

2. Forex Margin Leverage

You can leverage your money with Forex trading through a margin account deposit. Your deposit might be small when compared to many stock investments, but you can still enjoy amazing profits through leverage. Unlike the stock market, some Forex brokers will offer as much as a 200:1 leverage. This means you can invest $1,000 of your own money to create a margin of $200,000! Margin calls are used by brokers to keep risks to a minimum for you and the broker.

3. Profits for Rising or Falling Currencies

With currency trading online, you can earn profits in both a rising and falling currency market. When currency pairs are up or down, you can still make big profits depending on the position you take. The "long" position means you are buying the pair at one price and selling it at a higher price later. The "short" position means you are selling the currency pair and buying it back at a lower price. The key to success in Forex trading online is to make the right picks either way.

4. Around-the-Clock Trading

One thing you'll love about the Forex market is it never sleeps during its open times. You can trade in Forex 24/7, from Sunday evening to Friday afternoon. This enables you to trade at night (2nd or 3rd shift) and still work a full-time job during the day. You can also trade on a part-time basis, and you're always in control of when you trade!

5. Plenty of Forex Training for Beginners

Another great thing about online Forex trading is you can learn from experienced Forex traders and brokers through online demos, newsletters, e-books, and numerous online resources. These trading tools are available free or at very low cost and can help you learn all you need to know to get started. As a beginner, you can take advantage of free currency trading demo accounts to practice trading before actually making a trade. These are absolutely risk-free because you're not trading with real money yet.

Online Forex trading offers these benefits and many others. With so many useful Forex resources online, you can start trading with a very small investment and quickly work your way up to tremendous profits!

About the Author

Chris Robertson is an author of Majon International, one of the worlds MOST popular internet marketing companies. For tips/information, click here: forex trading
Visit Majon's Financing\Investing directory.

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Understanding What Good Forex Software Can Do For You by Jon Arnold

Forex, which is short for Foreign Exchange, is a market in which one type of currency is exchanged with another currency for profit. The foreign exchange markets are open only five days a week but during those days you can make trades 24 hours a day. Forex software is your inside guide to the foreign exchange market allowing you to benefit from currency transactions all around the world. Information is refreshed frequently giving you the most up to date rate exchanges and allowing you to make the best financial decisions regarding foreign currency exchange.

Although you’ll have Forex software guiding you, approved transactions still have to go through your broker. They have the same software you’ll have and plus they have the knowledge of the market so you’ll be able to make a sound financial decision based on their expertise and your willingness to invest in foreign currency markets. There are different trading platforms and Forex software gives you the decision making tools and the charting applications, many times you’re given live support and news from around the world that affects trading and your decision to invest.

With every investment comes risk, and you should never chance more that you can afford to lose. Forex software has a simulator which allows you to gain and improve your trading skills; the software is very user friendly and also provides you with trading analysis and it starts with beginners and expands all the way to advanced or expert traders. It doesn’t matter what level you’re at or want to climb to, Forex software has a program that will meet and exceed your needs.

You also need to understand that even expert and successful Forex traders will sometimes make a losing trade. This comes with the territory, and you cannot allow yourself to become emotionally attached to any particular trade, but the key to success is to trade smart and with knowledge of what is going on in the markets, which will allow you to make more profitable trades than losing ones.

Depending on what kind of trader or investor you’ll want to be its best to examine all the types of applications available. Trading platforms are available on desktops or mobile devices. Some Forex software allows you to make trading decisions based on your own system, the software is there to help you develop your own way of trading. Real time news and when the markets are open is information you can’t just take a guess at, you need Forex software to guide you and give you the best information available.

The foreign exchange market is an investment that many people don’t realize exists; you may have heard conflicting information about it and never explored the possibilities that might give you an edge on retirement or potential investments. Forex software gives you the advantage of knowing the markets and benefiting from daily trading.

The foreign exchange market can change in an instant due to events happening half way across the globe, so wouldn’t it be nice to have software that alerted you to a change in foreign currency. Even watching the news or receiving updates won’t get you as connected as you’d be with Forex software. Depending on the software package you’ll buy according to your needs, you can expect to pay as little as $100.00 and higher for software programs that give you more information to help in your exchange decision.

One of the best features about Forex software is the fact that you can look at past markets from years ago, this is always helpful in determining the future market. Since foreign currency exchange has become another important investment tool to help you build your financial future it makes sense to invest in Forex software and see where it can take you.

About the Author

For more insights and additional information about Forex Software as well as reviews of some of the leading Forex software, please visit our web site at

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Besides the expert options described above, there are other nontraditional ways to make money on the stock market. In considering these options, however, you should consider making a career of trading stocks and securities. Some types of trading are simply not for the faint of heart, and that means you must have complete motivation and an adventurous spirit to take part in these areas of the market. The chances of taking a giant hit and experiencing a great loss are multiplied.

Day Trading

Day traders take on some of the greatest market risk of all. Because day traders work with investments that change drastically within hours, they are by nature playing in the lion’s den. These stocks are extremely volatile, and for most, day trading is a quick way to lose a great deal of money. It is difficult to make a great deal of cash in this manner, and it is even more difficult to forecast the outcome of these day trade stock options. You cannot be certain of the overnight position (the net value at which a stockbroker or day trader will open the following morning).

And in Forex, there is little room for day trading, as the market never shuts down during the workweek. In these cases, the day trader has to set a time limit for him- or herself to get out, selling all shares, so that he or she can sleep soundly while the world spins round and start the next day fresh.

Day trading is very dangerous and is not recommended to newcomers. In fact, it is not really recommended at all, and most people who partake of this volatile part of the industry are extremely seasoned in trading on the open market, do not consider the risk factors carefully enough prior to entering this branch of the market, or have enough money that they simply wish to try this form of investment and do not care if they lose a goodly sum.

Secondary Markets

Secondary markets are interesting in that they are created by the government to help redistribute money that is used for loans. Fannie Mae and Freddie Mac are two of the major corporations from which stocks are purchased on a secondary market.

Here is how it works. When a person purchases a home, he or she requests a loan from the bank, usually for about eighty percent of the cost of the house. This is granted, and the house is purchased by the bank for the individual or family, who begins to pay off the loan to the bank.

Meanwhile, to assure that money is available at that bank for the next person who needs a mortgage loan, Fannie Mae or Freddie Mac, two entities originally established by the United States government, will purchase the loan from the bank. Therefore, the money is returned to the bank for use in the future.

What do these agencies then do with the deficit they have acquired? They sell it. On the secondary market, they break up the loan into shares that are backed by the mortgage itself and sell those shares, recovering the money from investors. Eventually, those securities mature, probably about the same time that the original loan is paid off to the bank, and the investors reap the benefits of their investment with the interest earned.

Another way to take advantage of a volatile international stock market is to make a swap. This is the exchange of securities or bonds in order to take advantage of lower interest rates. For example, if a business entity in Britain is in possession of one security, and another in Japan is in possession of a different security, the two commodities may be beneficially traded or sold to each other in order to save on the interest rates, if the currently held bond or security is kept at a lower interest rate in the opposing market.
For example, let’s say one business is in possession of a bond “A” that is paying out only two percent interest in its current market, and another is holding bonds “B” in its market at three percent interest. If bond A is actually paying out three percent on the foreign market, and bond B can be cashed in for four percent on the first market, both parties can make more money on a trade of bonds. They can mutually benefit from a sale of the securities to each other due to a gain of more interest.

If that seems confusing, then perhaps a swap is not in your near future. This is more often processed between businesses on the foreign market rather than individual parties, though with the correct broker, it could be accomplished. However, should you work the deal, you need know little except that you are looking at a higher profit margin than previously, and your broker will take care of the rest.

If you determine that you should have stock options as a business, you will probably decide to hire a fulltime consultant for all your financial needs, including the handling of your share holdings. In fact, when businesses are large enough and present a strong enough trading presence within the market, especially on Forex, you will find that there are entire departments dedicated to maintenance on the stock options.

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Forex Price Movement - How and Why Prices Really Move and How You Can Win by Sonia Kristina

You will read a lot of nonsense online from people claiming the markets have a mathematical order and can be predicted when its obvious they cant! Why? Well if you could, everyone would know the price in advance and there would be no market. You can't predict prices; you can win though, if you understand the following.

The market is an odds game. This means that it is very similar to a game of poker or blackjack. These players know they won't win every hand but if they can keep betting when the odds are in their favour and passing by hands or folding, when the odds are against them they can win.

You will read all the time about traders saying they have some mathematical formula and can see how prices move in advance however mathematical formulas cannot be applied with CERTAINTY to an odds based market.

Sure you can get the odds on your side and win if you get the odds on your side.

Trading the odds works, because although humans can be unpredictable, they can also at times be very predictable and this is because human nature never changes - greed and fear always push prices and push them to far on occasions and these set ups can be traded for profit.

If you can learn to spot high odds formations on the charts you can win.

Trading forex is not about perfect market timing (that's impossible) it's about making money and if you got 50% of every major trend you would be very rich.

To many traders think they can beat the market but you can't.

You are trading in an area where only you can be wrong and the market is always right. If you let your emotions and ego get involved and take losses personally, you are going to lose.

Forex markets require a set of rules you understand and have confidence in to lead you to currency trading success and you must apply your forex trading strategy with total discipline, keeping losses small and running your profits. If you can do this you can win.

Forex trading is not about having a good forex trading system - it's about having a trading system and the discipline to apply it. Keep in mind if you don't have the discipline to apply your system - you don't have one!

If you want to win at forex, you need to understand and trade the odds and take your losses cheerfully and run your profits.

In forex trading it's not the market that beats the trader it's the trader that beats himself.

It's a proven fact that anyone can learn to trade forex markets and win -but most don't because they cannot get the right mindset. If you understand this article, then you know what to do to enjoy currency trading success - Good Luck!

About the Author


For free 2 x trading Pdf's, with 50 of pages of essential info on Successful Currency Trading Methods visit our website at:

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Another way to take advantage of the ever-shifting value of each individual currency is to trade based on the changing rates. What exactly does this involve? You must closely watch the changing conversion rates. When a currency conversion rate changes drastically, it is time to make a move. This is very similar to arbitrage, but the area is much riskier due to high volatility. For instance, if you have purchased a stock in the scenario above on the U.S. market for two dollars a share, and suddenly the British pound gains value, dropping to a conversion of only half a pound for every two dollars, you would want to sell your shares on the British market because the value of a pound is higher and now has greater purchasing power.

One piece of advice to keep in mind, though, is that it is best to immediately dispose of all liquid assets in foreign currency, usually in the same day. This is referred to as tomorrow next because it takes two to three business days for foreign currency to be delivered, and by exchanging the currency for value in stocks on the same business day, you avoid having to take delivery of the currency altogether.

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Forex - An International Online Currency Exchange Amazing World Full of Secrets by Mikel Freije

Forex is an international online currency exchange that was established in 1971. It is now the premier foreign currency exchange market in the world, with an average daily trading volume reaching as high as one and a half trillion. Forex is a true, established 24-hour market, which offers a major advantage over stock and futures trading. Forex Currency Trading begins each day in Sydney, then moves around the globe to Tokyo, London, and finally New York. Forex is a great way to make quick money online. You just have to know the basic skills for trading and you will be on your way to making money at home.

Forex is currently one of the most popular trading industries on the market, which sometimes forex is known as FX, or currency exchange. Forex involves the process of selling pairs of currencies, or else buying pairs of currencies in units. FOREX is a market where the value of individual currencies from all over the world are traded. Forex is an international market that buys and sells currencies of the world; the mechanisms of the marketplace are very similar to that of other markets such as the stock market. The purpose is to buy low and sell high to maximize profits.

Forex is no different than anything else, the few people "in the know" make money and the rest are hung out to dry. Some public investors jump into Forex as they see the opportunity like the bright lights of the Vegas strip. Forex is online currency trading or online foreign exchange. FOREX is huge business. In our opinion, It’s the mamma of all industries.

FOREX is a highly profitable business which doesn’t depend on time, place or political situation in your country. The main FOREX advantage is that you perform operations using computer from any part of the world 24 hours per day 5 days per week. Forex is also dictated at times by speculation of dealers, brokers, or others. What they predict becomes a major influence on forex. Forex is the largest and most liquid market in the world where around three trillion dollars exchange take place every day. That?s an enormous money flow.

Forex is here to walk you through the steps to set up an account and start making money right now on the foreign exchange market. Forex is foreign exchange market where large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions buy or sell one currency for another. Buyers seek to buy at the lowest vailable price and sellers seek to sell at the highest available price. Forex is the worldwide market for buying and selling currencies. These markets were developed to cater for the supply and demand of different currencies by governments, companies and individuals - for international trade and assisting importers and exporters.

Forex is known for its ability to adapt to the strong demand of real-time information as markets move instantaneously. The robustness of its platform is also key to its ability to answer heavy data and information traffic. Forex is made up of 5000 trading institutions like international banks, commercial companies, government banks and brokers for all types of foreign currency exchange. Forex is not affected by any one bear market. Forex traders buy and sell foreign currency pairs from around the world, simultaneously buying one and selling the other.

About the Author

For more information on Forex Currency Trading visit our site: All You Need to Know About Forex Trading.

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Monday, 22 September 2008
Forex Trading Advice - Advice to Avoid at All Costs and Where to Find the Best by Samuel Leslie Berkovits

If you are starting out on your forex education and seeking forex advice there are some great sources but most advice wont help you win. Here are the best sources of forex advice and many are free...

Let's first go to where you won't get good forex trading advice.


What successful traders have time to hang around forums?

I don't know any and there mostly populated by losers, who get their kicks from dispensing their wisdom because they can't win at trading and it makes them feel big. The other group that hang around forums are vendors, hoping to sell their junk products, as the solution to your trading profits. Steer clear of forums at all costs.

Put Your Email in and Learn Secrets

Vendors do this all the time, to get names to email blast their products to.

Normally the advice you get is obvious have a plan, cut your losses, run your profits etc. Hey, never knew that! Don't bother with these unless you want a full inbox.

Forex Robots and Automatic Advice

You don't have to do anything or know anything, just plug them in and you have an income for life for $100 wow!

Does anyone believe the vendors who sell these products? Obviously they do - but who in there right mind wants to use a product that has never made money and has a simulated track record? Not me, call me a cynic - but the right word is realist. If you want to make money in forex you need to work for it.


If brokers could trade they wouldn't be brokers, they would be traders.

There guides and newsletters are normally terrible and reflect the herd and will see you lose. Furthermore, most brokers are market makers i.e. they win, when you lose so a bit of a conflict of interest.

Forex News

It's great and interesting but the so called experts telling you where prices will go next are not traders and invariably the news reflects the herd who lose its stories and opinions nothing more. Never TRADE Off a news story.

So where can you get good forex advice?

You can get a ton of advice for free and if you want to use forex technical analysis to trade, you can learn about all the indicators and theories for free and build your trading system from them. We have explained this in other articles so look them up.

You can also get some good forex courses with money back guarantees - just make sure, you pick one that teaches you something unique, to give you a trading edge.

Now if you want to spend some money for $100 or so you can get some of the best advice of all, from some of the worlds most profitable traders, by popping along to your local online bookstore.

We recently did a top 10 trading books and they can ALL be got for just over $100 which is a sound investment.

Most forex trading advice you see online is not going to help you win but there is some great advice you can get for free and from your local bookstore and for a couple of hundred dollars or less, you can get some great forex education.

About the Author


For free 2 x trading Pdf's, with 50 of pages of essential Forex Trading Education visit our website at:

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Sunday, 21 September 2008
Automated Forex Trading System: Increases Your Trade Volumes by Howard H

The exchange-traded futures market was the first to switch on automation. Then, the traders on the Interbank spotted the FX or forex market and decided to catch up with the latest trend and moved to the new system

The Automated Forex trading system allows traders to execute their trade on the spot, 24 hours a day 7 days a week. This new automated system is based on existing technical indicators and custom trading rules. With the automated trading system now in place, a trader can trade in various local markets as well as international markets within varying time zones. In other words, you can place trades or close deals with different traders from various markets around the world even in the middle of the night.

There are various features included in the automated trading system such as: automated trailing stops especially if the trader is losing in a particular trade position, account equity management, stops and / or limits orders, discretionary market orders and various technical analysis indicators within your discretion for enabling trend -following systems.

Automated Forex trading systems supports most of the following indicators: WMA (weighted moving average), EMA (exponential moving average), SMA (simple moving average), VMA (variable moving average), TMA (triangular moving average), TSMA (time series moving average), WATR (wilder's average true range), VHF (vertical horizontal filter), Standard deviation, Trailing stops, Mass index, and fixed limits and stops are a few to mention.

The success of the automation process to the Forex market is attributed to several factors. The trader has the ability to perform or execute trades in real time. With automation, a trader can close trades within a few milliseconds. With a manual system, trades normally closed after several hours. Prior to the automation, there were instances where a trader could incur several losses in a row. This prevented, the trader from making any fresh transactions. Now, with the Forex automated trading system this problem can be avoided.

Automation also allows for greater diversification. The automated system also has the ability to analyze short-term data. This feature is not available with a manual trading system. The biggest advantage for traders using automated system is they can predict market trends in less than an hour.

About the Author This website has forex articles,forex articles,forex audios and forex signals

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Saturday, 20 September 2008
After spending a lot of time buying and trading on both domestic and foreign markets, you will find that the process becomes easier and almost intuitive. You no longer have to work so hard to determine currency conversion or find the next big explosive commodity. It will be like second nature for you.

What, then, becomes the next big challenge for someone trading on the open market? What keeps things from becoming monotonous and boring? First of all, there is always something new and different happening on the Foreign Exchange Market. Remember, it operates 24 hours a day, and you never know what you will find when you wake up in the morning. However, there are various ways that you can take advantage of the variance in currency conversion and a lag in time between markets that can affect trading values.


There are some commodities that are traded in multiple currencies on multiple markets on Forex. Although computers have made worldwide communication almost lightning fast these days, all of these markets can trade together with fairly equivalent values for the securities shared across currencies.

However, the system is not perfect, and the value may rise or fall in one country and currency prior to the same change in value reaching across another border. Seasoned traders have learned to take advantage of this lag in the market trending by using a process called arbitrage. In this transaction, you purchase the particular stock or security on the market with the lower price while simultaneously selling the same in a market where the value is higher. The process is a bit complex, so we will use an example. Let’s say that one U.S. dollar is equivalent to .5 British pounds, meaning that everything is going to be twice as expensive in British pounds.

Now, let’s take a look at the price of a stock that is traded on both markets. If they were equivalent, then the stock would trade for two dollars in the United States and one pound in Britain. However, if something happens and the stock value drops in Britain, it is six hours ahead of the United States, and this drop may not hit the American market immediately.

If the value of the stock drops in Britain to .8 pounds, the purchase price is now below that of the price in dollars due to the currency conversion. In this case, arbitrage would take place when you bought shares of the stock in on the British market in pounds and sold it on the U.S. market in dollars, benefiting by the slow communication of the fall in value of the stock. In effect, you will make $.40 per stock.

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Sunday, 7 September 2008
In the stock market, there are various types of orders that can be placed to help protect you from making a bad investment or to limit the amount you pay for a certain security or other commodity. For instance, if you have made a bad investment and do not want to reinvest in a particular security, you should sell all shares of that stock, regardless of taking on a small loss. This action is referred to as closing a position. On the contrary, if you are doing well with your investment, you might participate in a rollover, simply reinvesting any earnings in additional shares of the stock or security.

An open order is exactly what it sounds like, meaning that the order remains pending until it is either executed by your stockbroker or canceled by you as the client. A stop order would cancel any pending orders you have placed with your stockbroker. You also have options like One Cancels the Other Orders. These allow you to have interest in several commodities, leaving orders with your stockbroker to buy all of them, should they drop to a certain price. Then, should one of those reach this preset low price, your stockbroker will follow your direction and invest your money in that particular security, followed by a cancellation of all additional orders.

When a broker gives you an estimate on the price for a particular stock or commodity, it is considered a quote. A quote is never completely accurate and is usually referred to as a spot price, as the value of a security can change within a few seconds. However, it is as close to accurate as can be expected. When you put in an order, the broker then processes the fill, or completion, of that order. The actual value at which the trade is completed is called the fill price. The completion of a trade or purchase, referred to as a settlement, can also be called the execution of a transaction or realization of an order. As you see, there are a lot of terms to take into consideration, and we have not even begun to consider terms used in some of the tougher areas of the market.

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Thursday, 4 September 2008
One of the major foreign markets that Americans trading on Forex will encounter is that of the British. While several other terms relating to the stock market will be similar because of the common language, there are some specific terms that are very different in the British trading vocabulary.

For example, in the United States, stockbrokers who hold onto securities purchased at low prices for the purpose of selling them to clients in a higher priced market (so that the client can turn around and resell them for the profit on the open market) are called market-makers. However, in Britain, this type of investor is simply referred to as a “jobber”.

Another term you will want to be familiar with is “yard”. This does not refer to a green patch of land, a measurement in inches, or even 36 of something. The term is used in reference to quantity of currency rather than value and is equivalent to one million units of the currency in question. In other words, you can have a yard of dollars or a yard of yen, and though it is the same quantity of bills, coins, or whatever physical currency is used, it is not necessarily equivalent in value.

In Britain, they do not use the Euro, and they do not use the U.S. dollar. They have chosen to still use the pound sterling, a currency that has been used in the country for hundreds of years. However, Britain is currently on a path to make the conversion to the Euro within the next five years.

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Wednesday, 3 September 2008
Now that you know a little more about the stock market, and you have decided to try your hand at investment, you should be more concerned with understanding the jargon you will hear on the trading room floor. Although you probably will not find yourself amid a group of screaming stockbrokers on Wall Street (and these days, most of the trading is done by computer anyway), knowing that learning to talk the talk is part of walking the walk.

Margins, Spreads, And Other Condiments

Okay, so it is margins, not margarines, but it sounds very similar. In order to understand the stock market, especially on Forex, you need to speak not a language meant for common communication, but the language of trade. For instance, when you think of a margin, for many this means a variable – like the “margin of error” in a statistic.

However, in trade, it refers to the sum of money borrowed from a broker in order to purchase stocks when the market is on a downtrend. Then, when the value begins its next upswing, you sell the stock at the higher price, pay back the margin (along with the premium accrued), and retain the profit.
When you buy on margin, the money lent by the stockbroker is referred to as a margin account. The margin account is provisional based on the value of the stock. Occasionally, if the value of the stocks purchased should drop too low for the safety margin set forth by the broker, the agent will request that more money be deposited into the margin account to make up for loss. This is referred to as a margin call.

In some trades, the market value does not come into play. For instance, a forward trade is set up between two individuals or two companies outside the open market. It involves a process of negotiation and an eventual compromise in price. There is usually a bid made – the offer to buy a commodity at a certain price – and an asking price or offer – the price for which the other business entity is willing to sell the securities or other holdings. The difference between these two purchase numbers is referred to as the spread.

If the spread cannot be narrowed and eventually closed, no deal can be made. This agreed-upon price is called the forward price, and all details involved in the trade process when this type of transaction takes place are detailed in a contract and referred to as forward points. Usually, the forward price is outlined as available for a particular date, and should the transaction not be completed on this date (referred to as the transaction date), then the trade must be renegotiated.

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Tuesday, 2 September 2008
No, we are not referring to anything in the garage, the bedroom, or a country band. A whipsaw is market trend that defies the odds. It can be thought of as the “fender bender”. Despite how careful you are as you learn to drive a car and become coordinated, sometimes you cannot do anything to avoid being rear-ended.

Whipsaw is a term for what happens when everything points toward a specific direction in market trend, causing you to buy (if it looks as though prices are going to rise) or sell (if it seems they are about to fall), then the opposite effect occurs.

For example, if you purchase a security at five dollars per share because the stock seems to have fallen as far as it can go and appears to be starting an upward trend, then unexpectedly, the stock plummets to one dollar per share, this is considered a whipsaw effect. If this happens to you, as it surely will if you play the market long enough, the best thing to do is wait it out. The stock will do one of two things – it will either dissolve entirely, and the company will go bankrupt (this is what you do not want to happen), or it will rebound, and you can opt to wait for a chance to turn a profit or you can get out as soon as the purchase rate is reached.

Whipsaws are not the end of the world, and no one can expect to gain with every stock market purchase. However, if you find that you are involved in several of these instances, you should seriously reconsider your investment options. You may be reading the signs incorrectly, or you could be picking bad stocks. You should seek advice for any future investments you expect to make prior to purchasing any further stocks or securities.

Another way to overturn a bad investment like this is to proceed with an offset transaction – a purchase or sell that offsets the loss of a previous transaction. You could either purchase additional stock in the same company at the lower price if you expect it to recover, or you can opt for another hot commodity that is about to explode in price, either of which will help you offset your loss. You could also sell shares of a security in which you have a large amount of unrealized gain – gain that cannot be measured in liquid assets or cash due to increase in value of stock and security holdings – in order to replace the lost cash value.

All of these are viable options to recover a loss, but waiting for the share value to rebound is always the first choice. It avoids the loss of funds already invested, retains the option to pursue profit, and reduces the risk of further investment into the market.

As you grow and learn about these various options, you will need to feel more comfortable when surrounded by financial gurus and geeks who speak what sounds like gibberish, muttering words you have never heard left and right. The following chapter will take you through some of the meanings of the major “buzz” words used in the stock market and the international financial district.

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One of the most important aspects of protecting your investments is balancing your risks with reassurances. There are several ways to do this, and we will discuss those in this chapter.

Limit Orders And Balancing Risks

A limit order is a standing amount at which you have agreed to buy or sell a particular security or other commodity. For instance, you have designated to your stockbroker that you will not sell X Security until its value reaches a minimum value of Y dollars. At the same time, you will not purchase the same X Security if it exceeds a value of Z. Setting limits for the price you pay for a particular security, as well as the price you will accept to sell it, protects you and your investment in several ways.

First of all, you are maximizing your gains, but mostly, you are avoiding loss. Any loss that occurs with limit orders will always be unrealized loss, or a loss that is not measurable in liquid assets or cash. In other words, until you sell the stock and reap the net loss, it will not affect your net worth. Since you have set a limit that does not allow your commodities to be sold for less than the original cost, you cannot possibly have a loss in your net worth. At the same time, you are also assuring at least a certain amount of profit by setting your sell point high enough to reap that particular profit.

Another way to protect your assets is to hedge. This means that you create and sell a futures contract stating that, when your shares reach a certain value in the future, you will sell your holdings at this predetermined price. When that price is reached, the order will be processed and the transaction completed. Of course, if you ever change your mind about a limit that you have set, you can place a stop order with your broker, which designates that you no longer wish to trade at the specified dollar amount.

You can also buy on margin. This is very similar to short selling, but instead of borrowing stocks to sell, you are essentially borrowing money to purchase stocks on your own when the market value is down. Then, when the value of the securities you have purchased rises and you are able to sell for a profit, you repay the loan and keep the excess from the sell, minus the broker fees. Of course, all dealings with a stockbroker incur a premium, or fee for services rendered, and it is nearly impossible to trade without a broker or broker service. However, online services are often less expensive than live agents, but you can research to determine what your best option is.

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