Smart Plan for your Investment

To be successful at investing, you need to have a well thought out plan that sets where your basic value system, your objectives and a variety of investment kinds and strategies. Every one reading this article will be living, working and investing in different circumstances, with mind boggling possibilities for variation.For example: someone may have a full time job, but invests part time; The other one may run a small business, with investment on the side; Yet another may invest full time, as a business.
However, very few of us get to start full time investing right away – but we don't have the capital. So, what we can do? You need to develop your own long term Investment Plan - one that will allow you make changes in your circumstances and lifestyle. Every plan must be different and flexible. Here are some principles that you can use to develop your own plan: * Don't quit your day job until you have built up sufficient capital to weather the inevitable draw downs that every investor has to go through. Don't live in the stupidly false hope that it won't happen to you - it will! Take this as a given, and plan for it! * Start with a relatively low risk, but steady investment strategy (like selling options). Save the windmills (like buying options) for when you have the time to really focus on your investments. Once you have built up your capital with a relatively safe (and boring) strategy, start branching out into more fun stuff! * Diversify your investments, at several levels. Invest in different kinds of investment vehicles like stocks, bonds, CDs, mutual funds and dividend earners. Use different investment strategies, in ways that match your lifestyle, time allocation and risk tolerance. Consider long term position trading, momentum trading, swing trading, selling options (like credit spreads and naked puts), buying options (buying puts and calls or Deep-in-the-money options). Allocate your portfolio to different TYPES of investments and different STRATEGIES of investment. * Add an extra leg to your income generating efforts. If you have a full time job, then start a small business on the side - one that can run itself once you have set it up. Unless you really need this money, use the income from this business as seed money for your investment portfolio. * Don't get obsessed with investing. Invest for a purpose, not just to get rich. Use the money to GET A LIFE - preferably with your family. The classics are too full of stories and histories of people who end up hugely rich, but divorced, abandoned by their children, rejected by their friends... and so on. Investing can swallow a person up, and unless you keep a large perspective, you can drown. * GET OUT OF DEBT! Why pay interest to someone else, when you could be investing that money. I am talking about all kinds of debt....credit card, mortgage...everything! Add up all the interest that you have paid this year, then work out how rich you would be if you had taken that money (instead of making someone else fat) and invested it in plan that gave you a good return. The result will shock you! * Be generous!!! History shows that generous people are always much better off and much happier than the other kind. Remember: those who fail to plan plan to fail. The cliche is old, but truth remains!

Meaning of Forex? | ForexGen

The forex marketis the "place" where currencies are traded. Currencies are important to most people around the world, whether they realize it or not, because currencies need to be exchanged in order to conduct foreign trade and business. If you are living in the U.S. and want to buy cheese from France, either you or the company that you buy the cheese from has to pay the French for the cheese in euros (EUR). This means that the U.S. importer would have to exchange the equivalent value of U.S. dollars (USD) into euros. The same goes for traveling. A French tourist in Egypt can't pay in euros to see the pyramids because it's not the locally accepted currency. As such, the tourist has to exchange the euros for the local currency, in this case the Egyptian pound, at the current exchange rate.
The need to exchange currencies is the primary reason why the forex market is the largest, most liquid financial market in the world. It dwarfs other markets in size, even the stock market, with an average traded value of around U.S. $2,000 billion per day. One unique aspect of this international market is that there is no central marketplace for forex. Rather, currency trading is conducted electronically over-the-counter (OTC), which means that all transactions occur via computer networks between traders around the world, rather than on one centralized exchange. The market is open 24 hours a day, five and a half days a week, and currencies are traded worldwide in the major financial centers of London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney - across almost every time zone. This means that when the trading day in the U.S. ends, the forex market begins anew in Tokyo and Hong Kong. As such, the forex market can be extremely active any time of the day, with price quotes changing constantly.

Characteristics of forex Market

In recent years, the foreign exchange market favors more and more people as it becomes a favorite for international investors, and this is strongly related to the properties of the forex market. The main characteristics of the foreign exchange market are summarized below.

It is a market without a trading field
The finance industry generally consists of two sets of systems, namely the operation market and the business network. Stock trading is carried out through stock exchanges, like the New York Stock Exchange and the Tokyo Stock Exchange, that are centralised business financial commodities - they consist of unified procedures and intermediaries such that the quoted price and transaction time are the same across various brokers. The investor can buy and sell their holdings through any broker, therefore the stock exchange is said to "consist of a trading market and trading field".

On the other hand, foreign exchange transactions take place without any unification of the operation market and business network. The forex market has no centralised market like a stock exchange. The foreign currency trading network has formed into a global, non-formal organization that consists of an advanced information system. Forex traders are not required to hold a membership of any organization, but must obtain their colleague�s trust and approval. The forex market therefore is said to "consist of a market but no trading field". Each day, the trading volume in the global forex market runs into several billions of U.S. dollars.

Circulation work
Due to the different geographical position of the various financial centres, the forex market operates 24 hours each working day.

Early morning 0830 (New York time) New York market opens, 0930 Chicago market opens, 1830 Sydney opens, 1930 Tokyo opens, 2030 Hong Kong and Singapore open, before dawn 1430 Frankfurt opens, and at 1530 London market opens. The forex market therefore undergoes 24 hours of uninterrupted operation, from Monday to Friday each week.

This kind of continued operation, free from any time and spatial barrier is an ideal environment for investors. For instance, a forex trader may buy the Japanese Yen in the morning at the New York market, and in the evening if the Japanese Yen rises in the Hong Kong market, the trader can sell in the Hong Kong market. The freedom to operate in multiple markets provides an enormous number of opportunities.

Shift of Wealth
In the foreign exchange market, the exchange rate refers to the exchange ratio between the currencies of two countries. Fluctuations in the exchange rate change will cause one currency to lose its monetary value, and at the same time increase the monetary value of another currency. For instance, over 20 years ago a single US dollar bought 360 Japanese Yen, whereas at present 1 US dollar buys 110 Japanese Yen; this explains that the Japanese Yen has risen in value, and the US dollar has decreased in value (relative to the Yen). This is said to be a shift in wealth, as a fixed amount of Japanese Yen can now purchase many more goods than two decades ago.

In recent years, the size of the foreign exchange market fund has constantly increased, causing more exchange rate fluctuation every day, and urging this wealth shift to be larger.

(level 6) Another 5 Ways to Avoid Losing Money Trading Forex

31. Afraid to Take a Loss - Trading is business. Don't think that a poor trade is a reflection on you. It could be you are just ahead of your time or a commercial order hits the market and temporarily creates a small unexpected move. Again, place your stop beforehand and NEVER increase your pre-determined risk. If it's going bad, it will probably get worse; I think that's Einstein in motion stays in motion
32.Jumping the Gun : Don't be penny wise and dollar foolish; wait for your trade signal to be clear. Put on your trade and give it a decent size stop loss so that you don't get knocked out by random noise. Do trades and don't buy lottery tickets (extremely tight stops).
.33 Over-Relying on Risk Reward : There is zero advantage in risk reward; if you put a 20 point stop and a 60 point profit your chances are probably 3-1 that you will lose; actually with the spread its more like 4 to 1 (from entry point if it goes down 17 points you lose or up 63 you win; 17/63 is close to 4-1).
34. Trading for Wrong Reasons : Because the EUR/USD is going up is not in itself a reason to buy. Buying EUR/USD because its not moving is even worse; you're paying the toll (spread) without even a hint that you will get a directional move. If you are bored, don't trade - the reason you are bored is there is no trade to do in the first place.
35. Rumors : Rumors are rumors almost 100% of the time; think about where in the motion you heard the rumor. If EUR/USD is up 50 points in last 15 minutes and the rumor is dollar negative, well then you missed it. Whenever you trade, determine where in the motion you are entering.

(level 6) Another 5 Ways to Avoid Losing Money Trading Forex

. 26 Mixing Apples and Oranges : Have you ever done this: you see the EUR/USD trading higher, so you buy GBP/USD because it hasn't moved yet. That's a mistake. Most of the time the reason the GBP/USD hasn't moved yet is because its already overbought or some 4:30am UK news was bearish. Don't mix apples and oranges; if EUR/USD looks good, buy EUR/USD.
27. Rationalizing Killer. Absolute Killer: Put your trade on and let it run. If it hits your reasonable pre-determined stop, you're out. Moving your stop is like getting up after being crushed with a knockout blow; it's pointless, things will only get worse. Don't ignore the obvious - you are wrong, so get out. Come back the next day and try again. A small loss will not hurt you, but a catastrophic loss will.
28. Too Much Detail : If you are trading more than 2 indicators, then you need to clean house. Having many indicators stifles trading and finds reasons not to trade. A setup and a trigger is all you need.
29. Avoiding the Hard Trades : Bank FX traders have an axiom: the harder the trade is to do, the better the trade. This I learned from experience - when I needed to buy EUR/USD and it was hard to get them, that's when it is necessary to pay up and get the business done. When it's easy to get them, then sit back and wait for better levels. So if you're trying to get into a trade or more importantly get out of a trade, don't putz around for a few points; get your business done.
30. Giving Up Too Easy : Your first trade of the day may not be your best but certainly it's no reason to quit. I have a preset daily trading limit and I use it; you can't make money by making excuses. Getting trades wrong is natural and should be expected.

(level4) Another 5 Ways to Avoid Losing Money Trading Forex

16. Lack of Confidence : Confidence only comes from successful trading. If you lose money early in your trading career it's very difficult to gain true confidence; the trick is don't go off half-cocked; learn the business before you trade.
17. Emotional Trading : When you don't pre-plan your trades, it is essentially a thought and not an idea; thoughts are emotions and a very poor basis for doing trades. Do people generally say intelligent things when they are upset and emotional? I don't think so.
18. Ignore Technical Conditions : Determining whether the market is over-extended long or over-extended short is a key determinant of near-time price action. Spike moves often occur when the market is all one way.
19. Lack of Courage to Take a Loss : There is nothing macho or gutsy about riding a loss, just stupidity and cowardice. It takes guts to accept your loss and wait for tomorrow to try again. Getting married to a bad position ruins lots of traders. The thing to remember is the market does crazy things often so don't get married to any one trade; it's just a trade. One good trade will not make you a trading success; rather, it is the monthly and annual performance that defines a good trader.
20. Not Focusing on the Trade at Hand : There is no room for fantasizing in successful trading. Counting up and mentally spending profits you haven't made yet is mental masturbation and does you no good. Same with worrying about a loss that hasn't happened yet. Focus on your position and have a reasonable stop loss in place at the time you do the trade. Then be like an astronaut. sit back and enjoy the ride, there is no sense worrying because you have no real control; the market will do what it wants to do.

What Is Forex?

The foreign exchange market is the "place" where currencies are traded. Currencies are important to most people around the world, whether they realize it or not, because currencies need to be exchanged in order to conduct foreign trade and business. If you are living in the U.S. and want to buy cheese from France, either you or the company that you buy the cheese from has to pay the French for the cheese in euros (EUR). This means that the U.S. importer would have to exchange the equivalent value of U.S. dollars (USD) into euros. The same goes for traveling. A French tourist in Egypt can't pay in euros to see the pyramids because it's not the locally accepted currency. As such, the tourist has to exchange the euros for the local currency, in this case the Egyptian pound, at the current exchange rate.
The need to exchange currencies is the primary reason why the forex market is the largest, most liquid financial market in the world. It dwarfs other markets in size, even the stock market, with an average traded value of around U.S. $2,000 billion per day. One unique aspect of this international market is that there is no central marketplace for foreign exchange. Rather, currency trading is conducted electronically over-the-counter (OTC), which means that all transactions occur via computer networks between traders around the world, rather than on one centralized exchange. The market is open 24 hours a day, five and a half days a week, and currencies are traded worldwide in the major financial centers of London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney - across almost every time zone. This means that when the trading day in the U.S. ends, the forex market begins anew in Tokyo and Hong Kong. As such, the forex market can be extremely active any time of the day, with price quotes changing constantly.